R e gu I a t i o
                            AWB.ER.C LIBRARY U.S. EPA


                    MARCH 16, 1995

Reinventing Environmental Regulation
             President Bill Clinton
            Vice President Al Gore
               March 16, 1995

                      TABLE OF  CONTENTS
Overview  	 1
      Introduction  	 1
      25 Years of Progress	2
      A Vision for the Next 25 Years 	4
      Reinvention Yes, Rollback No 	5
      10 Principles  for Reinventing Environmental Regulation	6

25 High Priority Actions	7
      Improvements to the Current System	8
            Performance and  Market-based Regulation	 8
            Setting Priorities  Based on Sound Science	8
            Building Partnerships 	9
            Cutting Red Tape	 10
            Better Accountability, Compliance and Enforcement	 11
            The Power of Information	 13
      Building Blocks for a New System	 14
            Alternative Performance-based Strategies	 14
            New Tools for Government and Industry	 16

      Appendix A: One-Pagers on the 25 High Priority Actions	 17
      Appendix B: Other Significant Actions 	43
      Appendix C: The Clinton/Gore Record: Two Years of Progress	46

       "Do we need more common sense and fairness in our
       regulations?  You bet we do. But we can have common sense and
       still provide safe drinking water.  We can have fairness and still
       clean up toxic waste dumps.  And we ought to do it."

             President Clinton
             State of the Union Address; January 24, 1995

       We are in the midst of a  critical transitional period for our nation's environmental
policy. The modem era of environmental protection began in 1970 with the first Earth Day,
the passage of landmark legislation, and the creation of the Environmental Protection Agency.
We have'accomplished much in  25 years to protect the health of our people and preserve
natural treasures for future generations.  But much remains to be done.
       It  is time to draw upon the lessons we have learned over the last 25 years to reinvent
environmental protection for the  21st century.  We have learned that the American people are
deeply committed to a healthy environment for their children and communities.  We have
learned that pollution is often a sign of economic inefficiency and business can improve
profits by preventing it.  We have learned that better decisions result from a collaborative
process with people working together, than from an adversarial one that pits them against
each other.  And we have learned that regulations that provide flexibility ~ but require
accountability --  can provide greater protection at a lower cost.
       The American people expect and deserve clean air to breathe, clean water to drink, a
safe food supply and safe places  to live, work and play for themselves and for future
generations.  The Clinton/Gore Administration is committed to providing that protection in a
common sense, cost effective manner.
       This report contains a comprehensive set of 25 High Priority Actions that will
substantially  improve the existing regulatory  system, and take  significant steps toward a new
and better environmental management system for the 21st century.

25 Years of Progress
       Since the first Earth Day almost 25 years ago, the American people have enjoyed
dramatic improvements in public health, worker safety, and the natural environment. We
have taken lead out of gasoline and paint.  We have virtually eliminated direct discharge of
raw sewage into the nation's water. We have banned DDT and other dangerous and persistent
pesticides.  Because of these and other actions, lead levels in the average American's
bloodstream have dropped by 25 percent since  1976, millions of Americans can now fish and
swim in formerly polluted waters, and the bald eagle - once close to extinction - has been
removed from the list of endangered species. Improvements in the quality of our air, water,
and land represent investments in the future that will pay dividends for generations to come.
       But, for all the progress we have made, serious environmental problems remain.
Examples include:

       Forty percent of our rivers and lakes still do not fully meet water quality standards;

       54 million Americans - one in five - still live in areas where the air does not meet
       public health standards; and

       We  are witnessing increases of asthma, breast cancer and other illnesses that may be
       related to environmental pollution.

       It is clear that we have not finished the job.  We must build on the successes of the
past to construct a framework for continued success in the future.
       Many of the  successes achieved thus far have been based on "end-of-the-pipe,"
"command-and-control" approaches. Under this system,  Federal and state governments have
set standards, issued permits for pollutant discharges, and then inspected, monitored and
enforced the standards set for each  environmental statute.  By regulating emission sources to
the air, water, and land, we have addressed many of the  obvious environmental problems.
       But  as we achieved these successes, we learned a great deal  about the limitations of
"command-and-control."   Prescriptive regulations can be inflexible, resulting in costly actions
that defy common sense  by requiring  greater costs for smaller returns. This approach can
discourage technological innovation that can lower the costs of regulation or achieve
environmental benefits beyond compliance.  Prescriptive regulation is often less effective in
addressing some  of the more diffuse sources of pollution that we will face in the years ahead.

       We have seen both the value and the limitations of "command-and-control" regulation
and end-of-pipe strategies. They will remain possible policy options to be chosen if they are
the most efficient, effective -- or only -- solutions to future environmental problems. But we
also know that  we must expand available policy tools to include new and innovative ways to
achieve greater levels of environmental  protection at a lower cost.
       For example, we have learned that setting "performance standards" and allowing the
regulated community to find the best way to  meet them can get results cheaper and quicker --
and cleaner  than mandating design standards or specific technologies.  We can promote
both lower-cost environmental protection and innovation in pollution  control and prevention
technology.  Using performance standards along with economic incentives encourages
innovation.  The lowest-cost and most effective strategies earn a greater return in the
marketplace.  Accountability and responsibility must accompany this increased flexibility so
our citizens have confidence that our environmental goals are, in fact, being met.
       We have also learned that a healthy environment and a healthy economy go hand-in-
hand.  This growing awareness is demonstrated by the strong support that the concept of
sustainable development has received from both industry and environmentalists across the
country and  around the world.  Our economic and our environmental goals must be mutually
reinforcing to produce both jobs and environmental quality.
       We have learned that the adversarial approach that has often characterized our
environmental system precludes opportunities for creative solutions that a more collaborative
system might encourage. When decision-making is shared, people can bridge differences, find
common ground, and identify new solutions.  To reinvent environmental protection, we must
first build trust among traditional adversaries.
       We have certainly learned that Washington, D.C. is not the source of all  the answers.
There is growing support for sharing decision-making by shifting  more authority  and
responsibility  from the Federal government to states, tribes and local communities.
       Drawing upon the lessons of the last 25 years, the Clinton/Gore Administration is
committed to reinventing our environmental protection system.  This is a positive effort to
build upon the strengths of the current system, while overcoming its limitations. We will
reform the system, not undermine it.  We will bring people together in support of reform,
rather than further polarizing a debate that has been polarized for  too long already.
       In tackling this challenge, we are guided by a commitment to  the progress of the last
25 years, a vision for the next 25 years, a set of 10 principles, and the knowledge that the
American people want common sense protection of public health and the environment.

 A  Vision for the Next 25 Years
       We envision a 21st century America in which healthy and economically secure people
 breathe clean air, drink clean water, eat safe food, and  live, work and play in clean and safe
       We envision a 21st century America in which economic incentives, environmental
 incentives, and technological innovation are aligned so  that economic growth improves 
 rather than diminishes  environmental quality.
       In the next century, environmental protection must be driven by clear and measurable
 national goals. Economic, environmental, and social goals must be integrated so policies are
 mutually supportive, not conflicting.  Performance will  be measured by achieving real results
 in the real world, not simply by adhering to procedures.
       We must set environmental standards with full public participation. We must
 encourage innovation by providing flexibility with an industry-by-industry, place-by-place
 approach to achieving standards, building on the work begun in the Common Sense Initiative.
 But we will require accountability that such standards be met.  Rather than focusing on
 pollutant-by-pollutant approaches, attention must shift to integrated strategies for whole
 facilities, whole economic sectors, and  whole communities.
       We must employ an inclusive decision-making process that will provide states, tribes,
 communities, businesses and individual citizens the opportunity  to participate.  In particular,
 low-income and minority citizens must have a meaningful voice in decisions that affect their
 lives.  But in addition to providing opportunity, we must encourage individuals, businesses,
 and governments to accept their responsibility for environmental stewardship.
       The power of information will be critical  to the  success of this new system.  Better
 information will allow businesses to identify and eliminate inefficiencies that create pollution
 and reduce profits.  Better information  will enable government to avoid "one size fits all"
 approaches and efficiently tailor solutions to problems.  Better information will allow citizens
to participate effectively in decisions that affect their families and communities.
       This new management system will require everyone to accept new roles and
responsibilities. Individuals will have new responsibilities as consumers  and  as participants in
local decision-making. Businesses will make environmental protection a strategic
consideration that will be designed into their products and services, not considered after the
fact.  State, tribal, and local governments will serve as full partners in the development and
implementation of policies to achieve national goals.  EPA will  become a partner providing
information and research to empower local decision-makers.

Reinvention Yes, Rollback No
       How do we attain this vision of the future?  The 25 High Priority Actions assembled
in this report provide the road map to reach our vision.  The first set of Actions, listed under
the heading "Improvements to the Current System," are examples of immediate steps to fix
problems associated with today's regulatory structure.  Additional actions  will be identified in
a June 1 report to the President following a comprehensive review of all existing regulations.
It will recommend eliminating obsolete or unnecessary requirements.
       But we can't be satisfied with simply improving elements of a regulatory system that
has evolved piece-by-piece over 25 years. By implementing the second set of Actions
included under the heading "Building Blocks for a New System," we will provide the
flexibility to test alternative strategies to achieve environmental goals.  The most notable of
these initiatives is Project XL (page 14). This program will give a limited number of
responsible companies the opportunity to demonstrate excellence and leadership.  They will
be given the flexibility to develop alternative strategies that will replace current regulatory
requirements, while producing even greater environmental benefits.
       The Clinton/Gore Administration is committed to reinventing  environmental protection
so it will protect more and cost less.  But we are not starting from scratch.  In the last two
years, the Administration has made tremendous progress in adopting common sense reforms
to our environmental regulatory system (See Appendix C).  We have spearheaded a new,
cleaner, cheaper and smarter direction for environmental protection.  In the year ahead, we
will continue our progress through the ambitious agenda contained in this report.
       But let no one misunderstand us. Our effort to reinvent environmental regulation does
not imply compromise on the public health and  environmental  protection  goals to be
achieved.  While increased flexibility is a central principle of our reinvention effort, flexibility
is not a codeword for loophole. Those who abuse this new flexibility will find the traditional
tools  still at hand to enforce the law.
       The American  people, in poll  after poll, cite their determination  to achieve high
standards of environmental quality.  This Administration shares that commitment.  We will
oppose those who would undercut protection of public health and the environment under the
guise of "regulatory relief."  America does not need dirtier air or dirtier water.  The historic
protection we have achieved over the last 25 years must be maintained, sustaining the promise
of a clean and healthy environment that has been made and renewed by almost every
President since Teddy Roosevelt.  We will work with  the new Congress whenever possible,
but we will not go  backwards. Reinvention yes, rollback no.

10 Principles for Reinventing Environmental Protection

1.  Protecting public health and the environment are important national goals, and individuals,
businesses and government must take responsibility for the impact of their actions.

2.  Regulation must be designed to achieve environmental goals in a manner that minimizes
costs to individuals, businesses, and other levels of government.

3.  Environmental regulations must be performance-based, providing maximum flexibility in
the means of achieving our environmental  goals, but requiring accountability for the results.

4.  Preventing pollution, not just controlling or cleaning it up, is preferred.

5.  Market incentives should be used to achieve environmental goals, whenever appropriate.

6.  Environmental regulation should be based on the best science and economics, subject to
expert and public scrutiny, and grounded in values Americans share.

7.  Government regulations must be understandable to those who are affected by them.

8.  Decision making should be collaborative, not adversarial, and decision makers must inform
and involve those who must live with the decisions.

9.  Federal, state, tribal and local governments must work as partners to achieve common
environmental goals, with non-federal partners taking the lead when appropriate.

10. No citizen should be subjected to unjust or disproportionate environmental impacts.

       "We are at a crossroads.  The decisions we make today will determine
       whether we leave to future generations an attractive, livable world or an
       ever-escalating series of problems.  More than ever, we must work
       vigorously to advance the twin goals of environmental protection and
       economic growth."

            Vice President Gore
            July 15,  1994
      Our strategy to reinvent environmental protection will proceed on two tracks that will
converge in the future to produce a new era of cleaner, cheaper, and smarter environmental
management. The first track is a set of High Priority Actions (page 8) targeted to fixing
problems with today's regulatory programs. These actions demonstrate our commitment to
providing flexibility, sparking innovation, and requiring accountability; to cutting red tape; to
encouraging collaboration; and to focussing upon achieving environmental results in local
communities, rather than adherence to bureaucratic procedures in Washington.
      The second track is a set of High Priority Actions (page 14) designed to develop
innovative alternatives to the current regulatory system.  We will enter into partnerships with
businesses, environmentalists, states and communities to test alternative management
strategies for single facilities, industrial sectors, or geographic areas. The knowledge gained
from such bold  experimentation will lay the groundwork for developing a new environmental
management system for the 21st century.
      This dual strategy is a comprehensive approach to continually improving our
environmental management system -- aimed at our twin goals of enhanced environmental
protection and vibrant economic growth.  One-page descriptions of these 25 High Priority
Actions can be found in Appendix A. Appendix B contains a set of Other Significant

Performance and Market-based Regulations
       Regulatory policies that rely on performance standards in concert with market-based
incentives greatly enhance cost-effectiveness and innovation, by encouraging the lowest cost
and most innovative compliance strategies.

1.     Open-market air emissions trading.  EPA will issue an emissions trading rule for
       smog-creating  pollutants that will allow states to obtain automatic approval for open
       market trading of emission credits with accountability for quantified results.
       Expanding use of market trading on a local and regional level will give companies
       broad flexibility to find lowest cost approaches to emission reductions.  The rule will
       encourage experimentation with new trading options, while enabling states to pursue
       more quickly allowance-based cap systems, which are already under development in 
       some areas.

2.     Effluent trading in watersheds.  EPA will place top priority on promoting use of
       effluent trading to achieve water quality standards (e.g., establishing a framework for
       different types of effluent trading, issuing policy guidance for permit writers, and
       providing technical assistance).  Trading can be used to achieve higher water quality in
       watersheds at lower cost than inflexible discharge requirements for individual sources.
Setting Priorities based on Sound Science
       Sound and credible environment decisionmaking depends on good science and good
data.  When hazards are understood and risks have been fully assessed, remedies can be
crafted with precision.  Twenty-five years ago, little was known about environmental hazards
and far less about the risks they posed.  Through the years, we have considered both the
hazards and how best to assess the resulting risks. EPA must remain at the cutting edge of
risk assessment and ensure independent peer review of the science used in regulatory
decisions to mitigate risk in the most efficient and effective manner possible.

3.     Refocus RCRA on high-risk wastes.  The regulation of hazardous wastes will be
       reformed so that: low-risk wastes exit the Resource Conservation and Recovery Act
       hazardous waste system; states are allowed latitude in designing management
       requirements for low-risk, high-volume wastes generated during environmental cleanup
       operations; and, a new "common-sense" definition of solid waste will be developed to
       simplify industry compliance with RCRA rules.

4.     Refocus drinking water treatment requirements on highest health risks. EPA will
       reorder its priorities for drinking water regulations based on a careful analysis of
       public health risks and discussions with stakeholders. While working on this
       realignment, EPA will pursue a postponement of court-ordered  deadlines for drinking
       water regulations.  Additionally, EPA will boost support for voluntary efforts to
       immediately reduce risks through improved management of water treatment facilities
       and tailor drinking water monitoring requirements to reflect local contaminant threats.

5.     Expand use of risk assessment in local communities. EPA has sponsored the
       development of computer software that allows non-specialists to conduct simple risk
       assessments. As part of an expanded risk  training program, EPA will provide (at cost)
       this computer program to local governments, small businesses, and local citizens
       groups.  This tool will allow estimates of exposures and human health risks on a site-
       specific basis.  Broad availability to training and  access to risk  assessment tools and
       data bases will increase public understanding of risk assessment and empower citizens
       to participate in environmental decisions in an informed manner.
Building Partnerships
       No one has a greater interest in local environmental decisions than the people who are
affected by them.  States, tribes and communities are anxious for greater autonomy and
responsibility for results.  EPA is taking an activist role in moving environmental decisions
and accountability  to the level closest to the problem ~ be it state, tribal, or local.  A major
part of achieving a shift in authority is building the capacity  at the state and local levels to
solve local problems.  Upon enactment of necessary legislation, EPA will vigorously pursue:

 6.     Flexible funding for states and tribes.   EPA will provide an option for state and
       tribal governments to combine their existing grant funds to reduce administrative
       burdens and improve environmental performance. Under these Performance
       Partnership Grants, states and tribes will be able  to target funds to meet their specific
       needs, as long as they are consistent with environmental requirements.  These grants
       would be subject to performance criteria negotiated between the EPA Administrator
       and the  grant recipients.

 7.     Sustainable Development Challenge Grants. This new competitive action grant
       would prompt local formulation  of comprehensive, place-based management
       connecting sustainable economic development with sound environmental practices.
       Within legislatively set national objectives, stakeholders will be challenged to produce
       coordinated programs, using the  action grant to mobilize, organize and  attract
       community  and private sector participation.  A successful application would
       demonstrate a high level of stakeholder involvement, and availability of other sources
       of funds. Recipients would be expected to leverage direct private sector investment in
       place-based environmental protection.

8.     Regulatory negotiation and  consensus-based rulemaking.  EPA will  review all rules
       to identify candidates for negotiated rulemaking  a process that involves  all
       stakeholders in developing agreement on now best to regulate.  Additionally, the
       Common Sense Initiative process will be used to  identify regulations that can be
       developed through negotiation and consensus.
Cutting Red Tape
       Continuing the work started under Vice President Gore's National Performance
Review, EPA will search out opportunities to simplify and reduce paperwork, including up
front during the permitting process, and in recordkeeping and reporting. By June of this year,
EPA will review all of its regulations and identify those that should be eliminated or
simplified.  These actions will preserve essential data needed to measure environmental results
and determine compliance with the law, but will eliminate low-value requirements.  The three
examples below illustrate EPA's commitment to eliminating red tape by reducing paperwork,
simplifying reporting,  and consolidating rules for easier understanding.

9.     25% reduction in paperwork.  EPA wall reduce existing reporting and recordkeeping
       burden hours by 25% beginning with local governments and small businesses.
       Initiatives already underway include expanded use of electronic reporting and
       recordkeeping. EPA will meet extensively with industry, states, and other interested
       groups to identify ways of minimizing reporting and recordkeeping requirements.

10.    One-Stop emission reports. EPA will create a consolidated system for routine
       emission reporting to the Agency, which will substantially reduce the multitude of
       reporting forms for different kinds of pollutant discharges from one facility.  Given the
       magnitude of this change and the logistics involved, consolidated reporting will begin
       with pilot programs in coordination with states.  Based on the experience gained,  we
       will apply the "one-stop" approach more broadly.

11.    Consolidated federal air rules (one-industry   one rule).  EPA  will work with key
       industries, beginning with the chemical industry, to eliminate conflicting and
       overlapping federal air compliance requirements.  Deleting duplicative and confusing
       regulations will result in increased understanding by industry about emission limits and
       monitoring, recordkeeping and reporting requirements, and will reduce compliance
       costs  with no measurable  loss of environmental protection.  Subsequently,
       consolidation for other media will be undertaken, based on experience gained with air
Better Accountability, Compliance and Enforcement
       While environmental requirements can and will be made more flexible and cost
effective, the public will continue to expect compliance with the law and accountability for
results.  We will encourage good actors and provide incentives for compliance while
preserving a level playing field and deterring violations through targeted enforcement actions.
We will encourage compliance through incentives for self-policing, including penalty
reductions and testing of third-party auditing and self certification, and we will provide more
effective assistance to small businesses seeking to comply with environmental regulations.
We will maintain the level playing field through aggressive enforcement that targets the
highest risks and most significant noncompliance problems. Many of these initiatives will  be
coordinated through EPA's new Environmental Leadership Program.

 12.    Risk-based enforcement. EPA will target enforcement actions against significant
       violations that present the greatest risks to human health and the environment.  This
       will require development of tools that allow analysis of risk as well as patterns of
       violations among corporations and facilities within a particular sector, and making this
       information more publicly available.

 13.    Compliance incentives for small businesses and communities.  The nation will
       enjoy greater environmental protection if responsible small businesses and small
       communities who volunteer to comply with environmental regulations can access
       compliance assistance without fear of fines and penalties. Thus, EPA will provide up
       to  180 days for small businesses to correct violations identified through federal or state
       technical assistance programs. A similar approach will be used for small communities.

14.    Small business compliance assistance centers.  EPA will develop national customer
       centers for six small business sectors (including printing, metal finishing, auto service
       stations) that face multiple environmental  requirements.  The centers will support trade
       associations and state small business associations through plain-English guides to
       compliance, electronic access to information linking pollution prevention and
       compliance opportunities, and by  cutting paperwork and consolidating reporting  for the
       affected  industries.

15.    Incentives for auditing, disclosure and correction. To reward today's responsible
       companies and eliminate costly litigation and red tape, EPA will provide incentives
       through reduced penalties for companies that disclose and promptly correct violations
       -- except for criminal violations, imminent and substantial endangerment, or repeat

16.    Self certification. Compliance through self certification can reduce the reporting
       burden for those environmental requirements not associated  with emissions or risk
       data.  EPA will develop a self certification program for pesticide registrants, and then
       expand self certification into other program areas.

The Power of Information
       Quality information is central to all aspects of environmental decisionmaking.
Government, businesses, and citizens need information about prevailing and projected
environmental conditions and trends; about the effects of pollution; about the success of
mitigation strategies; and about costs and benefits of these strategies.  Businesses need quality
information to identify opportunities to prevent pollution and save money.  Citizens need
access to information to  participate in decision-making in a meaningful and informed manner.
Alternative performance-based systems of environmental protection -- such as facility-,
sector-, and community-based approaches  can only succeed if high quality  information is
available and can be easily accessed.

17.    Public electronic access.  EPA will significantly expand its existing programs (e.g.,
       Public Information Center, hotlines) to make information from all EPA programs
       available through Internet and other electronic means that many Americans can access
       directly from their homes, schools and libraries.

18.    Center for environmental information and statistics. EPA will administratively
       establish a new Agency-wide center charged with assessing, consolidating and
       disseminating information.  The center will serve multiple and diverse stakeholders ~
      providing products that respond to the expressed needs of its customers.   The center
       will commission an independent study to evaluate the full range of data needs
       (including additional data as well as unnecessary data elements that  are currently
      collected).  EPA data management systems and technological improvements that can
      increase efficiency and access will also be  addressed.

       It isn't enough to focus on improving the current regulatory system.  Incremental
change alone will never get us where we ultimately need to be.  As we move toward a new
century, it is imperative that we challenge ourselves to step outside the context of the
established way of doing things to identify new and innovative means to achieve our goals.
The High Priority Actions that follow do just that. They will test the building blocks for a
new way to ensure both a vibrant economy  and a healthy environment.  By providing
flexibility - with accountability -- we will spark technological innovations that will
demonstrate that economic and environmental goals can be achieved simultaneously.  The
knowledge  gained from this bold experimentation will allow us to leapfrog past the limitations
of the current system to create a new environmental management system for the 21st century.

Alternative Performance-based Strategies
       EPA has developed a coordinated series of demonstration projects designed to provide
the opportunity to implement alternative management strategies for facilities, industrial
sectors, communities, and federal agencies.  These projects will provide environmental
managers the flexibility to employ technological innovation to achieve environmental goals
beyond what the law requires, while requiring accountability for performance.  These projects
will also  encourage collaborative decision-making with increased citizen involvement.  EPA
will sponsor the following demonstration projects:

19.    Project XL.  This project is a critical component of the Administration's effort to
       reinvent regulation.  In partnership with the states,  the Administrator will provide a
       limited number of responsible companies the opportunity to demonstrate excellence
       and leadership.  They will  be given the flexibility  to replace the requirements of the
       current system at specific facilities with an alternative strategy developed by the
       company if certain conditions are met: (a) the alternative strategy must produce
       environmental performance superior to that which would be achieved by full
       compliance with current laws and regulations; (b) the alternative strategies must be
       "transparent" so that citizens can examine assumptions and track progress toward
       meeting promised results; (c) the alternative strategy must not create worker safety or


       environmental justice problems; (d) the alternative strategy must enjoy the support of
       the community surrounding the facility; and (e) the alternative strategy must be

20.    Alternative strategies for sectors.  Through the use of industry covenants and other
       forms of enforceable agreements, EPA and several industries will demonstrate how
       adjustments and modifications in  environmental regulatory requirements can achieve
       more cost-effective environmental results.  The industries involved in the Common
       Sense Initiative will provide the first opportunities to test this approach.

21.    Alternative strategies for communities.  EPA will join with states and communities,
       and perhaps other federal agencies,  to conduct pilot projects that will demonstrate  and
       assess the merits of community-designed and directed strategies for achieving
       environmental  and economic goals.  The pilots will  be undertaken with communities
       that are seeking innovative alternatives that promise greater efficiency and
       effectiveness than current approaches, as well as with communities that are grappling
       with limited ability to meet current  regulatory requirements.  The pilots will apply, in
       a geographic area, the concepts contained  in the facility and sector projects, and will
       build on the Administration's Empowerment Zone and Ecosystem Management
       Initiatives. These pilots will  integrate the  mutually supportive goals of economic
       development and environmental protection at the community level with full public

22.    Alternative strategies for agencies. EPA will work with other federal agencies that
       have environmental responsibilities  to ensure that their programs achieve
       environmental  results in the most cost-effective manner, while eliminating needless
       bureaucratic procedures. The initial pilot in this effort will focus on two to four
       Department of Defense facilities.  EPA and DoD will enter into a memorandum of
       understanding to  define performance goals and jointly devise an optimal approach  to
       achieve those goals.  The approach  will combine pollution prevention, compliance and
       technology research projects.

New Tools for Government and Industry.
       In addition to sponsoring alternative strategy pilot programs, EPA will place increased
emphasis on developing new management tools for government and industry to utilize in
implementing new environmental management systems.

23.    Third-party audits for industry compliance.  One approach for streamlining
       compliance oversight is to use independent, certified, private sector firms to audit
       industry performance.  The Environmental  Leadership pilot program, with input from
       environmental groups, industry and states, will evaluate criteria for third-party audits
       which assure the public that environmental requirements are being met and violations
       disclosed and promptly corrected.

24.    Multi-media permitting. EPA will conduct several demonstrations of multi-media
       ("one-stop") permits. These permits will address all releases and use performance-
       based approaches to assure  comprehensive environmental protection, encourage
       pollution prevention, minimize duplication and delay, and allow facility managers to
       use lowest-cost solutions.

25.    Design for Environment  green chemistry challenge.  EPA proposes that the
       agency and the chemical  industry jointly sponsor national awards for companies that
       develop pollution prevention processes for chemical production and use. Major targets
       will be using renewable resources for chemical production, substituting solvents that
       do not contribute to air pollution, and designing new chemicals and chemical processes
       that are more safely made and that are safe for the  environment.

                             APPENDIX A
1     Open-market air emissions trading
2     Effluent trading in watersheds
3     Refocus hazardous waste regulation on high-risk wastes
4     Refocus drinking water treatment requirements on highest risks
5     Expand use of risk assessment in local communities
6     Flexible funding for states and tribes
7     Sustainable development challenge grants
8     Regulatory negotiation and consensus-based rulemaking
9     25% reduction in paperwork
10    One-Stop emission reports
11    Consolidated federal air  rules
12    Risk-based enforcement
13    Compliance incentives for small businesses and communities
14    Small business compliance assistance centers
15    Incentives for auditing, disclosure, and correction
16    Self certification
17    Public electronic access
18    EPA Center for environmental information and statistics

19    Project XL
20    Alternative strategies for sectors
21    Alternative strategies for communities
22    Alternative strategies for agencies
23    Piloting third-party audits for industry compliance
24    Multi-media permitting
25    Design for the Environment  "Green Chemistry Challenge"

 1.  Open-market air emission trading
Action: Establish an open trading market that will allow for attainment of the ozone air
quality standard at far less cost.

Background: Emissions trading is a way of reducing pollutant emissions to the environment
by applying pollution reduction measures at the places where reductions are most cost
effective.  A facility can avoid costly compliance measures by reducing emissions at points
where it is most cost effective to do so, and not apply controls where costs are exorbitant, so
long as equivalent or greater reductions are made.

The current ozone control program has focused on a combination of technology-based
mandatory measures and State plans that historically have discouraged flexible emission-
trading programs. In response, EPA has already issued regulations and guidance to encourage
development of economic incentive programs, helped develop an emissions trading market in
southern California, and sponsored demonstration projects in the Northeast and elsewhere.

We now believe we have enough experience with trading concepts  to provide clear EPA
positions that would encourage economic approaches while ensuring equal or better
environmental results. EPA's issuance of a generic trading rule would go a long way towards
persuading states to adopt such measures.

Description:  EPA will issue a generic trading rule for ozone-creating pollutants (volatile
organic compounds  and nitrogen oxides) that will provide far more flexibility than ever before
for companies to trade emission credits without prior state or federal approval.

Any State that adopts an identical rule will receive automatic EPA  approval.  Once in the
state plan, companies may freely engage in trades without prior regulatory agency approval as
long as emissions tracking and accountability protocols are followed in accordance with the

The guidance provided in this generic rule will also serve to facilitate adoption by states of
emissions  budget or cap-based trading programs.

Federal leadership in crafting model  rules and guidance will permit States to  exploit the
significant opportunities for market-based programs inherent in the  1990 amendments.

2.  Effluent trading in watersheds
Action:  Implement effluent trading on a national scale as a cost-effective approach for
reducing water pollution

Background: Under the Clean Water Act, "point source" dischargers (industrial and
municipal facilities that discharge wastewater through pipes into rivers and streams) are
required to reduce pollution to meet water quality standards.  Dischargers have traditionally
met these standards uniformly at each discharge pipe.

Under an  effluent trading program, a discharger that can reduce pollution below the minimum
level required to meet water quality standards can sell its excess pollution reductions to other
dischargers within the same watershed. This can have several desirable effects. First, it
allows dischargers to take advantage of the economies of scale and the treatment efficiencies
that vary from discharger to discharger; thus, it may reduce the total cost of compliance for
all dischargers in the watershed.  Second, it creates an economic incentive for dischargers to
go beyond minimum pollution reductions and encourages pollution prevention. Finally, by
encouraging more timely action to ieduce pollution, it may prevent future environmental
degradation  more effectively than traditional command-and-control approaches.

Trading programs  can also be established for other sources of water pollution, including
"nonpoint sources" (e.g., run-off from farms) and "indirect" dischargers (companies whose
wastewater is treated by a municipal sewage treatment plant).

Depending upon the type of effluent trading implemented, the cost savings can be
considerable.  EPA has estimated potential cost savings for three types of effluent trading:

              $611 million to $5.6 billion for point source/nonpoint source trading
              $8.4 million to $1.9 billion for point source/point source trading
              $658 million to $7.5 billion for trading among indirect dischargers

Description:  EPA will encourage effluent trading by:

       Establishing a framework promoting different types of effluent trading

       Issuing policy guidance to permit writers confirming EPA support for effluent trading
       for pollution reduction above technology-based minimum levels

       Providing technical assistance in preparing analyses of the total amount of permissible
       pollution in a watershed (the technical cornerstone for water quality analysis and
       watershed trading)

 3.  Refocus hazardous waste regulation on high-risk wastes

 Action:  Better target private industry and government resources toward higher-risk
 environmental problems related to hazardous waste management.

 Background: EPA's hazardous waste regulations have been effective in assuring that
 hazardous waste is safely treated, stored and disposed of.  However, some of these regulations
 require all hazardous wastes to meet the same management standards and do not tailor
 standards to the nature or degree of risk posed by particular wastes.

 Description:  EPA plans to make the following major changes to better focus its hazardous
 waste regulations on high-risk wastes and reduce impediments to recycling:

  Hazardous waste identification rule  To better align hazardous waste regulatory
 requirements with the risks being controlled, the Agency will propose a rule this year to
 allow low-risk listed hazardous wastes to exit the hazardous waste regulatory scheme. This
 rule has been developed through a multi-stakeholder, consensus-based process.

  Contaminated soil, ground water and surface water  EPA will allow states greater
 flexibility in determining the appropriate way to regulate soil, ground water  and surface water
 which is contaminated with relatively small quantities of hazardous waste. The expense and
 difficulty  of managing high-volume,  low-risk wastes as hazardous wastes can impede cleanup.

  "Universal wastes"  Many discarded batteries, thermostats and pesticides are now regulated
 as hazardous wastes.  Retail outlets and other businesses are reluctant to collect these items
 for recycling because of the expense  and complexity of the regulatory requirements.  EPA
 will promulgate a rule this year which will significantly reduce regulatory requirements
 (including paperwork) for retail outlets and other entities that collect these materials for
 recycling. In the  future, EPA and States may include other appropriate hazardous wastes in
 this special collection scheme.

  "Common-sense" definition  of solid waste -- EPA will modify its regulations defining when
 hazardous materials which are recycled, recovered or reused are "wastes" and thus subject to
EPA hazardous waste regulations.  The Agency's goal is to reduce impediments to
 environmentally sound recycling and to simplify and clarify its regulations.   Developed with
 extensive  participation by interested parties, this rule will establish a simplified regulatory
framework for all industries, as well as tailored  approaches for selected key industries.

  By April 15, EPA will convene a multi-stakeholder process to identify a legislative package
of "rifle shot" reforms to fix provisions of RCRA that result in high  costs and marginal
 environmental benefit.  If the group is unable to reach a consensus, the Administration will
 consider the views of all participants  and deliver a reform package to Congress by July 15.

4.  Focus drinking water treatment requirements on highest risks

Action:  Focus the EPA drinking water program on the highest risks and cut costs and increase
flexibility for states and water suppliers.

Background:  The 1986 amendments to the Safe Drinking Water Act (SDWA) required EPA to
issue national standards for 83 contaminants in 1989 and 25 additional contaminants every three
years thereafter.  This regulatory "treadmill" is now widely recognized as diverting resources
from high priority risks to lower priorities. These regulations have had the effect of requiring
expensive monitoring, especially for small systems that provide water to the public, and have
imposed high oversight costs on States.

Description:  During the SDWA reauthorization effort, the Administration emphasized:

       Targeting regulations on substantial health risks

       Retaining State management of drinking water programs

       Providing funding and technical assistance for small systems that provide drinking water
       to the public

       Reducing monitoring burdens

       Preventing pollution  by effectively protecting drinking water sources

EPA will improve the performance of the drinking water regulatory program  without the need
for legislative changes  in three areas:

       Establishing priorities for rulemaking based on health risks.  EPA is seeking a delay for
       all court schedules for drinking water and, based on a reassessment of health risks posed
       by contaminants in drinking water and consultation with all stakeholders  on  regulatory
       priorities and approaches, EPA will set new priorities and schedules for drinking water

       Encouraging voluntary treatment.  EPA is working with water suppliers and  States to
       develop a voluntary program to improve the treatment of drinking water so as to reduce
       the occurrence of bacterial and other microbiological pathogens.

       Simplifying monitoring requirements.  EPA will streamline monitoring requirements for
       chemical contaminants in drinking water and allow further "tailoring"of monitoring based
       on the existing quality of the drinking water source.

 5.  Expand use of risk assessment in local communities
Action: Promote risk-based decision making in communities and States by providing training
and easy-to-use risk assessment tools.

Background:  EPA uses risk assessment in most of its decisions ~ from setting standards to
clean-up of contamination. However, while some States and communities are proficient in risk
assessment, most are not. The general public is not familiar with how risks are assessed,
what assumptions are being made, and how they affect the outcome.   Simplification of risk
assessment methods and development of tools that non-specialists can understand and apply is
needed so that risk assessment can be used more broadly as one tool  to inform local decision-

Description:  EPA will work with communities and states to identify available tools that meet
specific community needs. This project will initially focus on four activities:

       Computer programs   EPA will make available computer software, including the
       "Risk Assistant" program, that allows communities to perform simple risk

       Data bases  There are a number of data bases, such as the Integrated  Risk
       Information System (IRIS), that contain information about specific chemicals and that
       are used in preparing risk  assessments.  The combined use of these data bases,
       community-specific exposure information, and simple risk assessment programs will
       enable communities to  conduct risk assessments. EPA will develop a simple,
       consolidated user friendly  data base (on a CD ROM ) that  can be supplied to
       communities at cost.

       Training and information materials -- While the computer program and the data bases
       will allow risk assessments to be done in a much easier fashion, training and
       background information on risk assessment are  also needed. EPA will  prepare a set of
       background documents on risk assessment and a training course on the application of
       risk assessment tools.  Ultimately, EPA plans to develop a self teaching course using
       video and other electronic means.

       Comparative risk techniques - The comparison of risks involves combining technical
       aspects of risk assessment with social values. EPA will continue to develop
       comparative risk approaches, through state and  local demonstration projects.

6.  Flexible funding for states and tribes
Action:  Award grants to states and tribes that combine funds from several EPA grant
programs -- to allow flexibility, so that limited resources can be directed to the most
significant problems.

Background: EPA provides several grants to states and tribes to assist them in administering
environmental protection programs.  In FY 1995 approximately $600 million will be awarded
to states and tribes for program implementation of the Clean Air Act Amendments, Clean
Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, and other
statutes.  Funds awarded in each of these categorical grants are  for a specified program or
activity and are subject to specific limits on eligible activities.

The states and tribes have difficulty integrating programs in a common sense way, or
targeting funds to highest priority environmental problems.  Recognizing this problem, the
Agency has been awarding  grants to Indian tribes to conduct planning and to develop and
establish multimedia programs. In FY  1995, EPA is conducting demonstration projects with
four states to enable them to better coordinate certain activities  such as watershed protection
and facility  inspections,  which are currently conducted under separate EPA grants.  These
demonstrations are being run using existing authority  which is limited and cannot be
expanded to cover the full range of state and tribal  environmental protection needs.

Description:  The Administration will seek legislative authority for FY 1996 to award
Performance Partnership Grants to states and federally-recognized Indian tribes.   If the
Agency receives this authority, Performance Partnership Grants will enable eligible states and
tribes to combine funds  which would otherwise be awarded as categorical grants.

The major benefit of Performance Partnership Grants will be to improve the ability of  states
and tribes to integrate programs. They  will afford states and tribes flexibility to focus
resources on the most serious environmental problems.  Performance Partnership Grants will
encourage broad intergovernmental dialogue, and encourage public participation in
environmental decision making.

 7.  Sustainable development challenge grants
Action: Encourage community, business, and government to work cooperatively to develop
flexible, locally-oriented approaches that link place-based environmental management with
sustainable development and revitalization.

Background:  Significant accomplishments to improve the environment have occurred over
the past 20 years.  To ensure continued progress in environmental protection, EPA wants to
help localities develop comprehensive, placed-based management strategies that relate
sustainable economic development with sound environmental practices. The concept of this
pilot grants program is to challenge communities to produce their own coordinated programs
within legislatively-set national objectives.

The intent is to spark innovative and sustainable economic development which is linked to
comprehensive ecosystem management and environmental performance. These grants will
provide seed funding to catalyze formation of a coalition of stakeholders who will develop
and implement a program to comprehensively address local environmental problems.

Description: Patterned after the Empowerment Zone/Empowerment Community Initiative, this
sustainable development challenge grant will be a nationwide competition, with awards based
on the proposed project's level of stakeholder involvement, project funding requirements and
the proposal's demonstration of availability of other sources of funds.

The process will be open to states, regions, or localities.  The application process would
include demonstrating the relationship of the project to a comprehensive, cross-media,
environmental needs assessment of the area, the preparation of which would necessitate local
stakeholder participation and involvement. Challenge grant recipients must leverage direct
private sector investment in place-based environmental protection.  Any variance from the
approved needs assessment would be reviewed at the regional level.  Eligibility  for all
subsequent challenge grants will take into account the demonstrated effectiveness of prior
challenge grants.

8.  Regulatory negotiation and consensus-based rulemaking
Action:   Increase the use of regulatory negotiation and other consensus-based decision

Background:  EPA has been a pioneer in the use of consensus-based decisionmaking to
develop regulations. In the most formal of these consensus-based approaches -regulatory
negotiation ("reg neg") - EPA and representatives of all major groups affected by a particular
regulation try to reach agreement on regulatory requirements. This process not only improves
the quality of rules, but increases public acceptance and minimizes litigation. Even when full
agreement cannot be reached, regulatory negotiation can help identify issues and options,
educate interested parties and narrow areas of dispute.

Although regulatory negotiation  is the most well known consensus-based procedure for
developing rules, EPA has experimented with other less formal methods to consult with
affected parties, promote useful information exchange, and find common ground on
controversial issues. These range from continuous policy dialogue to ad hoc discussion
forums to public meetings and focus groups.

Description: After a number of years of successful experimentation with regulatory
negotiation and other consensus-based rulemaking tools, EPA will now routinely evaluate the
appropriateness of using consensus-based rulemaking every time it issues or revises a
regulation.  By June 1, 1995, EPA will examine all regulations currently under development
and identify candidates for regulatory negotiation and other forms of consensus-based

The Agency will also seek to expand its use of informal negotiation in other settings, such as
the current practice of negotiating test rules to determine unknown risks of existing chemicals
under the Toxic Substances Control Act.

 9.   25% reduction in paperwork
Action:  By June 1, 1995, identify obsolete, duplicative and unnecessary monitoring,
recordkeeping and reporting requirements  with a goal of ultimately reducing existing
paperwork burdens by at least 25%.

Background: Virtually all EPA programs require regulated entities to undertake
environmental monitoring, to maintain records and to periodically report information to EPA.
The information generated by these requirements is used to determine what pollution controls
are necessary, to ensure compliance with pollution control requirements, and to obtain
information on  the impact of pollution and pollution  controls on the environment.

Most of EPA's  information collection requirements have been developed at separate times
over many years to meet the needs of individual environmental  programs (e.g., the hazardous
waste program, the water pollution program).  As a result, some of the requirements are not
well-coordinated within or across programs and are duplicative or inconsistent. Some
requirements are also not well-integrated with State programs for collecting environmental
information.  Finally, some requirements have not been reviewed recently to ensure that they
are still necessary and that they reflect the latest developments in monitoring techniques,
environmental management and information collection technology.

Description:  By June 1,  1995, EPA will review all of  its monitoring, recordkeeping and
reporting regulations to identify requirements which are obsolete, duplicative or unnecessary,
and which can be corrected quickly through administrative or regulatory actions.  When this
initial review is completed, EPA will  commence rulemaking to make appropriate changes.
Throughout calendar year 1995, EPA  will work extensively with States, local governments,
industry and environmental groups to determine other requirements that should be revised or
eliminated and what types of revisions are necessary. At the end of the year, EPA will
announce a broader program of paperwork reforms that will entail numerous rule-by-rule

EPA's ultimate  goal is to reduce existing monitoring, recordkeeping and reporting burdens by
at least 25%, giving special emphasis  to requirements imposed on  States, localities, and small
business. To attain this goal, EPA plans to fully examine not only the need for requirements,
but also how essential information can be collected and provided at lowest  cost. Among
other things, the Agency will test the  use of "one-stop"  reporting (see High Priority Action  9)
and explore how technology (such as  electronic data  interchange) can be used  to reduce
paperwork burdens and improve the timeliness and usefulness of information received.

10.  One-stop emission reports

Action:   Consolidate environmental reports and provide "one-stop" reporting for the regulated

Background:  Environmental data is collected by EPA and its state partners under a variety of
statutory and regulatory authorities.  This approach is potentially duplicative and burdensome
to industry, and also makes the use of data by the public (and even by EPA and the states)
difficult. New approaches and information systems are needed that can reduce reporting and
paperwork  burdens for industry, foster multimedia and geographic approaches to solving
environmental problems, and provide the public with meaningful, real-time access to
environmental data.

Description:  To replace the multitude of reporting forms currently required for all the
different types of pollution discharged from a single facility, EPA will create a  "one-stop"
reporting system for the collection of routine emissions data.  EPA will also provide easy
public access to this environmental information.

Achieving this goal will require a fundamental re-engineering of how EPA, the states  and the
regulated community manage information.  Given the magnitude of this change, this initiative
will be developed in stages.  Eventually, this new system will create a common set of basic
information for all programs, starting with unified facility identification information and  a
common chemical nomenclature.  Pilot projects with the states and industry will be used  to
evaluate and refine the "one-stop" program.

Of course,  information such as discharge monitoring and emergency release reports that are
essential components of the compliance program would continue to be submitted.

The easy public access and consolidated reporting provided by the one-stop system will
improve environmental information management and save industry, states, municipalities and
the federal  government time and  money.

 11.  Consolidated federal air rules
Action: For any single industry, such as the chemical industry, all Federal air rules will be
incorporated into a single rule with one set of emission limitations, monitoring, recordkeeping
and reporting requirements.

Background: Over the past 25 years, EPA has issued a series of national air regulations,
many of which affect the same facility.  Some facilities are now subject to five or six national
rules, often affecting the  same emission points.  Each rule has emission control requirements
as well as monitoring, recordkeeping and reporting requirements.

These requirements may be duplicative, overlapping, or worse ~ contradictory. It is often
difficult for plant managers to determine compliance strategies to satisfy all requirements and
for State and local permitting agencies to determine the applicability  of different requirements
for permitting purposes.  Resources are often wasted by both industry and states and
localities in  "sorting out" and complying with the panoply of multiple requirements.
Moreover, as the Agency continues to issue new air toxics  rules, as mandated by the CAA,
the problem is compounded.

Description: Whenever one of the new air toxics rule is written, all  existing Federal rules
applicable to the industry sector will be reviewed to determine whether their provisions either
need to be eliminated or incorporated into the new rule.  Affected industries will be consulted
to identify duplicative and conflicting provisions and to provide assistance in drafting the
single rule.

The chemical industry has agreed to work  with EPA's air programs to explore this approach.
If the approach is successful with the chemical industry,  it  will be expanded to air rules for
other industry sectors.  EPA will then consider extending this program to water and waste

12.  Risk-based enforcement
Action:  Target enforcement, through a series of coordinated actions, to violations that present
the most serious threats to human health and the environment.

Background:  Enforcement actions are most valuable when they deter violations that could
cause serious harm to the environment or public health. Directing enforcement actions
according to risks and patterns of noncompliance will make the most effective use of limited
resources. Additionally, reducing inspections of facilities with good compliance records will
free up resources for the most serious noncompliance and risk problems.

Providing greater access to data about compliance history  and environmental performance will
help State programs set priorities.  Additionally, making this information available to the
public will allow communities to track progress and compare similar facilities. It may also
lead to development of objective environmental performance ratings by private sector

Description:  To guide EPA enforcement actions by the significance of the environmental and
health risk, EPA will:

      Require enforcement personnel to calculate the environmental benefits of each
      enforcement case  beginning this year

      Reduce inspections of wastewater discharges and hazardous waste facilities that have
      outstanding compliance records

      Provide the public with data on compliance history and environmental performance for
      facilities within at least five industrial  sectors -- by the end of 1995

      Evaluate six risk assessment methodologies, and by September, 1995, identify one or
      more that may be used to assess the relative risk of specific facilities based on
      emissions to all environmental media.  These methodologies will then be submitted for
      scientific peer review.

 13. Compliance Incentives for small businesses and communities
Action: Allow small businesses, which are minor sources of pollution and which receive
compliance assistance, with a six-month grace period to correct violations.

Background:  Even small businesses that are minor sources of pollution may collectively have
a substantial impact on the environment.  In order for states to achieve local air and water
quality standards, new ways need to be found to bring these sources into compliance.

Many small businesses want to be good citizens in their communities, but need information
about how to comply with environmental requirements. Some are unlikely to ask for help
because they fear possible enforcement action. Many states view as futile enforcement
against small  companies that often lack the ability to pay any significant penalty. States are
more interested in using inspection staff to provide compliance assistance.

Description:  EPA will provide small businesses which are minor sources of pollution a grace
period of up to six months to correct violations  identified by federal or state compliance
assistance  programs.  No penalties or enforcement actions will be assessed for any violations
discovered through participation in these programs, and corrected during the grace period.
EPA will exercise its discretion to extend the grace period for facilities that are making a
good faith effort to comply, but need additional  time.  A similar approach will be used for
small communities.

A grace period will encourage companies to request  help and to achieve compliance.  The
program includes appropriate safeguards to protect public health and the environment.  For
example, the grace period will not be available to shield criminal  conduct or delay action to
correct violations that present a serious threat to public health and the environment.

EPA has experimented with this approach under the  Clean Air Act. EPA is now extending
the approach to violations of other statutes.

14.  Small business compliance assistance centers
Action:   Establish national compliance service centers for metal finishers, printshops, auto
service stations and other small business sectors that face substantial federal regulation.

Background:  Certain small business sectors face substantial compliance costs under more
than one of EPA's programs.  Noncompliance rates are high in these industries.  In order to
achieve compliance, small businesses in these industries need requirements explained in plain
English, cost-effective waste prevention opportunities identified, and paperwork held  to a

States and trade associations sometimes provide technical assistance to these sectors,  but
efforts tend to be ad hoc or fragmented.  In this initiative, the federal government will serve
as "wholesaler" of information, to support state programs and trade associations that provide
"retail" services to small business customers.

Description:  EPA will establish national compliance assistance centers that will:

       Assist state and local agencies and trade associations to develop "plain English" guides
       to regulations

       Identify low-cost strategies to achieve compliance

       Develop ways to consolidate reporting and cut paperwork for client industries

EPA and the Department  of Commerce will jointly announce the establishment of a national
compliance assistance center for metal finishing this spring, and new centers for  auto service
stations and the printing industry later this year.

The long term plan is to establish one national compliance center for each small  business
sector, which would work  with the trade association and state programs providing technical
assistance for that particular industry.

 15. Incentives for auditing, disclosure and  correction
Action: Establish a new compliance incentive policy for regulated entities that audit their
own operations, and agree to voluntarily correct and publicly disclose violations.

Background: EPA's enforcement policies should encourage compliance with the law and
voluntary disclosure and correction of violations. Such policies promote cooperation, rather
than confrontations  in enforcement.

Description:  EPA will institute a compliance-incentive policy for regulated entities with a
record of compliance with environmental laws.  Under this policy, regulated entities will face
penalties no greater than the economic benefit gained from any violations. In addition, EPA
will effectively waive penalties for minor violations, as well as more punitive "gravity based"
penalties.  EPA will not conduct criminal investigations of companies that voluntarily disclose
and promptly correct violations.

This policy takes effect on April 18, 1995. The Agency will develop more detailed guidelines
based on a consultative process with state, industry, and public interest groups.

EPA will  continue to recover the economic benefit that companies may have gained from
violations, to preserve the level playing field for those who make an early investment in
compliance. The policy also includes safeguards to prevent abuse.  For example, penalty
reductions would not be available for criminal conduct, violations that result in serious
environmental  harm, repeat violations, or involuntary disclosures.  EPA also reserves the right
to investigate any individual or employee for criminal misconduct, even  when not proceeding
against a corporation.

EPA's proposal offers a positive alternative to across-the-board privileges and immunities  that
could be used to shield criminal misconduct, drive up litigation costs, and create an
atmosphere of distrust between regulators, industry, and local communities.

16.  Self certification
Action:  Eliminate unnecessary paperwork and review associated with permitting and
registration -- beginning with pesticide registration and expanding to other program areas.

Background:  Self certification means that regulated parties may notify EPA that they are in
compliance with EPA's requirements , and EPA then accepts that certification  rather than
reviewing the company's performance.  Self certification may offer substantial savings for the
regulated businesses and for regulatory agencies.  Pesticide registration, for example, is one
area where significant time and cost savings are likely:

       Self certification for low-risk amendments to product registrations will reduce EPA's
       work load and greatly accelerate approval of many amendments.  Approximately 20%
       of the 6,500 amendments  received annually may qualify for self certification, which
       would result in a time savings for each action of three to four months.

       Self certification of acute  toxicity studies will speed applications for new products by
       eliminating the need for EPA to exhaustively review data. Many of the 600
       applications with data received each year would benefit from these changes.

       A computer program which determines the proper precautionary ("warning") labeling
       for a product will enable registrants to submit correct labeling and help EPA staff to
       assure that labeling is acceptable. This computer program could reduce review time by
       five to six months and help minimize the number of applications which are rejected
       for incorrect labeling.

Description: EPA will pilot a program to test standards for self-certification of compliance
with specific companies.  Self certification, if publicly credible, can offer an alternative to
traditional government inspections. In addition, EPA will substantially streamline the
pesticide product registration process  - using self certification.

In broader application, self certification could reduce reporting of activities which  do not
involve environmental measurements or significant risk.  For example, self certification could
extend to certain requirements of the Clean Water Act for certain types of used chemicals  and the
Clean Air Act under parts of the Enhanced Monitoring Rules.

 17.  Public electronic access
Action:  Make information from all EPA programs available through the Internet and other
electronic means that Americans and local organizations can access in their homes, schools
and libraries.

Background: EPA's public access program will enable the public, as well as State, tribal, and
local governments, to be full partners in the Agency's comprehensive approach to
environmental protection.  An informed public is better able to recognize and protect itself
from environmental risks and to ensure that environmental issues are addressed equitably.

Description:  EPA will immediately upgrade the electronic communication of environmental
information by:

       Significantly expanding the type and amount of information EPA puts on Internet,
       such as regulations, scientific documents and educational materials

       Automating EPA rulemaking dockets and loading them onto Internet to encourage
       increased public participation in the rulemaking process

       Making EPA's EARTH1 Internet server more user friendly, and expanding its capacity
       to host online dialogue with the public

       Implementing and enhancing the EPA Government Information Locator Service, so
       that people can more easily and quickly track down specific documents and

       Providing easy access to data on major facilities and their pollutant discharges through
       EPA's Envirofacts database and the user friendly Gateway systems software on
       Internet. This will allow citizens to obtain information about environmental issues in
       their communities

As EPA expands its electronic information systems, it will assure that all members of the
public have access to these systems regardless of social, economic, and academic status.  EPA
will work to build strategic partnerships with State, tribal and local governments, as well as
non-governmental and commercial organizations that provide environmental  information, to
ensure  that all environmental information is widely available.  The Agency will also establish
"one stop" information centers for the public; projects include instituting a "1-800-EPA-INFO"
telephone number and upgrading Headquarters and Regional public information centers.

18.  EPA center for environmental information and statistics
Action:  Establish an EPA center to harmonize EPA information collection and management,
and provide for public access to quality assured environmental statistics and information.

Background: Environmental information will become increasingly important as EPA expands
its performance and market-based management approaches.  Additionally, as environmental
protection is decentralized -- to states, tribes and communities  reliable information about
the condition of the environment will be needed to ensure that programs are achieving desired
results.  EPA will establish a customer-oriented center that will provide information and
statistics on national, regional and local environmental conditions and trends that are
integrated across environmental programs.  The center's main function will not be to collect
primary data -- it will instead focus on the integration of data collected by others.  Through
the center, EPA will be better able to address fundamental cross-media questions such as:
What pollution sources are causing the most damage? How do geographic regions compare?
How effectively are we dealing with environmental problems?

Description:  EPA will establish, through a cooperative effort with all EPA programs, regions
and laboratories, a new center that will be responsible for:

       Coordinating with federal, state and local environmental agencies that produce and use
       environmental data and information

       Harmonizing EPA environmental data

       Conducting cross-media assessments of data needs directed at reducing duplication and
       reporting burdens

       Assisting EPA programs in the development of statistically valid survey designs and
       the use of statistical sampling of information

       Providing statistical methods for integrating data from different federal agencies, states
       and localities

       Assisting in design of studies to assess effectiveness of environmental programs and
       strategies (e.g., pollution prevention), and in presentation of environmental information
       in ways that promote a multimedia perspective

       Improving public access to environmental statistics and data through the establishment
       of  statistical  data bases and systems which allow user access to all levels of data 
       from the raw data to highly processed information.

 19.  Project XL
Action:  Support initiatives by facility managers to demonstrate excellence and leadership by
reducing costs of environmental management and achieving environmental performance
beyond that required in existing regulations.

Background: Numerous firms and facility managers have determined that routine application
of national environmental requirements is not always the best solution to their environmental
problems.  In particular, those with a record  of environmental leadership have found that
substantial cost savings can sometimes be realized, and environmental quality enhanced,
through more flexible approaches involving pollution prevention.

For example, a company may find that upgrading its wastewater treatment system to meet
Clean Water Act technology-based requirements would have a negligible impact on water
quality, and that it could achieve greater overall environmental protection by redirecting its
pollution control efforts toward programs to minimize hazardous emissions from unregulated
sources, to recycle hazardous wastes and to reduce the use of toxic chemicals in the
manufacturing process.

Description:  On a demonstration project basis, EPA will support company projects to replace
existing regulatory requirements with alternative environmental management strategies where
the company can demonstrate that such strategies will achieve better environmental results
than expected to be achieved under existing law.  In deciding whether to approve a particular
strategy, EPA will consult extensively with the affected State and the local community.  The
final strategy will be embodied in an enforceable document and contain provisions  that will
allow EPA, the State and the community to monitor progress toward achieving results.

This initiative is intended to provide more flexibility for those "good actors" and
environmental leaders that have developed creative, common sense ways of achieving superior
environmental protection at their facilities.  Because it raises a number of complex  issues
(e.g., how to measure environmental results, how to establish an environmental baseline)
which need to be worked out in the implementation process, EPA is proposing to test it on a
pilot basis. Facilities of companies participating in the Common Sense Initiative, as well as
other facilities selected by EPA, will be eligible to participate in this program. Potential
benefits of this initiative include:

       Increased flexibility to adopt innovative solutions to environmental problems
       Increased (and more cost-effective) environmental protection
       Improved compliance and increased use of innovative technologies
       Expanded use of waste minimization and pollution prevention strategies
       A more cooperative relationship between regulators, the facility, and the community

20.  Alternative strategies for sectors
Action:  Support and evaluate the use of EPA-industry agreements to reduce cost and achieve
full protection of human health and the environment through flexible, comprehensive
management approaches.

Background: Regulators generally do not have an overview of the entire set of requirements
affecting an industry sector. Often, environmental regulations cover a wide variety of industry
sectors and take a relatively uniform  approach in terms of the requirements imposed on those
sectors.  In other cases, regulations are developed with specific  individual  sectors in mind, but
typically cover only one or a few of  many pollution source categories within the sector.   The
result is that companies are not generally able to plan environmental compliance investments
in a comprehensive, strategic manner. This limits opportunities for pollution prevention and
raises the total  cost of compliance.

An alternative approach is to design requirements that respond to the conditions  in an industry
sector. Based on such designs, EPA  and industry groups would voluntarily negotiate
agreements incorporating these  requirements.  EPA-industry agreements would "be
supplemented by company-level agreements that translate the industry-wide commitments into
obligations for  specific companies and facilities.

Description:   The six industries participating in the Common Sense Initiative (CSI)  will be
the initial candidates from which 2-4 industries will be selected.  Selection will be based both
on industry willingness and on the interest of other CSI stakeholders in applying the
agreement approach to a specific sector.  Once an industry has been selected, CSI
stakeholders will try  to agree on the environmental  improvement  goals to be met by the sector
as a whole, and the best means of translating the sector-wide goal into a company-specific
improvement target.

An explicit goal of this project  will be to identify the feasibility of using industry agreements
as a complement to, or as a replacement for, the current system of establishing industry and
facility environmental requirements.  Industry agreements will operate on a substantially
larger scale than facility-specific agreements. This  may mean greater opportunities to  identify
cost-effective means  of achieving  environmental quality goals, as  well as economies of scale
for monitoring, employee education and public participation.  It may also be a way for small
businesses within an  industrial  sector to participate  where it would not be possible at the
facility-specific scale.

 21.  Alternative strategies for communities

 Action: EPA will support the development and implementation of community-driven
 strategies to integrate environmental quality and economic development goals at the local

 Background:  Continued progress in achieving environmental quality and economic
 development will depend on greater involvement of communities in designing local solutions
 to local problems. In the current regulatory structure, local communities are seen as
 implementors of Federal or State programs rather than as designers of effective environmental

 Community-based environmental management includes local assessment and ranking of
 environmental problems, community education about these problems, and locally-developed
 strategies to address them. These strategies can be reinforced by  leveraging regional and
 strategic planning; through technical assistance and information tools; and, by facilitating
 intergovernmental and public-private partnerships.

 Community-based environmental strategies must be integrated with, and supportive of,
 community economic development goals.

Description: In this  limited pilot program, EPA, working with  other federal agencies as
 appropriate, will  build upon the  experience gained in the Administration's Empowerment Zone
 and Ecosystem Management Initiatives.  The agency will assist  a  limited number of
 communities (towns and townships, counties, cities, metropolitan areas) in developing and
 implementing alternative strategies to achieve environmental quality and economic
 development goals.  Two kinds of communities will be considered:

       Communities  which propose alternative environmental management strategies that
       make more sense in a particular community or geographic area and that will exceed
       existing environmental requirements.  These strategies could benefit from a wide range
       of innovative  planning and financing approaches, but would be expected to meet
       existing legal  deadlines.

       Communities  which lack the financial or technical resources to meet existing
       requirements,  but are willing to enter into enforceable agreements to make progress
       toward meeting environmental standards.  These agreements would often extend across
       more than one environmental program area and would recognize the need for
       flexibility in approach or timing.

Both approaches  will involve setting and achieving verifiable environmental results, as well as
citizen or community participation in setting goals and monitoring results.

22.  Alternative strategies for agencies
Action:  Demonstrate alternative environmental management strategies -- that lower cost and
produce greater environmental quality - at selected Department of Defense installations.

Background:  Government installations face challenges similar to industrial facilities and
communities in complying with environmental regulations at lowest cost.  Government
agencies are interested in testing management alternatives that can replace EPA's traditional
ways of doing business.  EPA will establish a government sector project, beginning with
Department of Defense, that will identify ways of achieving greater environmental  results than
are possible under existing regulatory requirements -- at less cost to the taxpayer.

The common theme of this pilot program is to make government agencies more accountable
for achieving environmental results while granting them greater flexibility in how those results
are achieved. EPA will seek to involve state and local environmental officials in the design,
selection, implementation and review of pilot projects  and the program as a whole.  It will
also seek to empower citizens in surrounding communities in the environmental management

Description:  EPA and the Department of Defense  (DoD) have established a partnership to
test alternative environmental management  strategy at  selected DOD facilities. Under this
initiative, DoD base commanders, in cooperation with  EPA and with relevant state agencies,
will develop and implement strategies that produce greater environmental protection than
would be achieved under existing regulations.

A major focus of these actions will be near-term investment in pollution prevention
approaches that reduce compliance and remediation costs in the long run.

To ensure full citizen involvement in this process, DOD will produce high quality and
understandable environmental information that allows citizens  in the communities surrounding
DOD installations to fully participate in the decisions.

EPA will provide technical  support for all EPA program areas (i.e., water, air, waste).
Strategies developed under these projects will be enforceable and results will be independently

 23. Piloting third-party audits for industry compliance
Action: Test standards for third-party auditing through Environmental Leadership pilot
projects with specific companies.

Background: Many companies conduct periodic audits of their operations to determine
whether they are in compliance with environmental requirements. While most of these audits
are conducted by company employees, some are conducted by environmental consulting
firms or other independent environmental experts.

If thorough and reliable, these private "third-party" audits can help provide independent
verification of a company's environmental performance and compliance without the direct
expenditure of government resources.  Thus, third-party auditing  can help EPA better focus its
inspection resources on non-complying facilities.

Description:  EPA  will work with industry, States  and environmental groups to test standards
for  third-party auditing.  These standards will include:

       Procedures that auditors must follow to detect violations and prevent non-compliance
       A requirement for periodic EPA inspections to verify the  accuracy of audit reports
       Mentoring projects to help small businesses achieve compliance
       Requirements concerning the public availability of audit results.

EPA's project will build on existing private sector  standards.

On  April 1, EPA will announce pilot projects to test third-party auditing with twelve partners
from the public and private sectors.  The Agency expects to complete these projects within
one year.

24.  Multi-media permitting
Action: Pilot test "one-stop" permitting to reduce paperwork and procedural burdens, avoid
duplication and inconsistencies, and assure more comprehensive environmental protection.

Background: Many facilities must obtain multiple environmental permits in order to operate,
addressing releases  of pollution to several environmental media (e.g., air, water, soil).  In
many cases, these permits are issued at different times and by different permit authorities.

The absence of a single, coordinated permitting process has created problems for both
permittees and regulators.  Permittees frequently find themselves preparing multiple
applications and going through  multiple permit proceedings to obtain all the necessary permits
for a single  facility. Multiple permits may not adequately address all environmental problems
(as some problems  may "fall through the cracks").  Further, because they do not address
environmental problems holistically, multiple permits may result in the undesirable cross-
media  transfer of pollutants. Finally, these permits may contain overlapping, poorly-
coordinated  and contradictory requirements.

Description:  EPA will pilot test the feasibility of issuing a single environmental permit for
facilities which currently require multiple permits.  Permittees at pilot facilities would  submit
a single application for a single permit setting  forth all the pollution control  and clean-up
requirements for that facility. EPA will work  with the permittee, the affected State and local
communities to assure  that all releases from  a  facility are addressed, that permitting
requirements for all media are well-integrated, and that duplication and inconsistencies are
avoided.  This approach will promote "common sense" solutions to multimedia pollution
problems  and encourage the use of pollution prevention.

In addition,  EPA will establish multimedia Regional permitting teams to better coordinate the
issuance of multiple permits, to individual facilities.  This will be a useful "first step" in
testing the feasibility of the  multimedia pilot program described above.

25.  Design for the Environment - "Green Chemistry Challenge"
Action:   Promote pollution prevention and industrial ecology through a new EPA Design for
the Environment partnership with the chemical industry.

Background:  Design for the Environment partnerships with the chemical industry can
encourage changes that both promote economic development and benefit the industry by
helping find cost-effective ways to prevent pollution.  Publicity associated with the awards
program, coupled with financial prizes provided by the chemical industry, can provide a
strong incentive for broad industry cooperation.

Description:  The program would set up financial incentives and an EPA award system for
companies that address the following pollution prevention goals:

      Making more chemicals from renewable resources.  By increasing the use of
      renewable resources in the development of chemicals, the amount of toxic inputs
      would be reduced.

      Substituting new, safer solvents that do not contribute to air pollution.  Since the use
      of traditional solvents contributes to a wide range of air pollution problems --
      including stratospheric  ozone depletion and smog --  companies will be asked to find
      processes where new, safer solvents can be used.

      Designing chemicals that are manufactured more safely and that are safer for the

The challenge is for industry to find cleaner, cheaper and smarter ways to produce the
materials we depend on. EPA will work cooperatively with industry to establish this
program, provide technical assistance in designing safer processes, and track the reductions
achieved  in the use, manufacture,  and release of harmful chemicals.

                               APPENDIX B


Performance and market-based regulations

1      Facility-wide air emissions.  EPA will conduct several demonstrations of facility-wide
       limits for air emissions that allow companies increased management flexibility and to
       use least-cost control options.  This approach will significantly reduce the amount of
       time industry must devote to permitting activities and  save millions of dollars in
       permitting costs.

2      Flexibility in meeting effluent discharge deadlines.  EPA will propose targeted
       Clean Water Act revisions  to extend compliance schedules for industrial wastewater
       treatment standards, for companies that apply innovative treatment approaches that
       prevent pollution.  This will create incentives for pollution prevention.

Setting priorities based on sound science

3      Eliminate millions of storm water permit applications.  EPA will set up a formal
       process with all stakeholders to limit storm water control requirements to only those
       facilities where a water quality problem exists.  This would exempt millions of sites
       (small municipalities, and light industry and commercial sites -- nearly 80% of the
       universe now subject to regulation) without any significant impacts on water quality.

4      Exempt low-risk pesticides and toxic chemicals from regulation. EPA is proposing
       to exempt 31 low-risk active ingredients and 160 inert ingredients from pesticide
       regulation (resulting in substantial economic benefits to manufacturers).  A similar
       exemption will be proposed for low-risk chemicals under TSCA, for which
       manufacturers must now submit premanufacturing notices.  This action could yield a
       25% reduction in this notification.

5      Environmental forecasting to anticipate future environmental problems.  EPA will
       establish a program to help identify and study emerging environmental problems. This
       anticipatory effort will attempt to lessen the need for rapid future decisions made using
       a weak  science base, and should enable the United  States to avoid expensive
       environmental control and clean-up programs. This activity will be guided by a new
       report by the EPA  Science  Advisory Board (Beyond the Horizon:   Using Foresight to
       Protect  the Environmental Future, 1995).

 Building Partnerships

 6     State and tribal flexibility for municipal landfill permits.  EPA will encourage
       states and tribes to implement a flexible, performance-standard approach for permitting
       municipal landfills.  EPA will propose criteria for approving state and tribal programs
       that regulate municipal landfills.  This action will enable tribes and states to implement
       a flexible, performance-based approach.
Cutting red tape

7      Save billions on PCB disposal.  EPA will revise the PCB disposal regulations  by
       reducing the number of permits required, by eliminating duplicative state and Federal
       controls, and by (most importantly) giving states and the regulated community the
       flexibility to choose less expensive disposal methods to achieve health standards.  The
       estimated savings from this action is two to six billion dollars per year, for as much as
       thirty years.

8      Simplify air permit revision requirements.  EPA will develop a streamlined process
       for revising air quality permits. This will enable a state to build on its existing
       programs and avoid creating  unnecessary and prescriptive regulations.  This may save
       thousands of review hours and millions of dollars.

9      Simplify review of new air pollution  sources. This first major reform in 15 years
       will provide greater flexibility, significantly reduce the number of industry activities
       that are subject to major new source review, reduce time delays in permit issuance,
       and create incentives for use  of innovative technologies.  The project will reduce
       regulatory burdens  for many facilities and should result in at least 25 percent fewer
       permit  reviews.

10     Simplify water permit paperwork.. EPA will reduce the paperwork burdens for
       municipalities and businesses by simplifying the permit application forms for water

11     Streamlining RCRA corrective action procedures. EPA will promote "faster,
       better"  cleanups under RCRA.  The Agency will propose a rule that responds to
       number of promising ideas that were identified through discussions with outside
       stakeholders, such as reducing government oversight and expediting use of interim
       protective measures. This rule could save two billion dollars annually.

Better accountability, compliance and enforcement

12    Flexible compliance agreements for specific industries. Working with industries,
      EPA will develop experimental EPA/Industry Compliance Agreements to allow
      companies to disclose violations and correct them in a timely manner.  In exchange for
      these voluntary disclosures, EPA would agree to reduce the size of the penalties. The
      agreements will provide a specified time period during which industry may come to
      EPA and sign the agreement.

The power of information

13    Independent study on collecting and using information more effectively. EPA will
      commission an independent study that will provide recommendations to improve data
      collection and management at EPA..  These recommendations will be used to design a
      center for environmental information and statistics.

14    Electronic  data transfer. EPA will establish a system to allow facilities to report
      monitoring  results electronically. This will help reduce monitoring burdens while
      enhancing enforceability or accountability.

                               APPENDIX C




Slashed Toxic Air Pollution from Chemical Plants with a Flexible New  Regulation:  EPA
issued an air pollution regulation of unprecedented scope that will reduce emissions of over a
hundred hazardous organic pollutants by nearly 90% by early 1997, protecting the health of
Americans who live near chemical facilities in 35 states. This regulation clearly  signified
EPA's objective to move from a one-size fits all regulation to an  approach based on
flexibility, innovation and common sense.  This regulation provides flexibility by allowing
businesses to continue to emit from pollution sources that are not cost-effective  to control if
extra reductions are achieved at other vents in the same plant.  Businesses can implement cost
effective, common-sense control measures and do not need to install the same stringent level
of technology on  each source of pollution in their plant, as had been traditionally required.
This approach will result in both cleaner and cheaper results and  firms that  take advantage of
this flexibility to  reduce costs will be asked to make an extra 10% reduction in their overall
emissions. Among the benefits of this  regulation are greater protections for public health,
increased crop yields, less destruction of animal habitat, and a reduction in smog equivalent to
taking 38 million cars off American roads.

Marshalled the Government's  Buying Power to Promote Recycled Products and
Environmentally Safer Products: The Clinton Administration recognized that the biggest
barrier to the recycling of municipal solid waste is the  lack of a mature market for recycled
products, and set  out to  help change that by issuing an  Executive Order requiring the federal
government to buy recycled goods and thereby build demand.  EPA has led efforts to
implement that order and proposed last April a major guideline designating  21 additional
items Federal agencies should buy with recycled content, including commonly used items
such as plastic trash bags, concrete and carpeting.  EPA also drafted separate guidance for
Federal procurement officials to help them determine which other products  are
environmentally preferable.

Issued A National Plan to Prevent and Recycle Hazardous Waste:  To implement the
Clinton Administration's priority emphasis on pollution prevention and recycling of hazardous
waste, EPA released last fall a national blueprint to reduce toxic, persistent  and
bioaccumulative constituents in hazardous waste by 25% by the year 2000 and by 50% by
2005.  The blueprint enlists an array of regulatory and  especially non-regulatory measures and

maps out a consultative process with state governments, industry and other stakeholders to
ensure that the strategies employed will be based on consensus and tailored to local needs.
The plan allows companies that have already made strides in this area to take credit for their
actions and foresees flexible reduction levels across facilities that will add up to the aggregate
goals of the plan.

Rewarded Early Performance in Cutting Air Pollution with Flexibility: EPA launched an
Early Reductions Program that provides facilities that emit hazardous air pollutant sources
with a six-year extension to a Clean Air Act compliance deadline if they achieve over 90
percent of their pollution reductions ahead of schedule. EPA also offered a new and more
flexible framework than the customary one for demonstrating these reductions so that
businesses would find it more cost-effective to choose this alternative.

Gave Businesses Choice to Opt-In to the Acid Rain Permit Trading System: EPA
established a voluntary program allowing businesses with combustion facilities such as boilers
and turbines to join the Acid Rain trading system and receive allowance permits for their
annual sulfur dioxide emissions.  These businesses can then trade their permits or sell them
for a profit if they can reduce emissions below their customary level. This innovative market
approach provides new choices and incentives to businesses that are not required to observe
particular regulatory limits.  The benefits of this  approach include reduced emissions which
contribute to acid rain and greater health protection. Public health benefits of reducing acid rain
include greater prevention of respiratory illnesses, with a monetary savings estimated at $69
billion through the year 2010 due to decreased mortality, hospital admissions, and emergency
room visits.  Environmental benefits include protecting aquatic life in streams and lakes and
preventing the decline of forests. Other economic benefits include reduced costs of compliance
for the electric utilities that are required to be in  the Acid Rain trading system; for example,
businesses that choose to join can reduce their emissions and then sell their left over emission
entitlement to utilities facing higher control costs (and which therefore prefer to purchase
allowances that allow them to continue to emit).

Promoted Market-Based Programs for Reducing Air Pollution: EPA issued Economic
Incentive Program rules that provide a framework for the development and use of emissions
trading, emission fees and other market-based approaches for controlling stationary and
mobile sources of air pollution.  These market-based approaches provide economic incentives
for technology vendors and industry to develop new pollution control technologies that are
both cleaner and cheaper than those that would otherwise be required.  A growing number of
states throughout the country -  including California, Texas, Illinois, Connecticut and
Massachusetts  are implementing or actively developing market-based programs under these
new  rules.


 Promoted Redevelopment of Contaminated City Properties, or "Brownfields": To reduce
 the incidence of Superfund cleanup requirements deterring redevelopment of inner city sites,
 EPA last month removed approximately 25,000 sites from the Superfund Inventory where it
 was determined that there was no need for further  federal action.  Taking them off the list has
 removed a major impediment to investment and redevelopment. EPA will issue guidance this
 year calling for quicker decisions  as to which sites need further study and which may be ripe
 for redevelopment without extensive cleanup.  Over the next two years, EPA will increase
 from eight to fifty the number of grants to cities for promoting economic redevelopment of
 these sites.  EPA will issue guidance to expand the circumstances  in which EPA can forge
 agreements with prospective land purchasers not to impose liability if the land in question
 was contaminated prior to purchase.  Another imminent EPA guidance will clarify EPA's
 policy  of freeing  lenders of cleanup  liability if they are not directly managing a contaminated

 Strengthened the Quality and Credibility of EPA Science: EPA instituted an expanded
 peer review policy in June 1994 to require all major EPA science  products to undergo
external peer review prior to use in  regulatory or policy decisions. EPA has committed to
allocating 50% of research dollars to long-term research to develop better understanding of
environmental problems and to get early warning of tomorrow's problems; the remaining 50%
will be used to vigorously support the applied research needs of EPA's program and regional
offices. EPA revised its research program to use risk assessment and risk management as the
principal priority-setting criteria. A high priority is being placed on research to reduce the
significant uncertainties that remain associated with risk assessment methodologies. EPA will
shortly publish a new risk characterization policy requiring impartial presentation of risk
assessments, scientific assumptions, and description of major uncertainties and data gaps.  A
special effort was undertaken by EPA to evaluate its  laboratories, which resulted in a new
organizational structure  that will improve risk assessment; this new organization streamlines
headquarters operations  by 50 percent. EPA also doubled funding for investigator-initiated
research grants in order to expand the  number of first-rate, outside scientists conducting research
related  to EPA's mission. EPA initiated a new graduate fellowship program to support students
conducting environmentally related research, thereby investing in the next generation of
environmental scientists and engineers.  Lastly, EPA updated its guidelines so that analyses of
the impact of its regulations will reflect the latest economic and scientific methodology, thereby
enhancing understanding of the costs and benefits of regulation.

Reduced Dioxin Risk to  Americans by Cutting Municipal and Medical Waste Incinerator
Emissions:  Municipal  and medical waste incinerators have been identified as two  of the
largest  known sources of dioxin, a chemical that persists in the environment for a long time
and can cause cancer and reproductive and developmental defects.  Incinerators also release
thousands of tons of other dangerous pollutants, such as lead, mercury, and cadmium that can

cause cancer, neurological disorders, and respiratory disease.  EPA's proposed standards will
cut medical and municipal incinerator emissions by tens of thousands of tons, and dioxin
emissions wall be cut by more than 99 percent.

Protected Americans from Lead Poisoning through Coordinated  Inter-Agency Action:
Experts have called lead poisoning the number one environmental threat to children's health in
the United States.  Severe lead exposure can cause coma, convulsions and death. Lower
levels can cause adverse health effects on central nervous system and kidneys, raise adult
blood pressure and permanently impair the intelligence of children.  Though blood lead levels
in American children have declined over the past two decades largely due to the EPA-led
phaseout of leaded gasoline, the Clinton Administration is aggressively responding to recent
scientific knowledge showing that damage can be  done at a much lower concentration than
previously thought.   Consistent with its emphasis on environmental justice, the Administration
is seeking to reduce  disproportionate  lead exposure in inner-city children.  Reflecting the
Administration's strong emphasis on inter-agency collaboration, EPA co-proposed with the
Department of Housing and Urban Development a regulation requiring disclosure of lead-
based paint hazards whenever  property is sold.  EPA last fall proposed a rule specifying the
requirements for training and certification of professionals who specialize in abatement of  lead
hazards. Last summer, EPA published public guidance on identifying hazardous levels of
lead in  paint, soil, and dust. Last spring, EPA proposed a rule requiring lead hazard
education in relation to building renovations.  EPA proposed to eliminate the remaining uses
of lead  in gasoline for highway use and another one to cut emissions of lead and other air
toxics from secondary lead smelters by 2,400 tons each year, without affecting the price of
lead to  consumers.  This summer, EPA will propose to restrict significant new uses of lead so
that new pathways of exposure will not be created.

Collaborated with Small Businesses in Evaluating and Designing Environmentally Safer
Products and Processes:  EPA's "Design for the Environment" (DfE) Program  is a voluntary
program through which EPA works with businesses on a sector-by-sector basis to promote
pollution prevention  and to assist in developing environmentally safer chemicals, materials,
and processes.  The DfE program evaluates the relative environmental benefits and risks of
alternative production processes, a complex analytical task that is often difficult for small
businesses to do by themselves. The DfE program focuses primarily on small business-
dominated sectors and is working, for example, with the dry cleaning industry to evaluate
alternatives to the use of perchloroethylene (perc)  in terms of their costs, effectiveness and
environmental effects. Other DfE projects are underway with the printing, printed  wiring
boards,  computer and metal  plating industries, as well as with the scientific community in
green chemistry.  Through DfE, EPA leverages its expertise and serves as a catalyst for the
broader diffusion of both information and safer technology.

Set Priorities for Protecting Americans from Radioactive Contamination Based on Risks
of Exposure: EPA issued a final regulation to prevent contamination of groundwater in the
vicinity  of inactive uranium  processing sites, and to set priorities for  clean-up based on

 relative risks of human exposure.  Contaminants include both toxic and radioactive substances
 that can cause cancer and genetic damage.  Department of Energy (DOE) studies indicate that
 at least 4.7 billion gallons of ground water have become contaminated as a result of these
 uranium contaminants.  The recent issuance of this EPA standard clears the way for DOE to
 complete the clean-up of contaminated groundwater and provides flexibility to prioritize
 cleanup based on the populations affected, a far more cost-effective approach than the
 prevailing standard in place since 1983.

Launched "Common Sense Initiative" to Tailor Environmental Protection Policies to
Specific Industries:  To protect public health and the environment more effectively and less
expensively, EPA launched a major initiative that looks at pollution on an industry-by-
industry basis rather than using the pollutant-by-pollutant approaches of the past. The
initiative involves everyone from manufacturers to community organizations in fashioning
new strategies and approaches that emphasize pollution prevention while providing cleaner,
cheaper and smarter protection for everyone.  All aspects of environmental policy ~ from
emissions reporting requirements to needed changes in environmental laws -- are being
examined.  The Initiative has started by focusing on six pilot industries: iron and steel;
electronics and computers; metal  plating and finishing; automobile assembly; printing; and oil
refining.  Together they represent nearly 11 percent of the Gross Domestic Product, account
for one-eight of all toxic emissions reported to EPA, and employ four million people.  Some
are high-tech, other industrial; some are small business, others are large companies.  The
teams are: reviewing regulations to get better environmental results at less cost through
increased coordination; seeking opportunities to give industry the incentives and flexibility to
develop innovative technologies that meet and exceed environmental standards while cutting
costs; looking at ways to change the permitting system; encouraging innovation; and creating
opportunities for public participation; and improving environmental reporting requirements.

Launched a New Era of Improved EPA/State Relations:  For the first time ever, the
Clinton Administration has involved  States and tribes in  EPA's internal planning process.  In
July, 1994, EPA Administrator Carol M. Browner signed a Joint Policy Statement with
representatives of the State environmental commissioners, outlining a new set of partnership
principles including reform of the oversight process; increasing the flexibility of funding;
improving communications and data sharing; and improving technical assistance and training
for the states.  In  1995, EPA initiated grant flexibility pilot projects in Massachusetts, New
Hampshire, and North Dakota.  EPA also established new processes for state and local
involvement in the regulatory development process.

Provided Assistance to Build Environmental Capacity of Local Governments and Small
Towns: EPA established a new Local Government Advisory Committee to make

recommendations on how to better address local government needs and a new Small Town
Task Force with representatives from small towns across America to focus on the unique
environmental and  economic issues facing these communities.  EPA charged its ten regional
offices to establish a local government liaison function and doubled the number of EPA-
supported Environmental Finance Centers to provide analysis and technical assistance to
communities across the nation on financing environmental programs.  EPA is conducting
Regional Geographic Initiatives and Comparative Risk Projects to assist numerous
communities and 27 states to help them set their own environmental priorities.  EPA has also
issued several  user-friendly  reports directed at helping local decision-makers design an
effective environmental protection system.

Launched and Expanded Voluntary, Results-Oriented Partnerships with the Private
Sector: The Clinton Administration has initiated or expanded a number of voluntary, results-
oriented programs to assist businesses in identifying previously unrecognized losses associated
with waste.  The programs are projected to save over $60  billion in energy  costs by the year
2000, while creating jobs in efficiency and other emerging industries.  EPA's most prominent
examples of voluntary partnerships are contained in President Clinton's Climate Change
Action Plan, which  has reduced air pollution  that threatens global warming  and local air
quality and implements a commitment to reduce U.S. greenhouse gas emissions to 1990 levels
by the year 2000.  The Plan encompasses a set  of comprehensive and mostly voluntary
actions that will produce cost-effective reductions in greenhouse gas emissions from the
residential, commercial, agricultural, and transportation sectors.  Some of the highlights
       Climate Wise, encourages and recognizes voluntary reductions across all sectors of
       the economy. Already, businesses representing 3 percent of U.S industrial energy use
       have pledged to reduce annual emissions by 10 million tons of greenhouse gases by
       the year 2000.  DuPont projects that it will save $31 million per year as a result of
       actions it will take to meet its Climate Wise pledge.

       Motor Challenge, helps companies install high efficiency motor systems, has recruited
       over 100 partners, established a national technical assistance hotline and is soliciting
       sites for 25 showcase technology demonstrations that will help encourage rapid
       adoption of high-efficiency motor systems by U.S. businesses.

       Waste Wi$e, encourages voluntary prevention and recycling of business waste and has
       attracted over 350 businesses.
      Natural Gas Star, encourages natural gas producers to adopt practices that can
      profitably to reduce methane losses from gas transmission lines and coal mines.  The
      program has expanded to include over 35 corporate partners, representing over 55% of

       the transmission company pipeline miles, 25% of distribution company pipeline miles,
       and 35% of all service connections.

       Green Lights, a program to encourage business and industries, local governments and
       other agencies and institutions to use energy-efficient lighting, has added 503 new
       participants since October 1993, for a total of more than 1,650.  These participants
       have reduced lighting electricity consumption by an average of 47 percent, saving
       approximately $60 million each year.

       State and Local Outreach Program has awarded grants to eighteen states to
       complete greenhouse gas inventories or develop comprehensive mitigation strategies
       essential for laying the foundation for actual reduction efforts.  Twenty-four states
       have participated in the program, including seven  in the "Green Fleets" initiative (to
       encourage procurement of energy efficient vehicles) and 25 cities in the "Cities for
       Climate Protection" program that helps cities save money and energy.

 Chose Voluntary Agreement Over Regulation to Cut Sludge Disposal Risks:  Instead of
 imposing a new regulation, EPA  signed a voluntary agreement with the American Forest and
 Paper Association to reduce the risks associated with land disposal of pulp and paper mill
 sludge. It includes limits on the levels of dioxin in sludge that is disposed on land and limits on
 subsequent use of that land. The affected companies were able to avoid a prescriptive regulation,
 and EPA accomplished its environmental goals with the agreement's provision for site
 management practices, a testing program, a program for distributing and marketing sludge
 products, and record keeping and reporting requirements.

 Implemented Executive  Order to Promote Environmental Justice:   In the year since
President Clinton signed Executive Order 12898 on Environmental Justice, EPA has convened
a new Interagency Federal Working Group to establish criteria for identifying disproportionate
impacts on minority and low-income populations, and coordinate research and  projects with
other federal agencies.  EPA also formed a Federal Advisory Committee ~ the National
Environmental Justice Advisory Council ~ to bring a cross-section of local and national
perspectives to bear on preparing EPA's environmental justice strategic plan, which will be
issued this spring.  Among the concrete, field projects underway is a pilot project at the Del
Amo, California Superfund site, where EPA awarded a grant to establish a health  services
facility to provide environmental  health education and medical testing for residents. EPA also
established  a partnership with Morgan State University to train teachers to serve as
community resources for information on hazardous waste issues and government decision-
making. EPA also provided critical guidance for the Administration's Empowerment
Zone/Enterprise Community Program, which boosts sustainable development efforts in
disadvantaged communities.

Enhanced Community Participation in Superfund Cleanups:  Through its Brownfields
Action Agenda, EPA is working in partnership with state and local governments,
communities, industries and small business to clean up contaminated sites in cities across the
country to bring them back to life and create jobs. EPA has encouraged the establishment of
community advisory groups to increase community participation in cleanup decisions at
Superfund sites.  EPA is also expanding the use of Technical Assistance Grants, which are
given to citizen groups around Superfund  sites.

Expanded Public Participation  in Hazardous Waste Permitting: For the first time in the
15-year history of the Federal hazardous waste program, EPA has proposed a rule that will
permit applicants to make information available to local  communities about the facility and
meet with local citizens prior to submitting a permit application.  The permitting agency,
whether EPA or the state government, will be required to notify the surrounding community
once the permit application is received and will be given flexibility to tailor the level of
public input to community interest leading up to the permit decision.

Worked with States to Manage Petroleum-Related  Wastes Rather than Imposing New
Federal Regulations:  EPA  pursued an innovative alternative by granting seed money to an
organization of oil and gas producing states to work together with industry, environmental
groups and communities to develop guidelines for state programs to manage these wastes.
After the guidelines were developed, EPA funding and technical assistance were also provided
for teams of state officials to peer review each state program for adequacy and weaknesses.  The
process created both support for the guidelines and an incentive to upgrade state programs
without imposing rigid federal requirements.

Initiated New State-Local-Tribal Partnerships to Design More Efficient Waste
Management Plans:  EPA provided assistance to the  Cherokee Tribe to build a pilot
partnership with neighboring Jackson and  Swain counties in North Carolina to develop a
regional solution to solid waste management problems. The initiative prompted exploration of
joint partnerships for recycling and equipment purchases. EPA views the success of this
project as a demonstration  to state, local and especially tribal governments, that have often
been at odds, of the genuine  environmental and human health results that can be gained
through partnerships that do not threaten sovereignty.  EPA is promoting this concept

Promoted Streamlining of State Waste Management Regulation: As a pilot project, EPA's
Seattle office recently authorized the State of Washington to carry out the hazardous waste
corrective action program under'the state's Superfund authority.  Most states have Superfund
programs, whereas only a few states have  requested authorization to manage their own
Resource Conservation and Recovery  Act  (RCRA) corrective action programs.  Under the
Washington arrangement, the overlapping  Superfund and RCRA programs have been
coordinated to eliminate the need for the state to develop an  entirely separate and duplicative
cleanup bureaucracy.  EPA is working to expand this approach around the country, while
encouraging more states to undertake their own corrective action programs instead of
continuing to cede Federal  control.

 Launched Project to Set National Environmental Goals:  EPA has launched a major
 initiative to develop ambitious long-range goals for America's environment and measurable
 10-year benchmarks to mark success toward those goals. EPA conducted nine major public
 roundtables throughout the country with a cross-section of Americans, including business
 leaders, environmental advocates, government officials and labor representatives.  By
 enhancing the national consensus concerning measurable outcomes, the Goals Project has
 created a new opportunity to shift government policy away  from prescriptive dictates to
 flexible, performance-based approaches.

 Developed Historic Water Management Plan for California, Protecting Farmers, Urban
 Drinking Water and Endangered Fish: After two years of intensive consultation with
 affected constituencies, EPA published final water quality standards for the San Francisco
 Bay/Delta.  As the West Coast's  largest estuary, the Bay/Delta supplies habitat for over 120
 fish species and  large populations of waterfowl as well as irrigation water for 45 percent of
 the Nation's fruit and vegetables. The innovative protection plan encompassing EPA's water
 quality standards was jointly developed by federal government agencies, the State of
 California, businesses, urban and agricultural water agencies and suppliers, and environmental
 advocates.  The plan takes a comprehensive, ecosystem approach rather than a single-
 pollutant, individual source approach, and will provide many benefits to the millions of
 Americans depending  on the Bay/Delta.  It will help arrest the  severe and continuing decline
 of Bay/Delta fish and  wildlife resources, like the winter-run salmon.  It provides a three-year
 window of opportunity to do more  sensible  long-term planning and management.  The Clinton
 Administration managed this critical challenge by producing an adaptive management scheme
 that protects endangered species while assuring reliability in state and Federal water projects
 allocations to support farmers and urban water users.

 Increased the Use of Regulatory Negotiations to Give Affected Parties a Greater Voice in
 EPA Decision-making:  EPA is a recognized leader in the federal government in pioneering
 successful Regulatory  Negotiations  (Reg-Neg) process that convenes representatives of various
 interest groups, businesses and federal or other government agencies and has been able to
 reach consensus  on an important and wide-ranging set of rule proposals over the last two
years.  Four examples from a larger set follow:

Reg-Neg ftl/Negotiated Safer Drinking Water: To assure that public health  is adequately
protected,  EPA negotiated with representatives from public water systems; state and local
health agencies;  environmental organizations; consumer groups; and federal, state  and local
governments for  a cluster rule that would: (1) reduce exposure  to chlorinated disinfection by-
products by 20%-30%; (2) reduce exposure  to other non-chlorinated byproducts; (3) eliminate
hundreds of thousands of cases of disease due to microbial contamination each year; and (4)
 control such potentially deadly parasites as Cryptosporidium in large water systems.

Launched Interim Voluntary Action to Protect Americans from Threats like the
Bacterial Water Illness in Milwaukee:  Given the significant risks to human health in the
interim before implementation of the above cluster rule, EPA is working with  the water
suppliers on a voluntary treatment optimization program to maximize the effectiveness of
existing treatment in removing microbial  threats.

Reg-Neg #2/Reduced Toxic Air Pollution from Wood Manufacturing: EPA  met with state
agencies, large and small wood furniture  manufacturers, coatings manufacturers,  and
environmental groups and proposed a negotiated regulation to reduce toxic air pollution from
Wood Furniture Manufacturing Operations. The proposed rule affects 750 manufacturing
facilities and will  reduce emissions of toxic pollution by 30,000 metric tons per year.

Reg-Neg #3/Reduced Toxic Air Pollution from Steel Manufacturing: EPA issued a
regulation to cut toxic air pollution from  Steel Plant Coke Ovens in October 1993 that broke a
20-year deadlock on the issue and will cut 1500 tons of pollution annually.  The regulatory
negotiation included participation by industry, environmental groups,  and State and local
agencies and the resulting rule offers flexibility to the steel and coke  oven industry by
providing a choice of two compliance methods.

Reg-Neg #4/Reduced Threat to Water Quality from "Combined Sewer" Run-off:  To
stem the threat to  Americans' water supplies, EPA launched an enforceable national protection
framework through the  nation's basic water pollution permitting program resulting from aa
negotiated agreement among key stakeholders, and provides municipalities with flexibility to
develop site-specific, cost-effective solutions to this problem rather than  complying with a
one-size-fits-all dictate.

Protected the Great Lakes from Toxic  Pollution  and Used Consensus-Building Process:
EPA, working in partnership with eight Great Lakes States, produced a common-sense,
comprehensive plan to restore the health  and the economy of the Great Lakes. Through a
consensus-building process, the program will remove toxic chemicals from the Great Lakes
basin that contains about 95 percent of the United States' freshwater and is home to one-fifth of
all Americans and one-quarter of industry. The final  plan provides the Great Lakes states and
tribes with community-based flexibility to tailor solutions to local conditions and to set sound
health and environmental protection goals, while developing cost-effective solutions.

Negotiated Environmental Side Agreement to NAFTA and Established Commission to
Coordinate  Enforcement of Environmental Laws: The North American Free  Trade
Agreement and its side  agreements represent the most comprehensive attempt in  history to
integrate trade and environmental concerns within the context of a regional trade agreement
and has heightened enforcement in Mexico has already stimulated greater U.S. exports of
environmental technology.  In addition, two financing organizations were established, the
Border Environmental Cooperation Commission (BECC) and the North American
Development Bank (NADBank)  to help assist in financing badly needed environmental
facilities in the U.S.-Mexico border area,  such as wastewater treatment plants and drinking
water systems.


 Implemented Executive Order to Streamline the Regulatory Development Process: Since
 President Clinton issue.d Executive Order #12866 on Regulatory Planning and Review on
 September 30, 1993, EPA has implemented a number of regulatory streamlining efforts. In
 June 1994, EPA redesigned its rulemaking process to be more flexible, less encumbered by
 procedural delays, and more responsive to both industry and EPA needs.  The new regulatory
 development process allows EPA to more clearly identify both its regulatory  priorities and
 those actions that are designated as "significant" under the Executive Order.  EPA's process
 requires actions to be "tiered" according to priorities set by the Administration and the
 regulation's anticipated impact on industry and other stakeholders. This has streamlined the
 regulatory development process and reduced delay in promulgating EPA's less complex and
 more routine actions.  EPA has also undertaken new initiatives to solicit  and  incorporate the
 early input of State, local, and tribal governments in the development of regulations.

 Launched Major Initiative to Reduce Permitting Burdens on  Industry: EPA assembled a
 results-oriented team with representation from federal, state and local government to
 streamline environmental permitting so that Americans can focus on being economically
 productive and can protect our shared environment without needless paperwork.  The Permit
 Improvement Team recommended revisions to regulations to allow alternatives to traditional
 individual permits, to encourage greater pollution prevention and  innovative technology, and
 to provide special incentives for good performance such as expedited processing and
 alternative compliance strategies and schedules.   The team  also developed methods for
 enlisting earlier and more meaningful public participation in  the permitting process, and met
 with a cross-section of stakeholders to develop action plans.  The team has launched pilot
 projects that will develop models for future  implementation on a  nationwide scale.

 Launched Consensus-Building Effort with States to Simplify the Tracking of Interstate
 Movement of Hazardous Waste:  Many businesses have expressed frustration that the form
 for reporting their movement of hazardous waste varies from state to state. EPA has reviewed
 this problem in collaboration with states, businesses and other stakeholders, and.this summer
 will propose consensus changes to bring uniformity to the paperwork.

 Reduced Regulatory Barriers to  Innovative Technologies:  The EPA-led Environmental
Technology Initiative (ETI), launched by President Clinton in his first State of the Union
 address is improving American competitiveness in the growing market for new environmental
technologies.  ETI reduces the cost of compliance, provides new tools for cleaning up the
 environment, and  mobilizes American entrepreneurs to compete in the market place.  The top
priority of the ETI is to reduce barriers to innovation. This includes assisting entrepreneurs
with obtaining permits and sites to test and demonstrate their new technologies for potential
purchasers, helping small businesses identify the most cost-effective prevention or control
technologies, and  disseminating information and technical assistance to undergird a more
efficient market.   Three examples of recent changes instituted to help technology developers

       Eased Restrictions on Testing Hazardous Waste Technology:  EPA issued a rule in
       early  1994 which eased the restrictions on testing hazardous waste technologies by
       increasing the quantity of contaminated soil that can be used without a permit in
       testing the new technology. Previous limits were set too low to allow for realistic
       tests of new technologies, and unnecessarily inhibited the development of new
       technologies. Easing the conditions of these tests helps not just developers, but also
       decision-makers who need to evaluate new technology claims before deciding on a
       clean-up strategy.

       Approved New Hazardous Waste Testing and Monitoring Technologies:  In
       January, EPA amended its hazardous waste regulations to approve new and more cost-
       effective hazardous waste monitoring and testing technologies for inclusion in its
       nationally used manual.  Manufacturers of environmental technology,  commercial  labs,
       and private labs that do environmental monitoring will benefit from this increased
       choice of  innovative methods. Several of the newly approved methods promote
       pollution prevention by reducing the use of solvents.

       Accommodated Innovative Technology Under the  Nitrogen  Oxides Air Pollution
       Regulation: Last July  5, EPA issued a new policy that allows states to give
       businesses extra time to comply with Reasonably  Available Control Technology
       (RACT) regulations for nitrogen oxide pollution.  This new policy will facilitate the
       development and installation of cost-effective innovative controls.  The option is only
       available where a source is actively pursuing an innovative control technology that
       would not be available by  May 31, 1995, the regulation deadline for RACT

Proposed to Reduce Barriers to Financing by Businesses  with  Underground Storage
Tanks: Liability concerns of banks and other lenders have made  it  difficult for gas  stations,
farmers, convenience stores,  local retailers and other facilities with underground storage tanks
to obtain financing. EPA proposed a rule last year to reduce lenders' concerns, which will
substantially increase the capital available to these businesses for expansion and
environmental compliance activities and thereby reduce the risks of contamination for those in
the community.

Reduced Permitting Requirements for Closing Hazardous Waste Management Facilities:
Last November, EPA proposed a rule that expands and improves the options available to
businesses closing hazardous waste disposal facilities.  The rule, when final,  will allow EPA
to use administrative orders instead of permits to expedite the closure of these facilities and
the initiation of their cleanup.

Reducing Air Permitting Burdens for Plant Expansion or Construction:  EPA will next
month announce  changes to its pre-construction review permit program under the Clean Air
Act.  The changes will increase flexibility and reduce burdens on industry, the first such
overhaul in over  15 years.  These  permits  are required when  an industry or another major
source wants to construct or make significant modifications to a facility, traditionally a
cumbersome and time-consuming process known as New Source Review (NSR).  EPA

 launched a consultative effort with industry, states and environmental groups to simplify the
 NSR process and produced a series of reforms. One such reform allows plants to operate
 under a plant-wide emission cap, which means a facility manager can make physical
 modifications at any time without being subject to customary NSR permitting restrictions if
 they make off-setting emissions reductions elsewhere in the plant.  This allows for flexibility
 and cost effective management in achieving the goals of the Clean Air Act. Businesses can
 then respond more quickly to changing market conditions without waiting for a permit. This
 EPA announcement will deregulate clean emissions units and pollution control and pollution
 prevention projects so that red tape will no longer delay common sense, cost-effective
 changes that are environmentally sound.

 Amended Toxics Release Inventory Reporting Requirements to Reduce Burden on
 Industry for Lower-level Releases:  The Toxics  Release Inventory (TRI) is a database that
 enables Americans to learn about pollution in their communities and participate in decisions
 that them. TRI requires facilities that manufacture or use listed toxic chemicals to  report  their
 annual releases to the environment. Last November, EPA amended TRI reporting
 requirements by  reducing the amount of information that must be submitted by facilities that
 release or transfer less than 500 pounds of a listed chemical. EPA estimates that this
 streamlining effort will reduce the national burden on  industry by 400,000 hours or $20
 million per year, while maintaining important public health protections.  In a separate action
 this summer, EPA will propose guidance to clarify what information must be reported by
 industry under the TRI, which will enable the public to better use the data reported and
 increase data consistency between facilities and industries.  EPA will also redesign  a key
 inventory reporting form to incorporate the latest pollution prevention principles and reduce
 some of the industry burden  associated with its completion.

Streamlining New Chemical Review Approvals and Risk Reviews:  The Toxic Substances
 Control Act requires that chemical manufacturers notify EPA of risks posed by new chemicals
prior to their manufacture. EPA has recently streamlined  this program by expanding
 exemptions from filing requirements for certain low-risk or low-volume chemicals and for
those with very  limited human exposure.  These changes will result in a 30 percent reduction
in the number of notices required under this program,  lowering administrative costs to EPA
and providing regulatory relief to many small businesses that develop and manufacture new
chemicals. EPA is also developing a program  to permit electronic data submission.  EPA also
proposed changes to the form used to report risk information on chemicals  that will decrease
the  types information that must be included in  cases where they are already being submitted
to EPA and the  states under other EPA-administered statutes. EPA has also undertaken a
 study to identify types of health and environmental effects information being submitted that
have limited practical utility.

Cut Red Tape To Enable Safer Biological Pesticides to Be Used:  Ninety percent of
biological  and microbial pesticides pose little or no threat to human health because people are
not  exposed to them. Accordingly, EPA  issued a  final rule that eliminates the customary
 requirement for  an Experimental Use Permit for these pesticides.  Experimental Use Permits
 are  normally granted for testing the product on a limited acreage plot for a specified time
period in order to determine  its effectiveness and safety.  Eliminating this requirement for this

category of safer pesticide products will allow them to enter the market more quickly and
cheaply, thus promoting their development and use as a safer alternative.

Reduced Reporting Requirements for Lower-Volume Releases: The Comprehensive
Environmental Response,  Compensation and Liability Act (CERCLA) establishes EPA
authority to respond to releases, or threats of releases of specified hazardous substances.
Under this law, EPA establishes "reportable quantity" levels that trigger reporting of the
release to  the government. The government then determines whether an action responding to
the release is needed.  In  an  effort to reduce reporting burdens on industry, EPA has identified
specific rules where it can adjust upward the threshold at which reporting becomes necessary.
This has the effect of deregulating releases at a level lower than the specified threshold,
saving both industry and governmental time and resources.  These threshold adjustments also
enable EPA to focus its attention on the most serious hazardous substance releases.  For
example, EPA will this spring propose to raise the threshold for five broad categories of
hazardous air pollutants.  For example, one of these pollutants,  ethlyene glycol,  is used for de-
icing airplanes and also as an  antifreeze.  Consumers have been required to report leaks in their
radiators to federal and state officials and airlines have needed to report every time they de-ice a
plane.  This rule will reduce such reporting requirements. The final rule is expected to result in
annual net cost savings of $500,000.

Increased Incentives to Use Small Business Assistance Programs Designed to Aid
Compliance with the Clean Air Act: Small businesses often have technical difficulty
understanding their obligations under EPA laws. To assist small businesses in complying
with air pollution regulations, the Clean Air Act required  states to adopt small business
compliance assistance programs.  When it was found that small businesses were hesitating to
use the programs, EPA issued a new policy last August to address their concerns.  Under this
policy, states have been granted flexibility to offer a small business a window of opportunity
to correct a violation discovered through their participation  in the assistance program without
penalty.  Alternatively, a state may keep information on violations detected through such a
program  confidential from its enforcement division. These incentives are expected to increase
use of this innovative program, thereby increasing compliance and reducing pollution.  High
Priority Action #14 in the main portion of this report takes this clean air program as a starting
point and calls for its expansion to other EPA-administered laws.

Made the Federal Government Accountable for Its Own Pollution By Requiring Public
Reporting and Reduction of Toxic Releases:  President Clinton signed an Executive Order
directing federal agencies to comply with the reporting requirements imposed on the private
sector for toxic pollution releases, and to voluntarily reduce by 50 percent their releases or
off-site transfers of those chemicals by 1999.  EPA has played a key role in implementing the
order, by preparing guidance documents outlining  Federal agency pollution prevention
strategies and facility-level plans.  EPA also drafted  a "Code of Environmental Principles" to
implement the Order's "Federal Government Environmental  Challenge Program." Sixteen
Federal agencies have prepared draft strategies for meeting the requirements of the Order.

 Streamlined Compliance Inspections: EPA launched an effort to evaluate different
 approaches to multi-media compliance inspections so that businesses will not have to suffer
 through multiple visits from compartmentalized government bureaucrats interested only in
 individual  media such as air pollution or water pollution or solid waste. EPA will develop a
 sector-specific compliance checklist to streamline inspections, initially for the printing
 industry and subsequently for other small business-dominated sectors, including dry cleaning.

 Creating a Model Regulatory Assistance Service Center for Metal Finishing Industry:
 As part of the Common Sense Initiative (described above under "Building Partnerships"), EPA
 is establishing a Metal Finishing Service Center with the Commerce Department's National
 Institute of Standards and Technology to provide businesses in this sector with easy access to
 comprehensive information on polluting prevention opportunities, regulatory  compliance
 requirements in plain English, and technologies and techniques for reducing pollution in the
 most competitive manner. The Center will make its services available to state and local
 technical assistance programs.  Similar centers will be established for other sectors in the

Developed Systematic Database for Tailoring Compliance Strategies to Specific
Industries:  Recognizing that government must fully understand the businesses and operations
which it regulates, EPA organized a new compliance assurance office on an industry-by-
industry basis instead of the customary air, water, solid waste and pesticide compartments.
To establish a firm informational basis for the new office's activities, EPA has compiled
comprehensive profiles of eighteen industries, mostly small-business-dominated ones.  These
notebooks contain detailed descriptions of industrial processes, regulatory requirements,
historical compliance data, and opportunities for pollution prevention.  This information will
promote businesses' self-evaluation and enhance the inspection process.

Clarified Government Guidance to Reduce Rejections of Pesticide  Applications:  EPA
substantially re-engineered the process by which it reviews data submitted on the safety of
pesticides and makes decisions to reject or approve their use. By systematically identifying
the factors underlying rejections and working with industry to clarify scientific guidance so
that they no longer recur, EPA has succeeded in expediting the process and has recently been
completing a record number of pesticide reviews.  Overall rejection rates are much reduced.
This has reduced the cost to industry  of obtaining pesticide approvals,  since they are
undertaking fewer studies that have preventable flaws.  In response to the project, pesticide
companies have  also strengthened their quality control procedures and  are producing better
data.  This promising new cooperation between EPA and the regulated community has
reduced the cost and time required  to bring new, safer pesticides to market, while cutting
EPA's administrative expenditures.

Authorized State to Manage a Hazardous Chemical Rather than Imposing a Regulation:
Dichloroethane is a probable human carcinogen. It is also a high-volume chemical with
substantial air and water releases, as reported in the Toxics Release Inventory. EPA's

Existing Chemicals Program conducted an analysis which found that the majority of the risk
was from one facility in the State of Indiana. Rather than using a command-and-control
approach, EPA provided the information to the State of Indiana whose action resulted in the
company implementing significant pollution prevention steps.  These actions led to an
immediate reduction in Diochloroethane emissions to virtually zero.  This case also helped
EPA initiate a dialogue with the Chemical Manufacturers Association on product stewardship,
including the responsibilities of companies to assist their customers in the proper use of
chemical products.

Used Education Rather than  Regulation to Reduce Health Risks from the Cultural Use
of Mercury: EPA faced a special challenge in addressing the risks of mercury poisoning
stemming from  cultural and ritual uses of metallic mercury, such as the sprinkling of mercury
in homes or vehicles, adding mercury to floor washes, burning mercury in candles, carrying
mercury as a charm, and ingesting mercury as a folk medicinal remedy.  Many such practices
originated in Caribbean and Latin American cultures, and came with Spanish and Haitian
Creole-speaking immigrants to  the United States.  Concerned that regulatory action to restrict
the use or sale of mercury  could infringe on First Amendment religious freedoms and drive
the practices themselves underground, EPA consulted with national Hispanic organizations
and embarked instead on a public education campaign to  warn people of mercury hazards and
encourage them to use less hazardous substances.  EPA contracted with the Hispanic Radio
Network for a series of Spanish language radio  broadcasts discussing mercury dangers,
broadcasted last September, and prepared multi-lingual fact sheets on risks.  Because of the
affected community's distrust of government authority, EPA is also working with the U.S.
Catholic Conference to encourage their distribution of mercury warning materials.  This effort
reflects EPA's commitment to working flexibly  with specially vulnerable communities to
devise appropriate solutions.