[Federal Register Volume 60, Number 99 (Tuesday, May 23, 1995)]
[Notices]
[Pages 27282-27291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12563]



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ENVIRONMENTAL PROTECTION AGENCY

[FRL-5197-9]


Regulatory Reinvention (XL) Pilot Projects

AGENCY: Environmental Protection Agency (EPA).

ACTION: Solicitation of proposals and request for comment.

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SUMMARY: EPA is announcing a set of actions to give regulated sources 
the flexibility to develop alternative strategies that will replace or 
modify specific regulatory requirements on the condition that they 
produce greater environmental benefits. This document announces three 
of EPA's regulatory [[Page 27283]] reinvention pilot programs: the XL 
program for facilities; the industry-wide or sector-based XL program; 
and XL program dealing with government agencies regulated by EPA. EPA 
invites private and public entities or groups of entities regulated by 
EPA under its various statutory authorities to submit proposals in 
these areas. Proposals for a fourth area--the community-based XL 
program--will be accepted at a later time. This document also invites 
interested members of the public to comment on all aspects of these 
programs. The document responds to President Clinton's announcement, 
contained in the March 16, 1995, document Reinventing Environmental 
Regulation, that EPA would implement pilot programs to develop 
innovative alternatives to the current regulatory system. EPA has set a 
goal of implementing a total of fifty projects in the four program 
areas. Each project will involve the exercise of regulatory flexibility 
by EPA in exchange for a commitment on the part of the regulated entity 
to achieve better environmental results than would have been attained 
through full compliance with all applicable regulations. This program 
will be undertaken in full partnership with the states. These pilots 
complement EPA's ongoing regulatory reinvention activities, including 
the Common Sense Initiative and the Environmental Leadership Program. 
This summer, EPA will select up to six project proposals and begin the 
development of a final project agreement. Final Project Agreements for 
the remaining pilots will be based on EPA's learning experience on the 
initial projects.
    The document includes background information on the programs; a 
description of the programs; their relationship to other regulatory 
reinvention activities; the criteria, process, and timing for the 
selection of projects; an invitation for public comment; and the 
Information Collection Request document required by the Paperwork 
Reduction Act.

DATES: The period for submission of proposals will begin upon EPA's 
announcement in the Federal Register that clearance has been obtained 
under the Paperwork Reduction Act, allowing EPA to accept proposals. 
This will be an open solicitation with no set end date, and project 
proponents may submit more than one project proposal. The period for 
comment on all aspects of the programs will begin with publication of 
this document and extend for thirty days. The period for comment on the 
attached Information Collection Request will begin with the publication 
of this document and extend for ten days.

ADDRESSES: Project proposals and all comments should be sent to: 
Regulatory Reinvention Pilot Projects, FRL-5197-9, Water Docket, Mail 
Code 4101, US EPA, 401 M Street, SW., Washington, DC, 20460. The docket 
accepts no faxes. In addition to providing general information about 
the proposed project, project proponents are encouraged to comment on 
the relationship of their proposals to the criteria for project 
selection described in this notice. Proponents of projects are invited, 
but by no means required, to submit other useful materials in paper or 
other audio/visual or electronic formats.

FOR FURTHER INFORMATION CONTACT:
Jon Kessler, Office of Policy, Planning and Evaluation; United States 
Environmental Protection Agency; West Tower 1013; 401 M Street, SW.; 
Mail Code 2111; Washington, DC, 20460. The telephone number for the 
Office is (202) 260-4034. The facsimile number is (202) 401-6637.

SUPPLEMENTARY INFORMATION:

Background

    Over the last two years, the Environmental Protection Agency has 
charted a course designed to demonstrate that environmental goals can 
best be achieved by providing regulatory and policy flexibility while 
maintaining accountability, that flexibility can also provide greater 
protection at a lower cost, that better decisions result from a 
collaborative process with people working together, and that 
environmental solutions are often achieved by focusing efforts at the 
facility or place where protection is being sought. EPA has found that 
allowing facilities, communities, and other entities to explore non-
traditional pollution control solutions can result in regulated 
entities achieving environmental protection results beyond those 
anticipated by current regulations or policies. Often these alternative 
approaches can produce cheaper, more efficient results as well.

Description of the Programs

    On March 16, 1995, the President announced as part of his National 
Performance Review regulatory reinvention initiative that EPA would 
develop a set of pilot projects that provide the flexibility to test 
alternative strategies to achieve environmental goals. The initiative 
will give a limited number of regulated entities an opportunity to 
demonstrate excellence and leadership. They will be given the 
flexibility to develop alternative strategies that will replace or 
modify specific regulatory requirements on the condition that they 
produce greater environmental benefits. In exchange for greater 
flexibility, regulated entities will be held to a higher standard of 
accountability for demonstrating project results. This Federal Register 
Notice is a solicitation for pilot project proposals in the three 
general areas: Industry-wide projects (XL for Sectors); facility based 
projects (XL for Facilities); and government agency projects (XL for 
Government). Proposals are invited from groups of firms in an industry, 
individual regulated facilities, and government agencies regulated by 
EPA.
    These projects will require the participation of state and tribal 
regulatory agencies. In most cases, these agencies are full partners 
with EPA as they implement EPA programs that have been delegated to 
them. EPA is taking a decentralized or ``franchising'' approach to the 
implementation of XL programs. Under this approach, individual projects 
will be managed in most cases by the units of government that are best 
suited to address the issues raised by the projects. These may be state 
or tribal environmental agencies that are co-regulators with EPA, EPA 
headquarters, or EPA regional offices. As they develop project 
proposals, project proponents should coordinate with and gain the 
support of their state and tribal environmental agencies that have 
regulatory responsibility within the scope of the project. In addition 
to their role as co-regulators, these same agencies, as well as other 
local government agencies, are major stakeholders in the management of 
environmental quality. As such, their support for project proposals 
should be sought in any case.
    Selection and participation in the program will proceed as 
indicated in the flow chart that follows. EPA expects that there will 
be competition among project proponents for acceptance into the 
program. The first stage in the process begins with the publication of 
this notice. Those who have projects meeting the listed criteria are 
encouraged to submit initial project proposals. EPA will then review 
submissions to select those that do most to advance the purposes of 
this program. An internal review process has been established to 
evaluate proposals submitted in response to this notice. This group, 
consisting of representatives of state and tribal environmental 
agencies as well as EPA headquarters and regional offices, will screen 
all proposals, considering the criteria described in this notice, and 
recommend proposals for further [[Page 27284]] development. The group 
may also seek additional comment from relevant local environmental 
officials.
    Based on the recommendations of the review group, EPA will invite 
particular project proponents to join with state or tribal 
environmental agencies as well as other coregulators, to develop a 
Final Project Agreement. EPA will encourage project proponents at this 
stage to incorporate their project plans into the overall strategic 
plan of the business entity. In any case, the responsibility for 
developing detailed project plans that address the program criteria 
will be with the project proponents. Only the signing of a Final 
Project Agreement will constitute the selection of a pilot as a full 
fledged pilot project. Parties to the Final Project Agreement should 
include at least EPA, project proponents, state or tribal environmental 
agencies, as well as other co-regulators. These agreements will deal 
with project-specific issues such as legal authority for project 
implementation, provision for regulatory flexibility for pilots, public 
involvement, specific commitments to environmental progress, expected 
environmental results, enforceability, etc. Each Final Project 
Agreement should clearly set forth objective, specific requirements 
that the subject facility or facilities have agreed to meet. EPA 
anticipates that the agreements will be structured so that any 
enforcement relief EPA has provided with respect to applicable 
regulatory requirements will be conditioned on the facilities' 
compliance with the specified requirements. EPA invites project 
proponents to include, in their proposals, suggestions for additional 
or alternative approaches to enforcing these requirements. Unless 
otherwise agreed to by both EPA and the proponent, the time to 
negotiate and sign a Final Project Agreement should be limited to six 
months from the date of initial project acceptance. The final phase of 
the program involves implementation, monitoring, and evaluation of the 
agreement terms.
    EPA will hold a series of state and regional workshops to provide 
additional information on the programs and on project proposal 
development.

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[[Page 27285]]

[GRAPHIC][TIFF OMITTED]TN23MY95.000



BILLING CODE 6560-50-C

[[Page 27286]]

Data Quality Issues

    To demonstrate that an alternative environmental management 
strategy is more effective than existing and reasonably foreseeable 
future regulatory requirements, project proponents should estimate both 
the baseline result from these requirements and the environmental 
results from the alternative strategy for their specific projects. 
These estimates are likely to be uncertain due to scientific and/or 
engineering questions as well as to interpretations of future 
applicable regulatory requirements. An important element of the Final 
Project Agreement will be an explicit statement concerning what data 
and analyses are needed to make these findings. The Final Project 
Agreement will be based on the learning experience EPA has with the 
projects it initially selects.

Project Examples

    Consistent with EPA's objective to develop and demonstrate more 
flexible environmental management strategies, EPA intends to be 
flexible in entertaining proposals pursuant to this notice. In 
evaluating proposals, EPA will consider the selection criteria included 
in this notice. EPA also encourages proponents of proposals to be 
creative in suggesting alternative strategies and new forms of 
flexibility. To help stimulate such creativity, we provide the 
following guidance for the three different types of pilot projects. 
These examples are intended to be illustrative only; EPA encourages the 
submission of other types of projects that address the selection 
criteria and that have the strong prospect of producing ``cleaner, 
cheaper, smarter'' results compared to the current system.
    Facility-based XL projects. National environmental requirements may 
not always be the best solution to environmental problems. Substantial 
cost savings can sometimes be realized, and environmental quality 
enhanced, through more flexible approaches involving pollution 
prevention. Pilot projects focused on individual facilities should test 
alternatives to current environmental management approaches driven by 
compliance with existing regulations. Taking account of facility-
specific circumstances, the overall objective should be to devise and 
test more flexible approaches that result in both better environmental 
results and reduced compliance costs.
    Industry-wide XL projects. The many regulations affecting an 
industry are often promulgated piecemeal over a long period of time 
rather than as a comprehensive environmental program. In many cases, 
national regulations apply relatively uniform requirements to many 
industries with very different environmental and economic 
characteristics. Pilot projects addressing these problems might take 
many forms. One example is the approach taken in The Netherlands, where 
overall environmental performance objectives and emission reduction 
targets for entire industries are negotiated between trade associations 
and the government, followed by enforceable facility-specific 
agreements to implement the industry-wide goals. Such projects might 
take the form of combining all federal (and possible state) 
requirements for an industry into a single, integrated Final Project 
Agreement. Sector-based and place-based strategies might be combined in 
a project that focused on a number of facilities in the same or related 
industries within a given geographic region or ecosystem. Projects 
might propose development of enforceable ``best management practices'' 
for pollution prevention or pilot the application of upcoming ISO 14000 
voluntary environmental standards within a specific industry sector. 
EPA also encourages projects that combined an industry-wide component 
with facility-specific pilots to test the industry-wide strategy being 
developed.
    XL projects for government agencies regulated by EPA. Government 
agencies, in the management of their facilities, have the same 
environmental responsibilities and face many of the same regulatory 
issues as private businesses. Agency-sponsored projects might test 
concepts with broad application in both public and private sector 
facilities. In seeking to comply with environmental statutes, however, 
government agencies also face unique obstacles and often have unique 
opportunities to innovate. Pilot projects in this category might 
address themselves to the unique issues faced by government agencies, 
such as the optimization of environmental control strategies over the 
long term in the context of annual budgeting, or the ability to reduce 
overall compliance costs by controlling specific pollution sources out 
of reach of environmental regulators. Outside of the process described 
today, the Department of Defense and EPA are working to develop pilot 
projects at two to four DOD facilities. The DOD pilots will seek to 
define performance goals and create an optimal approach to achieve 
those goals, combining compliance with unique pollution prevention and 
technology resources available to DOD.

Relationship of Pilots to Other Reinvention Efforts
    The Common Sense Initiative was launched to move the Agency beyond 
the traditional medium by medium approach to environmental management 
to a systematic, sector-based approach. Announced in July 1994, the CSI 
focuses on six industry sectors--auto manufacturing, computers and 
electronics, iron and steel, metal finishing, petroleum refining, and 
printing industries. Each is directed by a consensus-based, multi-
stakeholder advisory subcommittee, with CSI as a whole directed by the 
Common Sense Initiative Council operating under the Federal Advisory 
Committee Act. The purpose of CSI is to recommend changes in 
environmental regulations, statutes and programs that will result in 
``cleaner, cheaper, and smarter'' outcomes for entire industries. Such 
changes, when accepted and promulgated, will lead to permanent 
adjustments to current programs.
    Each of the CSI sector-specific subcommittees is developing a plan 
covering a broad spectrum of activities including (but not limited to) 
regulations, pollution prevention, reporting requirements and public 
access to data, permitting, innovative compliance assistance and 
enforcement, and innovative technology. In some cases, these plans will 
include projects that meet the criteria outlined today for regulatory 
reinvention pilots. Firms or other project sponsors in CSI industries 
are encouraged to develop XL projects. Project sponsors in CSI 
industries considering such projects should work through CSI in order 
to develop them. This will enable them to take advantage of the 
substantial progress being made through CSI including established 
stakeholder committees, working relationships among stakeholders, and 
progress toward identifying common concerns. (Project sponsors in CSI 
industries should contact Vivian Daub, Interim Director, Common Sense 
Initiative, at (202) 260-7417.)
    The Environmental Leadership Program (ELP) grew out of a desire to 
test innovative compliance approaches such as third-party auditing. It 
is one of the means for streamlining compliance oversight as referenced 
in the President's March 16 announcement. ELP allows facilities to 
identify ways to streamline reporting requirements and reduce 
compliance inspections, without sacrificing environmental and public 
health protection. Facilities will use innovative management techniques 
such as environmental auditing and pollution prevention to reduce the 
[[Page 27287]] burden of paperwork and inspections on the facilities, 
while enhancing compliance with existing environmental laws. At the 
completion of these one-year pilot projects, the lessons learned from 
these projects will be applied to others.
    ELP differs from the XL programs being announced today in that the 
XL programs include flexibility from existing regulation in exchange 
for the attainment of environmental results beyond what would have been 
achieved through full compliance with those regulations. ELP projects, 
on the other hand, work to achieve improvements in environmental 
quality within existing regulatory requirements.
    EPA expects that compliance-oriented ELP projects may include 
regulatory innovations, and that some projects conducted pursuant to 
today's notice will also address compliance systems. EPA welcomes XL 
program proposals from ELP participants. (For information on ELP 
contact Tai-Ming Chang, Director, Environmental Leadership Program, at 
(202) 564-5081.)

Legal Mechanisms for Pilot Projects

    EPA will seek to use a variety of administrative and compliance 
mechanisms to provide regulatory flexibility for final project 
agreements. Where a pilot project does not fully comply with one or 
more environmental requirements (e.g., where a facility does not fully 
attain a technology-based emission or discharge standard but adopts a 
pollution prevention program or installs additional controls on other 
releases so as to achieve superior environmental results at the 
facility), EPA will use enforcement mechanisms to facilitate the 
projects. These will be conditioned on the pilot project meeting 
requirements specified in the project plan. In particular 
circumstances, EPA may consider changes in underlying regulations, or 
may seek changes in underlying statutes. EPA recognizes that these 
questions raise issues of importance both to the Government and to 
potential participants in regulatory pilot projects. Applicants are 
invited to present EPA with proposed approaches tailored to provide the 
regulatory flexibility for their pilot projects.

Project Criteria

    EPA will consider the following criteria in evaluating pilot 
project proposals:
    1. Environmental results. Projects that are chosen should be able 
to achieve environmental performance that is superior to what would be 
achieved through compliance with current and reasonably anticipated 
future regulation. ``Cleaner results'' can be achieved directly through 
the environmental performance of the project or through the 
reinvestment of the cost savings from the project in activities that 
produce greater environmental results. Explicit definitions and 
measures of ``cleaner results'' should be included in the project 
agreement negotiated among stakeholders.
    2. Cost savings and paperwork reduction. The project should produce 
cost savings or economic opportunity, and/or result in a decrease in 
paperwork burden.
    3. Stakeholder support. The extent to which project proponents have 
sought and achieved the support of parties that have a stake in the 
environmental impacts of the project is an important factor. 
Stakeholders may include communities near the project, local or state 
governments, businesses, environmental and other public interest 
groups, or other similar entities.
    4. Innovation/Multi-Media Pollution Prevention. EPA is looking for 
projects that test innovative strategies for achieving environmental 
results. These strategies may include processes, technologies, or 
management practices. Projects should embody a systematic approach to 
environmental protection that tests alternatives to several regulatory 
requirements and/or affects more than one environmental medium. EPA has 
a preference for protecting the environment by preventing the 
generation of pollution rather than by controlling pollution once it 
has been created. Pilot projects should reflect this preference.
    5. Transferability. The pilots are intended to test new approaches 
that could conceivably be incorporated into the Agency's programs or in 
other industries, or other facilities in the same industry. EPA is 
therefore most interested in pilot projects that test new approaches 
that could one day be applied more broadly.
    6. Feasibility. The project should be technically and 
administratively feasible and the project proponents must have the 
financial capability to carry it out.
    7. Monitoring, reporting and evaluation. The project proponents 
should identify how to make information about the project, including 
performance data, available to stakeholders in a form that is easily 
understandable. Projects should have clear objectives and requirements 
that will be measurable in order to allow EPA and the public to 
evaluate the success of the project and enforce its terms. Also, the 
project sponsor should be clear about the time frame within which 
results will be achievable.
    8. Shifting of risk burden. The project must be consistent with 
Executive Order 12898 on Environmental Justice. It must protect worker 
safety and ensure that no one is subjected to unjust or 
disproportionate environmental impacts.
    EPA intends to work cooperatively with project proponents to 
develop and refine acceptable approaches. At the same time, the Agency 
must retain the ultimate authority to select projects based on a 
qualitative consideration of these criteria. Moreover, given the pilot 
nature of the programs proposed today and the limited number of slots, 
projects that satisfy many or all of the criteria may nonetheless not 
be selected if, in the Agency's judgment, other proposed projects 
better serve the objectives of the program. Moreover, no person is 
required to submit a proposal or obtain approval as a condition of 
commencing or continuing a regulated activity. Accordingly, there will 
be no formal administrative review available for proposals that are not 
selected, nor does EPA believe there will be a right to judicial 
review.

Timing for Project Selection

    EPA intends to invite selected project proponents to negotiate 
final project agreements on a phased basis, with a small number of 
early selections followed by a period of project selection on a rolling 
basis. This summer, EPA plans to invite approximately six project 
proponents to begin the development of a Final Project Agreement. 
Beyond that date, project proponents will be invited to enter the next 
phase of the program on a rolling basis. EPA intends to select and 
initiate approximately 50 pilot projects within the next two years.

Request for Comment on Aspects of Program Pilots

    Interested members of the public are invited to comment on all 
aspects of the pilot project program. EPA requests specific comment on 
the legal mechanisms for implementing project agreements, and the data 
requirements for determining both existing environmental baselines and 
the level of environmental quality that would result from the project 
agreement.

Paperwork Reduction Act

    The information collection provisions in this notice, including the 
request for proposals, have been submitted for approval to the Office 
of Management and Budget (OMB) under the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. An Information Collection Request 
[[Page 27288]] document has been prepared by EPA (ICR No. 1749.01) and 
is attached as an appendix to this notice. Additional copies may be 
obtained from Sandy Farmer, Information Policy Branch; EPA, 401 M 
Street, SW. (Mail Code 2136); Washington, DC 20460 or by calling (202) 
260-2740. These information collection provisions are not effective 
until OMB approves them and a notice of OMB approval containing the ICR 
control number is published in the Federal Register. EPA will announce 
by separate Federal Register notice when proposals may be submitted.
    Public reporting burden for this collection of information is 
estimated to average 150 hours per application response, including: 
time for reviewing instructions; developing the proposal; reviewing the 
proposal through respondent management; and consulting in some fashion 
with state or tribal co-regulatory agencies as encouraged in the 
solicitation. An additional 10 hours per respondent are estimated to be 
required of the state and tribal agencies consulted in the development 
of project proposals.
    Send comments regarding the burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden to Chief, Information Policy Branch; EPA; 401 M Street, SW. 
(Mail Code 2136); Washington, DC 20460; and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503, marked ``Attention: Desk Officer for EPA.'' The 
period of comment for the Information Collection Request will begin 
with the publication of this notice and extend for ten days.

    Dated: May 17, 1995.
Fred Hansen,
Deputy Administrator.
Solicitation for Proposals for Regulatory Reinvention Pilot Projects--
Supporting Statement for Information Collection Request (#1749.01)

1. Identification of the Information Collection

1(a) Title and Number of the Information Collection
Title: Regulatory Reinvention Pilot Projects
1(b) Short Characterization
    This is a solicitation for proposals for a new program established 
pursuant to President Clinton's March 16, 1995, National Performance 
Review initiative: Reinventing Environmental Regulation. Regulatory 
Reinvention Pilot Projects are a set of pilot projects to test 
performance-based environmental management systems as alternatives to 
command and control regulatory approaches. These projects (called 
Project XL) are divided into four categories: facility-based projects, 
industry- or sector-based projects, community-based projects, and 
government agency-based projects. Under these projects, regulated 
entities will be given flexibility to depart from existing regulatory 
requirements in exchange for enforceable commitments to achieve 
environmental results that, on the whole, go beyond what would have 
been achieved through full compliance with those regulations. A 
competitive proposal process will allow us to select those projects 
that show the most promise to demonstrate successful alternative 
environmental management strategies.
    The information will be collected by EPA's Office of Policy, 
Planing, and Evaluation (OPPE), which has been given responsibility for 
implementation of this program. The program itself will include other 
offices within EPA headquarters, EPA regions, state and tribal 
environmental agencies. The solicitation will help us identify those 
regulated entities who are interested in participating in Project XL 
pilot projects, the types of projects they are interested in pursuing, 
and the extent to which those projects our criteria for project 
selection. EPA has no form that is designated for a collection of this 
type.
    This solicitation for proposals will be included in a Federal 
Register notice announcing Project XL, and will be sent to parties that 
have already expressed interest in developing pilot projects. Potential 
project proponents will mail completed proposals to the Office of 
Policy, Planning and Evaluation at EPA. The proposals will be 
distributed to a cross-agency review group that will evaluate and 
select proposals for initial participation in pilot project 
development. The process is further described in the attached notice.

2. Need for and Use of the Collection

2(a) Need/Authority for the Collection
    The information is needed to implement the regulatory reinvention 
pilot project initiative outlined by President Clinton in his 
Reinventing Environmental Regulation directive. Under this initiative, 
EPA is to solicit its regulated entities for their best ideas on 
regulatory reinvention, and for pilot projects to test those ideas.
2(b) Use/Users of the Data
    The proposals collected pursuant to this solicitation will be used 
as the starting point for development of full-fledged pilot projects. A 
competitive process will ensure that EPA can choose from a pool of 
useful project ideas. Moreover, a simple and flexible proposal format 
such as envisioned here will allow a diversity of regulated entities, 
small as well as large firms, agencies, and communities, to develop 
proposals. EPA will use the proposal submissions to screen ideas and 
select the most promising ones for further development.

3. The Respondents and the Information Requested

3(a) Respondents/SIC Codes
    Potential respondents include all entities regulated by EPA 
pursuant to its authority under the various environmental statutes who 
wish to participate in the regulatory reinvention pilot project 
program.
3(b) Information Requested
    The attached notice does not specify a format for proposals. It 
requests that proposals include, ``* * * in addition to providing 
general information about the proposed project, project proponents are 
encouraged to comment on the relationship of their proposals to the 
criteria for project selection described in this notice. Proponents of 
projects are invited, but by no means required, to submit other useful 
materials in paper or other audio/visual or electronic formats.'' As 
noted earlier, EPA's goal is to create as flexible as possible a 
solicitation process.
    The nature of activities respondents are expected to conduct 
include: preparation of technical proposals, discussion with management 
of the respondent, consultation with state, tribal agencies, local 
governments and community or environmental stakeholders, and clerical 
matters related to project proposal. In technical preparation, 
respondents are encouraged to address the nine criteria described in 
the attached notice. Respondents are expected to describe the nature of 
control, pollution prevention, or other activities to be undertaken as 
part of the project; to define the scope of regulatory flexibility 
needed to undertake these activities (i.e. The otherwise required 
actions to be forgone in this project); and to discuss the nature of 
stakeholder or other processes the project would propose in order to 
move to Final Project Agreement. Proposals would likely 
[[Page 27289]] require some level of management sign-off from the 
respondent.
    There is no recordkeeping requirement. Time for management 
discussions is also included in burden estimates. The notice strongly 
encourages consultation with state, tribal and community stakeholders, 
such as holding a meeting with the applicable regulatory agency.

4. The Information Collected--Agency Activities, Collection 
Methodology, and Information Management

4(a) Agency Activities
    EPA will receive proposals and will develop a method for screening 
them based on the criteria described in the attached notice. These 
proposals will then be distributed to the cross-agency workgroup, with 
proposals addressing specific areas of regulatory policy highlighted to 
those parts of EPA with specific interest in those areas. Although the 
number of proposals submitted in response to this notice is a matter of 
speculation, EPA has estimated that it will be between one hundred and 
five hundred. EPA intends to ultimately implement about 50 projects. As 
such, proposals that clearly violate or do not address the criteria 
will be screened out at this point. However, OPPE intends to provide 
the other EPA, state and tribal agencies participating in the cross-
agency project selection process maximum opportunity to view project 
proposals. As such, most proposals will be distributed directly to the 
committee without initial screening.
    As was noted earlier, this will be an open solicitation following a 
``rolling admissions'' model with no set end date. (A cutoff will 
ultimately be announced via a future Federal Register notice.) As such, 
proposals will be screened and reviewed as they arrive. Once screened 
and reviewed, proposals will be responded to in one of three fashions. 
Proposals will be rejected, and proposers thanked for their interest. 
Proposals will be accepted, and proponents invited to participate in 
the development of Final Project Agreements, or proposals will be 
deferred for future consideration. In this instance, EPA may discuss 
with the project proponent ways to increase the attractiveness of the 
proposal.
4(b) Collection Methodology and Management
    This notice was developed by a team consisting of EPA headquarters 
and regional personnel; and representatives of state environmental 
agencies, through the Environmental Commission of the States. EPA also 
held discussions with a number of program stakeholders, including 
environmental and regulated community organizations. Also, a number of 
comments on the solicitation process were received unsolicited in 
response to President Clinton's March 16 directive and follow up press 
coverage of the regulatory reinvention effort. The solicitation process 
is the result of all of these comments and opinions.
    The collection process will be as follows. EPA will place this 
solicitation in the Federal Register. EPA will also distribute copies 
upon request, and participate where invited in workshops designed to 
assist potential project proponents in development of proposals. 
Proposals will be sent to an EPA docket, where they will be logged in 
and catalogued. The docket will retain a copy for archival purposes, 
and display a copy for public viewing. Three additional copies will 
then be sent to OPPE for screening, reference purposes, and 
distribution to the cross-agency committee for proposal review. OPPE 
has also developed a Lotus Notes database for purposes of tracking 
proposals and telephone or other inquiries related to them.
4(c) Small Entity Flexibility
    The flexible proposal process described earlier is designed to be 
useful to large as well as small entities. It was designed to be simple 
to respond to, with no undue burden on entities without full-time 
environmental managers, etc. EPA does not expect that this solicitation 
would impose additional burdens on small entities.
4(d) Collection Schedule
    This will be an open solicitation for proposals, beginning with 
publication of the attached notice and with no set end date. In terms 
of choosing projects for initial participation in the program, EPA 
intends to select up to six projects by mid-June.

5. Nonduplication, Consultations, and Other Collection Criteria

5(a) Nonduplication
    EPA does not have a form that would collect the information needed 
under the Regulatory Reinvention Pilot Projects pursuant to the 
recommendations of our cross-agency committee. Nor do existing 
databases of project proposals (e.g. Environmental Technology 
Initiative) provide a useful source of projects for this effort.
5(b) Consultations
    This notice was developed by a team consisting of EPA headquarters 
and regional personnel; and representatives of state environmental 
agencies, through the Environmental Commission of the States. EPA also 
held discussions with a number of program stakeholders, including 
environmental and regulated community organizations. Also, a number of 
comments on the solicitation process were received unsolicited in 
response to President Clinton's March 16 directive and follow up press 
coverage of the regulatory reinvention effort. The solicitation process 
is the result of all of these comments and opinions.
5(c) Not Applicable
5(d) Not Applicable
5(e) Not Applicable

6. Estimating the Burden and Cost of the Collection

6(a) Respondent Burden
    This section presents EPA's estimates of the burden hours and cost 
to complete the information collection activities associate with this 
collection. In using this analysis, however, it should be remembered 
not only that all responses to this solicitation are voluntary, but 
also that respondents have some expected value attached with their 
participation. Fundamental to projects in this program will be reduced 
cost of compliance due to increased regulatory flexibility. Not unlike 
a contracts-based Request For Proposals, one would not expect a 
response from any entity where the burdens associated with preparing 
the response outweigh the expected benefits to the respondent.
    As noted earlier, EPA estimates the number of response proposals 
pursuant to this solicitation to be approximately 100 to 500. 
Estimating respondent costs in developing proposals is made difficult 
by the extremely flexible approach to this solicitation. Recall that 
the solicitation does not specify the form or nature of responses, 
except to give respondents a sense that only brief proposals (no more 
than 10 pages) are requested. EPA has already received several 
unsolicited proposals in response to the March 16, 1995, Reinventing 
Environmental Regulation document in which the pilot project programs 
were announced. To estimate the cost of proposal development, EPA asked 
(via telephone conversation) a sample of seven of these proposal 
sponsors to estimate the cost of preparing their unsolicited 
submissions. The data presented here are based on the median of their 
responses.
    The proposal development process is, for these purposes, divided 
into four phases: technical aspects, management discussion, 
consultation with [[Page 27290]] government agencies and other 
potential stakeholders, and clerical preparation. Technical aspects 
cover development of the substantive portions of the proposal. The 
average for technical aspects of proposal development is estimated at 
50 person hours. Management discussion covers presentation and 
refinement of proposals at corporate or other entity management levels. 
Management time also includes estimates of legal review, which though 
technical, has higher than average technical labor costs. The average 
time for management level discussions is estimated at 30 person hours. 
The solicitation strongly encourages project proponents to seek the 
support of state or tribal environmental agencies in advance of 
proposal to EPA. Although none of our unsolicited respondents had 
actively pursued this, they estimated the cost of doing so at 
approximately 60 person hours of management and technical time for the 
regulated entities, and 10 person hours of mixed management and 
technical time for the state or tribal agency. Clerical aspects of the 
proposal, such as typing, mailing, etc., were estimated at 10 hours. 
These figures, along with labor costs associated with them, are 
summarized in Figure 1.

                               Figure 1.--Estimate of Respondent Burden and Costs                               
----------------------------------------------------------------------------------------------------------------
                                                                             Hours                              
                                             -------------------------------------------------------------------
                                                 Management       Technical         Clerical          Total     
----------------------------------------------------------------------------------------------------------------
Prepare technical proposal..................               10               35                5               50
Discuss with management.....................               25                5  ...............               30
Consult with state/tribal agencies..........               40               20  ...............               60
Clerical aspects of proposal................  ...............  ...............               10               10
                                             -------------------------------------------------------------------
    Subtotal--technical proposal............               75               60               15              150
                                             ===================================================================
      Subtotal (@ 100 respondents)..........            7,500            6,000            1,500           15,000
      Subtotal (@ 500 respondents)..........           37,500           30,000            7,500           75,000
State/tribal consultation...................                5                5  ...............               10
    Subtotal (@ 100 respondents)............              500              500  ...............            1,000
    Subtotal (@ 500 respondents)............            2,500            2,500  ...............            5,000
                                             -------------------------------------------------------------------
      Range of total burden hours...........     8,000-40,000     6,500-32,500      1,500-7,500    16,000-80,000
----------------------------------------------------------------------------------------------------------------
                                                                                                                
(3) Costs                                                                                                       
----------------------------------------------------------------------------------------------------------------
Labor cost assumptions (per hour)...........              $70              $50              $20  ...............
    Subtotal--technical proposal............            5,250            3,000              300           $8,550
      Subtotal (@ 100 respondents)..........          525,000          300,000           30,000          855,000
      Subtotal (@ 500 respondents)..........        2,625,000        1,500,000          150,000        4,275,000
    Subtotal--state/tribal costs............              350              250  ...............              600
      Subtotal (@ 100 respondents)..........           35,000           25,000  ...............           60,000
      Subtotal (@ 500 respondents)..........          175,000          125,000  ...............          300,000
                                             -------------------------------------------------------------------
        Range of total labor costs (x $1000)      $560-$2,800      $325-$1,625         $30-$150      $915-$4,575
----------------------------------------------------------------------------------------------------------------

    In summary, respondent burden are estimated at 150 hours per 
respondent for preparation of each application (including consultation 
with state and tribal authorities, and mailing), and an additional 10 
hours per state or tribal government agency are estimated to be 
required for consultation in the development of each project proposals. 
Given the expected range of between 100 and 500 applications, the total 
application burden are estimated at between 16,000 and 80,000 hours.
6(b) Respondent Costs
    Per the previous discussion, total respondent costs are estimated 
to range between $915,000 (100 applicants), and $4,575,000 (500 
applicants). This includes between $855,000 and $4,275,000 to develop 
the technical proposal, and another $60,000 to $300,000 for state and 
tribal consultation in proposal development.
6(c) Estimating Agency Burden and Cost
    EPA will incur costs to process and review specific proposal and 
provide outreach in support of proposal preparation. For specific 
applications, EPA will incur costs to: Receive and process the 
proposals; initially screen the proposals; and distribute proposals to 
the cross-agency review group. (This document does not estimate the 
costs of the full regulatory reinvention pilot project program, but 
only the gathering of information through this solicitation). In 
addition, EPA will incur costs to perform outreach and training and 
disseminate information on the solicitation. Agency costs are 
summarized in Figure 2. Total EPA costs, at the upper range of five 
hundred responses, are estimated at $432,500.

       Figure 2.--Estimate of EPA Cost for Information Collection       
------------------------------------------------------------------------
                                                    Proposal     Total  
------------------------------------------------------------------------
Receive and process proposals....................         $10  .........
Perform initial screening........................          50  .........
distribute proposals across Agency...............           5  .........
Specific proposal costs..........................          65    $32,500
Creating additional information documents........  ..........     50,000
[[Page 27291]]
                                                                        
Conducting workshops/public outreach.............  ..........    350,000
    Total........................................  ..........   $432,500
------------------------------------------------------------------------

6(d) Bottom Line Burden Hours and Costs
    Total respondent burden and cost for completing the proposals 
solicited in the Regulatory Reinvention Pilot Project are estimated at 
approximately 16,000 to 80,000 burden hours, and $915,000 to 
$4,575,000. Total EPA costs for processing specific proposals and 
supporting proposal development through technical outreach and 
workshops is estimated at $432,500.

6(e) Reasons for Change in Burden

    This new burden results from the desire to implement regulatory 
reinvention pilot projects to test implementation alternative, 
performance-based, options to conventional command and control 
regulatory approaches.

6(f) Burden Statement

    Public reporting burden for this collection of information is 
estimated to average 150 hours per application response, including: 
time for reviewing instructions, developing the proposal; reviewing the 
proposal through respondent management; and consulting with state or 
tribal co-regulatory agencies, and other community or environmental 
stakeholders are encouraged in the solicitation. An additional 10 hours 
per respondent are estimated to be required of the state and tribal 
agencies consulted in the development of project proposals. Send 
comments regarding this burden estimate or any other aspect of this 
collection of information, including suggestions for reducing this 
burden, to: Director, Regulatory Information Division, Mail Code 2136, 
U.S. Environmental Protection Agency, 401 M Street, S.W., Washington, 
D.C., 20460, Attention Regulatory Reinvention Pilot Projects 
Information Collection Burden (ICR#1749.01); and to the Office of 
Management and Budget Paperwork Reduction Project, Washington, D.C. 
20503.

[FR Doc. 95-12563 Filed 5-22-95; 8:45 am]

BILLING CODE 6560-50-M