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Agency Information Collection Activities: Proposed Collection; Comment Request; Regulatory Pilot Projects (Project XL)

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Environmental Protection Agency (EPA).




In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), this document announces that EPA is planning to submit for renewal the following continuing Information Collection Request (ICR) to the Office of Management and Budget (OMB): Regulatory Pilot Projects (Project XL) (EPA ICR No. 1755.06) (OMB Control No. 2010-0026, current ICR expires February 28, 2002). Before submitting the ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection as described below.


Comments must be submitted on or before January 8, 2002.


The public may contact Mr. Brian Swett in EPA's Office of Environmental Policy Innovation for a paper copy of the ICR (free of charge). Mr. Swett may be reached by mail at the U.S. EPA Office of Environmental Policy Innovation (Mail Code 1807), 1200 Pennsylvania Avenue, NW., Washington, DC 20460; by telephone at (202) 260-1718, by e-mail at, or by FAX at 202-260-1812.

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Mr. Eric Marsh in the Office of Environmental Policy Innovation. Mr. Marsh may be reached by phone at (202) 260-2782, by e-mail at, or by FAX at 202-260-1812. Or contact Ms. Katherine Dawes in the Office of Environmental Policy Innovation. Ms. Dawes may be reached by phone at (202) 260-8394, by e-mail at, or by FAX at 202-260-3125.

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Affected entities: Entities potentially affected by this action include XL project sponsors, XL project stakeholders, state, tribal and local regulatory agencies, select members of the business industry, environmental organizations, industry trade associations, academics, and community members.

Title: Regulatory Pilot Projects (EPA ICR No.1755.06) (OMB Control No. 2010-0026, current ICR expires February 28, 2002).

Abstract: In March 1995, the U.S. Environmental Protection Agency initiated Project XL in response to a challenge to transform the environmental regulatory system to better meet the needs of a rapidly changing society while maintaining the nation's commitment to protect human health and safeguard the natural environment. Project XL tests innovative ideas that demonstrate eXcellence and Leadership by those who must comply with EPA regulations and policies. To test these new ideas, Project XL gives companies, communities, local governments, military bases, and universities flexibility from certain environmental regulations in exchange for commitments to achieve superior environmental performance at less cost. Through site-specific agreements with project sponsors, EPA is gathering data and project experience that will help the Agency redesign current approaches to public health and environmental protection. Under Project XL, sponsors—private facilities, multiple facilities, industry sectors, Federal facilities, communities, universities, and states—can implement innovative strategies that produce superior environmental performance, provide flexibility, cost savings, paperwork reduction or other benefits to sponsors, and promote greater accountability to stakeholders.

The intent of Project XL is to allow the EPA to experiment with untried, potentially promising regulatory approaches, both to assess whether they provide superior environmental performance and other benefits at the specific facility affected, and whether they should be considered for wider application. Such pilot projects allow the EPA to proceed more quickly than would be possible when undertaking changes on a nationwide basis. EPA may modify rules, on a site-or state-specific basis, that represent one of several possible policy approaches within a more general statutory directive, so long as the alternative being used is permissible under the statute.

The adoption of such alternative approaches or interpretations in the context of a given project does not, however, signal EPA's willingness to Start Printed Page 56672adopt that interpretation as a general matter, or even in the context of other XL projects. It would be inconsistent with the forward-looking nature of these pilot projects to adopt such innovative approaches prematurely on a widespread basis without first determining whether or not they are viable in practice and successful for the particular projects that embody them. These pilot projects are not intended to be a means for piecemeal revision of entire programs. Depending on the results in these projects, EPA may or may not be willing to consider adopting the alternative approach or interpretation again, either generally or for other specific facilities. EPA believes that adopting alternative policy approaches and/or interpretations, on a limited, site-or state-specific basis and in connection with a carefully selected pilot project is consistent with the expectations of Congress about EPA's role in implementing the environmental statutes (so long as EPA acts within the discretion allowed by the statute). Congress' recognition that there is a need for experimentation and research, as well as ongoing reevaluation of environmental programs, is reflected in a variety of statutory provisions.

Before submitting an official proposal to EPA, the project sponsor typically has informal discussions with EPA about proposal design. Once a formal proposal is submitted, EPA along with the corresponding state environmental agency then review the proposal. EPA bases acceptance of proposals on the extent to which proposals meet the following eight criteria: (1) Superior environmental performance, (2) cost savings and reduced paperwork, (3) stakeholder involvement, (4) innovation or pollution prevention, (5) transferability, (6) feasibility, (7) monitoring, reporting and evaluation, and (8) no shifting of risk burden. If the proposal is accepted, EPA and the partnering state agency negotiate the conditions of the proposal with the project sponsor along with other interested stakeholders, including local and national environmental groups and nearby community residents. Once an agreement is reached regarding the conditions of the proposal and the necessary regulatory flexibility, the Final Project Agreement (FPA) is signed and the project sponsor can begin implementation.

XL project proposals are collected by EPA's Office of Environmental Policy Innovation (OEPI) [formerly the Office of Reinvention], which has been given responsibility for implementation of this program. Since its inception in 1995, over 100 Project XL proposals have been received and reviewed, and over 50 pilot projects have been implemented. The program itself includes other offices within EPA headquarters, EPA regions, federal, state, tribal and local government agencies. The renewal of this ICR is important as it will allow the Agency to identify additional 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 meet our criteria for proposal selection.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The EPA would like to solicit comments to:

(i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(ii) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

(iii) Enhance the quality, utility, and clarity of information to be collected: and

(iv) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submissions of responses.

Burden Statement: This section presents EPA's estimates of the burden and cost to complete the information collection activities associated 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.

EPA estimates the number of response proposals pursuant to this ongoing solicitation to be between 10 and 25 per year over the life of this ICR. Estimating respondent costs in developing proposals is made difficult by the wide variety of projects and the extremely flexible approach to this solicitation. Since the March 16, 1995 announcement of the program, EPA has received over 100 Project XL proposals. In the seventh year of the program, EPA continues to receive inquiries about the program as well as formal written proposals.

In March 2000, Resources for the Future (RFF) released a report titled “The Cost of Developing Site Specific Environmental Regulations: Evidence from EPA's Project XL,” which in part discussed survey data regarding the cost of Project XL proposal development for sponsors and EPA. The citation information for this report is: Blackman, Allen and Mazurek, Janice, “The Cost of Developing Site-Specific Environmental Regulations: Evidence from EPA's Project XL,” Resources for the Future, March 2000, Discussion Paper 99-35-REV. It can be found at:​disc_​papers/​PDF_​files/​9935rev.pdf. In the Fall of 1998, using a sample of 11 private sector sponsors, all of which submitted their proposals within the first six months of the initiation of Project XL, RFF conducted a survey of the sponsors and EPA regional offices on the cost of proposal development, including the monetized value of legal fees and person hours spent. In general, EPA regional offices are largely responsible for developing the proposal with the sponsor before its formal submission, and thus surveying the cost to EPA regional offices of proposal development captures the bulk of the total costs to EPA. Staff in the Office of Environmental Policy Innovation that work on Project XL have reviewed the cost findings of the report and found them to be reasonable and sound estimates of current and future costs.

In 1995, to estimate the cost in hours of proposal development, EPA asked (via telephone conversation) a sample of seven proposal sponsors to estimate the cost of preparing their submissions. While the monetary cost of person hours is well captured by the RFF study, it did not report specifically on the average hours spent, and thus the findings from this EPA survey are mentioned below.

The RFF study found that Project XL proposal development cost each sponsor an average of $64,637. Using this cost figure as our best estimate, total sponsor costs per year for proposal development for Project XL are estimated to be between $646,370 (10 proposals) and $1,615,925 (25 proposals).

The EPA survey found that development and preparation of a project XL proposal took approximately Start Printed Page 56673150 hours per sponsor. Using this hour figure as our best estimate, total sponsor hours spent per year on proposal development for Project XL are estimated to be between 1,500 (10 proposals) and 3,750 (25 proposals).

The RFF study found that Project XL proposal development cost the EPA regional offices, our proxy for total EPA cost, an average of $11,339 per proposal. Using this cost figure as our best estimate, total EPA costs per year for proposal development for Project XL are estimated to be between $113,390 (10 proposals) and $283,475 (25 proposals).

Bottom line respondent costs for proposal solicitation and development are estimated to range between $646,370 and $1,615,925 per year. Bottom line EPA costs for processing specific proposals and supporting proposal development are estimated at between $113,390 and $283,475 per year. It should be noted that these estimates are probably on the high end of the true average cost of proposal development and submission. As the RFF study notes, due to several efforts and steps undertaken by EPA to better facilitate and streamline the proposal development and submission process, proposal development costs may be lower now than when the respondents were surveyed for the 2000 report.

No capital or start-up costs will be associated with this effort.

Burden means total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

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Dated: October 25, 2001.

Elizabeth A. Shaw,

Office Director, Office of Environmental Policy Innovation.

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[FR Doc. 01-28194 Filed 11-8-01; 8:45 am]