The good news is these problems can be fixed. We ask you to support the administration's performance partnership grants proposal, which would allow States and tribes to consolidate Federal grants to address these kinds of issues.

In conclusion, I would like to emphasize to you the State directors are eager to work with you as you consider changes to the environmental protection system.

We are indeed on the front lines in implementing the laws you pass, and I think we bring a unique perspective to this debate, understanding how these laws work and how these laws do not work.

PREPARED STATEMENT

We hope you will support the State EPA's effort to reform the oversight system, and we hope you will help us by reducing the restrictiveness of environmental laws and by approving legislation allowing States to combine Federal grants to improve environmental performance.

Thank you.

Senator BOND. Thank you very much, Ms. Gade.

I certainly can relate in very many specifics to what you stated. [The statement follows:]

PREPARED STATEMENT OF MARY A. GADE

Good Morning. My name is Mary Gade and I am the Director of the Illinois Environmental Protection Agency. I also serve as vice president of the Environmental Council of the States (ECOS), a new national, non-partisan association of state and territorial environmental commissioners. I bring a unique state, regional and national perspective to the issues before this Subcommittee having spent the last four years as a senior state environmental official and thirteen years at the U.S. Environmental Protection Agency both in its Chicago Office and in Washington, D.C. as the Deputy Assistant Administrator for the Office of Solid Waste and Emergency Response.

I welcome the opportunity to share my personal views and those of my state colleagues on aggressive, new approaches to environmental management. Based on our experience, we believe that the findings and recommendations contained in the National Academy of Public Administration (NAPA) report, "Setting Priorities, Getting Results: A New Direction for the Environmental Protection Agency," give Congress an excellent road map for making critical changes to improve environmental protection. We believe the question today is not whether to make changes at all, but instead which changes to make and how rapidly.

Much has changed since the first Earth Day twenty-five years ago. Yet the underlying philosophy and delivery system we use for environmental protection has not changed. The NAPA report could not have come at a better time. State directors are on the front lines implementing environmental protection and clamoring for change. And, many within EPA want change too. The people we regulate and the citizens we serve are dissatisfied with the way our nation goes about the business of protecting our

environment.

We think it's time to ask a few fundamental questions: Does the current system provide a high quality environment that protects human health at less cost and with minimal government Intrusion? Do our laws and management structure help us or prevent us from achieving this goal? Can changes be made based on lessons learned, new Information ard changed priorities? The answers are not surprising.

After twenty-five years, the system that has been the source of unprecedented and extraordinary environmental progress is outmoded, unable to meet the environmental challenges ahead. What we thought would work in the 70's and 80's, did. We can all take pride in the tremendous environmental successes we have achieved. But what we must accomplish in the 90's and beyond requires more tools than simple command and control.

Traditional command and control regulations don't work for the hundreds of thousands of smaller sources like Ma and Pa gas stations and dry cleaners. (I don't know about your dry cleaner, but mine doesn't have an environmental specialist on staff.) To help these smaller sources protect the environment, we must work with them in a nontraditional partnership providing education and technical assistance.

After-the-fact pollution controls, our current regulatory staple, don't make sense any more as a primary tool for environmental protection. Pollution prevention must be increasingly emphasized as the tool of first choice--and incentives must be developed to encourage this new direction. It doesn't make sense to spend hundreds of thousands of dollars cleaning up when the money could be better spent on new technology.

NAPA's report puts in print what we've been talking about for years--we need bold change and we need it now. Common sense ideas like risk-based decision making, increased roles for states, flexibility for industry, and reliance on environmental Indicators are the changes that need to occur.

The time is right. ECOS was formed, in part, to push change by speaking with one strong state voice. EPA has just Introduced initiatives to reinvent regulation and Congress is poised to act. These are powerful forces, and it will take powerful forces to make these changes reality and not rhetoric.

I will focus my specific comments on three areas of the NAPA report: First, expanding the role of the States by reforming oversight, establishing environmental block grants, and shifting from bean counts to environmental performance measures. Second, changing EPA's organizational structure to eliminate needless fragmentation and to

revamp the roles of its regional offices. And third, drafting an organic environmental statute to eliminate artificial barriers and promote flexibility, innovation and cost-effective

compliance.

1. ROLE OF STATES

NAPA Recommendation 4.1: Congress and EPA should enhance the federal-state environmental partnership by reforming the division of responsibilities between EPA and the States.

NAPA Recommendation 4.1(d): Congress should authorize EPA to delegate additional elements of existing statutes to states, if the administrator determines that a state role is more appropriate than a Federal role.

Twenty-five years ago when USEPA was created, States established regulatory agencies to implement federal laws and regulations. As my friend and fellow commissioner Kathy Prosser of Indiana has said, in the early days the Federal/State relationship was much like that of a parent and child. USEPA as the parent had knowledge, expertise, responsibility and funding to carry out environmental protection. As states created environmental agencies USEPA told us how to form, what to work on and when to take action, and it gave us money to get the job done. It also punished us when we didn't abide by Its rules. In the early days, as states were developing capacity for environmental protection, this parental oversight was necessary. Like the child who has grown up, we now have a different need from our parent. States no longer need USEPA to tell us when to come home, or what to wear. We've graduated from college, have driver's licenses, and own homes. What we need now from our parent, USEPA, is technical assistance, baseline national standards, funding and flexibility. States are looking for and expect an equal partnership with USEPA. Satisfying these needs will require some major changes in the current system.

Oversight Reform

NAPA Recommendation 4.1(a); EPA should reward good state performance with additional autonomy and flexibility.

NAPA Recommendation 4.1(c): EPA should maintain a credible capacity to step in when states fail to perform.

NAPA Recommendation 4.2: EPA's Regional Offices should focus on building the state's capacity to manage environmental problems.

NAPA Recommendation 5.1(b): Congress should give a clearer, more concise direction to USEPA by requesting meaningful information about improvements in the environment.

Most of the tension in the current State/EPA relationship centers on Federal oversight of programs delegated to the States. Under most Federal environmental statutes, States have primary responsibility for Implementing regulatory and enforcement programs. In fact, the fifty states and territories now administer all or part of almost 700 Federally delegated programs and, in many instances, have been doing so for years. Like a parent, USEPA has been reluctant for a variety or reasons, including a fear of Congress, to relinquish control and let States genuinely take the lead in running these programs. Too often, oversight includes micro-management through site specific and case by case reviews of state actions from permits and inspections to enforcement. Worse, it often fails to take into consideration the very real differences in capacity from state to state. Consequently, the current oversight process promotes frustration, duplication of effort and loss of opportunities.

Let me share with you one particularly egregious example of oversight gone awry. Illinois received approval from USEPA to issue wastewater discharge permits over 18 years ago. Until just last year, USEPA's Region V staff performed concurrent reviews of 100% of the draft permits the State issued for all 265 of our major dischargers. Even USEPA would acknowledge that these site specific reviews turned up very few problems and yet by our estimates resulted in a 50% duplication of staff-time for almost two decades. While the level of oversight is changing, albeit Inconsistently, from Region to Region and program by program, it often fails to recognize the States' capabilities and wastes valuable resources.

Congress itself exacerbates the problem by placing specific oversight mandates

in legislation. The 1990 Clean Air Act Amendments require states to submit all Title V air permits to USEPA before issuance. Of the 2,500 permits we anticipate issuing In Illinois, we expect that USEPA will be co-reviewing somewhere between 350 and 1000 of them. Given the impressive technical expertise of my air permit staff and the