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Statement of Need: Since EPA was formed in 1970, State capacity and responsibility for implementing environmental and public health protection programs has grown steadily. Until 1996, State and interstate agencies could receive EPA assistance in carrying out their environmental programs only through a variety of categorical environmental grants, such as grants for water pollution control, air pollution control, and hazardous substance control. Meanwhile, environmental problems and their solutions have grown more complex and solutions to these complex problems often crossed EPA program lines. In light of this complexity, State and EPA leaders recognized that continued environmental progress could be best achieved if EPA and States worked together more effectively as partners and environmental programs were made more flexible in terms of their coverage. In response, EPA asked Congress for new authority that would provide that needed flexibility. In 1996, Congress authorized the award of Performance Partnership Grants (PPGs), in which State and interstate agencies can choose to combine two or more environmental program grants. This proposed rule will implement the PPG program which promotes State-EPA collaboration; provides opportunities for innovation; and reduces paperwork. EPA expects the rule will foster joint planning and priority-setting by explicitly requiring that State priorities and needs be considered, along with national and regional guidance, in negotiating grant work plans, consistent with the National Environmental Performance Partnership System (NEPPS). Under this rule, a State can choose to organize its grant work plans in accord with environmental goals and objectives or in other new ways rather than using categories predefined by EPA. The length of a grant budget period will be negotiable. These opportunities afforded by the PPG program and this rule are available to all States. This rule accommodates all potential variations in how EPA and individual States work to build partnerships. The rule also minimizes duplicative effort by allowing for multiple uses of information or processes wherever appropriate. The regulation advances ongoing efforts to build more effective State-EPA partnerships and to improve environmental conditions by providing States with increased flexibility to direct resources where they are needed most to address environmental and public health needs.

Summary of the Legal Basis: Not required by law or court order.

Alternatives: EPA can continue to award PPGs under guidance prepared by the agency and announced in the Federal Register.

Anticipated Costs and Benefits: The rule does not result in any new costs. It is expected to allow cost and administrative savings for States by reducing the amount of grant paperwork and by simplifying accounting requirements that do not require recipients to account for expenditures in accordance with their original funding sources. With PPGs, recipients can negotiate work plans with EPA that direct Federal funds where the recipients need them most to address environmental and public health problems. Recipients can also try new multimedia approaches and initiatives, such as children's health protection programs, multimedia inspections, compliance assistance programs, and ecosystem management, that were difficult to fund under traditional categorical grants.