EPA PULLS PLAN TO GIVE STATES MORE LEEWAY ON RULES.

Byline: The New York Times

In an embarrassing about-face, the Environmental Protection Agency has withdrawn a plan to give the states more flexibility in carrying out environmental rules.

The original plan, which called states ``a natural laboratory for testing new ideas'' and pledged that the federal agency would speedily approve their regulatory innovations, was killed Tuesday by the deputy administrator, Frederic J. Hansen.

The proposal had been drafted after three months of meetings between federal officials and members of the Environmental Council of the States, which is made up of the heads of each state's main environmental agency.

When it was issued in draft form Feb. 14, the agreement had seemed to be on a fast track. The agency sought comments by March 7, so that a final draft could be approved at a meeting of state environmental leaders in May.

The draft said the states and the federal agency agreed ``on the need to experiment with new approaches to improve our nation's environment.''

But environmental groups and others said the proposal failed to guarantee that in return for the extra flexibility the states would adopt approaches that led to a cleaner environment and not just to cheaper environmental controls.

Hansen said in an interview Wednesday that the states had been asked only to help develop a mechanism for speeding the correction of minor inefficiencies in regulation. Instead, he said, the proposal could have been used to circumvent virtually any regulation or statute.

The rejection of the proposal threatens to renew strains between the federal and state agencies.

State officials said dropping the proposal would prevent them from instituting experiments like one in Minnesota that would change which types of factory air pollution are continuously monitored. The state says the change would allow it to focus on other toxic emissions.