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Joint EPA/State Agreement on Pursue Regulatory Innovation
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: October 29, 1997 (Volume 62, Number 209)]
[Notices]
[Page 56182-56189]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29oc97-80]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5914-7]
Joint EPA/State Agreement on Pursue Regulatory Innovation
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice.
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SUMMARY: The purpose of this notice is to solicit public comment on the
draft Joint EPA/State Agreement to Pursue Regulatory Innovation. This
draft was prepared jointly by the EPA and the Environmental Council of
the States (ECOS). The agreement will provide a framework for how EPA
and the States will promote and implement future regulatory innovation
efforts. A copy of this notice is available on the Internet at http://
www.epa.gov/reinvent.
DATE: Comments are due by November 28, 1997.
ADDRESSES: Comments may be submitted to: Gail Robarge, Office of
Reinvention (mailcode 1102), 401 M Street, SW., Washington, DC 20460;
email address: robarge.gail@epamail.epa.gov. ECOS members may submit
comments to: Tina Parker, Environmental Council of the State, 444 N.
Capitol Street, NW., Suite 305, Washington, DC 20001; email address
tparker@sso.org.
FOR FURTHER INFORMATION CONTACT: Gail Robarge, EPA Office of
Reinvention, phone 202/260-9101, email robarge.gail@epamail.epa.gov; or
Bruce Brott, Minnesota Pollution Control Agency, phone 612/297-8380,
email bruce.brott@pca.state.mn.us.
SUPPLEMENTARY INFORMATION:
Background
In order to find new, better and more efficient and effective ways
to improve environmental protection, the ECOS and EPA Administrator
formed a joint task group to develop an agreement on EPA-State
regulatory innovation. The purposes of the agreement are to: improve
environmental protection in the United States; improve EPA/State
environmental management systems; and provide for timely decision-
making on innovation proposals.
The agreement establishes guiding principles for innovation and an
efficient process that is receptive to innovative proposals from the
States for achieving shared environmental objectives. The agreement
will encourage and facilitate the exploration of ideas which are
potentially more cost-effective and/or have a better environmental
impact. It will improve decision-making between the States and EPA on
innovation proposals, emphasizing clear lines of communication,
decision authority, accountability and timeliness. It will provide
opportunities for stakeholder involvement at the state and national
levels.
An informal stakeholder meeting was held to discuss the draft
agreement in September. Participants offered many thoughtful comments
and constructive suggestions (a summary of this meeting is posted on
the Web at http://www.epa.gov/reinvent). Comments from the meeting will
be taken into consideration by EPA and ECOS as we review other comments
received during the next 30 days.
A public meeting to discuss the draft agreement will be held on
Nov. 20, 1997, in Washington, D.C. Please contact Louise McLaurin (202/
260-4261 or mclaurin.louise@epamail.epa.gov) to register for the
meeting and to obtain details regarding time and location.
TEXT OF DRAFT AGREEMENT
Part 1
Joint EPA/State Agreement To Pursue Regulatory Innovation
``* * * We must encourage innovation by providing flexibility with
an industry-by-industry, place-by-place approach to achieving
standards,* * * But we will require accountability that such
standards be met. Rather than focusing on pollutant-by-pollutant
approaches, attention must shift to integrated strategies for whole
facilities, whole economic sectors, and whole communities.''
[Excerpt from President Clinton's ``Reinventing Environmental
Regulation,'' March 16, 1995]
The U.S. Environmental Protection Agency and the states agree on
the need to experiment with new approaches to improve our nation's
environment. These new approaches can help us identify cleaner,
cheaper, smarter ways
[[Page 56183]]
to ensure that all Americans enjoy a clean environment and healthy
ecosystems. Through this joint commitment, EPA and the states agree to
encourage, evaluate, implement, and disseminate ideas that seek better
ways of achieving our environmental goals. This agreement presumes that
EPA and the states will find ways to help good ideas succeed, and that
joint EPA and state efforts to promote and test new ideas will result
in the maximum benefit to the American people and their environment.
Two years ago, EPA and the states entered into an historic
agreement to establish the National Environmental Performance
Partnership System (NEPPS). That agreement recognized that we have
achieved significant progress since environmental protection programs
were created more than 25 years ago. Yet to meet today's new
challenges, we agreed that states and EPA must manage for environmental
results, increase public involvement, and use environmental indicators
to track our progress. We agreed that states and EPA must become true
partners in implementing federal programs, and that different state
programs need different levels of federal involvement.
This new partnership creates an environment in which state and
local regulatory innovations can, and should, flourish. As the primary,
front-line delivery agent for environmental programs, states are a
natural laboratory for testing new ideas. State and local environmental
professionals are closest to environmental problems and communities,
and can often develop the most practical solutions. These professionals
should be encouraged to seek innovative solutions that may not fit
within the traditional approaches. We agree that our efforts to promote
innovation must, in the end, be directed toward achieving our public
health and environmental goals in a more efficient or effective way.
EPA also seeks to promote regulatory innovations at all levels.
This agreement complements, but does not supplant, other national or
state efforts to develop regulatory innovations. Its purpose is to
establish a clear pathway and decision-making process for state
innovations that have encountered federal barriers or need greater
attention to help them succeed.
States and EPA agree that the following principles should guide us
as we develop, test and implement regulatory innovations:
Experimentation
Innovation involves change, new ideas, experimentation and some
risk of failure. Experiments that will help us achieve environmental
goals in better ways are worth pursuing when success is clearly
defined, costs are reasonable, and environmental and public health
protections are maintained.
Environmental Performance
Innovations must seek more efficient and/or effective ways to
achieve our environmental and programmatic goals, with the objective of
achieving a cleaner, healthier environment and promoting sustainable
ecosystems.
Smarter Approaches
To reinvent environmental regulation, regulators must be willing to
change the way we traditionally look at environmental problems and be
receptive to innovative, common sense approaches.
Stakeholder Involvement
Stakeholders must have an opportunity for meaningful involvement in
the design and evaluation of innovations. Stakeholders may include
other state/local government agencies, the regulated community, citizen
organizations, environmental groups, and others. The opportunities for
stakeholder involvement should be appropriate to the type and
complexity of the innovation proposal.
Measuring and Verifying Results
Innovations must be based on agreed-upon goals and objectives with
results that can be reliably measured in order to enable regulators and
stakeholders to monitor progress, analyze results, and respond
appropriately.
Accountability/Enforcement
For innovations that can be implemented within the current
regulatory framework, current systems of accountability and mechanisms
of enforcement remain in place. For innovations that involve some
degree of regulatory flexibility, innovators must be accountable to the
public, both for alternative regulatory requirements that replace
existing regulations and for meeting commitments that go beyond
compliance with current requirements. Regulators will reserve full
enforcement authority to ensure compliance with alternative regulatory
requirements, and must be willing to explore new approaches to ensure
accountability for beyond-compliance commitments.
State-EPA Partnership
The states and EPA will promote innovations at all levels to
increase the efficiency and effectiveness of environmental programs. We
must work together in the design, testing, evaluation and
implementation of innovative ideas and programs, utilizing each other's
strengths to full advantage.
EPA agrees to establish a process that ensures timely review and
decision-making on state innovation proposals based on implementation
of the above seven principles. The states agree to consult early with
EPA, to develop proposals consistent with the above principles, and to
involve stakeholders. EPA and the states agree on the need for a
clearinghouse of regulatory innovations so that promising ideas can be
shared across state lines and within EPA.
We agree that the principles and process described in this
agreement should be open to continual improvement. As part of ongoing
review and evaluation, EPA and the states agree to evaluate the need to
further institutionalize the broad principles and process to help
future innovations succeed.
Through this agreement, as detailed in Part 2, states and EPA are
committed to work together and with all stakeholders to apply the
lessons learned from successful innovations in creating the best
possible system to achieve greater environmental protection at a
reasonable cost. We agree to encourage innovation that will prepare us
for meeting our environmental challenges well into the 21st century.
Part 2
I. Overview of This Agreement
This agreement embodies a set of general principles and a process
for EPA/State innovation activities. This agreement includes:
--Statements of purpose and scope of the agreement;
--Over-arching principles that will govern joint EPA/state
regulatory innovation activities;
--The process EPA and the states will use to identify good ideas,
including both the continuation of existing State/EPA interactions to
start innovation projects, and the establishment of a new mechanism for
making decisions on innovative proposals that do not fit into ongoing
reinvention programs; and
--Guidelines for how EPA and the states will evaluate the success
of innovation activities carried out under this agreement.
This agreement builds on the many reinvention efforts that are
underway in the states and EPA. It is intended to ensure joint
decision-making, timely review, broad public involvement, and continued
progress in fostering and implementing ideas that are good for
[[Page 56184]]
our environment and the people we serve.
II. Purpose and Scope of the Agreement
A. Purpose
The Administrator of the U.S. Environmental Protection Agency (EPA)
and senior State environmental officials agree to three purposes for
this effort: to improve environmental protection in the United States;
to improve EPA/State environmental management practices; and to provide
timely decision-making on good ideas. These purposes are described
below.
1. Improved Environmental Protection
The Administrator of the U.S. Environmental Protection Agency (EPA)
and senior State environmental officials agree that the states and EPA
need to encourage, seek out, and try innovative approaches to improve
our nation's environment. These innovative approaches can offer
mechanisms that are more cost-effective, less adversarial and
contentious, and have a better environmental impact. To support
sustainable development and continuous environmental improvement,
innovations should utilize pollution prevention methods rather than
pollution control whenever possible. While we have made significant
progress in environmental protection, much remains to be done and no
backsliding can be permitted. Innovative approaches offer us tools to
improve current environmental protection programs and to tackle the
environmental problems of the future.
2. Improved EPA/State Environmental Management Practices
Through this agreement, EPA and the states will develop improved
management practices that promote collaboration and shared
responsibility for innovations. This agreement is consistent with the
concepts embodied in the National Environmental Performance Partnership
System (NEPPS). In fact, NEPPS was established, in part, to encourage
innovative approaches by states, consistent with agreed-upon
environmental goals and indicators. The agreement recognizes that
states and local governments are natural laboratories for testing new
ideas and that EPA has an important role in promoting innovation at all
levels, while continuing to ensure that the states provide fundamental
public health and environmental protection. This agreement identifies
how we will work together to identify and promote innovative ideas and
better ways of doing business. It is intended to help us communicate
and evaluate such ideas and to encourage joint decision-making on how
such innovations can be fostered, designed and implemented.
3. Timely Decision-Making on Good Ideas
Finding better ways to accomplish our environmental goals is part
of the everyday practice of good government. Current processes through
which many successful state innovations have been carried out should
continue. We recognize that the most challenging regulatory innovation
proposals have been difficult to address. This agreement establishes an
optional avenue for prompt consideration and evaluation of innovation
proposals.
EPA and States may conclude that some successful regulatory
innovation projects demonstrate that changes in EPA regulations,
policies, guidance, or interpretations are needed to improve the
nation's environmental protection system. Where such changes can be
made under existing law, EPA will initiate the process for making the
changes--following applicable procedures. EPA and States may also
initiate policy discussions on potential statutory changes that may be
needed to enable nation-wide adoption of innovative approaches.
B. Scope of the Agreement
As used in this agreement, ``regulatory innovation'' is a broad
concept. It encompasses the process of proposing, testing, evaluating,
refining and sharing innovative approaches to environmental regulation
in order to achieve national, regional, state, tribal, and local
environmental objectives. Regulatory innovations should be more
efficient and/or provide greater environmental protection than current
approaches, foster cooperation, and include opportunities for strong
stakeholder involvement.
Many types of innovations are possible, and potential innovations
will vary in scope, complexity, ease of implementation, environmental
benefits, and other characteristics. At this point in time, it is
difficult to design a single system or process that is appropriate for
all potential innovations. Innovations should be accomplished through
the normal course of business whenever possible. This agreement
provides a clear pathway for innovative proposals that need extra
attention or are too complex to be handled through normal channels.
Proposals that are less complex can be implemented more quickly,
leading to early success, while more difficult projects will likely
need more analysis and stakeholder participation. This agreement builds
on and complements other innovation activities, but is not intended to
replace them.
III. Principles for EPA/State Regulatory Innovation
EPA and the States agree to a set of basic overarching principles
which will guide our joint regulatory innovation activities. There are
seven overarching principles relating to regulatory innovation
activities--Experimentation, Environmental Performance, Smarter
Approaches, Stakeholder Involvement, Measuring and Verifying Results,
and Accountability/Enforcement, and State-EPA Partnership.
A. Experimentation
Innovation involves change, new ideas, experimentation, and some
risk of failure. Experiments that will help us achieve environmental
goals in better ways are worth pursuing when success is clearly
defined, costs are reasonable, and environmental and public health
protections are maintained.
1. The States and EPA should recognize the value of prudent risk-
taking and value-added experiments to achieve improved results.
2. The States and EPA should seek ways to make good ideas work,
presuming that change and innovations consistent with environmental
goals are worth our investment.
3. The States and EPA should carefully monitor and manage
innovations to ensure that problems are immediately identified and
remedied. Experimentation should be based on sound judgment, reasoning
and common sense.
4. If a promising experiment encounters difficulties, but
environmental protection is not jeopardized, project sponsors should be
allowed sufficient time to fix problems before the experiment is
abandoned in favor of the traditional approach.
5. Innovations with greater potential benefits may warrant some
additional risk-taking.
6. Experimentation does not include relaxing health or
environmental standards or reducing protection of public health or the
environment.
B. Environmental Performance
Innovations must seek more efficient and/or effective ways to
achieve our environmental and programmatic goals, with the objective of
achieving a cleaner, healthier environment and promoting sustainable
ecosystems.
1. Protecting public health and the environment are the primary
goals of
[[Page 56185]]
both EPA and State environmental agencies, and we agree that
innovations can help us find cleaner, cheaper, smarter ways of
improving our nation's environment.
2. Many opportunities exist to improve environmental protection
through innovations that have the clear potential to provide
environmental and ecosystem benefits. In addition, innovations may be
designed primarily to improve the cost effectiveness of achieving
environmental goals; these projects must ensure that there is no
adverse impact on: environmental protection, public access to
information, and public access to the decision-making process.
3. For projects that have a greater uncertainty of the
environmental outcome, or that involve experimental technologies or
approaches, alternative requirements should be expected to have the
clear potential to provide increased environmental protection, promote
ecosystem sustainability, or both. EPA and the state agency, in their
best judgment and in consultation with stakeholders, will determine
whether such proposals have the clear potential to produce appropriate
gains in environmental protection, improved sustainability of the
ecosystem, or both.
4. Innovations may be designed to fit local and regional
conditions, as long as local solutions do not create environmental
problems for other localities, such as undesired downwind and
downstream effects, or undermine national standards.
5. No population group should be subjected to unjust or
disproportionate environmental impacts as a result of the innovation.
C. Smarter Approaches
To reinvent environmental regulation, regulators must be willing to
change the way we traditionally look at environmental problems and be
receptive to innovative, common sense approaches.
1. Regulators should seek creative ways to remedy environmental
problems or improve environmental protection in a community, facility,
sector or place.
2. Regulators should work with industry and communities to solve
environmental problems by removing barriers that prevent prudent,
common sense solutions.
3. Regulators should be professional, accountable and deserving of
the public's trust.
4. Regulators should seek to understand all perspectives, and help
stakeholders find common ground.
5. Regulators should act promptly to evaluate, and implement,
proposals that are straightforward, technically achievable, and have
clear advantages, while ensuring adequate public review.
D. Stakeholder Involvement
Stakeholders must have an opportunity for meaningful involvement in
the design and evaluation of innovations. Stakeholders may include
other state/local government agencies, the regulated community, citizen
organizations, environmental groups, and others. The opportunities for
stakeholder involvement should be appropriate to the type and
complexity of the innovation proposal.
1. Innovations should include opportunities for early, open, and
inclusive stakeholder involvement in project development, specifically
including those who may be affected by the decisions. Stakeholders
should be provided adequate time to review proposals and participate in
the process.
2. Consistent with the principle of providing meaningful
opportunity for stakeholder involvement, each State should have the
flexibility to use its own stakeholder participation process, as long
as applicable federal and state requirements are met or exceeded. EPA
and States will identify national program issues and ensure
opportunities for active involvement from national stakeholder groups.
3. Project proposals and the process for their consideration should
be made transparent to stakeholders so that the benefits of the
proposed change can be fully evaluated. Information needed to
understand the proposed innovation and to verify compliance and
environmental performance should be publicly available in an
understandable form. EPA and States commit to provide regular analysis
of the types of innovations implemented and their environmental
impacts.
E. Measuring and Verifying Results
Innovations must be based on agreed-upon goals and objectives with
results that can be reliably measured in order to enable regulators and
stake-holders to monitor progress, analyze results and respond
appropriately.
1. The success of innovations should be judged by the results they
achieve. Goals and objectives should be: established in advance,
measurable, and based on the desired results.
2. Results should be verifiable by reliable measurements and both
process and results should be understandable to regulators and the
public.
3. Regulators should have access to high quality information
sufficient to verify the environmental performance of an innovation.
4. Regulators and the public should have a full understanding of
the differences between the innovation and traditional approaches,
including expectations for the project, accountability for performance,
and any potential risks.
F. Accountability/Enforcement
For innovations that can be implemented within the current
regulatory framework, current systems of accountability and mechanisms
of enforcement remain in place. For innovations that involve some
degree of regulatory flexibility, innovators must be accountable to the
public, both for alternative regulatory requirements that replace
existing regulations and for meeting commitments that go beyond
compliance with current requirements. Regulators will reserve full
enforcement authority to ensure compliance with alternative regulatory
requirements, and must be willing to explore new approaches to
establish accountability for beyond-compliance commitments.
1. During the project, existing statutory and regulatory
requirements remain in effect and fully enforceable for persons or
activities not covered by the innovation project.
2. If a promising innovation project encounters difficulties, but
environmental protection is not jeopardized, flexible enforcement
responses should be used to allow project sponsors sufficient time to
fix problems before a project is abandoned in favor of the traditional
approach.
3. Regulators must have authority to address such circumstances as
imminent and substantial endangerment, actual harm, or criminal
conduct.
4. Innovations may include both: (a) Enforceable ``alternative
regulatory requirements'' that provide protection equivalent to current
environmental standards, and (b) other ``beyond-compliance
commitments'' which seek to exceed current standards or requirements.
Alternative regulatory requirements and beyond-compliance commitments
should be clearly distinguished in advance.
Alternative Regulatory Requirements:
--Alternative regulatory requirements should be enforceable with
all the remedies available under current law.
--Regulators should use enforcement discretion in choosing remedies
when a facility fails to meet alternative regulatory requirements.
--Potential responses for failure to meet such alternative
regulatory
[[Page 56186]]
requirements should be identified in advance.
Beyond-Compliance Commitments
--As part of an innovation, facilities may agree to beyond-
compliance commitments in exchange for regulatory flexibility or some
other incentive.
--Potential responses for failure to meet such beyond-compliance
commitments should be defined in advance.
--Responses for failure to meet beyond-compliance commitments
should fit the circumstances. They may include trying a different
approach, modifying the innovative approach, or reverting to the
traditional approach, but they should not include enforcement
penalties.
G. State-EPA Partnership
The States and EPA will promote innovations at all levels to
increase the efficiency and effectiveness of environmental programs. We
must work together in the design, testing, evaluation and
implementation of innovative ideas and programs, utilizing each other's
strengths to full advantage.
1. As the primary front-line managers of many environmental
protection programs, the States and local governments are a natural
laboratory for innovations. The States should manage their own
programs, adapt to local conditions, and test new approaches for
delivering more environmental protection for less.
2. The federal government should ensure good science, strong
national health and environmental standards, and should work in
partnership with the States by providing analysis, expertise, and
facilitating learning among the States. EPA should promote innovation
at all levels (national, regional, state, tribal, place-based,
community, and in the private sector). EPA retains its role to set
national standards and measures, implement programs not delegated to
states or tribes, address interstate issues, apply and interpret
national statutes and regulations, and ensure fair and effective
enforcement, thus ensuring that all States provide fundamental public
health and environmental protection.
3. EPA and State roles in innovations must be clearly designed to
utilize each party's unique strengths and avoid duplication. Decision
makers should be clearly identified.
4. Assigned roles and responsibilities should be honored and
respected, and joint problem-solving should be encouraged.
5. Communication must be open, honest, frank and frequent. The
States and EPA should work to understand each other's perspectives,
achieve consensus on major issues, make decisions in a timely manner,
and resolve conflicts quickly and efficiently.
IV. Process for Considering State Innovations Proposals
EPA and the states are engaged in many successful efforts to
reinvent environmental regulation. These efforts should continue
unimpeded. EPA and the States agree that, where procedures currently
exist, innovation proposals should be handled through normal EPA/state
program activities or other ongoing reinvention activities. Proposals
that do not fit into an existing pathway can be handled via the new
process established under this agreement.
The process of developing Performance Partnership Agreements (PPAs)
under National Environmental Performance Partnership System offers one
opportunity for States and EPA, working with stakeholders, to agree on
innovative approaches to pursue. However, participation in a PPA is not
the only avenue for States and EPA to work on innovative approaches.
Memorandum of Agreements and/or Work Plans can serve the same function
as a PPA. Inclusion of anticipated innovative approaches in the PPAs or
other agreements will allow the states and EPA to allocate staff
resources and establish priorities for innovative projects. For
example, individual states may choose to place higher priority on
innovation projects which promote clear cost or environmental benefits
for the public. It is envisioned that States will include in the PPAs
or other agreements a discussion of potential innovative activities,
indicating how the innovations link to environmental goals and
providing a picture of proposed changes.
A. Use Existing Pathways
This agreement is designed to supplement, rather than replace,
ongoing innovation activities underway in EPA and the States. Such
innovation activities should continue. State innovations that do not
require a change to Federal guidance, regulations or statutes can
proceed without EPA review. EPA's role will consist of support and
advice, if requested. EPA and States should continue to work together
on innovations that may involve using existing flexibilities in current
law and regulation, and on existing innovation programs such as Project
XL.
B. New Process Established Under This Agreement
The States and EPA agree to establish an optional process which
States may use to get timely decisions on innovation proposals. This
process includes senior-level management attention and specific time
frames to ensure prompt decisions by EPA. The following process
establishes a management framework so that actions and next steps,
along with interested participants and decision-makers, can be clearly
identified and taken into account. EPA's Regional Administrators are
responsible for ensuring that the process moves forward; individual
states are expected to establish similar senior-level points of contact
to manage the State's role in the innovation process.
This process is intended to be flexible. For example, EPA Regional
Offices, EPA Headquarters Offices, and the States are encouraged to
maintain open lines of communication at both staff and management
levels beyond the formal process described below, and states are
encouraged to invite EPA into the early discussion stages of any
project. Early consultation between EPA and the States is important in
identifying obstacles early and in determining who needs to be involved
so that the project can move forward expeditiously.
EPA will also work with individual States as needed to establish
priorities in the review of proposals based on guidance developed in
the Performance Partnership Agreement or other EPA/State agreed
mechanism. EPA and the States recognize that the success of this
process will be affected by the quality and clarity of proposals and
the effectiveness of communication between EPA, the state, and
stakeholders. The States and EPA are committed to working together to
ensure that communications are frequent, open, honest, and directed to
finding means to allow innovations to succeed.
While one of the objectives of the innovation proposals is
efficiency, the very act of designing an experiment, testing the
hypothesis, and evaluating the results may be resource intensive for
all parties. The optimum management of resources by EPA and the State
will help ensure the success of the review process, the implementation
of the projects, and adherence to time lines.
1. Stage One--Developing Quality Proposals
States and EPA recognize that clear, well-developed proposals will
facilitate review and speed decision-making.
[[Page 56187]]
States are encouraged to consult with EPA as early as possible in the
development of a proposal. The States should be able to use this early
consultation process to develop a clear understanding of their
proposals with EPA and key stakeholders.
During the early consultation, the State and EPA will identify
issues that need attention, possible barriers to implementation,
uncertainties regarding risks, and value added to all parties. These
discussions will be open and candid and will provide the States with
information that will be important and useful for the development of
the proposal. While early consultation is encouraged, not all proposals
will require the same degree of discussion and/or consultation.
EPA and States will bring a positive, constructive approach to
consideration of proposals and seek ways to help good ideas to succeed.
States will prepare proposals that: (a) Are consistent with the
principles described in this agreement, and (b) clearly present the
objective of the proposal, the expected benefits, a description of the
activities, and a determination as to whether the proposal: may require
a change to Federal guidance, policy, past practices or rule
interpretation, but not regulations or statutes; may require a change
to or waiver from Federal regulations, but not statutes; or, may
require a change to a Federal statute.
EPA will: (a) Provide clear statements of its position, along with
timely and authoritative answers to questions about what changes,
variances, or associated approvals a particular proposal may require;
and (b) work with the State to identify the most efficient path by
which a particular proposal could be implemented.
In addition, States will provide meaningful opportunities for
stakeholder involvement in the development of regulatory innovation
proposals. The degree of stakeholder involvement depends on the nature
of the proposal. Where a proposal would involve a change in or variance
from existing national guidance, regulations, or statutes, early
consultation among EPA, states, and national stakeholder groups can
help identify critical issues that need to be addressed. If EPA
believes that national stakeholder involvement is warranted, EPA will
contact the State and identify, in partnership with the State, an
approach to obtain such involvement as early in the process as
possible.
The Senior State Environmental Official or their designee then
submits a written description of the regulatory innovation proposal to
the EPA Regional Administrator, who then initiates the review process
described below. The State will designate a high-level official as the
single point of contact for each project.
2. Stage Two--Review of Proposal and Decision
a. EPA Review. The EPA Regional Office will have primary
responsibility for review of the innovation proposal. This
responsibility includes proposal distribution within the Region and to
the affected EPA National Program Managers and the Office of
Reinvention; review and response to the State; and appropriate
stakeholder involvement. In cases where national policy or regulatory
issues are involved, the Regional Administrator must ensure complete
review by relevant national program offices.
EPA will consider several factors in the review of the innovative
proposals, including
(1) Consistency with the principles in this agreement;
(2) Comments from stakeholders;
(3) Type of flexibility from federal guidance or regulation needed
to implement the proposal;
(4) Clear presentation and analysis of issues;
(5) Potential benefits of the innovation as compared to the
investment of time and resources required for implementation, and
impact on agencies' resources and workloads.
The review process is intended to be flexible. EPA and the State
should maintain open lines of communication at all levels--staff and
management--to ensure that questions and concerns are raised and
discussed. During the review process, EPA may seek input from other
States and stakeholders, including environmental groups and the
regulated community, to fully identify the strengths and weaknesses of
the proposal.
b. EPA Decision. Upon completion of the consultation and review
period, the Regional Administrator will make a decision to accept or
reject a proposal. If a proposal involves a national policy or
regulatory issue, the decision will be made jointly with relevant
National Program Managers and the Office of Reinvention. This decision
will be communicated verbally and in a written form to the designated
Senior State Environmental Official. If the proposal is not accepted,
the decision will include the rationale for the determination.
EPA and the State will determine the category into which the
proposal falls. The type of proposal will have an impact on the time
frame for implementation. The categories are:
Category 1: Straight-forward, transparent proposal with clear
advantages, few obstacles, technically achievable, and minimum
environmental risk.
Category 2: Experimental proposal that has a greater uncertainty of
environmental outcome; requires more attention to design,
implementation, and evaluation; and may involve some risk of failure.
The unpredictability of the experiment means that it will be more
resource intensive and may require more time.
Category 3: Strategic proposal that involves broad-based, new
approaches (e.g., statutory changes) and requires policy discussion to
further develop concepts. Proposals may be assigned to an existing
policy forum for discussion or a new forum could be established.
If the proposal requires changes of interpretation or substance
regarding national statutes, regulations or policies before proceeding
with an innovation project, both EPA and the State will reach agreement
on all proposed changes. These projects will be accomplished through
mechanisms available under Federal law and regulation, which may
include variances, site-specific rules, legal interpretations, or other
means.
c. Appeals. In the event that a dispute arises during this process
or a State disagrees with a Region's decision, the State may appeal in
writing to the EPA Deputy Administrator. The State may also request a
review by a panel consisting of EPA Senior Managers and State
Commissioners. The panel will review the proposal, the issues, and
merits of the dispute, and submit recommendations to the EPA Deputy
Administrator for a final decision.
4. Time Frames for Decision
EPA and the States are committed to working together to ensure
timely responses to State proposals.
a. Initial response to proposal. EPA will respond to the State with
follow-up questions, clarifications, and initial reactions including an
initial identification of obstacles to approval within four weeks of
its receipt of a written innovation proposal from the State.
b. Decision to proceed with proposal: EPA will decide whether to
make a favorable recommendation within 3 months of the receipt of a
proposal from the State. Decisions on proposals may be reached more
quickly for proposals that are straight-forward, with clear
[[Page 56188]]
advantages, widely supported, technically achievable, and implementable
in the short-term.
V. Measuring and Evaluating Success
Before an approved proposal is implemented, we must define success
and how we will measure it. This can help eliminate misunderstandings
about whether or not the process and innovation as a whole is
progressing effectively, and if it is not, what steps need to be taken
to correct any problems.
Therefore, EPA and the States agree on the importance of evaluating
the success of regulatory innovation activities that flow through the
process outlined in Section IV. The challenge is to develop useful
measures without choking the very creativity we seek to stimulate. We
want to ensure that a variety of ideas are being proposed, that
decisions are made in a timely fashion, and that the most promising
innovations are being implemented successfully. To accomplish this, we
must measure both the success of our decision-making process and the
success of the innovations themselves.
A. Measuring the Process
We must ensure that the decision making process is effective, or
the process will not be used. The success of the process depends
primarily on the effectiveness of the communications between EPA and
the States and the timeliness of decisions. Measurements include: (1)
the number and quality of innovation projects proposed, (2) the number
and quality of innovations implemented, (3) the timeliness of the
actions taken in the process, (4) the number of proposals appealed, and
(5) the speed with which information about successful innovations are
disseminated to other states. EPA and states will also evaluate other
factors that are difficult to measure but are critically important to
successful outcomes, including the degree of EPA-State cooperation and
stakeholder participation. EPA should collect this information and make
it available at a central location so it can be used by the States,
EPA, and stakeholders. Within 60 days of signing this agreement, EPA
and ECOS will designate a central location.
B. Measuring the Innovation's Impact
The success of the innovation project's impact will depend on how
well it was designed and the results achieved. Successful innovation
project designs should be clearly described so successful projects can
be used to improve the entire system, and/or adapted to other site
specific situations. The quality of the projects implemented can be
measured by: (1) Environmental impact, (2) efficiency, and (3) other
relevant indicators. In addition to providing information about the
success of an individual innovation project, these measurements also
provide guidance on improving future innovation projects. States and
EPA should agree in advance who is responsible for collecting and
disseminating this information.
The proposed measures in Appendix A provide a starting point for
discussion in terms of a framework and some common criteria for
innovations. Common criteria allow the states and EPA to evaluate the
progress in innovations state-wide and nationally.
VI. Information Sharing
Accepted state innovation proposals and completed projects are most
valuable when widely available to state and local regulators, the
regulated community, environmental organizations and the public at
large. We agree on the need to share information, track commonalities
and analyze barriers to promising state innovations. Knowledge of both
successes and failures will help the states, EPA and stakeholders
develop better approaches for achieving our environmental goals.
Because sharing information and innovative ideas among the states is
core to ECOS' mission, ECOS will set up a regulatory innovation
clearinghouse that highlights the results of this agreement and other
state/EPA innovations that EPA Regional Reinvention Ombudsmen or State
Commissioners deem appropriate.
VII. Next Steps
EPA and the States agree on the following steps to ensure prompt
implementation of the agreement:
A. Joint Evaluation
By October 1998, states and EPA will begin to evaluate the success
of regulatory activities that have been reviewed under the new process.
The evaluation will consider both the environmental and efficiency
benefits derived from each innovation, and the efficiency of the new
review process. The results of the evaluation will be shared with EPA,
the states and stakeholders.
B. Modifications to the Agreement
If the evaluation indicates a need to modify or amend this
agreement, EPA and the states agree to discuss such modifications or
amendments and make needed changes by January 1999.
Attachments:
A. Model for Core Performance Measures
B. Examples of Regulatory Innovations
Attachment A--EPA/State Environmental Regulatory Innovations Core
Performance Measures
Environmental Goal
A sustainable environment with healthy communities and
ecosystems
Environmental Objectives
--Air quality improvements
--Water quality improvements
--Land quality improvements
Program Objectives (Outcomes)
--More effective and efficient environmental regulatory systems
--Reductions in releases to the environment
--Reductions in resources expended to implement the regulatory
process, by regulators, regulated entities, other stakeholders:
time, workyears, money
--Increased stakeholder participation in the regulatory process
--Large majority of high priority, high quality innovation
projects are successfully implemented
--Successful results of innovation projects are: clearly
described, widely disseminated, adopted in other site specific
situations, used to improve entire systems
Program Activities (Outputs)
--Number of innovation projects proposed
--Number of innovation projects implemented
--Quality of projects implemented: environmental, efficiency,
other indicators
--Stakeholder participation
--Timeliness of actions taken in process
Attachment B--Examples of Regulatory Innovations
To encourage creative thinking and the development of good
regulatory innovation proposals, EPA and the States have developed
the attached examples of regulatory innovation projects. Four
examples of potential regulatory innovations are provided. Examples
1, 2 and 3 are suggestions of innovative ideas that states have
developed--they are intended to illustrate the kinds of proposals
that may be developed. These examples have not been reviewed or
accepted by EPA as projects for this process. Example 4 describes an
innovative proposal that was recently implemented in North Carolina.
Example 1: Mercury in Wastewater Effluent
Objective: Substitute sludge testing and limit requirements for
mercury in place of effluent limits and monitoring requirements in
NPDES permits for municipalities.
Description and expected benefits: Mercury cannot be detected
accurately in municipal wastewater effluent. Dilution of mercury in
effluent leads to non-detectable monitoring results. In addition,
mercury test methods at the low levels seen in municipal effluent
can easily pick up contamination of sampling and analysis and lead
to false positives. As a result, most municipalities
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can show compliance with mercury effluent limits and need take no
steps to reduce mercury in their effluent.
This proposal would eliminate effluent limits from NPDES permits
for municipalities, and instead substitute sludge monitoring (where
mercury concentrates in the wastewater treatment process). If
mercury in sludge exceeds federal clean sludge levels,
municipalities would be required to develop mercury source reduction
programs. Since mercury can be more accurately detected in sludge,
this would lead to better targeting of the municipalities that need
to develop mercury source reduction programs.
Federal obstacle halting or hindering progress: Requires changes
in either federal statute or variance/change in federal regulations.
Attorneys state that sludge requirements as proposed cannot be tied
to surface water standards.
Additional background information: This proposal was strongly
supported by municipalities, environmental groups, Wisconsin DNR
staff, and EPA staff. All saw that this proposal would lead to
greater environmental benefits than the current NPDES system.
State: Wisconsin Department of Natural Resources, Bureau of
Watershed Management.
Example 2: Continuous Emissions Monitoring for Air Pollutants
Objective: Create a flexible approach to compliance
demonstration for air emission limits that have been consistently
achieved. In exchange, install continuous emissions monitoring for
other toxic pollutants for which more data is needed. This approach
would reward facilities which have demonstrated superior
environmental performance with simplified compliance demonstration
requirements.
Description and expected benefits:
--Federal guidance on practical enforceability requires that
compliance demonstration schemes use available technology which
produces verification of compliance data as frequently as
practically possible.
--A facility is required to use continuous emission monitors
(CEMs) to show compliance with an air emission limit. Data has been
gathered for several years and it shows consistent emission levels
at or lower than 50% of the limit. In addition, other surrogate
process parameters are continuously monitored.
--The permittee wishes to show compliance by an alternative
compliance method which requires periodic testing to assure
continued compliance. The surrogate parameters will continue to be
monitored and will be used to ensure that the operating conditions
remain within the range under which compliance has been demonstrated
by periodic testing.
--In exchange, the facility agrees to install CEM for certain
toxic organics from certain processes. The nature and levels of
these toxics are not very well defined based on mass balance
approaches. The information generated by these CEMs will be useful
for an air toxics analysis being conducted in the area.
Federal obstacle halting or hindering progress: Requires change
or deviation from established EPA policies regarding federal
enforceability as a practical matter on emission limits. However,
the demonstrated level of confidence on compliance warrants a less
rigorous approach, particularly because it includes a periodic
verification process.
Additional background information: The permittees believe that
it is important to build a trust relationship with regulators to be
able to re-direct resources to areas where the need is greater to
realize further improvements or to generate new information on
environmental matters.
State: Minnesota Pollution Control Agency, Air Quality Division,
Permits Section
Example 3: Tiered Permitting System for Hazardous Waste Facilities
Objective: Create a permitting system for hazardous waste (HW)
management facilities that are presently exempt from the existing
RCRA Part B permitting system but still pose a potential threat to
human health and the environment if improperly designed and
operated.
Description and expected benefits:
--Current RCRA regulations exempt recycling facilities from any
permitting requirements, but require a Part B permit if HW is stored
prior to recycling.
--Environmentally safe recycling is preferable to disposal and
should be encouraged.
--Recycling facilities can be as complicated as treatment and
disposal facilities and require some oversight to ensure that they
are protective of human health and the environment.
--Requiring the standard Part B permit for recycling facilities
creates a disincentive and may greatly limit the number of recycling
facilities.
--A less onerous tiered permit provides regulatory oversight and
does not pose the same disincentive as a Part B permit for recycling
facilities.
--The tiered permit incorporates performance standards and
financial assurance as appropriate and is custom tailored to the
facility without requiring all of the elaborate features of a Part B
permit.
Federal obstacle halting or hindering progress: May require a
variance from federal statutes and regulations that prescribe
standards and require a Part B permit for storage of HW depending on
what type of storage activities are covered under the tiered permit.
Additional background information: State legislation required
fluorescent lamp recyclers to be permitted. Rules are in the
development stage with extensive regulated community involvement.
The tiered permitting system will be extended to all types of HW
facilities for which a Part B permit is not required or not
appropriate, including recyclers and some types of storage
facilities.
State: Minnesota Pollution Control Agency, Hazardous Waste
Division, Regulatory Compliance Section.
Example 4: River Basin-Based Planning and Permitting
Objective: To coordinate stream modeling and permitting on a
river-basin or sub-basin scale instead of in a piecemeal fashion.
Description and expected benefits:
River-basin based planning and permitting would:
--Enable better planning and resource allocation
--Increase consistency between permits
--Increase consideration of basin-wide pollutant inputs (point
and nonpoint) for better decision-making and planning
--Improve efficiency of modeling, data collection for modeling,
and permitting activities
--Provide opportunity for greater stakeholder involvement in the
planning process
Federal statutes prohibit permits with a term greater than five
years. To synchronize NPDES permit renewal for an entire river
basin, the state had to issue five year permits followed by an
additional short-term permit. The burden on permitting and modeling
staff was further increased because EPA Region IV was also pressing
NC to address its permit backlog. The state lacked sufficient
modeling resources to address the existing backlog and also issue
short term permits in selected basins. The state proposed to reissue
the short-term permits with existing limits without modeling and to
refocus its permitting staff away from the permit backlog and toward
the basin-wide permitting approach. Region IV was hesitant to
endorse the basin-wide concept.
Contact with EPA Headquarters (Office of Water) convinced EPA to
hire a facilitator to help the state develop an implementation
strategy for the basin-wide planning and permitting approach. EPA
Headquarters also sponsored a workshop to obtain input from
surrounding states. This involvement allowed the state to develop a
convincing strategy, and subsequently, Region IV agreed to the
proposal. EPA also provided a 104(b)(3) grant to increase monitoring
and modeling in the Tar-Pamlico River Basin to help pilot the
approach.
Federal obstacle halting or hindering progress: Required change
in EPA past practice.
Additional background information: At first, permittees reacted
to the short-term permits due to the extra burden of completing
permit applications and paying application fees. However, the
concerns of permittees were quelled by pointing out the long-term
improvements in consistency among permits in the river basin and in
efficiency of issuing these permits. Environmental stakeholders were
supportive of the approach from the start due to a greater
opportunity for involvement in the planning process.
State: North Carolina.
Dated: October 16, 1997.
J. Charles Fox,
Associate Administrator, Office of Reinvention.
[FR Doc. 97-28553 Filed 10-28-97; 8:45 am]
BILLING CODE 6560-50-P