ECOS/EPA Incentives Workgroup

**Subgroup 3**

Evaluation of Regulatory and Statutory Options for Improving and
Streamlining the Implementation Process for Incentives

**I. Background**

The purpose of Subgroup #3 is to *evaluate potential regulatory and
statutory options for improving and streamlining the implementation
process for incentives.* A continuing challenge for both the U.S.
Environmental Protection Agency (EPA) and states in promoting
performance-based programs is whether to employ existing statutory and
regulatory authority, or to advocate adoption of new authorizing
legislation or regulations to remove barriers to innovation and create
incentives. Two areas of focus were identified for this group:

1.  Identifying existing and proposed statutory and regulatory paths to
    authorize and facilitate the development of incentives for
    performance-based programs.

2.  Analyzing barriers to incentives implementation to improve the
    delivery of incentives to interested members.

**II. Research Conducted**

To support the work of improving the incentives process, the group
conducted three research tasks including a review of state and federal
authorizing legislation for performance-based environmental leadership
programs; and a survey of state experience in implementing Performance
Track (PT) incentives.

[State Authorizing Legislation for Performance-Based
Programs]{.underline}

We first reviewed the authorizing statutes for performance-based
environmental leadership programs in 16 states (see Attachment 1 for a
summary). Based on this review, state legislative activity regarding
performance-based programs begins in 1996 and continues to the present.
Incentives specified in state statutes include: recognition and awards;
self-monitoring, reporting, and certification; consolidated and
simplified reporting and monitoring; deferred enforcement and waiver of
certain civil penalties provided that violations discovered in a
self-audit are corrected promptly and are not serious; preferred vendor
status; priority for funding; financial credits or rebates applied
against permit fees; emission credits in exchange for beyond-compliance
performance; low priority inspections; and alternative compliance
approaches.

Alternative compliance approaches require a demonstration of equivalent
or better environmental performance to qualify for this incentive.
States have experimented with environmental management systems as an
alternative to ensuring compliance with existing requirements, provided
alternative air permitting limits on a sector basis, and offered members
of leadership programs the opportunity to advance an alternative
compliance approach that meets the requirements and approval of the
regulatory agency. Subgroup #2\'s report on \"Better Incentives\"
provides additional state and federal examples of alternative compliance
approaches.

[Federal Proposed Legislation to Advance Performance-Based
Programs]{.underline}

At the federal level, so called \"Second Generation\" legislation was
introduced in 1997 and 1999 in the U.S. Senate and U.S. House,
respectively. Both the Senate and House bills proposed to authorize EPA
to enter into innovative environmental agreements to encourage better or
superior environmental performance and results. These bills are still in
committee.

[State Experience in Implementing Performance Track
Incentives]{.underline}

We contacted states to understand the drivers and challenges associated
with state adoption of the PT regulatory incentives and their
implementation (see Attachment 2 for a summary). Of the 13 states
identified on our list as having implemented one or both of the PT
incentives, we conducted interviews with Colorado, North Carolina,
Oklahoma, Pennsylvania, Tennessee, Virginia, and Washington. Our
findings from this outreach include: (1) adoption of the incentive rule
changes does not appear to be an obstacle to implementation; (2) the
need for a working relationship and good communication between the
performance-based programs and the media staff is key to promoting and
implementing incentives at the facility level; (3) a limited number of
PT members are eligible and interested in the incentives; (4) there is
state interest in a mechanism for providing PT incentives to members of
state leadership programs; and (5) the level of engagement by EPA
Regional staff in incentives implementation varies considerably.

**III. Recommendations**

Our recommendations are separated into short-term and long-term
projects. The short--term recommendations tend to focus more on making
incentives easier to implement once they've been created. These
recommendations have been incorporated in Subgroup 1's Draft Report: A
System for Identifying, Developing, and Implementing Incentives for
Performance Track and State Programs.

The long-term recommendations are just that and will require a
commitment well beyond 2005. Including these recommendations here is
intended more to keep the ideas on the radar screen than to take
immediate action.

# A. Short -Term

## Program Awareness Packages for Media Offices: 

## 

## Based on research concerning implementation issues encountered with the recent PT RCRA and MACT incentives in various states, there is a general lack of awareness of PT and/or state performance-based leadership programs within the various media programs (air, water, waste, etc). It is our recommendation that a communications package be prepared for distribution to regional PT and state performance program representatives. This package would be designed to assist PT and state performance program representatives to enhance awareness among media program staff and increase communications between key stakeholders. It could include information on key contact personnel, resources for additional assistance, templates for educational materials and/or a presentation on PT and state programs that could be customized to explain the benefits of the program to different audiences. 

## Incentives Communications Packages for EPA Regional and State Staff:

> Based on research concerning implementation issues encountered with
> the recent PT RCRA and MACT incentives in various states, it is also
> recommended that communications packages should be prepared for
> regional PT and state performance program representatives in
> connection with the launching of a new incentive. Packages could
> include a summary of the incentive, recommended process(es) for
> implementation, a key contact within EPA if problems should arise,
> list of members eligible for the incentive and a fact sheet for
> eligible members. Communication packages will need to be tailored to
> the type of incentive and may not always require the same materials.
>
> In addition to providing communications packages to EPA Regional and
> State staff, it would help states\' PT outreach efforts if EPA were to
> send incentives information directly to eligible PT facilities as
> well, particularly in states where ongoing contact with facilities is
> infrequent either because no state performance-based programs exists
> or because there is limited state support for PT.

## Model Legislation for States:

> A review of state performance-based leadership programs revealed that
> state legislatures have often included specific authorizing authority
> for developing incentives, including alternative compliance methods,
> as part of performance-based programs. State environmental agencies,
> therefore, are granted the requisite authority to reward members of
> their leadership programs. Ideally, similar legislation at the federal
> level would establish a foundation upon which to build and further the
> cause of more PT incentives faster. However, this may be more of a
> long-term solution.
>
> To encourage other states to adopt legislation that authorizes
> performance-based programs and incentives, we recommend preparation of
> a model state statute. This model legislation could take the best from
> existing state performance-based program legislation such as authority
> for developing incentives, alternative compliance methods, and
> eligibility for, and termination of, incentives. In addition, the
> model legislation could create a path for state performance-based
> programs to satisfy PT program requirements, thereby creating the
> potential for members in state programs to be eligible for PT
> incentives.
>
> **B. Long-Term**
>
> [Enabling Act]{.underline}
>
> Advocates of legislative solutions, as opposed to regulatory
> solutions, argue that uncertain statutory foundations constrain
> innovation, increase transaction costs,[^1] and leave industry
> vulnerable to potential EPA enforcement action and citizen lawsuits.
> Authorization of the PT program at the federal level, including
> setting the stage for incentive development and alternative compliance
> methods with such authorization being extended to any equivalent state
> performance-based program could remove barriers to innovation and
> further creation of incentives allowing for improved environmental
> outcomes that cannot be achieved through the traditional means.
>
> At the federal level, so-called \"Second Generation\" legislation was
> introduced in 1997 and 1999 in the U.S. Senate and U.S. House,
> respectively. Both the Senate and House bills would authorize EPA to
> enter into innovative environmental agreements to encourage better or
> superior environmental performance and results, thereby:
>
> \(1\) eliminating any legal uncertainty regarding EPA\'s authority to
> implement innovative programs, such as the Performance Track program;
> and
>
> \(2\) protecting participating companies from lawsuits.
>
> Both bills make clear that the authority granted to EPA to modify or
> waive requirements would not include contravention of the \"specific
> terms\" of an existing statute. Thus, such an \'innovations\' statute
> is intended to supplement, not replace, existing environmental
> statutes. Both of these bills are currently still in Congressional
> committees. It will require renewed political interest to garner
> support to move these legislative initiatives, or similar proposals,
> forward.
>
> [Equivalency of PT with State Programs]{.underline}:
>
> It is our recommendation that states are granted authority to extend
> PT incentives to state leadership program members. This would require
> EPA to review state performance-based programs to determine whether a
> program is equivalent to the acceptance and retention standards for
> PT, or allow states to demonstrate equivalency based on specified
> criteria. This may become a short-term goal on its own (pilot project)
> and/or it may be combined with the legislation recommendation above
> for a longer-term solution.

**Draft Action Steps for Improving and Streamlining the**

# Incentives Implementation Process

+-----------------------+-----------------------+-----------------------+
| **Step in Process**   | **Who is              | *                     |
|                       | Responsible**         | *Timeframe/comments** |
+-----------------------+-----------------------+-----------------------+
| **Short-Term          |                       |                       |
| Recommendations**     |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 1\. Develop program   | Performance Track     | By end of calendar    |
| awareness packages    | team;                 | year.                 |
| for media offices.    |                       |                       |
|                       | State programs        |                       |
+-----------------------+-----------------------+-----------------------+
| 2\. Prepare           | Performance Track     | Within 2 months of    |
| incentives            | team;                 | finalizing an         |
| communications        |                       | incentive.            |
| packages for EPA      | State programs        |                       |
| Regional and State    |                       |                       |
| staff.                |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 3\. Model legislation | Performance Track     | By end of calendar    |
| for States.           | team with State input | year.                 |
|                       | and review.           |                       |
+-----------------------+-----------------------+-----------------------+
| **Long-Term           |                       |                       |
| Recommendations**     |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 1\. Consider seeking  | Performance Track     | As appropriate;       |
| support to            | team and EPA          | coordinated           |
| re-introduce federal  | management            |                       |
| legislation for       |                       |                       |
| performance-based     |                       |                       |
| programs.             |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 2\. Develop process   | Performance Track     | As appropriate;       |
| for establishing      | team; OGC and OECA;   | coordinated           |
| equivalency of state  | State programs        |                       |
| performance-based     |                       |                       |
| programs to extend PT |                       |                       |
| incentives to state   |                       |                       |
| leadership program    |                       |                       |
| members.              |                       |                       |
+-----------------------+-----------------------+-----------------------+

**Attachment 1**

**State Performance-Based Environmental Leadership Programs:**

**Summary of Incentives Authorized by State Legislation**

To support the EPA/State Incentives workgroup, we reviewed the
authorizing statutes for performance-based environmental leadership
programs in 16 states. In addition, we include three states in which the
leadership programs were created pursuant to a gubernatorial executive
order (Delaware), a Commissioner\'s policy (New York), or legislation
that is in process (Michigan). Based on this review, state legislative
activity regarding performance-based programs begins in 1996 and
continues to the present (see Table 1).

+------------+-------------+-------------------------------------------+
| **Table    |             |                                           |
| 1:**       |             |                                           |
|            |             |                                           |
| **Date of  |             |                                           |
| State      |             |                                           |
| L          |             |                                           |
| egislation |             |                                           |
| A          |             |                                           |
| uthorizing |             |                                           |
| Perform    |             |                                           |
| ance-Based |             |                                           |
| Program**  |             |                                           |
+------------+-------------+-------------------------------------------+
| **State**  | **Date of   | **Name of Performance-Based Program**     |
|            | Passage of  |                                           |
|            | Le          |                                           |
|            | gislation** |                                           |
+------------+-------------+-------------------------------------------+
| Arizona    | 2000        | Voluntary Environmental Performance       |
|            |             | Program                                   |
+------------+-------------+-------------------------------------------+
| California | 1999        | Voluntary Pilot Program                   |
+------------+-------------+-------------------------------------------+
| Colorado   | 1998        | Environmental Leadership Program          |
+------------+-------------+-------------------------------------------+
|            | 2004        | Environmental Management System Permit    |
|            |             | Program                                   |
+------------+-------------+-------------------------------------------+
| C          | 1999        | Exemplary Environmental Management        |
| onnecticut |             | Systems                                   |
+------------+-------------+-------------------------------------------+
| Delaware   | 2003        | Principles for Responsible Industry       |
|            |             | (PRIDE)                                   |
|            | Executive   |                                           |
|            | Order       |                                           |
+------------+-------------+-------------------------------------------+
| Florida    | 2000        | Alternative Methods of Regulatory         |
|            |             | Permitting                                |
+------------+-------------+-------------------------------------------+
|            | 2002        | Citrus Juice Processing Facilities        |
+------------+-------------+-------------------------------------------+
|            | 2004        | Environmental Award Program               |
+------------+-------------+-------------------------------------------+
| Illinois   | 1996        | Environmental Management System Agreement |
+------------+-------------+-------------------------------------------+
| Kentucky   | 2005        | Program under development                 |
+------------+-------------+-------------------------------------------+
| Maine      | 2000        | Environmental Leadership Program          |
+------------+-------------+-------------------------------------------+
| Michigan   | 2005 Senate | Clean Corporate Citizen Program           |
|            | bill passed |                                           |
+------------+-------------+-------------------------------------------+
| Minnesota  | 1996        | Minnesota XL Permit Project               |
+------------+-------------+-------------------------------------------+
|            |             | Environmental Improvement Program         |
+------------+-------------+-------------------------------------------+
| New        | 1998        | Enhanced Environmental Performance        |
| Hampshire  |             | Agreements                                |
+------------+-------------+-------------------------------------------+
| New York   | 2004        | New York Environmental Leaders            |
|            | Comm        |                                           |
|            | issioner\'s |                                           |
|            | Policy      |                                           |
+------------+-------------+-------------------------------------------+
| Oregon     | 1997        | Green Permits Program                     |
+------------+-------------+-------------------------------------------+
| South      | 2002        | Environmental Excellence Program          |
| Carolina   |             |                                           |
+------------+-------------+-------------------------------------------+
| Texas      | 1998        | Regulatory Flexibility Order              |
+------------+-------------+-------------------------------------------+
|            | September   | Environmental Management Systems          |
|            | 2001        |                                           |
+------------+-------------+-------------------------------------------+
|            |             | Performance-Based Regulation              |
+------------+-------------+-------------------------------------------+
|            | December    | Texas Environmental Management System     |
|            | 2001        | Program                                   |
+------------+-------------+-------------------------------------------+
|            | 2003        | Strategically Directed Regulatory         |
|            |             | Structure                                 |
+------------+-------------+-------------------------------------------+
| Virginia   | 2005        | Virginia Environmental Excellence Program |
+------------+-------------+-------------------------------------------+
| West       | 2004        | Environmental Excellence Program          |
| Virginia   |             |                                           |
+------------+-------------+-------------------------------------------+
| Wisconsin  | 2004        | Environmental Results Program             |
+------------+-------------+-------------------------------------------+

In particular, we reviewed the incentives that are specifically
authorized in these states\' legislation. We focus on
statutorily-authorized incentives, rather than incentives created
administratively, to understand the types of incentives supported by
state legislatures and to evaluate creative prototypes that might be
more widely used at the state or federal levels. Below we provide some
highlights of our evaluation of these statutes and also attach a table
that provides the specifics for each state including whether the
authorizing legislation is permanent (or sunsets after a certain period
of time), a brief description of the performance-based program and a
list of specific incentives, funding sources if available, and a web
link to the legislation and/or the program (see Table 2).

[Types of Incentives Included in State Statutes]{.underline}

Incentives specified in state statutes include: recognition and awards;
self-monitoring, reporting, and certification; expedited review and
processing of permit applications; single point of contact support;
consolidated and simplified reporting and monitoring; deferred
enforcement and waiver of certain civil penalties provided that
violations discovered in a self-audit are corrected promptly and are not
serious; preferred vendor status; priority for funding; financial
credits or rebates applied against permit fees; emission credits in
exchange for beyond-compliance performance; low priority inspections;
and alternative compliance approaches. This review demonstrates a keen
interest by state legislatures in promoting performance-based
environmental programs with incentives for participants. We have not
evaluated, however, how many of these incentives are being implemented
in active programs, the specifics of each incentive, nor to what degree
members are benefiting from them.

[Alternative Compliance Approaches]{.underline}

Many states offer alternative compliance approaches to environmental
leaders in lieu of conventional regulatory and permitting systems. In
all cases, equivalent or better environmental performance must be
demonstrated; whereas the mechanisms to bind the parties differ by
state. In some states, variances or waivers are available, and in
others, a consolidated permitting agreement or participation contract is
agreed upon and executed by the participant and the environmental
agency. Incentives that offer alternative compliance approaches include
the three categories below, together with the state(s) that offer each
category:

1.  [Environmental Management System Agreements/Permits]{.underline}:
    these agreements or permits allow participants to use an
    environmental management system as an alternative approach to ensure
    compliance with existing requirements.

    -   Colorado\'s EMS Permit Program

    -   Illinois\' EMS Agreement

2.  [Sector-Based Alternative Air Permitting]{.underline}: this approach
    provides alternative air permitting limits in lieu of air operating
    and construction permits.

    -   Florida\'s Citrus Juice Processors

3.  [Alternative Compliance Approaches to Meeting Existing
    Requirements]{.underline}: this incentive offers members of
    performance-based programs the opportunity to advance an alternative
    compliance approach that meets the requirements and approval of the
    regulatory agency.

    -   Florida\'s Alternative Methods of Regulatory Permitting;

    -   Minnesota\'s XL Permit Project;

    -   Minnesota\'s Flexible EMS Air Permit;

    -   New Hampshire\'s Enhanced Environmental Performance Agreements;

    -   Oregon\'s Green Permits Program;

    -   South Carolina\'s Environmental Excellence Program;

    -   Texas\' Regulatory Flexibility Order;

    -   Texas\' EMS Program;

    -   Texas\' Strategically Directed Regulatory Structure;

    -   Virginia\'s Environmental Excellence Program; and

    -   Wisconsin\'s Environmental Results Program.

[Conclusion and Next Steps]{.underline}

[This review demonstrates that state legislatures have often included
specific authorizing authority for developing incentives as part of
performance-based programs. State environmental agencies, therefore, are
granted the requisite authority to reward members of their leadership
programs. Alternative compliance approaches, for example, appear to hold
promise for innovation and may provide models for performance-based
programs at the federal level. However, such approaches may prove to
have significant transaction costs. To better understand how these
incentives have been applied in practice and the benefits and costs
associated with each incentive, additional investigations of state
programs and interviews of state staff and program members would be
necessary.]{.underline}

+------+--------+----------------------------+--------+--------------+
| **T  |        |                            |        |              |
| able |        |                            |        |              |
| 2:   |        |                            |        |              |
| SUM  |        |                            |        |              |
| MARY |        |                            |        |              |
| OF   |        |                            |        |              |
| S    |        |                            |        |              |
| TATE |        |                            |        |              |
| STAT |        |                            |        |              |
| UTES |        |                            |        |              |
| AUT  |        |                            |        |              |
| HORI |        |                            |        |              |
| ZING |        |                            |        |              |
| P    |        |                            |        |              |
| ERFO |        |                            |        |              |
| RMAN |        |                            |        |              |
| CE-B |        |                            |        |              |
| ASED |        |                            |        |              |
| E    |        |                            |        |              |
| NVIR |        |                            |        |              |
| ONME |        |                            |        |              |
| NTAL |        |                            |        |              |
| LE   |        |                            |        |              |
| ADER |        |                            |        |              |
| SHIP |        |                            |        |              |
| P    |        |                            |        |              |
| ROGR |        |                            |        |              |
| AM** |        |                            |        |              |
+======+========+============================+========+==============+
| *    | **Type | **Authorized Activity**    | **Fun  | *            |
| *Sta | of     |                            | ding** | *Reference** |
| te** | Autho  | (including Incentives)     |        |              |
|      | rity** |                            | (Ded   |              |
| **E  | (Perm  |                            | icated |              |
| nvir | /Temp) |                            | or     |              |
| onme |        |                            | Annual |              |
| ntal |        |                            | Ap     |              |
| Agen |        |                            | propri |              |
| cy** |        |                            | ation) |              |
+------+--------+----------------------------+--------+--------------+
| *    | August | **Voluntary Environmental  | §      | http://www.  |
| *Ari | 17,    | Performance Program:**     | 49-177 | azleg.state. |
| zona | 2000   |                            | of the | az.us/legtex |
| De   | signed | • Authorizes ADEQ to enter | legis  | t/44leg/2r/l |
| part | by the | into cooperative           | lation | aws/0263.htm |
| ment | Gov    | agreements with eligible   | states |              |
| of   | ernor, | participants with EMS,     | that   |              |
| E    | Senate | procedures to achieve and  | don    |              |
| nvir | Bill   | maintain compliance,       | ations |              |
| onme | 1321,  | mandatory training for     | made   |              |
| ntal | C      | employees, annual          | for    |              |
| Q    | hapter | evaluations, and system of | the    |              |
| uali | 263,   | verifiable measures to     | p      |              |
| ty** | am     | demonstrate compliance.    | urpose |              |
| (A   | ending |                            | of     |              |
| DEQ) | Title  |                            | f      |              |
|      | 49,    |                            | unding |              |
|      | C      |                            | this   |              |
|      | hapter |                            | p      |              |
|      | 1 and  |                            | rogram |              |
|      | adding |                            | shall  |              |
|      | A      |                            | be     |              |
|      | rticle |                            | made   |              |
|      | 5, §§  |                            | di     |              |
|      | 49-171 |                            | rectly |              |
|      | to     |                            | to the |              |
|      | 4      |                            | State  |              |
|      | 9-178. |                            | Trea   |              |
|      | P      |                            | surer. |              |
|      | rogram |                            |        |              |
|      | term   |                            |        |              |
|      | inates |                            |        |              |
|      | on     |                            |        |              |
|      | De     |                            |        |              |
|      | cember |                            |        |              |
|      | 31,    |                            |        |              |
|      | 2004.  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Formal public            |        |              |
|      |        | recognition by the         |        |              |
|      |        | Governor, including        |        |              |
|      |        | preferred vendor status,   |        |              |
|      |        | awards, public             |        |              |
|      |        | announcements, and press   |        |              |
|      |        | releases.                  |        |              |
|      |        |                            |        |              |
|      |        | • Self-monitoring,         |        |              |
|      |        | reporting, and             |        |              |
|      |        | certification, or          |        |              |
|      |        | third-party certification  |        |              |
|      |        |                            |        |              |
|      |        | • Accelerated review and   |        |              |
|      |        | processing of permit       |        |              |
|      |        | applications               |        |              |
|      |        |                            |        |              |
|      |        | • single point-of-contact  |        |              |
|      |        | for permitting             |        |              |
|      |        |                            |        |              |
|      |        | • Consolidation and        |        |              |
|      |        | simplification of          |        |              |
|      |        | reporting and monitoring   |        |              |
|      |        | requirements               |        |              |
|      |        |                            |        |              |
|      |        | • Extension of permit      |        |              |
|      |        | terms up to maximum        |        |              |
|      |        | allowed by law             |        |              |
|      |        |                            |        |              |
|      |        | • Total or partial waiver  |        |              |
|      |        | of civil penalties after   |        |              |
|      |        | cooperative agreement      |        |              |
|      |        | signed, provided certain   |        |              |
|      |        | exceptions are not         |        |              |
|      |        | triggered.                 |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | July   | **Voluntary Pilot          | annual | <http://www. |
| Cali | 6,     | Program:**                 | a      | calepa.ca.go |
| forn | 1999   |                            | ppropr | v/EMS/Public |
| ia** |        | • Establish no more than 8 | iation | ations/2003/ |
|      | As     | pilots to evaluate whether |        | LegReport/>  |
| **E  | sembly | use of EMS increases       |        |              |
| nvir | Bill   | public health and          |        |              |
| onme | 1102   | environmental protection   |        |              |
| ntal | (      | beyond conventional        |        |              |
| Pr   | Stats. | permitting and provides    |        |              |
| otec | 1999,  | better public information. |        |              |
| tion | Ch.    |                            |        |              |
| Agen | 65)    | • Voluntary program        |        |              |
| cy** | co     |                            |        |              |
|      | dified | • No waiver of existing    |        |              |
|      | in     | requirements.              |        |              |
|      | Public |                            |        |              |
|      | Res    | • Explore regulatory track |        |              |
|      | ources | for high performing        |        |              |
|      | Code   | organizations with the     |        |              |
|      | (PRC), | following criteria:        |        |              |
|      | §      |                            |        |              |
|      | 71045  | \(1\) compliance with all  |        |              |
|      | et     | applicable regulatory      |        |              |
|      | seq.   | standards must be assured, |        |              |
|      | (AM    | with preference to be      |        |              |
|      | 1102). | given to systems that      |        |              |
|      | Sunset | achieve performance        |        |              |
|      | J      | significantly beyond that  |        |              |
|      | anuary | required by existing law;  |        |              |
|      | 1,     |                            |        |              |
|      | 2002   | \(2\) information          |        |              |
|      |        | accessible to the public   |        |              |
|      |        | should be enhanced; and    |        |              |
|      |        |                            |        |              |
|      |        | \(3\) system should be     |        |              |
|      |        | simpler and more efficient |        |              |
|      |        | means of producing better  |        |              |
|      |        | environmental results and  |        |              |
|      |        | information; thereby       |        |              |
|      |        | providing significant      |        |              |
|      |        | value to agencies, public, |        |              |
|      |        | and the regulated          |        |              |
|      |        | community.                 |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Potential cost savings   |        |              |
|      |        | associated with EMS        |        |              |
|      |        | adoption, but no specific  |        |              |
|      |        | incentives provided in     |        |              |
|      |        | legislation.               |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | May    | **Environmental Leadership | annual | h            |
| Colo | 26,    | Program:**                 | a      | ttp://www.st |
| rado | 1998   |                            | ppropr | ate.co.us/go |
| De   |        | • Establish voluntary      | iation | v_dir/leg_di |
| part | House  | program for environmental  |        | r/olls?s1199 |
| ment | Bill   | leaders after consultation | (\$4   | 8/sl.235.htm |
| of   | 98     | with stakeholders.         | 93,980 |              |
| Pu   | -1058, |                            | for    | A complete   |
| blic | co     | • Participation is subject | first  | list of      |
| He   | dified | to review every 3 years.   | year)  | CDPHE Number |
| alth | in §§  |                            |        | range        |
| and  | 25-6   | • Establish mandatory and  |        | CHAPT        |
| the  | .7-101 | alternative elective       |        | ERincentives |
| E    | to     | program elements that      |        | may be found |
| nvir | 25-6   | include verifiable methods |        | at:          |
| onme | .7-110 | to measure progress.       |        | [[http:/     |
| nt** | of the |                            |        | /www.cdphe.s |
|      | Co     |                            |        | tate.co.us/e |
| (CHD | lorado |                            |        | l/elp/incent |
| PHE) | R      |                            |        | ivestable.pd |
|      | evised |                            |        | f]{.underlin |
|      | Sta    |                            |        | e}](http://w |
|      | tutes. |                            |        | ww.cdphe.sta |
|      | Sunset |                            |        | te.co.us/el/ |
|      | on     |                            |        | elp/incentiv |
|      | De     |                            |        | estable.pdf) |
|      | cember |                            |        |              |
|      | 31,    |                            |        |              |
|      | 2003,  |                            |        |              |
|      | but    |                            |        |              |
|      | p      |                            |        |              |
|      | rogram |                            |        |              |
|      | con    |                            |        |              |
|      | tinues |                            |        |              |
|      | to be  |                            |        |              |
|      | sup    |                            |        |              |
|      | ported |                            |        |              |
|      | by     |                            |        |              |
|      | CDPHE  |                            |        |              |
|      | Number |                            |        |              |
|      | range  |                            |        |              |
|      | CH     |                            |        |              |
|      | APTER. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Formal recognition       |        |              |
|      |        |                            |        |              |
|      |        | • Referred vendor status   |        |              |
|      |        |                            |        |              |
|      |        | • Awards & news releases   |        |              |
|      |        |                            |        |              |
|      |        | • Potential for fewer      |        |              |
|      |        | inspections                |        |              |
|      |        |                            |        |              |
|      |        | • Expedited permitting     |        |              |
|      |        |                            |        |              |
|      |        | • Consolidated reporting   |        |              |
|      |        | and monitoring             |        |              |
|      |        |                            |        |              |
|      |        | • Extended permit terms    |        |              |
|      |        |                            |        |              |
|      |        | • Emission credits in      |        |              |
|      |        | exchange for               |        |              |
|      |        | beyond-compliance          |        |              |
|      |        | performance                |        |              |
|      |        |                            |        |              |
|      |        | • Priority for funding     |        |              |
|      |        |                            |        |              |
|      |        | • Financial credits or     |        |              |
|      |        | rebates based on           |        |              |
|      |        | percentage of permit fees  |        |              |
|      |        |                            |        |              |
|      |        | • Eligible for P2          |        |              |
|      |        | revolving fund             |        |              |
+------+--------+----------------------------+--------+--------------+
|      | April  | **Environmental Management | Same   | http://www   |
|      | 19,    | System Permit Program:**   | fee    | .cdphe.state |
|      | 2004   |                            | prov   | .co.us/el/EM |
|      |        | • Authorizes CDPHE to      | isions | S/emspermit/ |
|      | Colo.  | implement a voluntary EMS  | as     |              |
|      | Rev.   | program that allows        | oth    |              |
|      | Stat.  | limited number of          | erwise |              |
|      |        | participants to be         | appli  |              |
|      | §      | determined by CDPHE.       | cable. |              |
|      | 25-6.6 |                            |        |              |
|      |        | • EMS Permit will allow    |        |              |
|      | House  | participants to use        |        |              |
|      | Bill   | alternative approaches to  |        |              |
|      | 0      | ensure compliance with     |        |              |
|      | 4-1147 | existing requirements.     |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Ability to develop       |        |              |
|      |        | alternative compliance     |        |              |
|      |        | approaches.                |        |              |
|      |        |                            |        |              |
|      |        | • Potential for reducing   |        |              |
|      |        | administrative burdens of  |        |              |
|      |        | participants and           |        |              |
|      |        | permitting authorities.    |        |              |
+------+--------+----------------------------+--------+--------------+
| *    | June   | **Exemplary Environmental  | Not    | <ht          |
| *Con | 29,    | Management Systems:**      | add    | tp://cga.ct. |
| nect | 1999   |                            | ressed | gov/ps99/Act |
| icut | Public | • Establish pilot program  | in     | /pa/1999PA-0 |
| De   | Act    | to support businesses with | legisl | 0226-R00HB-0 |
| part | No.    | EMS that are seeking       | ation. | 6830-PA.htm> |
| ment | 99-226 | permit or other approval.  |        |              |
| of   |        |                            |        |              |
| E    |        |                            |        |              |
| nvir |        |                            |        |              |
| onme |        |                            |        |              |
| ntal |        |                            |        |              |
| Prot |        |                            |        |              |
| ecti |        |                            |        |              |
| on** |        |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Expedited permitting     |        |              |
|      |        |                            |        |              |
|      |        | • Public recognition which |        |              |
|      |        | may include leadership     |        |              |
|      |        | seal or symbol             |        |              |
|      |        |                            |        |              |
|      |        | • Potential for reduced    |        |              |
|      |        | reporting                  |        |              |
|      |        |                            |        |              |
|      |        | • Facility-wide permit     |        |              |
|      |        |                            |        |              |
|      |        | • Plant wide emissions     |        |              |
|      |        | limits or emissions caps   |        |              |
|      |        |                            |        |              |
|      |        | • Reduced permitting fees. |        |              |
|      |        |                            |        |              |
|      |        | • Certificate issued by    |        |              |
|      |        | Commissioner.              |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | May    | **Principles for           | Not    | <            |
| Dela | 20,    | Responsible Industry       | add    | http://www.s |
| ware | 2003   | (PRIDE)**                  | ressed | tate.de.us/g |
| De   |        |                            | in     | overnor/orde |
| part | Exe    | • Voluntary program for    | Exe    | rs/webexecor |
| ment | cutive | facilities to commit to    | cutive | der44.shtml> |
| of   | Order  | specific actions to        | Order. |              |
| Nat  | 44     | implement Principles for   |        | See program  |
| ural |        | Responsible Industry       |        | website for  |
| R    |        |                            |        | members, but |
| esou |        |                            |        | no specific  |
| rces |        |                            |        | information  |
| and  |        |                            |        | on           |
| E    |        |                            |        | incentives.  |
| nvir |        |                            |        |              |
| onme |        |                            |        | <ht          |
| ntal |        |                            |        | tp://www.sta |
| C    |        |                            |        | te.de.us/gov |
| ontr |        |                            |        | ernor/pride/ |
| ol** |        |                            |        | index.shtml> |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Expedited or flexible    |        |              |
|      |        | permitting                 |        |              |
|      |        |                            |        |              |
|      |        | • Reduced inspections      |        |              |
|      |        |                            |        |              |
|      |        | • Awards                   |        |              |
+------+--------+----------------------------+--------+--------------+
| *    | 2000   | **Alternative Methods of   | Not    |              |
| *Flo |        | Regulatory Permitting:**   | add    |              |
| rida | Title  |                            | ressed |              |
| De   | XXIX   | • Explore alternatives to  | in     |              |
| part | Public | traditional methods of     | legisl |              |
| ment | Health | regulatory permitting,     | ation. |              |
| of   | C      | provided there is no       |        |              |
| E    | hapter | material increase in       |        |              |
| nvir | 40     | pollution emissions or     |        |              |
| onme | 3.0611 | discharges.                |        |              |
| ntal |        |                            |        |              |
| Prot |        | • Work with stakeholders   |        |              |
| ecti |        | to develop specific        |        |              |
| on** |        | limited pilot projects to  |        |              |
| (F   |        | test new compliance        |        |              |
| DEP) |        | measures.                  |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Reduce transaction       |        |              |
|      |        | costs.                     |        |              |
|      |        |                            |        |              |
|      |        | • Provide economic         |        |              |
|      |        | incentives for emissions   |        |              |
|      |        | reductions.                |        |              |
+------+--------+----------------------------+--------+--------------+
|      | Eff    | **Citrus Juice Processing  | Same   |              |
|      | ective | Facilities:**              | fee    |              |
|      | July   |                            | str    |              |
|      | 1,     | • Establishes experimental | ucture |              |
|      | 2002   | alternative air permitting | as for |              |
|      |        | limits on a sector-wide    | title  |              |
|      | F.S.   | basis in lieu of NSR       | V      |              |
|      | 03     | permitting.                | ope    |              |
|      | .08725 |                            | rating |              |
|      |        | • Requires evaluation of   | permit |              |
|      | Regul  | program to determine if    | pr     |              |
|      | ations | overall emissions benefits | ogram. |              |
|      | at     | equal or exceed            |        |              |
|      | F.A.C. | conventional permitting.   |        |              |
|      | Rule   |                            |        |              |
|      | 62-21  |                            |        |              |
|      | 0.340, |                            |        |              |
|      | De     |                            |        |              |
|      | cember |                            |        |              |
|      | 17,    |                            |        |              |
|      | 2002,  |                            |        |              |
|      | a      |                            |        |              |
|      | mended |                            |        |              |
|      | No     |                            |        |              |
|      | vember |                            |        |              |
|      | 1,     |                            |        |              |
|      | 2004   |                            |        |              |
|      |        |                            |        |              |
|      | See    |                            |        |              |
|      | also   |                            |        |              |
|      | 70 FR  |                            |        |              |
|      | 592    |                            |        |              |
|      | 8-5930 |                            |        |              |
|      | (Fe    |                            |        |              |
|      | bruary |                            |        |              |
|      | 4,     |                            |        |              |
|      | 2005)  |                            |        |              |
|      | for    |                            |        |              |
|      | EPA\'s |                            |        |              |
|      | condi  |                            |        |              |
|      | tional |                            |        |              |
|      | ap     |                            |        |              |
|      | proval |                            |        |              |
|      | of SIP |                            |        |              |
|      | rev    |                            |        |              |
|      | ision. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Alternative compliance   |        |              |
|      |        | standards in lieu of       |        |              |
|      |        | obtaining air pollution    |        |              |
|      |        | construction and operation |        |              |
|      |        | permits.                   |        |              |
+------+--------+----------------------------+--------+--------------+
|      | 2004   | **Environmental Award      | Not    |              |
|      |        | Program:**                 | add    |              |
|      | Title  |                            | ressed |              |
|      | XXIX   | • FDEP authorized to       | in     |              |
|      | Fla.   | administer an              | legisl |              |
|      | stat.  | environmental award        | ation. |              |
|      | §      | program to recognize       |        |              |
|      | 4      | efforts in the protection  |        |              |
|      | 03.414 | , conservation, or         |        |              |
|      |        | restoration of air, water, |        |              |
|      |        | or other natural           |        |              |
|      |        | resources.                 |        |              |
|      |        |                            |        |              |
|      |        | • FDEP authorized to adopt |        |              |
|      |        | rules to govern            |        |              |
|      |        | administration of program. |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentive:**             |        |              |
|      |        |                            |        |              |
|      |        | • Environmental award.     |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | June   | **Environmental Management | Not    | Illinois     |
| Illi | 13,    | System Agreement:**        | add    | state        |
| nois | 1996,  |                            | ressed | statutes and |
| E    | Public | • Authorizes IEPA to       | in     | regulations  |
| nvir | Act    | execute Environmental      | legisl | can be       |
| onme | No.8   | Management System          | ation. | located at:  |
| ntal | 9-465, | Agreement (EMSA) with      |        | http://      |
| Pr   | co     | voluntary pilot companies  |        |              |
| otec | dified | that demonstrate           |        | w            |
| tion | in 415 | innovative environmental   |        | ww.ilga.gov. |
| Agen | ILCS   | measures.                  |        |              |
| cy** | 5/5    |                            |        | See also:    |
| (I   | 2.3-3; | • Pilot candidate must     |        | http://www   |
| EPA) | J      | achieve beyond compliance  |        | .epa.state.i |
|      | anuary | results or a risk          |        | l.us/news-re |
|      | 1,     | reduction of compliance    |        | leases/2000- |
|      | 2002,  | that is clearly superior   |        | 2000-106-reg |
|      | Public | to the existing regulatory |        | ulatory-inno |
|      | Act    | system.                    |        | vation.html. |
|      | No.9   |                            |        |              |
|      | 2-397, | • Agency authorized to     |        | IEPA issued  |
|      | co     | enter into an EMSA with    |        | its first    |
|      | dified | any Performance Track      |        | EMSA in      |
|      | in 415 | member that meets the      |        | March of     |
|      | ILCS   | program\'s criteria.       |        | 2000 to a 3M |
|      | 5/     |                            |        | facility     |
|      | 52.3-1 |                            |        | located in   |
|      | and    |                            |        | Bedford      |
|      | 5      |                            |        | Park. Based  |
|      | 2.3-2; |                            |        | on           |
|      | July   |                            |        | c            |
|      | 10,    |                            |        | ommunication |
|      | 2003,  |                            |        | with IEPA    |
|      | Public |                            |        | personnel,   |
|      | Act    |                            |        | there may    |
|      | No.9   |                            |        | have been    |
|      | 3-171, |                            |        | one or two   |
|      | co     |                            |        | other EMSAs  |
|      | dified |                            |        | signed, but  |
|      | in     |                            |        | the staff    |
|      | 5/5    |                            |        | person who   |
|      | 2.3-1, |                            |        | managed the  |
|      | 5      |                            |        | program      |
|      | 2.3-2, |                            |        | retired in   |
|      | and    |                            |        | 2002 and     |
|      | 5      |                            |        | there has    |
|      | 2.3-4. |                            |        | not been     |
|      | Regul  |                            |        | much         |
|      | ations |                            |        | activity.    |
|      | for    |                            |        | The 3M       |
|      | Regu   |                            |        | facility in  |
|      | latory |                            |        | Bedford Park |
|      | Inno   |                            |        | is closed.   |
|      | vation |                            |        |              |
|      | Pr     |                            |        |              |
|      | ojects |                            |        |              |
|      | at 35  |                            |        |              |
|      | Ill.Ad |                            |        |              |
|      | m.Code |                            |        |              |
|      | 187.   |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • EMSA operates as         |        |              |
|      |        | alternative compliance     |        |              |
|      |        | approach (or facility-wide |        |              |
|      |        | \"permit\") in lieu of     |        |              |
|      |        | applicable requirements.   |        |              |
|      |        |                            |        |              |
|      |        | • Authority to give        |        |              |
|      |        | preference and allow       |        |              |
|      |        | greater incentives for     |        |              |
|      |        | pilots that include        |        |              |
|      |        | provisions for operating   |        |              |
|      |        | sustainably through        |        |              |
|      |        | continuous improvements in |        |              |
|      |        | products and processes.    |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | Antic  |                            |        |              |
| Kent | ipates |                            |        |              |
| ucky | r      |                            |        |              |
| De   | olling |                            |        |              |
| part | out    |                            |        |              |
| ment | new    |                            |        |              |
| of   | p      |                            |        |              |
| E    | rogram |                            |        |              |
| nvir | in     |                            |        |              |
| onme | Fall   |                            |        |              |
| ntal | 2005.  |                            |        |              |
| Prot | U      |                            |        |              |
| ecti | nclear |                            |        |              |
| on** | if     |                            |        |              |
|      | legis  |                            |        |              |
|      | lation |                            |        |              |
|      | is     |                            |        |              |
|      | n      |                            |        |              |
|      | eeded. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
| **M  | Eff    | **Environmental Leadership | E      | <            |
| aine | ective | Program:**                 | nviron | http://www.s |
| De   | July   |                            | mental | tate.me.us/d |
| part | 1,     | • Voluntary environmental  | Lead   | ep/oc/steup/ |
| ment | 2000   | leadership program         | ership | step-up.pdf> |
| of   |        | available to eligible      | Rev    |              |
| E    | 38     | participants with EMS,     | olving |              |
| nvir | MRSA   | compliance audit program,  | Loan   |              |
| onme | c.32   | P2 program, system of      | Fund   |              |
| ntal |        | verifiable measures to     |        |              |
| Prot | Unable | demonstrate compliance.    |        |              |
| ecti | to     |                            |        |              |
| on** | locate | • Member must also         |        |              |
| (M   | regul  | implement and maintain one |        |              |
| DEP) | ations | or more environmental      |        |              |
|      | that   | leadership actions         |        |              |
|      | were   | specified in the statute.  |        |              |
|      | to     |                            |        |              |
|      | have   |                            |        |              |
|      | been   |                            |        |              |
|      | a      |                            |        |              |
|      | dopted |                            |        |              |
|      | by     |                            |        |              |
|      | July   |                            |        |              |
|      | 1,     |                            |        |              |
|      | 2002.  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Dollar rebates or        |        |              |
|      |        | credits applied against    |        |              |
|      |        | permit fees.               |        |              |
|      |        |                            |        |              |
|      |        | • Formal public            |        |              |
|      |        | recognition by Governor    |        |              |
|      |        | and MDEP                   |        |              |
|      |        |                            |        |              |
|      |        | • Accelerate review and    |        |              |
|      |        | processing of permit       |        |              |
|      |        | applications.              |        |              |
|      |        |                            |        |              |
|      |        | • Increased                |        |              |
|      |        | self-monitoring,           |        |              |
|      |        | reporting, certification,  |        |              |
|      |        | or third-party             |        |              |
|      |        | certification to           |        |              |
|      |        | demonstrate compliance     |        |              |
|      |        |                            |        |              |
|      |        | • Extension of terms of    |        |              |
|      |        | licenses or permits        |        |              |
|      |        |                            |        |              |
|      |        | • Issuance of additional   |        |              |
|      |        | credits for emissions      |        |              |
|      |        | reductions beyond minimum  |        |              |
|      |        | requirements under         |        |              |
|      |        | established trading or     |        |              |
|      |        | credit program.            |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | No     | **Clean Corporate Citizen  |        | For the      |
| Mich | autho  | Program:**                 |        | status of    |
| igan | rizing |                            |        | the          |
| De   | st     | • Regulations establish    |        | legislation, |
| part | atute. | voluntary Clean Corporate  |        | see          |
| ment | Senate | Citizen Program (C3) under |        | http         |
| of   | Bill   | MDEQ\'s general            |        | ://www.legis |
| E    | 0354   | authorizing legislation.   |        | lature.mi.go |
| nvir | (2005) |                            |        | v/mileg.asp? |
| onme | has    | • Facilities that have     |        | page=getObje |
| ntal | been   | demonstrated environmental |        | ct&objName=2 |
| Q    | passed | stewardship and a strong   |        | 005-SB-0354. |
| uali | by the | environmental ethic are    |        |              |
| ty** | Senate | eligible to be recognized  |        | For the      |
| (M   | on May | as Clean Corporate         |        | regulations, |
| DEQ) | 5,     | Citizens.                  |        | see          |
|      | 2005   |                            |        | http:        |
|      | and    |                            |        | //www.michig |
|      | was    |                            |        |              |
|      | re     |                            |        | an.gov       |
|      | ferred |                            |        | /deq/0,1607, |
|      | to the |                            |        | 7-135-3307_3 |
|      | House  |                            |        | 666_4134-992 |
|      | Comm   |                            |        | 2\--,00.html |
|      | ittee. |                            |        |              |
|      | Bill   |                            |        | Over 100     |
|      | pr     |                            |        | facilities   |
|      | oposes |                            |        | have         |
|      | to     |                            |        | received C3  |
|      | p      |                            |        | designation  |
|      | rovide |                            |        | to date.     |
|      | legis  |                            |        |              |
|      | lative |                            |        |              |
|      | a      |                            |        |              |
|      | uthori |                            |        |              |
|      | zation |                            |        |              |
|      | for    |                            |        |              |
|      | the    |                            |        |              |
|      | pr     |                            |        |              |
|      | ogram. |                            |        |              |
|      | Regul  |                            |        |              |
|      | ations |                            |        |              |
|      | for    |                            |        |              |
|      | Clean  |                            |        |              |
|      | Cor    |                            |        |              |
|      | porate |                            |        |              |
|      | C      |                            |        |              |
|      | itizen |                            |        |              |
|      | P      |                            |        |              |
|      | rogram |                            |        |              |
|      | at     |                            |        |              |
|      | Mic    |                            |        |              |
|      | h.Admi |                            |        |              |
|      | n.Code |                            |        |              |
|      | R32    |                            |        |              |
|      | 4.1501 |                            |        |              |
|      | -1511. |                            |        |              |
|      |        |                            |        |              |
|      | Eff    |                            |        |              |
|      | ective |                            |        |              |
|      | March  |                            |        |              |
|      | 24,    |                            |        |              |
|      | 2000   |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Reduced reporting and    |        |              |
|      |        | monitoring                 |        |              |
|      |        |                            |        |              |
|      |        | • Expedited permits        |        |              |
|      |        |                            |        |              |
|      |        | • Public recognition       |        |              |
|      |        |                            |        |              |
|      |        | Senate Bill 0354 proposes  |        |              |
|      |        | establishing a one-time,   |        |              |
|      |        | first year \$500 reduction |        |              |
|      |        | in permit fees for each C3 |        |              |
|      |        | facility.                  |        |              |
+------+--------+----------------------------+--------+--------------+
| **M  | March  | **Minnesota XL Permit      | Not    | http:        |
| inne | 1996   | Project**:                 | add    | //www.reviso |
| sota |        |                            | ressed | r.leg.state. |
| P    | E      | • Voluntary pilot program  | in     | mn.us/stats/ |
| ollu | nviron | authorizing innovative and | legisl | 114C/01.html |
| tion | mental | flexible regulatory        | ation. |              |
| Con  | Regu   | approaches that encourage  |        | http://w     |
| trol | latory | facilities to implement    |        | ww.pca.state |
| Agen | Innov  | effective P2 strategies    |        | .mn.us/progr |
| cy** | ations | while complying with       |        | ams/projectx |
|      | Act,   | verifiable and enforceable |        | l/xl-leg.pdf |
|      | Minn.  | pollution limits.          |        |              |
|      | .Stat. |                            |        | http://www   |
|      | 114    | • Intent to consolidate    |        | .pca.state.m |
|      | C.01 - | existing permit            |        | n.us/program |
|      | 11     | requirements into one      |        | s/projectxl/ |
|      | 4C.28, | facility-wide permit.      |        | xl_rpt98.pdf |
|      | 1995,  |                            |        |              |
|      | a      | **Environmental            |        | http://w     |
|      | mended | Improvement Program (also  |        | ww.pca.state |
|      | 1996,  | known as Environmental     |        | .mn.us/progr |
|      | 1999,  | Audit Program)**:          |        | ams/ems.html |
|      | and    |                            |        |              |
|      | 2000.  | • Voluntary program to     |        |              |
|      | Act    | promote compliance by      |        |              |
|      | auth   | facilities with an EMS.    |        |              |
|      | orizes |                            |        |              |
|      | Min    | • Major facilities must    |        |              |
|      | nesota | prepare an environmental   |        |              |
|      | XL     | audit program P2 plan that |        |              |
|      | Permit | analyzes options for       |        |              |
|      | P      | technically and            |        |              |
|      | roject | economically reducing      |        |              |
|      | and    | pollution.                 |        |              |
|      | the    |                            |        |              |
|      | E      | • This individually issued |        |              |
|      | nviron | state permit option allows |        |              |
|      | mental | small and medium-sized air |        |              |
|      | Impro  | emission facilities that   |        |              |
|      | vement | employ a qualifying (ISO   |        |              |
|      | Pr     | 14001) EMS to operate      |        |              |
|      | ogram. | under emission caps set    |        |              |
|      |        | below federal thresholds   |        |              |
|      |        | (under 100 tons per year   |        |              |
|      |        | for most pollutants).      |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | Minnesota XL Permit        |        |              |
|      |        | Project:                   |        |              |
|      |        |                            |        |              |
|      |        | • Regulatory flexibility   |        |              |
|      |        | and alternative compliance |        |              |
|      |        | methods                    |        |              |
|      |        |                            |        |              |
|      |        | • Less administrative      |        |              |
|      |        | burden for permitting      |        |              |
|      |        | authorities and            |        |              |
|      |        | facilities.                |        |              |
|      |        |                            |        |              |
|      |        | Environmental Improvement  |        |              |
|      |        | Program:                   |        |              |
|      |        |                            |        |              |
|      |        | • Green Star recognition   |        |              |
|      |        |                            |        |              |
|      |        | • Deferred enforcement of  |        |              |
|      |        | 90 days if facility is     |        |              |
|      |        | meeting performance        |        |              |
|      |        | schedule and is not        |        |              |
|      |        | subject to exceptions      |        |              |
|      |        | (including criminal        |        |              |
|      |        | activity or causing        |        |              |
|      |        | serious harm, or imminent  |        |              |
|      |        | threat, to human health or |        |              |
|      |        | the environment.           |        |              |
+------+--------+----------------------------+--------+--------------+
|      | De     | **Flexible EMS Air         | Not    | http://      |
|      | cember | Permit:**                  | add    | www.revisor. |
|      | 6,     |                            | ressed | leg.state.mn |
|      | 2004.  | • This individually issued | in     | .us/arule/70 |
|      | Fl     | state permit option allows | regul  | 07/0100.html |
|      | exible | small and medium-sized air | ation. |              |
|      | EMS    | emission facilities that   |        | ht           |
|      | Air    | employ a qualifying (ISO   |        | tp://www.pca |
|      | P      | 14001) EMS to operate      |        | .state.mn.us |
|      | ermit, | under emission caps set    |        | /publication |
|      | State  | below federal thresholds   |        | s/aq2-30.pdf |
|      | Re     | (under 100 tons per year   |        |              |
|      | gister | for most pollutants).      |        |              |
|      | Min    |                            |        |              |
|      | nesota |                            |        |              |
|      | Rules  |                            |        |              |
|      | C      |                            |        |              |
|      | hapter |                            |        |              |
|      | 7007.  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Relief from minor and    |        |              |
|      |        | moderate permit amendment  |        |              |
|      |        | application requirements   |        |              |
|      |        |                            |        |              |
|      |        | • Fewer record keeping and |        |              |
|      |        | reporting requirements.    |        |              |
+------+--------+----------------------------+--------+--------------+
| *    | Eff    | **Enhanced Environmental   | Not    | ht           |
| *New | ective | Performance Agreements     | add    | tp://www.gen |
| H    | August | (EEPAs) :**                | ressed | court.state. |
| amps | 23,    |                            | in     | nh.us/rsa/ht |
| hire | 1998   | • Voluntary pilot program  | legisl | ml/X/125-C/1 |
| De   |        | authorizing innovative,    | ation. | 25-C-6-a.htm |
| part | N.H.R  | alternative compliance     |        |              |
| ment | ev.Sta | approaches that achieve    |        |              |
| of   | t.Ann. | equal or better            |        |              |
| E    | §      | environmental results than |        |              |
| nvir | 125    | those required under       |        |              |
| onme | -C:6-a | applicable requirements.   |        |              |
| ntal |        |                            |        |              |
| Se   | This   | • Approved EEPA operates   |        |              |
| rvic | p      | in lieu of existing        |        |              |
| es** | rogram | permits identified in the  |        |              |
|      | has    | agreement.                 |        |              |
|      | not    |                            |        |              |
|      | been   |                            |        |              |
|      | implem |                            |        |              |
|      | ented. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Regulatory flexibility.  |        |              |
+------+--------+----------------------------+--------+--------------+
| *    | April  | **New York Environmental   | NA     | http:        |
| *New | 5,     | Leaders:**                 |        | //www.dec.st |
| York | 2004   |                            |        | ate.ny.us/we |
| De   |        | • NYDEC to establish a     |        | bsite/ppu/em |
| part | Com    | voluntary program to       |        | s/index.html |
| ment | missio | reward organizations with  |        |              |
| of   | ner\'s | high performing EMSs and a |        |              |
| E    | Policy | commitment to superior     |        |              |
| nvir | (      | environmental performance  |        |              |
| onme | CP-34) | that is sustained and      |        |              |
| ntal |        | systemic.                  |        |              |
| Co   | **N    |                            |        |              |
| nser | ote:** | • NYDEC to develop and use |        |              |
| vati | This   | environmental performance  |        |              |
| on** | p      | improvement tools in the   |        |              |
|      | rogram | Department\'s enforcement  |        |              |
| (NY  | is not | program.                   |        |              |
| DEC) | auth   |                            |        |              |
|      | orized |                            |        |              |
| Pro  | by a   |                            |        |              |
| gram | State  |                            |        |              |
| u    | s      |                            |        |              |
| nder | tatute |                            |        |              |
| deve | or     |                            |        |              |
| lopm | regula |                            |        |              |
| ent. | tions. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Recognition              |        |              |
+------+--------+----------------------------+--------+--------------+
| **Or | 1997   | **Green Permits Program:** | App    | htt          |
| egon |        |                            | licant | p://www.leg. |
| De   | ORS    | • Program to achieve       | reim   | state.or.us/ |
| part | 4      | significantly better       | burses | ors/468.html |
| ment | 68.501 | environmental results than | ODEQ   |              |
| of   | to     | required by law through    | for    | http://ww    |
| E    | 46     | adoption of EMS or use of  | the    | w.arcweb.sos |
| nvir | 8.521; | innovative approaches or   | age    | .state.or.us |
| onme | and    | strategies.                | ncy\'s | /rules/OARs_ |
| ntal | ORS    |                            | full   | 300/OAR_340/ |
| Q    | 5      | • Voluntary program with 3 | direct | 340_014.html |
| uali | 53.11. | tiers of performance       | and    |              |
| ty** |        | eligibility.               | in     |              |
| (O   | April  |                            | direct |              |
| DEQ) | 23,    | • Program also provides    | costs  |              |
|      | 2003   | opportunity to obtain a    | of     |              |
|      |        | custom waiver permit.      | deve   |              |
|      | House  |                            | loping |              |
|      | Bill   |                            | and    |              |
|      | 3175   |                            | implem |              |
|      | amends |                            | enting |              |
|      | Green  |                            | the    |              |
|      | P      |                            | p      |              |
|      | ermits |                            | ermit, |              |
|      | legis  |                            | not to |              |
|      | lation |                            | exceed |              |
|      | to     |                            | \$2    |              |
|      | extend |                            | 5,000. |              |
|      | sunset |                            |        |              |
|      | of     |                            |        |              |
|      | is     |                            |        |              |
|      | suance |                            |        |              |
|      | of     |                            |        |              |
|      | p      |                            |        |              |
|      | ermits |                            |        |              |
|      | to     |                            |        |              |
|      | J      |                            |        |              |
|      | anuary |                            |        |              |
|      | 2,     |                            |        |              |
|      | 2008.  |                            |        |              |
|      |        |                            |        |              |
|      | 1999   |                            |        |              |
|      |        |                            |        |              |
|      | ODEQ   |                            |        |              |
|      | promu  |                            |        |              |
|      | lgates |                            |        |              |
|      | regul  |                            |        |              |
|      | ations |                            |        |              |
|      |        |                            |        |              |
|      | 340    |                            |        |              |
|      | OAR 14 |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Regulatory flexibility   |        |              |
|      |        | in the form of exemptions  |        |              |
|      |        | or waivers to promote      |        |              |
|      |        | innovative environmental   |        |              |
|      |        | approaches.                |        |              |
+------+--------+----------------------------+--------+--------------+
| **S  | May    | **Innovation in            | Same   | http://w     |
| outh | 29,    | Environmental Approaches   | fee    | ww.scstateho |
| Caro | 2002   | (Environmental Excellence  | str    | use.net/code |
| lina |        | Program:**                 | ucture | /t48c056.htm |
| De   | S.C.   |                            | as     |              |
| part | Code   | • Authorizes SCDHEC to     | would  |              |
| ment | Ann.   | enter into cooperative     | oth    |              |
| of   | §§     | agreements on a pilot      | erwise |              |
| He   |        | basis with up to 10        | apply  |              |
| alth | 48     | eligible participants for  | to     |              |
| &    | -56-10 | up to 5 years with a       | fac    |              |
| E    | to     | possible 5 year renewal.   | ility. |              |
| nvir | 48-5   |                            |        |              |
| onme | 6-160. | • Eligibility criteria     |        |              |
| ntal |        | include achieving          |        |              |
| C    | Review | emissions/discharge        |        |              |
| ontr | of     | reductions that exceed     |        |              |
| ol** | regul  | otherwise applicable       |        |              |
| (SCD | ations | requirements, providing    |        |              |
| HEC) | did    | for alternative compliance |        |              |
|      | not    | approaches that reduce     |        |              |
|      | result | administrative burden, or  |        |              |
|      | in any | achieving natural resource |        |              |
|      | inform | conservation.              |        |              |
|      | ation. |                            |        |              |
|      |        | • SCDHEC authorized to     |        |              |
|      |        | grant variances from       |        |              |
|      |        | existing requirements if   |        |              |
|      |        | the participant achieves   |        |              |
|      |        | emission reductions which  |        |              |
|      |        | exceed applicable          |        |              |
|      |        | statutory requirements.    |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • Alternative testing or   |        |              |
|      |        | reporting to reduce the    |        |              |
|      |        | administrative burden      |        |              |
|      |        | while ensuring compliance. |        |              |
|      |        |                            |        |              |
|      |        | • Deferred enforcement if  |        |              |
|      |        | participant is diligently  |        |              |
|      |        | pursuing compliance and    |        |              |
|      |        | correcting violations      |        |              |
|      |        | discovered in self-audit,  |        |              |
|      |        | provided certain           |        |              |
|      |        | exceptions are not         |        |              |
|      |        | triggered.                 |        |              |
+------+--------+----------------------------+--------+--------------+
| **T  | **     | **Regulatory Flexibility   | **     | http:        |
| exas | RFO:** | Order (RFO):**             | RFO:** | //www.tnrcc. |
| Co   |        |                            |        | state.tx.us/ |
| mmis | Sep    | • Application for RFO must | Appli  | exec/sbea/em |
| sion | tember | include detailed           | cation | s/index.html |
| on   | 20,    | description and            | fee of |              |
| E    | 1998   | documentation of why the   | \$250, |              |
| nvir |        | proposed alternative       | unless |              |
| onme | 30     | compliance approach is     | it is  |              |
| ntal | T      | more protective, not       | dete   |              |
| Q    | ex.Sta | inconsistent with federal  | rmined |              |
| uali | t.Ann. | law, implementation        | to be  |              |
| ty** |        | schedule, and any proposed | signi  |              |
| (T   | §§     | cross-pollutant transfers. | ficant |              |
| CEQ) | 9      |                            | and    |              |
|      | 0.10 - | • Public notice and        | co     |              |
|      | 90.20  | participation required.    | mplex, |              |
|      |        |                            | in     |              |
|      |        |                            | which  |              |
|      |        |                            | case   |              |
|      |        |                            | the    |              |
|      |        |                            | app    |              |
|      |        |                            | licant |              |
|      |        |                            | must   |              |
|      |        |                            | e      |              |
|      |        |                            | xecute |              |
|      |        |                            | a cost |              |
|      |        |                            | re     |              |
|      |        |                            | covery |              |
|      |        |                            | agr    |              |
|      |        |                            | eement |              |
|      |        |                            | with   |              |
|      |        |                            | TCEQ.  |              |
+------+--------+----------------------------+--------+--------------+
|      | **Act  | **Environmental Management | Not    |              |
|      | re     | Systems:**                 | di     |              |
|      | lating |                            | rectly |              |
|      | to the | • Adopt comprehensive      | add    |              |
|      | Texas  | program that provides      | ressed |              |
|      | NRCC** | incentives to encourage    | in     |              |
|      | (prede | the use of EMSes; and      | legisl |              |
|      | cessor | integrates the use of an   | ation. |              |
|      | of     | EMS into TCEQ\'s           |        |              |
|      | TCEQ): | regulatory programs,       |        |              |
|      |        | including permitting,      |        |              |
|      | Sep    | compliance assistance, and |        |              |
|      | tember | compliance summaries.      |        |              |
|      | 1,     |                            |        |              |
|      | 2001   | **Performance-Based        |        |              |
|      |        | Regulation:**              |        |              |
|      | 77th   |                            |        |              |
|      | Reg.   | • Authorized to adopt      |        |              |
|      | Legis. | performance-based programs |        |              |
|      | Sess.  | with reference to the SDRS |        |              |
|      | HB     | and the RFO.               |        |              |
|      | 2912   |                            |        |              |
|      |        |                            |        |              |
|      | [EMS]{ |                            |        |              |
|      | .under |                            |        |              |
|      | line}: |                            |        |              |
|      | §      |                            |        |              |
|      | 5.131  |                            |        |              |
|      |        |                            |        |              |
|      | [Perfo |                            |        |              |
|      | rmance |                            |        |              |
|      | -Based |                            |        |              |
|      | Reg.   |                            |        |              |
|      | for    |                            |        |              |
|      | Health |                            |        |              |
|      | and    |                            |        |              |
|      | Safety |                            |        |              |
|      | Code]{ |                            |        |              |
|      | .under |                            |        |              |
|      | line}: |                            |        |              |
|      | §§     |                            |        |              |
|      | 5      |                            |        |              |
|      | .751 - |                            |        |              |
|      | 5.758  |                            |        |              |
|      |        |                            |        |              |
|      | [Perfo |                            |        |              |
|      | rmance |                            |        |              |
|      | -Based |                            |        |              |
|      | Reg.   |                            |        |              |
|      | for    |                            |        |              |
|      | Water  |                            |        |              |
|      | Code]{ |                            |        |              |
|      | .under |                            |        |              |
|      | line}: |                            |        |              |
|      | §§     |                            |        |              |
|      | 1      |                            |        |              |
|      | 8.05 - |                            |        |              |
|      | 18.07  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      | *      | **Texas Environmental      | *      |              |
|      | *Texas | Management System          | *Texas |              |
|      | EMS:** | Program:**                 | EMS:** |              |
|      |        |                            |        |              |
|      | De     | • Provides incentives for  | Not    |              |
|      | cember | regulated entities that    | add    |              |
|      | 16,    | adopt and implement a      | ressed |              |
|      | 2001   | results-based EMS.         | in     |              |
|      |        |                            | legisl |              |
|      | 30     |                            | ation. |              |
|      | T      |                            |        |              |
|      | ex.Sta |                            |        |              |
|      | t.Ann. |                            |        |              |
|      | §§     |                            |        |              |
|      | 9      |                            |        |              |
|      | 0.30 - |                            |        |              |
|      | 90.44  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      | **S    | **Strategically Directed   | *      |              |
|      | DRS:** | Regulatory Structure       | *Texas |              |
|      |        | (SDRS):**                  | S      |              |
|      | August |                            | DRS:** |              |
|      | 14,    | • Authorizes TCEQ to       | Not    |              |
|      | 2003   | reward environmental       | add    |              |
|      |        | performance with           | ressed |              |
|      | 30     | regulatory incentives if   | in     |              |
|      | T      | applicant demonstrates     | legisl |              |
|      | ex.Sta | beyond compliance under    | ation. |              |
|      | t.Ann. | the Texas Water Code or    |        |              |
|      |        | the Texas Health and       |        |              |
|      | §§     | Safety Code, is eligible   |        |              |
|      | 9      | for an RFO, the Texas EMS  |        |              |
|      | 0.50 - | Program, the flexible air  |        |              |
|      | 90.72  | permit program, a          |        |              |
|      |        | voluntary program          |        |              |
|      |        | administered by the Small  |        |              |
|      |        | Business and Environmental |        |              |
|      |        | Assistance Division, or    |        |              |
|      |        | programs authorized as     |        |              |
|      |        | innovative by the          |        |              |
|      |        | executive director.        |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | Regulatory Flexibility     |        |              |
|      |        | Order:                     |        |              |
|      |        |                            |        |              |
|      |        | • Approved alternative     |        |              |
|      |        | compliance approaches      |        |              |
|      |        |                            |        |              |
|      |        | Texas EMS Program and      |        |              |
|      |        | Strategically Directed     |        |              |
|      |        | Regulatory Structure:      |        |              |
|      |        |                            |        |              |
|      |        | • Public recognition       |        |              |
|      |        |                            |        |              |
|      |        | • Eligible for regulatory  |        |              |
|      |        | flexibility                |        |              |
|      |        |                            |        |              |
|      |        | • On-site technical        |        |              |
|      |        | assistance                 |        |              |
|      |        |                            |        |              |
|      |        | • Accelerated access to    |        |              |
|      |        | program information        |        |              |
|      |        |                            |        |              |
|      |        | • Modification of state or |        |              |
|      |        | federal regulatory         |        |              |
|      |        | requirements that do not   |        |              |
|      |        | change emission or         |        |              |
|      |        | discharge limits           |        |              |
|      |        |                            |        |              |
|      |        | • Low priority inspection  |        |              |
|      |        | frequency                  |        |              |
|      |        |                            |        |              |
|      |        | Strategically Directed     |        |              |
|      |        | Regulatory Structure:      |        |              |
|      |        |                            |        |              |
|      |        | • In addition to those     |        |              |
|      |        | cited above, single point  |        |              |
|      |        | of contact for             |        |              |
|      |        | coordinating innovative    |        |              |
|      |        | programs                   |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | March  | **Virginia Environmental   | Not    | http://www.  |
| Virg | 24,    | Excellence Program:**      | add    | deq.state.va |
| inia | 2005   |                            | ressed | .us/veep/pdf |
| De   |        | • Authority to establish   | in     | /veeplaw.pdf |
| part | Code   | programs to recognize      | legisl |              |
| ment | of     | facilities and persons     | ation. |              |
| of   | Vir    | that have demonstrated a   |        |              |
| E    | ginia, | commitment to enhanced     |        |              |
| nvir | C      | environmental performance  |        |              |
| onme | hapter | and to encourage           |        |              |
| ntal | 11.1   | innovations in             |        |              |
| Q    | of     | environmental protection.  |        |              |
| uali | Title  |                            |        |              |
| ty** | 10.1,  | • Extent of                |        |              |
|      | §§     | recognition/incentives     |        |              |
| (V   | 1      | depends on whether the     |        |              |
| DEQ) | 0.1-11 | facility is (1) an         |        |              |
|      | 87.1 - | environmental enterprise,  |        |              |
|      | 10.1-  | (2) an exemplary           |        |              |
|      | 1187.7 | enterprise, or (3) an      |        |              |
|      |        | extraordinary enterprise.  |        |              |
|      |        |                            |        |              |
|      |        | • A person or facility may |        |              |
|      |        | participate in the program |        |              |
|      |        | for up to 3 years and may  |        |              |
|      |        | reapply to the program.    |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Tiered Incentives**      |        |              |
|      |        | (cumulative):              |        |              |
|      |        |                            |        |              |
|      |        | [Environmental Enterprise  |        |              |
|      |        | (E2)]{.underline}:         |        |              |
|      |        |                            |        |              |
|      |        | • Public recognition       |        |              |
|      |        |                            |        |              |
|      |        | • Reduced fees             |        |              |
|      |        |                            |        |              |
|      |        | • Governor\'s              |        |              |
|      |        | Environmental Excellence   |        |              |
|      |        | Awards                     |        |              |
|      |        |                            |        |              |
|      |        | [Exemplary Environmental   |        |              |
|      |        | Enterprise (E3) and        |        |              |
|      |        | Extraordinary              |        |              |
|      |        | Environmental Enterprise   |        |              |
|      |        | (E4)]{.underline}:         |        |              |
|      |        |                            |        |              |
|      |        | • Reduced inspection       |        |              |
|      |        | priority                   |        |              |
|      |        |                            |        |              |
|      |        | • Single point of contact  |        |              |
|      |        | between facility and VDEQ  |        |              |
|      |        |                            |        |              |
|      |        | • Streamlined              |        |              |
|      |        | environmental reporting    |        |              |
|      |        |                            |        |              |
|      |        | • Reduced monitoring       |        |              |
|      |        | requirements               |        |              |
|      |        |                            |        |              |
|      |        | • Prioritized permit and   |        |              |
|      |        | permit amendment review    |        |              |
|      |        |                            |        |              |
|      |        | • Ability to implement     |        |              |
|      |        | alternative compliance     |        |              |
|      |        | measures approved by the   |        |              |
|      |        | appropriate air, waste, or |        |              |
|      |        | water board.               |        |              |
+------+--------+----------------------------+--------+--------------+
| **   | Passed | **Environmental Excellence | The    | <            |
| West | March  | Program:**                 | sec    | http://www.w |
| Virg | 11,    |                            | retary | vdep.org/oi> |
| inia | 2004;  | • Authorizes WVDEP to      | may    |              |
| De   | Eff    | enter into environmental   | est    | h            |
| part | ective | performance agreements     | ablish | ttp://www.ep |
| ment | date   | with eligible participants | fees   | a.gov/perfor |
| of   | 90     | that specify applicable    | to     | mancetrack/s |
| E    | days   | requirements and any       | r      | tates/progra |
| nvir | from   | requirements that are      | ecover | ms/wv_env_ex |
| onme | pa     | modified, waived, or       | applic | cel_prog.pdf |
| ntal | ssage. | replaced, as well as the   | ation, |              |
| Prot |        | monitoring measures        | re     |              |
| ecti | Se     | necessary to ensure        | newal, |              |
| on** | ctions | accountability and         | and    |              |
|      | 2      | compliance.                | ad     |              |
| (WV  | 2-25-1 |                            | minist |              |
| DEP) | to     | • Program requires         | rative |              |
|      | 22-    | commitment by participants | costs  |              |
|      | 25-13, | to superior environmental  | in     |              |
|      | Code   | performance.               | curred |              |
|      | of     |                            | by     |              |
|      | West   | • The secretary may        | WVDEP. |              |
|      | Vir    | establish classes,         |        |              |
|      | ginia. | categories or tiers of     | Estab  |              |
|      |        | environmental performance  | lishes |              |
|      | Law    | agreements.                | an     |              |
|      | s      |                            | E      |              |
|      | unsets |                            | nviron |              |
|      | on     |                            | mental |              |
|      | June   |                            | Exce   |              |
|      | 30,    |                            | llence |              |
|      | 2009.  |                            | P      |              |
|      | P      |                            | rogram |              |
|      |        |                            | Ad     |              |
|      | Public |                            | minist |              |
|      | c      |                            | rative |              |
|      | omment |                            | Fund   |              |
|      | period |                            | al     |              |
|      | closed |                            | lowing |              |
|      | July   |                            | for    |              |
|      | 19,    |                            | gifts  |              |
|      | 2005   |                            | and    |              |
|      | for    |                            | dona   |              |
|      | pr     |                            | tions. |              |
|      | oposed |                            |        |              |
|      | rules. |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Incentives:**            |        |              |
|      |        |                            |        |              |
|      |        | • The secretary shall      |        |              |
|      |        | propose rules for          |        |              |
|      |        | legislative approval       |        |              |
|      |        | establishing incentives to |        |              |
|      |        | be granted to any          |        |              |
|      |        | participant that complies  |        |              |
|      |        | with the mandatory and     |        |              |
|      |        | elective program elements. |        |              |
+------+--------+----------------------------+--------+--------------+
| **W  | April  | **Environmental Results    | Not    | htt          |
| isco | 16,    | Program:**                 | add    | p://www.dnr. |
| nsin | 2004   |                            | ressed | state.wi.us/ |
| De   |        | • Authorizes WDNR to       | in the | org/caer/cea |
| part | C      | create two tiers of        | legisl | /environment |
| ment | hapter | voluntary programs that    | ation. | al/index.htm |
| of   | 299    | require having an EMS      |        |              |
| Nat  | Wis    | (Tier II), or committing   |        | http://w     |
| ural | consin | to implement an EMS within |        | ww.epa.gov/p |
| Res  | St     | a year\'s time (Tier I).   |        | erformancetr |
| ourc | atutes |                            |        | ack/states/p |
| es** | § 83   | • Tier I applicants shall  |        | rograms/03Ac |
|      | (29    | describe their plans for   |        | t276_Green_T |
| (W   | 9.83). | activities that enhance    |        | ier_4_04.pdf |
| DNR) |        | the environment; Tier II   |        |              |
|      | 2003   | applicants must            |        |              |
|      | Wis    | demonstrate a record of    |        |              |
|      | consin | superior environmental     |        |              |
|      | Act    | performance and commit to  |        |              |
|      | 276    | maintaining and improving  |        |              |
|      | (      | that performance.          |        |              |
|      | Senate |                            |        |              |
|      | Bill   | • Encourages the WDNR to   |        |              |
|      | 61)    | make the program           |        |              |
|      |        | compatible with federal    |        |              |
|      | P      | performance-based          |        |              |
|      | rogram | programs.                  |        |              |
|      | s      |                            |        |              |
|      | unsets |                            |        |              |
|      | after  |                            |        |              |
|      | July   |                            |        |              |
|      | 1,     |                            |        |              |
|      | 2009.  |                            |        |              |
+------+--------+----------------------------+--------+--------------+
|      |        | **Tiered Incentives**      |        |              |
|      |        | (cumulative)**:**          |        |              |
|      |        |                            |        |              |
|      |        | [Tier I]{.underline}:      |        |              |
|      |        |                            |        |              |
|      |        | • Public recognition       |        |              |
|      |        | through a numbered         |        |              |
|      |        | certificate, inclusion on  |        |              |
|      |        | the WDNR\'s website, and   |        |              |
|      |        | annually publish notice of |        |              |
|      |        | recognition in local       |        |              |
|      |        | newspaper.                 |        |              |
|      |        |                            |        |              |
|      |        | • Participant eligible to  |        |              |
|      |        | use program logo           |        |              |
|      |        |                            |        |              |
|      |        | • Direct point of contact  |        |              |
|      |        | between the WDNR and the   |        |              |
|      |        | facility                   |        |              |
|      |        |                            |        |              |
|      |        | • Fewer inspections        |        |              |
|      |        |                            |        |              |
|      |        | • Deferred civil           |        |              |
|      |        | enforcement if correcting  |        |              |
|      |        | violations identified in   |        |              |
|      |        | self-audits                |        |              |
|      |        |                            |        |              |
|      |        | [Tier 2]{.underline}:      |        |              |
|      |        |                            |        |              |
|      |        | • Applicants propose       |        |              |
|      |        | incentives that are        |        |              |
|      |        | proportional to their      |        |              |
|      |        | commitment to maintain and |        |              |
|      |        | improve their superior     |        |              |
|      |        | environmental performance. |        |              |
|      |        | If approved, such          |        |              |
|      |        | incentives and commitments |        |              |
|      |        | are included in a          |        |              |
|      |        | participation contract     |        |              |
|      |        | between the WDNR and the   |        |              |
|      |        | participant.               |        |              |
+------+--------+----------------------------+--------+--------------+

Attachment 2

Lessons Learned from the PTrack Incentives Implementation Process

To support the Incentives Workgroup in identifying options for
expediting the incentives implementation process, we contacted states to
understand the drivers and challenges associated with state adoption of
the PTrack regulatory incentives and their implementation.

Of the 13 states identified on our list as having implemented one or
both of the PTrack incentives, we conducted interviews with CO, NC, OK,
PA, TN, VA, and WA, representing Regions 3, 4, 6, 8 and 10,
respectively. Of the four states identified on our list as actively
pursuing implementation of PTrack incentives, we conducted an interview
with SC in Region 4.[^2] We initiated contact with the states on August
9, 2005; we completed interviews and follow-up communications by August
25, 2005.

We compiled basic information from our interviews into Exhibit 1 below.
Although the sample size for our interviews is relatively small, the
overlap in responses appears to offer a representative sample of states
involved in incentive implementation activities. We also provide a
summary of the main points gleaned from the interviews conducted and our
recommendations for how EPA can facilitate the implementation of PTrack
incentives.

# Main Points from Interviews

-   Adoption of the incentive rule changes does not appear to be an
    obstacle to implementation. The process for most states is very
    straightforward, except in the case of CO and TN where attempts were
    made to broaden the scope of the incentives to cover state
    leadership program members in addition to PTrack members. Even in
    these states, the rules were eventually adopted, minus the proposed
    language changes.

-   The state PTrack coordinator or P2 staff usually initiates the
    regulatory adoption process by contacting the state's media program
    staff to update them on the incentives. Media program staff
    receptivity is greater in states where the two programs have a
    working relationship and strong communication. Media program staff
    are responsible for bringing the proposed rule changes before the
    state's regulatory body. Some states report an internal lack of
    support for PTrack and innovative programs in general among state
    environmental officials and media program managers, which impedes
    efforts to promote PTrack and implement incentives at the facility
    level.

-   More significant to the incentive implementation process is the
    limited number of PTrack members who are eligible for the incentives
    and interested in them. Exhibit 1 shows that, particularly among
    states that have their own leadership programs in addition to
    PTrack, few, if any facilities are eligible or interested in
    pursuing these incentives.[^3] Although eligibility numbers are
    higher in the two states without leadership programs, respondents
    are not optimistic about participation. For example, WA indicated
    that most of the larger facilities, which could ultimately benefit
    from the incentives, are not eligible for them because of ongoing
    compliance problems preventing them from joining PTrack. And smaller
    facilities that are eligible for PTrack membership would not qualify
    for the incentives because of the size of their waste streams. SC, a
    state not authorized to offer incentives through its own leadership
    program, also identified constraints on facility eligibility and
    implementation of PTrack incentives. One of its eligible PTrack
    members will not pursue the RCRA incentive because the costs
    associated with changing the company's corporate policy to allow
    implementation in the one facility participating in PTrack are
    prohibitive.

-   A number of states, including CO and NC, want to provide incentives
    and greater regulatory flexibility to their leadership program
    members who are not PTrack members. They suggested that EPA regional
    media and compliance program staff do not feel authorized to expand
    eligibility for these incentives without formal guidance.

-   The role of EPA in PTrack incentive implementation varies
    considerably by region. The level of support for and promotion of
    PTrack by EPA regional staff to states and PTrack facilities appears
    to depend on:

1)  the PTrack staff presence at the region (e.g., NC reported that
    Region 4 has experienced significant turnover among P2 and PTrack
    staff);

2)  the familiarity of regional staff (particularly the media and
    compliance programs) with PTrack;

3)  the kind of working relationship that exists between the region and
    the state; and

4)  the level of routine contact between the regional staff
    (particularly the media and compliance programs) and state
    facilities.

> For example, states with leadership programs reported that PTrack was
> less appealing to their facilities because they do not have the same
> level of familiarity or contact with EPA regional staff as they do
> with state media program staff.

-   States suggested a few ways for EPA to facilitate PTrack incentives
    implementation at the state level:

1)  develop incentives that would be of greater interest to facilities
    and apply to specific industrial sectors (e.g., WA reported that it
    is trying to develop MOAs with trade associations to achieve
    compliance through P2;);

2)  grant equivalency status to state leadership programs that meet
    PTrack criteria;

3)  support the development of state incentives that are more responsive
    to local facilities' concerns (e.g., SC has initiated pilot projects
    that allow participating facilities to propose their own approaches
    to regulatory flexibility); and

4)  engender greater awareness of PTrack and incentives among regional
    staff, state environmental officials, state media program staff,
    industrial sectors, and PTrack members themselves.

> The need for direct communication about PTrack incentives among EPA
> Regions, state media program staff, and eligible facilities was noted
> more frequently by states that experience a lack of internal agency
> support for PTrack, including OK and TN.

## Recommendations

Drawing from the insights and experiences offered by the states, we
propose the following recommendations to EPA for improving its
facilitation of incentives implementation under PTrack:

I. *Collaborate with states and specific industry sectors to identify
innovative incentives that have broader applicability and are attractive
to more facilities.* Consider ways to either grant states authority to
extend PTrack incentives to state leadership program members or create
parity between PTrack and state leadership programs to make it easier
for facilities to obtain dual membership. For example, EPA and states
may wish to consider drafting federal regulatory language to authorize
eligibility to any state performance-based program that meets the
approval of EPA. This would require EPA to review state
performance-based programs to determine whether a program is equivalent
to the acceptance and retention standards of the PTrack program.

II\. *Collaborate with states to work through the practical issues
related to implementation "in the field."* In particular, state
inspectors/permitters and EPA regulatory staff may be concerned about
how compliance determinations are affected by certain incentives.

III\. *Work to develop consistent approaches to building awareness of
PTrack in Regions, including orientation of regional staff, outreach to
state PTrack coordinators and media program staff, and coordination of
outreach to existing and potential PTrack facilities to promote new and
existing incentives.* A standard communications package should be
prepared in connection with the launch of new incentives that includes
an EPA point-of-contact, a list of eligible PTrack members in each
state, and a fact sheet describing the incentive.

<table style="width:100%;">
<colgroup>
<col style="width: 11%" />
<col style="width: 9%" />
<col style="width: 6%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><strong>Exhibit 1. Ptrack Incentives Implementation
Summary</strong></td>
</tr>
<tr class="even">
<td colspan="5"><strong> </strong></td>
<td colspan="3"><h3 id="ptrack-facilities">Ptrack Facilities</h3></td>
<td colspan="3"><strong>EPA Regional Program Support
Needed(f)</strong></td>
</tr>
<tr class="odd">
<td><strong>States Interviewed(a)</strong></td>
<td><strong>RCRA Adopted(b)</strong></td>
<td><strong>MACT Adopted</strong></td>
<td><strong>Easy Implementation of Regulatory Change(c )</strong></td>
<td><strong>State Leadership Program</strong></td>
<td><strong>Potentially Eligible for RCRA Incentive (d)</strong></td>
<td><strong>Implemented RCRA Incentive</strong></td>
<td><strong>Potentially Eligible for MACT Incentive (d)</strong></td>
<td><strong>Greater Knowledge &amp; Support of Ptrack</strong></td>
<td><strong>Greater Outreach to States</strong></td>
<td><strong>Greater Outreach to Facilities</strong></td>
</tr>
<tr class="even">
<td colspan="11">Implemented Incentives</td>
</tr>
<tr class="odd">
<td>CO</td>
<td>Yes (E)</td>
<td>Yes</td>
<td>No</td>
<td>Yes</td>
<td>2 (2)</td>
<td>?</td>
<td>0 (3)</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="even">
<td>NC</td>
<td>Yes (IBR)</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
<td>1 (1)</td>
<td>0</td>
<td>0 (3)</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="odd">
<td>OK</td>
<td>Yes (IBR)</td>
<td>No</td>
<td>Yes</td>
<td>Yes</td>
<td>? (1)</td>
<td>?</td>
<td>? (2)</td>
<td>No</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="even">
<td>PA</td>
<td>Yes (IBR)</td>
<td>Yes</td>
<td>Yes</td>
<td>No</td>
<td>? (11)</td>
<td>?</td>
<td>? (5)</td>
<td>No</td>
<td>No</td>
<td>No</td>
</tr>
<tr class="odd">
<td>TN</td>
<td>Yes (V)</td>
<td>No</td>
<td>No</td>
<td>Yes</td>
<td>3 (4)</td>
<td>?</td>
<td>0 (0)</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="even">
<td>VA</td>
<td>Yes (V)</td>
<td>No</td>
<td>Yes</td>
<td>Yes</td>
<td>? (5)</td>
<td>1</td>
<td>1 (3)</td>
<td>No</td>
<td>No</td>
<td>No</td>
</tr>
<tr class="odd">
<td>WA</td>
<td>Yes (E)</td>
<td>In process</td>
<td>Yes</td>
<td>No</td>
<td>5 (4)</td>
<td>5</td>
<td>? (2)</td>
<td>No</td>
<td>No</td>
<td>No</td>
</tr>
<tr class="even">
<td colspan="11">Actively Implementing Incentives</td>
</tr>
<tr class="odd">
<td>SC</td>
<td>In process (V)</td>
<td>No</td>
<td>Yes</td>
<td>Yes(e)</td>
<td>2 (2)</td>
<td>?</td>
<td>? (1)</td>
<td>Yes</td>
<td>Yes</td>
<td>Yes</td>
</tr>
<tr class="even">
<td colspan="11">Notes: A "?" means that the state did not provide the
information (or the information provided was not clear). We attempted to
independently verify this information in cases where we could not obtain
clarification from the interview respondents.</td>
</tr>
<tr class="odd">
<td colspan="11">(a) We were unable to conduct interviews with five
states from the initial list (GA, FL, AL, DC, and DE) and two states
selected as replacements (IL and NJ) .</td>
</tr>
<tr class="even">
<td colspan="11">(b) For RCRA Delegation: IBR = Incorporation by
Reference; V = Verbatim Adoption of Federal RCRA Regulations; E =
Adoption of Equivalent and No-Less Stringent State Rule.</td>
</tr>
<tr class="odd">
<td colspan="11">(c) States that did not experience easy implementation
had proposed contentious language modifications to the rule changes that
delayed their adoption.</td>
</tr>
<tr class="even">
<td colspan="11">(d) Numbers on the left were supplied by interview
respondents. Numbers in parenthesis on the right were obtained through
independent review of our Ptrack member database (updated 8/2005). In
the case of RCRA, we counted as potentially eligible all members with
RCRA LQG permits; in the case of MACT, we counted as potentially
eligible all members with only CAA minor permits. Since the data do not
identify whether CAA permits cover hazardous air pollutants, it is not
possible to discern which facilities are subject to MACT requirements.
Additional follow-up with states coupled with review of PTrack members’
application materials may provide the level of detail required to
reconcile the two sets of numbers.</td>
</tr>
<tr class="odd">
<td colspan="11">(e) SC indicated that its leadership program is not
legally authorized by the state legislature to offer incentives to
member facilities; presently SC can only offer incentives through
PTrack.</td>
</tr>
<tr class="even">
<td colspan="11">(f) The responses by states reflect the variation in
EPA support of PTrack across regions and among programs within
regions.</td>
</tr>
</tbody>
</table>

[^1]: Blackman and Mazurek provide evidence that the cost to firms,
    regulators, and other stakeholders of developing site-specific
    environmental regulations to support innovation can be substantial.
    See Blackman, Allen and Mazurek, Janice, \"The Cost of Developing
    Site-Specific Environmental Regulations: Evidence from EPA\'s
    Project XL,\" Resources for the Future, Discussion Paper 99-35-REV,
    March 2000.

[^2]: We initially contacted nine of the 13 states identified on our
    list as having implemented the PTrack incentives. Of the nine, we
    were unable to conduct interviews with two states: GA, FL. FL
    declined an interview citing limited resources available to
    prioritize PTrack and too little information to report. We selected
    another two states from the list, IL and NJ, as replacements but
    were unable to conduct interviews with them. Among the four states
    identified as actively implementing PTrack incentives, we contacted
    but were unable to schedule interviews with AL, the District of
    Columbia, and DE. AL declined an interview because, according to our
    contact, it has not yet begun the implementation process and had
    nothing to report.

[^3]: It is difficult to know for certain how many PTrack member
    facilities are eligible for incentives based on state interviews
    alone. When asked about eligibility, few respondents had information
    on exactly how many of their PTrack members are eligible for or have
    sought to implement the incentives. In an attempt to verify numbers
    provided by respondents, we reviewed our PTrack member database to
    determine the number of facilities in each state potentially
    eligible for the RCRA and/or MACT incentives.