56182 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

accordance with 40 CFR part 166 was

submitted as part of this request.

The Applicant states that the

diamondback moth, a pest of almost all

crops in the cole vegetable group, has

become resistant to registered materials,

which were formerly effective at

providing control. The applicant states

that without an effective control such as

emamectin benzoate, the cole crop

growers in Florida will likely suffer

severe economic losses.

The Applicant proposes to apply

emamectin benzoate at a rate of 0.015 lb.

active ingredient (a.i.) per acre with a

maximum of six applications per crop

season, but no more than 0.09 lb. a.i.,

applied per acre per crop season. The

proposed use is for up to 13,400 acres

of the cole vegetable group. Therefore,

use under this exemption could

potentially amount to a maximum total

of 1,206 lbs. of the active ingredient,

emamectin benzoate. This is the first

time an exemption request for this use

has been requested by the state of

Florida.

This notice does not constitute a

decision by EPA on the application

itself. The regulations governing section

18 require publication of a notice of

receipt in the Federal Register for an

application for a specific exemption

proposing the use of a new

(unregistered) chemical. Such notice

provides for opportunity for public

comment on the application.

The official record for this notice, as

well as the public version, has been

established for this notice under docket

number [OPP–181050] (including

comments and data electronically as

described below). A public version of

this record, including printed, paper

versions of electronic comments, which

does not include any information

claimed as CBI, is available for

inspection from 8:30 a.m. to 4 p.m.,

Monday through Friday, excluding legal

holidays. The official notice record is

locate at the address in ‘‘ADDRESSES’’

at the beginning of this document.

Electronic comments can be send

directly to EPA at: oppdocket@epamail.epa.gov

Electronic comments must be

submitted as an ASCII file avoiding the

use of special characters and any form

of encryption. Comments and data will

also be accepted on disks in

WordPerfect 5.1/6.1 or ASCII file

format. All comments and data in

electronic form must be identified by

the docket number [OPP–181050].

Electronic comments on this notice may

be filed online at many Federal

Depository Libraries.

Accordingly, interested persons may

submit written views on this subject to

the Information Resources and Services

Division at the address above. The

Agency will review and consider all

comments received during the comment

period in determining whether to issue

the emergency exemption requested by

the Florida Department of Agriculture.

List of Subjects

Environmental protection, Pesticides

and pests, Emergency exemptions.

Dated: October 17, 1997.

James Jones,

Acting Director, Registration Division, Office

of Pesticide Programs.

[FR Doc. 97–28643 Filed 10–28–97; 8:45 am]

BILLING CODE 6560–50–F

ENVIRONMENTAL PROTECTION

AGENCY

[FRL–5914–7]

Joint EPA/State Agreement on Pursue

Regulatory Innovation

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Notice.

SUMMARY: The purpose of this notice is

to solicit public comment on the draft

Joint EPA/State Agreement to Pursue

Regulatory Innovation. This draft was

prepared jointly by the EPA and the

Environmental Council of the States

(ECOS). The agreement will provide a

framework for how EPA and the States

will promote and implement future

regulatory innovation efforts. A copy of

this notice is available on the Internet at

http://www.epa.gov/reinvent.

DATE: Comments are due by November

28, 1997.

ADDRESSES: Comments may be

submitted to: Gail Robarge, Office of

Reinvention (mailcode 1102), 401 M

Street, SW., Washington, DC 20460;

email address:

robarge.gail@epamail.epa.gov. ECOS

members may submit comments to: Tina

Parker, Environmental Council of the

State, 444 N. Capitol Street, NW., Suite

305, Washington, DC 20001; email

address tparker@sso.org.

FOR FURTHER INFORMATION CONTACT: Gail

Robarge, EPA Office of Reinvention,

phone 202/260–9101, email

robarge.gail@epamail.epa.gov; or Bruce

Brott, Minnesota Pollution Control

Agency, phone 612/297–8380, email

bruce.brott@pca.state.mn.us.

SUPPLEMENTARY INFORMATION:

Background

In order to find new, better and more

efficient and effective ways to improve

environmental protection, the ECOS and

EPA Administrator formed a joint task

group to develop an agreement on EPAState regulatory innovation. The

purposes of the agreement are to:

improve environmental protection in

the United States; improve EPA/State

environmental management systems;

and provide for timely decision-making

on innovation proposals.

The agreement establishes guiding

principles for innovation and an

efficient process that is receptive to

innovative proposals from the States for

achieving shared environmental

objectives. The agreement will

encourage and facilitate the exploration

of ideas which are potentially more

cost-effective and/or have a better

environmental impact. It will improve

decision-making between the States and

EPA on innovation proposals,

emphasizing clear lines of

communication, decision authority,

accountability and timeliness. It will

provide opportunities for stakeholder

involvement at the state and national

levels.

An informal stakeholder meeting was

held to discuss the draft agreement in

September. Participants offered many

thoughtful comments and constructive

suggestions (a summary of this meeting

is posted on the Web at http://

www.epa.gov/reinvent). Comments

from the meeting will be taken into

consideration by EPA and ECOS as we

review other comments received during

the next 30 days.

A public meeting to discuss the draft

agreement will be held on Nov. 20,

1997, in Washington, D.C. Please

contact Louise McLaurin (202/260–4261

or mclaurin.louise@epamail.epa.gov) to

register for the meeting and to obtain

details regarding time and location.

TEXT OF DRAFT AGREEMENT

Part 1

Joint EPA/State Agreement To Pursue

Regulatory Innovation

‘‘* * * We must encourage innovation by

providing flexibility with an industry-byindustry, place-by-place approach to

achieving standards,* * * But we will

require accountability that such standards be

met. Rather than focusing on pollutant-bypollutant approaches, attention must shift to

integrated strategies for whole facilities,

whole economic sectors, and whole

communities.’’ [Excerpt from President

Clinton’s ‘‘Reinventing Environmental

Regulation,’’ March 16, 1995]

The U.S. Environmental Protection

Agency and the states agree on the need

to experiment with new approaches to

improve our nation’s environment.

These new approaches can help us

identify cleaner, cheaper, smarter ways
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56183

to ensure that all Americans enjoy a

clean environment and healthy

ecosystems. Through this joint

commitment, EPA and the states agree

to encourage, evaluate, implement, and

disseminate ideas that seek better ways

of achieving our environmental goals.

This agreement presumes that EPA and

the states will find ways to help good

ideas succeed, and that joint EPA and

state efforts to promote and test new

ideas will result in the maximum

benefit to the American people and their

environment.

Two years ago, EPA and the states

entered into an historic agreement to

establish the National Environmental

Performance Partnership System

(NEPPS). That agreement recognized

that we have achieved significant

progress since environmental protection

programs were created more than 25

years ago. Yet to meet today’s new

challenges, we agreed that states and

EPA must manage for environmental

results, increase public involvement,

and use environmental indicators to

track our progress. We agreed that states

and EPA must become true partners in

implementing federal programs, and

that different state programs need

different levels of federal involvement.

This new partnership creates an

environment in which state and local

regulatory innovations can, and should,

flourish. As the primary, front-line

delivery agent for environmental

programs, states are a natural laboratory

for testing new ideas. State and local

environmental professionals are closest

to environmental problems and

communities, and can often develop the

most practical solutions. These

professionals should be encouraged to

seek innovative solutions that may not

fit within the traditional approaches.

We agree that our efforts to promote

innovation must, in the end, be directed

toward achieving our public health and

environmental goals in a more efficient

or effective way.

EPA also seeks to promote regulatory

innovations at all levels. This agreement

complements, but does not supplant,

other national or state efforts to develop

regulatory innovations. Its purpose is to

establish a clear pathway and decisionmaking process for state innovations

that have encountered federal barriers or

need greater attention to help them

succeed.

States and EPA agree that the

following principles should guide us as

we develop, test and implement

regulatory innovations:

Experimentation

Innovation involves change, new

ideas, experimentation and some risk of

failure. Experiments that will help us

achieve environmental goals in better

ways are worth pursuing when success

is clearly defined, costs are reasonable,

and environmental and public health

protections are maintained.

Environmental Performance

Innovations must seek more efficient

and/or effective ways to achieve our

environmental and programmatic goals,

with the objective of achieving a

cleaner, healthier environment and

promoting sustainable ecosystems.

Smarter Approaches

To reinvent environmental regulation,

regulators must be willing to change the

way we traditionally look at

environmental problems and be

receptive to innovative, common sense

approaches.

Stakeholder Involvement

Stakeholders must have an

opportunity for meaningful involvement

in the design and evaluation of

innovations. Stakeholders may include

other state/local government agencies,

the regulated community, citizen

organizations, environmental groups,

and others. The opportunities for

stakeholder involvement should be

appropriate to the type and complexity

of the innovation proposal.

Measuring and Verifying Results

Innovations must be based on agreedupon goals and objectives with results

that can be reliably measured in order

to enable regulators and stakeholders to

monitor progress, analyze results, and

respond appropriately.

Accountability/Enforcement

For innovations that can be

implemented within the current

regulatory framework, current systems

of accountability and mechanisms of

enforcement remain in place. For

innovations that involve some degree of

regulatory flexibility, innovators must

be accountable to the public, both for

alternative regulatory requirements that

replace existing regulations and for

meeting commitments that go beyond

compliance with current requirements.

Regulators will reserve full enforcement

authority to ensure compliance with

alternative regulatory requirements, and

must be willing to explore new

approaches to ensure accountability for

beyond-compliance commitments.

State-EPA Partnership

The states and EPA will promote

innovations at all levels to increase the

efficiency and effectiveness of

environmental programs. We must work

together in the design, testing,

evaluation and implementation of

innovative ideas and programs, utilizing

each other’s strengths to full advantage.

EPA agrees to establish a process that

ensures timely review and decisionmaking on state innovation proposals

based on implementation of the above

seven principles. The states agree to

consult early with EPA, to develop

proposals consistent with the above

principles, and to involve stakeholders.

EPA and the states agree on the need for

a clearinghouse of regulatory

innovations so that promising ideas can

be shared across state lines and within

EPA.

We agree that the principles and

process described in this agreement

should be open to continual

improvement. As part of ongoing review

and evaluation, EPA and the states agree

to evaluate the need to further

institutionalize the broad principles and

process to help future innovations

succeed.

Through this agreement, as detailed in

Part 2, states and EPA are committed to

work together and with all stakeholders

to apply the lessons learned from

successful innovations in creating the

best possible system to achieve greater

environmental protection at a

reasonable cost. We agree to encourage

innovation that will prepare us for

meeting our environmental challenges

well into the 21st century.

Part 2

I. Overview of This Agreement

This agreement embodies a set of

general principles and a process for

EPA/State innovation activities. This

agreement includes:

—Statements of purpose and scope of

the agreement;

—Over-arching principles that will

govern joint EPA/state regulatory

innovation activities;

—The process EPA and the states will

use to identify good ideas, including

both the continuation of existing State/

EPA interactions to start innovation

projects, and the establishment of a new

mechanism for making decisions on

innovative proposals that do not fit into

ongoing reinvention programs; and

—Guidelines for how EPA and the

states will evaluate the success of

innovation activities carried out under

this agreement.

This agreement builds on the many

reinvention efforts that are underway in

the states and EPA. It is intended to

ensure joint decision-making, timely

review, broad public involvement, and

continued progress in fostering and

implementing ideas that are good for
56184 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

our environment and the people we

serve.

II. Purpose and Scope of the Agreement

A. Purpose

The Administrator of the U.S.

Environmental Protection Agency (EPA)

and senior State environmental officials

agree to three purposes for this effort: to

improve environmental protection in

the United States; to improve EPA/State

environmental management practices;

and to provide timely decision-making

on good ideas. These purposes are

described below.

1. Improved Environmental Protection

The Administrator of the U.S.

Environmental Protection Agency (EPA)

and senior State environmental officials

agree that the states and EPA need to

encourage, seek out, and try innovative

approaches to improve our nation’s

environment. These innovative

approaches can offer mechanisms that

are more cost-effective, less adversarial

and contentious, and have a better

environmental impact. To support

sustainable development and

continuous environmental

improvement, innovations should

utilize pollution prevention methods

rather than pollution control whenever

possible. While we have made

significant progress in environmental

protection, much remains to be done

and no backsliding can be permitted.

Innovative approaches offer us tools to

improve current environmental

protection programs and to tackle the

environmental problems of the future.

2. Improved EPA/State Environmental

Management Practices

Through this agreement, EPA and the

states will develop improved

management practices that promote

collaboration and shared responsibility

for innovations. This agreement is

consistent with the concepts embodied

in the National Environmental

Performance Partnership System

(NEPPS). In fact, NEPPS was

established, in part, to encourage

innovative approaches by states,

consistent with agreed-upon

environmental goals and indicators. The

agreement recognizes that states and

local governments are natural

laboratories for testing new ideas and

that EPA has an important role in

promoting innovation at all levels,

while continuing to ensure that the

states provide fundamental public

health and environmental protection.

This agreement identifies how we will

work together to identify and promote

innovative ideas and better ways of

doing business. It is intended to help us

communicate and evaluate such ideas

and to encourage joint decision-making

on how such innovations can be

fostered, designed and implemented.

3. Timely Decision-Making on Good

Ideas

Finding better ways to accomplish our

environmental goals is part of the

everyday practice of good government.

Current processes through which many

successful state innovations have been

carried out should continue. We

recognize that the most challenging

regulatory innovation proposals have

been difficult to address. This

agreement establishes an optional

avenue for prompt consideration and

evaluation of innovation proposals.

EPA and States may conclude that

some successful regulatory innovation

projects demonstrate that changes in

EPA regulations, policies, guidance, or

interpretations are needed to improve

the nation’s environmental protection

system. Where such changes can be

made under existing law, EPA will

initiate the process for making the

changes—following applicable

procedures. EPA and States may also

initiate policy discussions on potential

statutory changes that may be needed to

enable nation-wide adoption of

innovative approaches.

B. Scope of the Agreement

As used in this agreement, ‘‘regulatory

innovation’’ is a broad concept. It

encompasses the process of proposing,

testing, evaluating, refining and sharing

innovative approaches to environmental

regulation in order to achieve national,

regional, state, tribal, and local

environmental objectives. Regulatory

innovations should be more efficient

and/or provide greater environmental

protection than current approaches,

foster cooperation, and include

opportunities for strong stakeholder

involvement.

Many types of innovations are

possible, and potential innovations will

vary in scope, complexity, ease of

implementation, environmental

benefits, and other characteristics. At

this point in time, it is difficult to

design a single system or process that is

appropriate for all potential

innovations. Innovations should be

accomplished through the normal

course of business whenever possible.

This agreement provides a clear

pathway for innovative proposals that

need extra attention or are too complex

to be handled through normal channels.

Proposals that are less complex can be

implemented more quickly, leading to

early success, while more difficult

projects will likely need more analysis

and stakeholder participation. This

agreement builds on and complements

other innovation activities, but is not

intended to replace them.

III. Principles for EPA/State Regulatory

Innovation

EPA and the States agree to a set of

basic overarching principles which will

guide our joint regulatory innovation

activities. There are seven overarching

principles relating to regulatory

innovation activities—Experimentation,

Environmental Performance, Smarter

Approaches, Stakeholder Involvement,

Measuring and Verifying Results, and

Accountability/Enforcement, and StateEPA Partnership.

A. Experimentation

Innovation involves change, new

ideas, experimentation, and some risk of

failure. Experiments that will help us

achieve environmental goals in better

ways are worth pursuing when success

is clearly defined, costs are reasonable,

and environmental and public health

protections are maintained.

1. The States and EPA should

recognize the value of prudent risktaking and value-added experiments to

achieve improved results.

2. The States and EPA should seek

ways to make good ideas work,

presuming that change and innovations

consistent with environmental goals are

worth our investment.

3. The States and EPA should

carefully monitor and manage

innovations to ensure that problems are

immediately identified and remedied.

Experimentation should be based on

sound judgment, reasoning and

common sense.

4. If a promising experiment

encounters difficulties, but

environmental protection is not

jeopardized, project sponsors should be

allowed sufficient time to fix problems

before the experiment is abandoned in

favor of the traditional approach.

5. Innovations with greater potential

benefits may warrant some additional

risk-taking.

6. Experimentation does not include

relaxing health or environmental

standards or reducing protection of

public health or the environment.

B. Environmental Performance

Innovations must seek more efficient

and/or effective ways to achieve our

environmental and programmatic goals,

with the objective of achieving a

cleaner, healthier environment and

promoting sustainable ecosystems.

1. Protecting public health and the

environment are the primary goals of
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56185

both EPA and State environmental

agencies, and we agree that innovations

can help us find cleaner, cheaper,

smarter ways of improving our nation’s

environment.

2. Many opportunities exist to

improve environmental protection

through innovations that have the clear

potential to provide environmental and

ecosystem benefits. In addition,

innovations may be designed primarily

to improve the cost effectiveness of

achieving environmental goals; these

projects must ensure that there is no

adverse impact on: environmental

protection, public access to information,

and public access to the decisionmaking process.

3. For projects that have a greater

uncertainty of the environmental

outcome, or that involve experimental

technologies or approaches, alternative

requirements should be expected to

have the clear potential to provide

increased environmental protection,

promote ecosystem sustainability, or

both. EPA and the state agency, in their

best judgment and in consultation with

stakeholders, will determine whether

such proposals have the clear potential

to produce appropriate gains in

environmental protection, improved

sustainability of the ecosystem, or both.

4. Innovations may be designed to fit

local and regional conditions, as long as

local solutions do not create

environmental problems for other

localities, such as undesired downwind

and downstream effects, or undermine

national standards.

5. No population group should be

subjected to unjust or disproportionate

environmental impacts as a result of the

innovation.

C. Smarter Approaches

To reinvent environmental regulation,

regulators must be willing to change the

way we traditionally look at

environmental problems and be

receptive to innovative, common sense

approaches.

1. Regulators should seek creative

ways to remedy environmental

problems or improve environmental

protection in a community, facility,

sector or place.

2. Regulators should work with

industry and communities to solve

environmental problems by removing

barriers that prevent prudent, common

sense solutions.

3. Regulators should be professional,

accountable and deserving of the

public’s trust.

4. Regulators should seek to

understand all perspectives, and help

stakeholders find common ground.

5. Regulators should act promptly to

evaluate, and implement, proposals that

are straightforward, technically

achievable, and have clear advantages,

while ensuring adequate public review.

D. Stakeholder Involvement

Stakeholders must have an

opportunity for meaningful involvement

in the design and evaluation of

innovations. Stakeholders may include

other state/local government agencies,

the regulated community, citizen

organizations, environmental groups,

and others. The opportunities for

stakeholder involvement should be

appropriate to the type and complexity

of the innovation proposal.

1. Innovations should include

opportunities for early, open, and

inclusive stakeholder involvement in

project development, specifically

including those who may be affected by

the decisions. Stakeholders should be

provided adequate time to review

proposals and participate in the process.

2. Consistent with the principle of

providing meaningful opportunity for

stakeholder involvement, each State

should have the flexibility to use its

own stakeholder participation process,

as long as applicable federal and state

requirements are met or exceeded. EPA

and States will identify national

program issues and ensure

opportunities for active involvement

from national stakeholder groups.

3. Project proposals and the process

for their consideration should be made

transparent to stakeholders so that the

benefits of the proposed change can be

fully evaluated. Information needed to

understand the proposed innovation

and to verify compliance and

environmental performance should be

publicly available in an understandable

form. EPA and States commit to provide

regular analysis of the types of

innovations implemented and their

environmental impacts.

E. Measuring and Verifying Results

Innovations must be based on agreedupon goals and objectives with results

that can be reliably measured in order

to enable regulators and stake-holders to

monitor progress, analyze results and

respond appropriately.

1. The success of innovations should

be judged by the results they achieve.

Goals and objectives should be:

established in advance, measurable, and

based on the desired results.

2. Results should be verifiable by

reliable measurements and both process

and results should be understandable to

regulators and the public.

3. Regulators should have access to

high quality information sufficient to

verify the environmental performance of

an innovation.

4. Regulators and the public should

have a full understanding of the

differences between the innovation and

traditional approaches, including

expectations for the project,

accountability for performance, and any

potential risks.

F. Accountability/Enforcement

For innovations that can be

implemented within the current

regulatory framework, current systems

of accountability and mechanisms of

enforcement remain in place. For

innovations that involve some degree of

regulatory flexibility, innovators must

be accountable to the public, both for

alternative regulatory requirements that

replace existing regulations and for

meeting commitments that go beyond

compliance with current requirements.

Regulators will reserve full enforcement

authority to ensure compliance with

alternative regulatory requirements, and

must be willing to explore new

approaches to establish accountability

for beyond-compliance commitments.

1. During the project, existing

statutory and regulatory requirements

remain in effect and fully enforceable

for persons or activities not covered by

the innovation project.

2. If a promising innovation project

encounters difficulties, but

environmental protection is not

jeopardized, flexible enforcement

responses should be used to allow

project sponsors sufficient time to fix

problems before a project is abandoned

in favor of the traditional approach.

3. Regulators must have authority to

address such circumstances as

imminent and substantial

endangerment, actual harm, or criminal

conduct.

4. Innovations may include both: (a)

Enforceable ‘‘alternative regulatory

requirements’’ that provide protection

equivalent to current environmental

standards, and (b) other ‘‘beyondcompliance commitments’’ which seek

to exceed current standards or

requirements. Alternative regulatory

requirements and beyond-compliance

commitments should be clearly

distinguished in advance.

Alternative Regulatory Requirements:

—Alternative regulatory requirements

should be enforceable with all the

remedies available under current law.

—Regulators should use enforcement

discretion in choosing remedies when a

facility fails to meet alternative

regulatory requirements.

—Potential responses for failure to

meet such alternative regulatory
56186 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

requirements should be identified in

advance.

Beyond-Compliance Commitments

—As part of an innovation, facilities

may agree to beyond-compliance

commitments in exchange for regulatory

flexibility or some other incentive.

—Potential responses for failure to

meet such beyond-compliance

commitments should be defined in

advance.

—Responses for failure to meet

beyond-compliance commitments

should fit the circumstances. They may

include trying a different approach,

modifying the innovative approach, or

reverting to the traditional approach,

but they should not include

enforcement penalties.

G. State-EPA Partnership

The States and EPA will promote

innovations at all levels to increase the

efficiency and effectiveness of

environmental programs. We must work

together in the design, testing,

evaluation and implementation of

innovative ideas and programs, utilizing

each other’s strengths to full advantage.

1. As the primary front-line managers

of many environmental protection

programs, the States and local

governments are a natural laboratory for

innovations. The States should manage

their own programs, adapt to local

conditions, and test new approaches for

delivering more environmental

protection for less.

2. The federal government should

ensure good science, strong national

health and environmental standards,

and should work in partnership with

the States by providing analysis,

expertise, and facilitating learning

among the States. EPA should promote

innovation at all levels (national,

regional, state, tribal, place-based,

community, and in the private sector).

EPA retains its role to set national

standards and measures, implement

programs not delegated to states or

tribes, address interstate issues, apply

and interpret national statutes and

regulations, and ensure fair and

effective enforcement, thus ensuring

that all States provide fundamental

public health and environmental

protection.

3. EPA and State roles in innovations

must be clearly designed to utilize each

party’s unique strengths and avoid

duplication. Decision makers should be

clearly identified.

4. Assigned roles and responsibilities

should be honored and respected, and

joint problem-solving should be

encouraged.

5. Communication must be open,

honest, frank and frequent. The States

and EPA should work to understand

each other’s perspectives, achieve

consensus on major issues, make

decisions in a timely manner, and

resolve conflicts quickly and efficiently.

IV. Process for Considering State

Innovations Proposals

EPA and the states are engaged in

many successful efforts to reinvent

environmental regulation. These efforts

should continue unimpeded. EPA and

the States agree that, where procedures

currently exist, innovation proposals

should be handled through normal EPA/

state program activities or other ongoing

reinvention activities. Proposals that do

not fit into an existing pathway can be

handled via the new process established

under this agreement.

The process of developing

Performance Partnership Agreements

(PPAs) under National Environmental

Performance Partnership System offers

one opportunity for States and EPA,

working with stakeholders, to agree on

innovative approaches to pursue.

However, participation in a PPA is not

the only avenue for States and EPA to

work on innovative approaches.

Memorandum of Agreements and/or

Work Plans can serve the same function

as a PPA. Inclusion of anticipated

innovative approaches in the PPAs or

other agreements will allow the states

and EPA to allocate staff resources and

establish priorities for innovative

projects. For example, individual states

may choose to place higher priority on

innovation projects which promote clear

cost or environmental benefits for the

public. It is envisioned that States will

include in the PPAs or other agreements

a discussion of potential innovative

activities, indicating how the

innovations link to environmental goals

and providing a picture of proposed

changes.

A. Use Existing Pathways

This agreement is designed to

supplement, rather than replace,

ongoing innovation activities underway

in EPA and the States. Such innovation

activities should continue. State

innovations that do not require a change

to Federal guidance, regulations or

statutes can proceed without EPA

review. EPA’s role will consist of

support and advice, if requested. EPA

and States should continue to work

together on innovations that may

involve using existing flexibilities in

current law and regulation, and on

existing innovation programs such as

Project XL.

B. New Process Established Under This

Agreement

The States and EPA agree to establish

an optional process which States may

use to get timely decisions on

innovation proposals. This process

includes senior-level management

attention and specific time frames to

ensure prompt decisions by EPA. The

following process establishes a

management framework so that actions

and next steps, along with interested

participants and decision-makers, can

be clearly identified and taken into

account. EPA’s Regional Administrators

are responsible for ensuring that the

process moves forward; individual

states are expected to establish similar

senior-level points of contact to manage

the State’s role in the innovation

process.

This process is intended to be

flexible. For example, EPA Regional

Offices, EPA Headquarters Offices, and

the States are encouraged to maintain

open lines of communication at both

staff and management levels beyond the

formal process described below, and

states are encouraged to invite EPA into

the early discussion stages of any

project. Early consultation between EPA

and the States is important in

identifying obstacles early and in

determining who needs to be involved

so that the project can move forward

expeditiously.

EPA will also work with individual

States as needed to establish priorities

in the review of proposals based on

guidance developed in the Performance

Partnership Agreement or other EPA/

State agreed mechanism. EPA and the

States recognize that the success of this

process will be affected by the quality

and clarity of proposals and the

effectiveness of communication between

EPA, the state, and stakeholders. The

States and EPA are committed to

working together to ensure that

communications are frequent, open,

honest, and directed to finding means to

allow innovations to succeed.

While one of the objectives of the

innovation proposals is efficiency, the

very act of designing an experiment,

testing the hypothesis, and evaluating

the results may be resource intensive for

all parties. The optimum management of

resources by EPA and the State will

help ensure the success of the review

process, the implementation of the

projects, and adherence to time lines.

1. Stage One—Developing Quality

Proposals

States and EPA recognize that clear,

well-developed proposals will facilitate

review and speed decision-making.
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56187

States are encouraged to consult with

EPA as early as possible in the

development of a proposal. The States

should be able to use this early

consultation process to develop a clear

understanding of their proposals with

EPA and key stakeholders.

During the early consultation, the

State and EPA will identify issues that

need attention, possible barriers to

implementation, uncertainties regarding

risks, and value added to all parties.

These discussions will be open and

candid and will provide the States with

information that will be important and

useful for the development of the

proposal. While early consultation is

encouraged, not all proposals will

require the same degree of discussion

and/or consultation.

EPA and States will bring a positive,

constructive approach to consideration

of proposals and seek ways to help good

ideas to succeed.

States will prepare proposals that: (a)

Are consistent with the principles

described in this agreement, and (b)

clearly present the objective of the

proposal, the expected benefits, a

description of the activities, and a

determination as to whether the

proposal: may require a change to

Federal guidance, policy, past practices

or rule interpretation, but not

regulations or statutes; may require a

change to or waiver from Federal

regulations, but not statutes; or, may

require a change to a Federal statute.

EPA will: (a) Provide clear statements

of its position, along with timely and

authoritative answers to questions about

what changes, variances, or associated

approvals a particular proposal may

require; and (b) work with the State to

identify the most efficient path by

which a particular proposal could be

implemented.

In addition, States will provide

meaningful opportunities for

stakeholder involvement in the

development of regulatory innovation

proposals. The degree of stakeholder

involvement depends on the nature of

the proposal. Where a proposal would

involve a change in or variance from

existing national guidance, regulations,

or statutes, early consultation among

EPA, states, and national stakeholder

groups can help identify critical issues

that need to be addressed. If EPA

believes that national stakeholder

involvement is warranted, EPA will

contact the State and identify, in

partnership with the State, an approach

to obtain such involvement as early in

the process as possible.

The Senior State Environmental

Official or their designee then submits

a written description of the regulatory

innovation proposal to the EPA

Regional Administrator, who then

initiates the review process described

below. The State will designate a highlevel official as the single point of

contact for each project.

2. Stage Two—Review of Proposal and

Decision

a. EPA Review. The EPA Regional

Office will have primary responsibility

for review of the innovation proposal.

This responsibility includes proposal

distribution within the Region and to

the affected EPA National Program

Managers and the Office of Reinvention;

review and response to the State; and

appropriate stakeholder involvement. In

cases where national policy or

regulatory issues are involved, the

Regional Administrator must ensure

complete review by relevant national

program offices.

EPA will consider several factors in

the review of the innovative proposals,

including

(1) Consistency with the principles in

this agreement;

(2) Comments from stakeholders;

(3) Type of flexibility from federal

guidance or regulation needed to

implement the proposal;

(4) Clear presentation and analysis of

issues;

(5) Potential benefits of the innovation

as compared to the investment of time

and resources required for

implementation, and impact on

agencies’ resources and workloads.

The review process is intended to be

flexible. EPA and the State should

maintain open lines of communication

at all levels—staff and management—to

ensure that questions and concerns are

raised and discussed. During the review

process, EPA may seek input from other

States and stakeholders, including

environmental groups and the regulated

community, to fully identify the

strengths and weaknesses of the

proposal.

b. EPA Decision. Upon completion of

the consultation and review period, the

Regional Administrator will make a

decision to accept or reject a proposal.

If a proposal involves a national policy

or regulatory issue, the decision will be

made jointly with relevant National

Program Managers and the Office of

Reinvention. This decision will be

communicated verbally and in a written

form to the designated Senior State

Environmental Official. If the proposal

is not accepted, the decision will

include the rationale for the

determination.

EPA and the State will determine the

category into which the proposal falls.

The type of proposal will have an

impact on the time frame for

implementation. The categories are:

Category 1: Straight-forward,

transparent proposal with clear

advantages, few obstacles, technically

achievable, and minimum

environmental risk.

Category 2: Experimental proposal that

has a greater uncertainty of

environmental outcome; requires

more attention to design,

implementation, and evaluation; and

may involve some risk of failure. The

unpredictability of the experiment

means that it will be more resource

intensive and may require more time.

Category 3: Strategic proposal that

involves broad-based, new

approaches (e.g., statutory changes)

and requires policy discussion to

further develop concepts. Proposals

may be assigned to an existing policy

forum for discussion or a new forum

could be established.

If the proposal requires changes of

interpretation or substance regarding

national statutes, regulations or policies

before proceeding with an innovation

project, both EPA and the State will

reach agreement on all proposed

changes. These projects will be

accomplished through mechanisms

available under Federal law and

regulation, which may include

variances, site-specific rules, legal

interpretations, or other means.

c. Appeals. In the event that a dispute

arises during this process or a State

disagrees with a Region’s decision, the

State may appeal in writing to the EPA

Deputy Administrator. The State may

also request a review by a panel

consisting of EPA Senior Managers and

State Commissioners. The panel will

review the proposal, the issues, and

merits of the dispute, and submit

recommendations to the EPA Deputy

Administrator for a final decision.

4. Time Frames for Decision

EPA and the States are committed to

working together to ensure timely

responses to State proposals.

a. Initial response to proposal. EPA

will respond to the State with follow-up

questions, clarifications, and initial

reactions including an initial

identification of obstacles to approval

within four weeks of its receipt of a

written innovation proposal from the

State.

b. Decision to proceed with proposal:

EPA will decide whether to make a

favorable recommendation within 3

months of the receipt of a proposal from

the State. Decisions on proposals may

be reached more quickly for proposals

that are straight-forward, with clear
56188 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

advantages, widely supported,

technically achievable, and

implementable in the short-term.

V. Measuring and Evaluating Success

Before an approved proposal is

implemented, we must define success

and how we will measure it. This can

help eliminate misunderstandings about

whether or not the process and

innovation as a whole is progressing

effectively, and if it is not, what steps

need to be taken to correct any

problems.

Therefore, EPA and the States agree

on the importance of evaluating the

success of regulatory innovation

activities that flow through the process

outlined in Section IV. The challenge is

to develop useful measures without

choking the very creativity we seek to

stimulate. We want to ensure that a

variety of ideas are being proposed, that

decisions are made in a timely fashion,

and that the most promising innovations

are being implemented successfully. To

accomplish this, we must measure both

the success of our decision-making

process and the success of the

innovations themselves.

A. Measuring the Process

We must ensure that the decision

making process is effective, or the

process will not be used. The success of

the process depends primarily on the

effectiveness of the communications

between EPA and the States and the

timeliness of decisions. Measurements

include: (1) the number and quality of

innovation projects proposed, (2) the

number and quality of innovations

implemented, (3) the timeliness of the

actions taken in the process, (4) the

number of proposals appealed, and (5)

the speed with which information about

successful innovations are disseminated

to other states. EPA and states will also

evaluate other factors that are difficult

to measure but are critically important

to successful outcomes, including the

degree of EPA-State cooperation and

stakeholder participation. EPA should

collect this information and make it

available at a central location so it can

be used by the States, EPA, and

stakeholders. Within 60 days of signing

this agreement, EPA and ECOS will

designate a central location.

B. Measuring the Innovation’s Impact

The success of the innovation

project’s impact will depend on how

well it was designed and the results

achieved. Successful innovation project

designs should be clearly described so

successful projects can be used to

improve the entire system, and/or

adapted to other site specific situations.

The quality of the projects implemented

can be measured by: (1) Environmental

impact, (2) efficiency, and (3) other

relevant indicators. In addition to

providing information about the success

of an individual innovation project,

these measurements also provide

guidance on improving future

innovation projects. States and EPA

should agree in advance who is

responsible for collecting and

disseminating this information.

The proposed measures in Appendix

A provide a starting point for discussion

in terms of a framework and some

common criteria for innovations.

Common criteria allow the states and

EPA to evaluate the progress in

innovations state-wide and nationally.

VI. Information Sharing

Accepted state innovation proposals

and completed projects are most

valuable when widely available to state

and local regulators, the regulated

community, environmental

organizations and the public at large.

We agree on the need to share

information, track commonalities and

analyze barriers to promising state

innovations. Knowledge of both

successes and failures will help the

states, EPA and stakeholders develop

better approaches for achieving our

environmental goals. Because sharing

information and innovative ideas among

the states is core to ECOS’ mission,

ECOS will set up a regulatory

innovation clearinghouse that highlights

the results of this agreement and other

state/EPA innovations that EPA

Regional Reinvention Ombudsmen or

State Commissioners deem appropriate.

VII. Next Steps

EPA and the States agree on the

following steps to ensure prompt

implementation of the agreement:

A. Joint Evaluation

By October 1998, states and EPA will

begin to evaluate the success of

regulatory activities that have been

reviewed under the new process. The

evaluation will consider both the

environmental and efficiency benefits

derived from each innovation, and the

efficiency of the new review process.

The results of the evaluation will be

shared with EPA, the states and

stakeholders.

B. Modifications to the Agreement

If the evaluation indicates a need to

modify or amend this agreement, EPA

and the states agree to discuss such

modifications or amendments and make

needed changes by January 1999.

Attachments:

A. Model for Core Performance

Measures

B. Examples of Regulatory Innovations

Attachment A—EPA/State Environmental

Regulatory Innovations Core Performance

Measures

Environmental Goal

A sustainable environment with healthy

communities and ecosystems

Environmental Objectives

—Air quality improvements

—Water quality improvements

—Land quality improvements

Program Objectives (Outcomes)

—More effective and efficient

environmental regulatory systems

—Reductions in releases to the

environment

—Reductions in resources expended to

implement the regulatory process, by

regulators, regulated entities, other

stakeholders: time, workyears, money

—Increased stakeholder participation in

the regulatory process

—Large majority of high priority, high

quality innovation projects are successfully

implemented

—Successful results of innovation projects

are: clearly described, widely disseminated,

adopted in other site specific situations, used

to improve entire systems

Program Activities (Outputs)

—Number of innovation projects proposed

—Number of innovation projects

implemented

—Quality of projects implemented:

environmental, efficiency, other indicators

—Stakeholder participation

—Timeliness of actions taken in process

Attachment B—Examples of Regulatory

Innovations

To encourage creative thinking and the

development of good regulatory innovation

proposals, EPA and the States have

developed the attached examples of

regulatory innovation projects. Four

examples of potential regulatory innovations

are provided. Examples 1, 2 and 3 are

suggestions of innovative ideas that states

have developed—they are intended to

illustrate the kinds of proposals that may be

developed. These examples have not been

reviewed or accepted by EPA as projects for

this process. Example 4 describes an

innovative proposal that was recently

implemented in North Carolina.

Example 1: Mercury in Wastewater Effluent

Objective: Substitute sludge testing and

limit requirements for mercury in place of

effluent limits and monitoring requirements

in NPDES permits for municipalities.

Description and expected benefits:

Mercury cannot be detected accurately in

municipal wastewater effluent. Dilution of

mercury in effluent leads to non-detectable

monitoring results. In addition, mercury test

methods at the low levels seen in municipal

effluent can easily pick up contamination of

sampling and analysis and lead to false

positives. As a result, most municipalities
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56189

can show compliance with mercury effluent

limits and need take no steps to reduce

mercury in their effluent.

This proposal would eliminate effluent

limits from NPDES permits for

municipalities, and instead substitute sludge

monitoring (where mercury concentrates in

the wastewater treatment process). If mercury

in sludge exceeds federal clean sludge levels,

municipalities would be required to develop

mercury source reduction programs. Since

mercury can be more accurately detected in

sludge, this would lead to better targeting of

the municipalities that need to develop

mercury source reduction programs.

Federal obstacle halting or hindering

progress: Requires changes in either federal

statute or variance/change in federal

regulations. Attorneys state that sludge

requirements as proposed cannot be tied to

surface water standards.

Additional background information: This

proposal was strongly supported by

municipalities, environmental groups,

Wisconsin DNR staff, and EPA staff. All saw

that this proposal would lead to greater

environmental benefits than the current

NPDES system.

State: Wisconsin Department of Natural

Resources, Bureau of Watershed

Management.

Example 2: Continuous Emissions Monitoring

for Air Pollutants

Objective: Create a flexible approach to

compliance demonstration for air emission

limits that have been consistently achieved.

In exchange, install continuous emissions

monitoring for other toxic pollutants for

which more data is needed. This approach

would reward facilities which have

demonstrated superior environmental

performance with simplified compliance

demonstration requirements.

Description and expected benefits:

—Federal guidance on practical

enforceability requires that compliance

demonstration schemes use available

technology which produces verification of

compliance data as frequently as practically

possible.

—A facility is required to use continuous

emission monitors (CEMs) to show

compliance with an air emission limit. Data

has been gathered for several years and it

shows consistent emission levels at or lower

than 50% of the limit. In addition, other

surrogate process parameters are

continuously monitored.

—The permittee wishes to show

compliance by an alternative compliance

method which requires periodic testing to

assure continued compliance. The surrogate

parameters will continue to be monitored

and will be used to ensure that the operating

conditions remain within the range under

which compliance has been demonstrated by

periodic testing.

—In exchange, the facility agrees to install

CEM for certain toxic organics from certain

processes. The nature and levels of these

toxics are not very well defined based on

mass balance approaches. The information

generated by these CEMs will be useful for

an air toxics analysis being conducted in the

area.

Federal obstacle halting or hindering

progress: Requires change or deviation from

established EPA policies regarding federal

enforceability as a practical matter on

emission limits. However, the demonstrated

level of confidence on compliance warrants

a less rigorous approach, particularly because

it includes a periodic verification process.

Additional background information: The

permittees believe that it is important to

build a trust relationship with regulators to

be able to re-direct resources to areas where

the need is greater to realize further

improvements or to generate new

information on environmental matters.

State: Minnesota Pollution Control Agency,

Air Quality Division, Permits Section

Example 3: Tiered Permitting System for

Hazardous Waste Facilities

Objective: Create a permitting system for

hazardous waste (HW) management facilities

that are presently exempt from the existing

RCRA Part B permitting system but still pose

a potential threat to human health and the

environment if improperly designed and

operated.

Description and expected benefits:

—Current RCRA regulations exempt

recycling facilities from any permitting

requirements, but require a Part B permit if

HW is stored prior to recycling.

—Environmentally safe recycling is

preferable to disposal and should be

encouraged.

—Recycling facilities can be as

complicated as treatment and disposal

facilities and require some oversight to

ensure that they are protective of human

health and the environment.

—Requiring the standard Part B permit for

recycling facilities creates a disincentive and

may greatly limit the number of recycling

facilities.

—A less onerous tiered permit provides

regulatory oversight and does not pose the

same disincentive as a Part B permit for

recycling facilities.

—The tiered permit incorporates

performance standards and financial

assurance as appropriate and is custom

tailored to the facility without requiring all

of the elaborate features of a Part B permit.

Federal obstacle halting or hindering

progress: May require a variance from federal

statutes and regulations that prescribe

standards and require a Part B permit for

storage of HW depending on what type of

storage activities are covered under the tiered

permit.

Additional background information: State

legislation required fluorescent lamp

recyclers to be permitted. Rules are in the

development stage with extensive regulated

community involvement. The tiered

permitting system will be extended to all

types of HW facilities for which a Part B

permit is not required or not appropriate,

including recyclers and some types of storage

facilities.

State: Minnesota Pollution Control Agency,

Hazardous Waste Division, Regulatory

Compliance Section.

Example 4: River Basin-Based Planning and

Permitting

Objective: To coordinate stream modeling

and permitting on a river-basin or sub-basin

scale instead of in a piecemeal fashion.

Description and expected benefits:

River-basin based planning and permitting

would:

—Enable better planning and resource

allocation

—Increase consistency between permits

—Increase consideration of basin-wide

pollutant inputs (point and nonpoint) for

better decision-making and planning

—Improve efficiency of modeling, data

collection for modeling, and permitting

activities

—Provide opportunity for greater

stakeholder involvement in the planning

process

Federal statutes prohibit permits with a

term greater than five years. To synchronize

NPDES permit renewal for an entire river

basin, the state had to issue five year permits

followed by an additional short-term permit.

The burden on permitting and modeling staff

was further increased because EPA Region IV

was also pressing NC to address its permit

backlog. The state lacked sufficient modeling

resources to address the existing backlog and

also issue short term permits in selected

basins. The state proposed to reissue the

short-term permits with existing limits

without modeling and to refocus its

permitting staff away from the permit backlog

and toward the basin-wide permitting

approach. Region IV was hesitant to endorse

the basin-wide concept.

Contact with EPA Headquarters (Office of

Water) convinced EPA to hire a facilitator to

help the state develop an implementation

strategy for the basin-wide planning and

permitting approach. EPA Headquarters also

sponsored a workshop to obtain input from

surrounding states. This involvement

allowed the state to develop a convincing

strategy, and subsequently, Region IV agreed

to the proposal. EPA also provided a

104(b)(3) grant to increase monitoring and

modeling in the Tar-Pamlico River Basin to

help pilot the approach.

Federal obstacle halting or hindering

progress: Required change in EPA past

practice.

Additional background information: At

first, permittees reacted to the short-term

permits due to the extra burden of

completing permit applications and paying

application fees. However, the concerns of

permittees were quelled by pointing out the

long-term improvements in consistency

among permits in the river basin and in

efficiency of issuing these permits.

Environmental stakeholders were supportive

of the approach from the start due to a greater

opportunity for involvement in the planning

process.

State: North Carolina.

Dated: October 16, 1997.

J. Charles Fox,

Associate Administrator, Office of

Reinvention.

[FR Doc. 97–28553 Filed 10–28–97; 8:45 am]

BILLING CODE 6560–50–P