Renewal of an Information collection request

for Regulatory Pilot Projects OMB Control No. 2010 - 0 026 EPA ICR No. 1755. 09

The United States Environmental Protection Agency

February 20 1 1Table of Contents Title Page 1. Id entification of the I nformation Collection

................................ ................................ .. 1 1(a) Title of the I nformation Collection

................................ ................................ ........ 1 1(b) Short Characterization/Abstract

................................ ................................ ............ 1 2. Need for and Use of the Collection 2(a) Need/Authority

for the Collection

................................ ................................ ........ 3 2(b) Practical Utility

/U sers of the Data

................................ ................................ ......... 3 3. Nonduplication, Consultations, and Other Collection Criteria 3(a) Nonduplication

................................ ................................ ................................ .... 3 3(b) Public Notice Required Prior to I CR Submission to OMB

................................ ....... 4 3(c) Consultations

................................ ................................ ................................ ...... 4 3(d) Effects of Less Frequent Collection

................................ ................................ ....... 4 3(e) General Guidel ines

................................ ................................ .............................. 4 3(f) Confidentiality

................................ ................................ ................................ .... 4 3(g) Sensitive Questions

................................ ................................ ............................. 4 4. The Respondents and t he I nformation Requested 4(a) Respondents/NAI CS Codes

................................ ................................ .................. 4 4(b) I nformation Requested

................................ ................................ ........................ 4 (I) Data items, including record keeping requirements (II) Respondent Ac tivities 5. The I nformation Collected

-- Agency Activities, Collection Methodology , and I nformation Management 5(a) Agency

Activities

................................ ................................ ................................ 5 5(b) Collection Methodology and Management

................................ ............................. 6 5(c) Small Entity

Flexibility

................................ ................................ ........................ 6 5(d) Collection Schedule

................................ ................................ ............................. 6 6. Estimating the Burden and Cost of the Collection 6(a) Estimating Respondent Burden and Cost

................................ .............................. 6 6(b) Estimating Agency

Burden and Cost

................................ ................................ ..... 9 6(c) Estimating the Respondent Universe and Total Burden and Costs

........................... 10 6(d) Reason for Burden Hour Change

................................ ................................ ......... 1 0 7. Burden Statement

................................ ................................ ................................ ..... 101 U.S. ENVIRONMENTAL PROTECTION AGENCY Regulatory Innovation Pilot Projects (ICR) No. 1755.0 9 1. Identification of the information collection 1(a) Title and Number of the Information Collection Title : Regulatory

I nnovation Pilot Projects, ICR No. 1755.0 9 , OMB Control No. 2010 - 0026

. 1(b) Short Characterization This is a request for renewal of currently approved I CR No. 1755.0 8 , which authorizes the solicitation of proposals for innovative pilot proj ects. A 60

- day comment period for this I CR renewal in the Federal Register concluded on December 6, 2010 , during which one comment w as received. In 1995, the U.S. Environmental Protection Agency (EPA) began to solicit innovative pilot projects in respons e to a challenge to transform the environmental regulatory sy stem to better meet the needs of a rapidly changing soci ety

while maintaining the nation’ s commitment to protect human health and safeguard the natural environment

. Since then, t hrough a number o f mechanisms including: site

- specific agreements with project sponsors at the facility or community level; broader agreements under the Joint EPA

– State Agreement to Pursue Regulatory Innovation ( http://www.ecos.org/files/1426_file_Agreement.pdf ); and at the State whole

regulatory

program - level through the Agency ’s State I nnovation Grant Program , EPA has been working effectively

with partners to test innovative approaches to environmental r egulation that focus on better environmental outcomes and better efficiency . Under prior I nformation Collection Requests (I CRs), EPA has been gathering data on performance under the earlier, facility

- specific innovation projects identified under Project X L ( http://www.epa.gov/projctxl/ ). P roject experience gained in these earlier projects is helping the Agency redesign current approaches in pursuit of improved public health and environmental protection and more efficient use of limited resources. Thro ugh t hese projects, sponsors private facilities, multiple facilities, industry sectors, Federal facilities, communities, universities, Tribes and States are implementing innovative strategies that produce superior environmental performance, provide flexibility , cost savings, paperwork reduction or other benefits to sponsors, and promote greater accountability to the public. The intent of conducting and supporting innovative pilot projects is to allow EPA to experiment with untried, potentially

promising regul atory

approaches, both to assess whether they provide superior environmental performance or other benefits, and whether they should be considered for wider application. Using this piloting approach, EPA can rely on carefully

controlled, but smaller scale tests to evaluate methodically the broader applicability

of any s pecific regulatory

innovation. This piloting approach provides EPA with a structured, applied policy laboratory

where tests of innovation at a manageable scale can be controlled and evaluated carefully much the same as2

engineering innovations require component

- by component tests and evaluation to bring an innovation to implementation. The piloting, or applied policy laboratory

approach allows EPA to propose and adopt changes based upon an act ual assessment of success at a small scale. Thus, the careful piloting of a regulatory innovation allows EPA to identify possible new policy approaches within the general statutory directive, and suggest alternative regulatory approaches aimed at better re sults and better efficiency , so long as the alternative proposed is permissible under statute. The adoption of such alternative approaches or interpretations in the context of a pilot project does not, however, signal EPA's willingness to adopt that inte rpretation as a general matter, or even in the context of other pilot projects. I t would be inconsistent with the forward

- looking nature of these pilot projects to adopt such innovative approaches prematurely on a widespread basis without first determining whether or not they are viable in practice and successful for the particular projects that embody them. These pilot projects are not intended to be a means for piecemeal revision of entire programs. Depending on the results of these projects, EPA may or m ay not be willing to consider adopting the alternative approach or interpretation again, either generally or for other specific facilities. EPA believes that testing alternative policy approaches and/or interpretations, on a limited basis (e.g., in a site

- specific circumstance or within a specific, state
- managed permitting program) and under the tight control of a carefully selected pilot project is consistent with the expectations of Congress about EPA's role in implementing the environmental statutes (so long as EPA acts within the discretion allowed by the statute). Congress' recognition that there is a need for experimentation and research, as well as ongoing reevaluation of environmental programs, is reflected in a variety of statutory

provisions. EPA ’s Office of Policy

(OP) has tested and evaluated innovative approaches in collaboration with state environmental agencies and directly with regulated entities through pilot projects supported through formal mechanisms such as the State I nnovation Grant P rogram which ran from 2002 through 2009 and under Project XL which ran from 1995 through 2003 , . The Office of Policy historically

has manag ed a careful program to pilot test, evaluate and implement select innovations in support of the Agencies regulatory p rograms . Since 1995, EPA has implemented pilot projects to test innovative ideas working with EPA headquarters, EPA regions, Federal, State, and local government agencies, as well as individual facilities and whole business sectors. The renewal of this I C R is important as it will allow the Agency to continue to monitor and present the outcomes of the projects still remaining from those earlier programs ev e n though they are no longer creating new pilot projects. I t will also allow the Agency to continue it s commitment to testing and evaluating innovati ve approaches for better environmental results as a partner with States, Tribes and communities . The r enewal of this I CR will allow EPA to continue to collaborate with the states as co

- regulators to test inno vative approaches for addressing emerging environmental issues such as climate change adaptation . I n addition, the renewal of this IC R is necessary

to allow EPA to continue information collection supporting its c ommitments to current projects under previo us approved I CR amendments (1755.03

- 1755.0 8 ).3

2. Need for and Use of the Collection 2(a) Need/Authority for the Collection The information is needed to allow the Agency to continue its ongoing work with states, regulated entities, and other stakehold ers that are already engaged in innovative regulatory piloting projects. The information is of value to the Agency in meeting its commitment to document and transfer practical innovation and regulatory flexibility for attainment of compliance and superior environmental results in partnership with regulated facilities , communities, states and tribes

. The information will support the reporting of improved environmental results and the analy sis of pilot projects to determine their efficacy and potential for b roader use. S tates implementing innovative regulatory

pilot tests in projects funded by a State I nnovation Grant are required to report on progress during the operation of a project and to provide a final project report summarizing outcomes and major find ings of each project. EPA’s policy on performance measurement in assistance agreements is an implementation outcome under the Government Performance and Results Act (GPRA § 1115 (a)(4) and §1116(c) ). The renewal of this I CR will allow OEPIto continue t o receive and work with project sponsors on proposals for innovation as well as document results from those projects. Responses related to inquiries by EPA about Project XL pilot projects are voluntary , as are any responses by

state environmental agencies to EPA’s request for input for the design of the annual competition. Under this I CR, EPA would be allowed to solicit its co

- regulators and the regulated entities for their best i deas on pilot projects to test and evaluate innovative practices , and for i nformation that will document the processes and environmental outcomes of pilot testing. .
2(b) Practical Utility/Uses of the Data In formation collected under this I CR renewal will have two purposes. First, EPA seeks to document the results of regul atory innovation pilot projects: to provide accountability reflected in environmental results; to understand the circumstances under which these innovative approaches work best; and to fully

document the projects and their outco mes in a way that allows oth er states or tribes to work with regulated entities to adopt successful approaches. Second, EPA will be allowed to consult with state and local environmental regulatory agencies on development and testing of novel approaches to addressing emerging environ mental issues

3. Nonduplication, Consultations, and Other Collection Criteria 3(a) Nonduplication The information to be obtained under this I CR has not been collected by EPA or any

other Federal agency .4

3(b) Public Notice Required Prior to ICR Sub mission to OMB In compliance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq .), EPA solicited comments on this I CR. A Federal Register (F.R.) notice for this I CR package was first published in the Federal Register on October 5, 20 10 , (Volume 75 , Number 192 , page 61483

– 61485 )

. One public comment was received in the 60

- day first notice in the Federal Register. This comment, from the Wisconsin Department of Commerce provided a reminder to the EPA Office of Policy that EPA Region 5 had committed t o providing technical assistance in the form of inspections for a State I nnovation Grant supported project for the state’s inspection of facilities participating in the auto body sector Environmental Results Program pilot. I n response to that comment, the annual and total burden for EPA has been recalculated in the support document to include a total (over the lifetime of this I CR amendment additional burden of 100 hours by EPA.
3(c) Consultations This notice was developed by the Office of Policy in con sultation with EPA Regional personnel.
3 (d) General Guidelines This I CR complies with OMB ’ s general guidelines for the collection of information. 3(e) Confidentiality The nature of the data being requested as part of this information collection is not confidential. 3(f) Sensitive Questions The information gathering activities discussed in this I CR do not involve any sensitive questions

. 4. The Respondents and the Information Requested 4(a) Respondents/NAICS Codes EPA historically

has wo rk ed with states, t ribes, local governments , businesses and other regulated entities on regulatory

innovation piloting . Potential respondents include the states and tribes as well as entities regulated by EPA and its co

- regulators in state and tribal agen cies pursuant to its authority under the various environmental statutes who are participat ing in innovative pilot projects. 4(b) Information Requested5

No new proposals are being accepted through Project XL or the State I nnovation Grant program Therefore the information collection activities fall generally into two categories within this I CR: (1) progress reporting and final reporting for all projects in implementation under Project XL and the existing State I nnovation Grant Program ; (2) occasional cons ultation with state, tribal and local environmental agencies related to pilot testing and evaluation of innovative approaches to address emerging environmental issues

. For projects in implementation under Project XL , EPA anticipates collection of informat ion to allow the Agency

to document and evaluate the outcomes of the remaining fourteen (14) pilot project s , including measurements of environmental outcomes including collection of final project report s , as identified in the Final Project Agreement or a p roject workplan that will provide the information required to assess the success and outcomes of each project. For the remaining twenty (20) projects sponsored under the now

- closed State I nnovation Grant Program, EPA anticipates collection of quarterly

pro gress reports and a final project report for each project to summarize results and provide evaluative information to describe the success and broader applicability of the piloted innovative approach. EPA will also provide direct technical assistance to the State of Wisconsin for a project supported under the State Innovation Grant Program by providing inspections for up to one hundred and forty ( 140 ) facilities participating in the State’s auto body repair shop Environmental Results Program (ERP) pilot. In formation collection for the compliance part of these inspections is addressed in I CRs supporting the compliance program but, because this pilot project, ty pical of other ERP projects provide measures of bey ond

- compliance performance by

small facilities in tended to indicate more effective environmental stewardship through waste and energy minimization, some information requested for these inspections by EPA personnel would not be covered in existing I CRs for the compliance inspection program. EPA also ant icipates needing the opportunity for occasional consultation with state and tribal environmental regulatory agencies to identify

potential partnership areas for piloting and evaluating innovative solutions to emerging environmental issues such as climate c hange adaption. 5. The Information Collected. Agency Activities, Collection Methodology, and Information Management

. 5(a) Agency Activities Agency activities associated with the collection of information for innovative pilot projects include:

 G ather information from project sponsors and participants on progress and results from existing innovation pilot tests initiated under Project XL and the State I nnovation Grant Program.  Occasional consultation with state and tribal environmental agencies th rough Federal Register Notices and responses, email, or written correspondence as well as through6

sy mposia and other meetings to gather ideas for pilot testing of innovative ideas focused on addressing emerging environmental issues.
5(b) Collection Metho dology and Information Management For projects implemented through Project XL and the State I nnovation Grant program : progress reports, correspondence, and final reports are submitted by each project sponsor by

email or mail and following review these rep orts are kept in project files by EPA project personnel. For the occasional consultation with states and tribes on pilot testing innovative approaches to address emerging environmental issues, EPA anticipates using Federal Register Notices and responses, email, or written correspondence as well as through sy mposia and other meetings 5 (c) Small Entity Flexibility

. Facilities participating in innovation projects under all projects under Project XL and State In novation Grant projects : participate on a voluntary basis and entities can choose not to participate at any

time if undue burden exists. 5(d) Collection Schedule

. No new proposals are being accepted through Project XL or the State I nnovation Grant Program

. For regulatory

innovation projects in implementation, progress reporting generally occurs quarterly and as a final project report for grant

- supported projects and annually and a final project report for XL projects

.

6. Estimating the Burden and the Cost of the Collection 6(a) Estimati ng Respondent Burden and Cost This section presents EPA ’ s estimates of the burden and costs necessary to complete the information collection activities associated with this collection. Burden hours and costs were based upon estimates provided by EPA staf f with extensive experience working with innovative pilot project sponsors and States to assess innovative pilot project ideas and proposals. EPA estimates average hourly respondent labor cost (including fringe and overhead) of $8 2.23 for legal staff, $ 68 .90 for managerial staff, $ 42.09 for technical staff, and $ 1 9.98 for clerical staff. To derive these estimates, EPA referred to the National Employ ment Cost I ndexes developed by the U.S. Bureau of Labor Statistics ( http://www.bls.gov/oes/current/oes_nat.h tm )

. In using this analy sis it should be remembered not only that all responses to this solicitation are7

voluntary , but that sponsors have some expected value attached with their participation. Not unlike a contracts

- based Request For Proposals, one woul d not expect a response from any entity where the burdens associated with preparing the response outweigh the expected benefits to the sponsor. Facilities participating in projects implemented by states supported under the State I nnovation Grant Program w ill be required to report on their environmental performance in order to allow states to meet their obligation under the assistance agreements to measure the environmental outcomes of their projects. The nature of the metrics and reports vary with the ty

p e of projects proposed. They

may range from pre

- and post

- implementation compliance reporting which is generally covered under programmatic I CR to reporting with innovative measures such as the adoption of best environmental business practices that result in pollution prevention through elimination of waste and business process change. This I CR is intended to allow the collection of this ty pe of information which provides a more reliable measure of the results of innovative practice. EPA anticipates that up to 800 facilities annually may be asked to provide information on performance measures related to adoption of innovation requiring 3,200 hours annually at an estimated cost of $ 188,248. For activities related to the preparation and submission of prog ress and final reports related to State I nnovation grant projects, EPA estimates that States would expend up to 1,340 hours annually , costing approximately $ 62 , 427

. EPA anticipates requesting final project reports from 12 XL Projects during the lifetime o f this IC R as a means of closing out and documenting the results of these projects and evaluating the further applicability

of the ideas tested in these demonstrations. No capital expenditures are needed by the respondent to complete the interview sin ce the responses can be made using existing equipment (e.g., telephone). Moreover, no operating and maintenance costs are needed since the activities (reviewing instructions, writing, discussions, and submissions of proposals) can be conducted in with exis ting equipment (e.g., phone, computer). For progress and final reporting on XL Projects, EPA projects that each project will require up to 20 hours to compile, compose and edit material to fulfill the commitment made by project sponsors in the Final Proje ct Agreement to report fully on the outcomes of these voluntary projects. Thus, approximately 240 hours will be required over the lifetime of this I CR (80 hours annually ) for these reports. The cost of this is estimated to be $4,154.88 annually

. For acti vities related to the collection of State input into the design of the innovation pilots, EPA anticipates that States and Tribes may expend up to 3 hours each to develop and submit comment to the Agency

for a total annual burden of 60 hours costing approxi mately $3,864.40

. Staff in the EPA Office of Strategic Environmental Management (formerly the National Center for Environmental In novation ) that work on the development of innovative pilot projects have reviewed the cost findings of the report and found them to be reasonable and sound estimates of8

current and future costs. Table 1. Average Annual Burden and Cost to Respondents

Table 1. Average Annual Burden and Cost to Respondents

Collection Activity Burden Hours and Individual Costs per Reci pient Total Costs Hours per Respondent per Activity Costs per Respondent per Activity Total Hours

for all Respondents Total Costs

for all Respondents Legal Mgmt Tech Cler

STATE INNOVATION GRANT SPONSORS: P ROGRESS AND OUTCOME REPORTING PHASE Collection of Annual Compliance and Other Performance Information By Participating Facilities to Report to State Agencies (Assumes 800 Facilities Annually) 1 1 2 $ 235.31 3 ,200 $ 188,248 .00

Quarterly Project Reporting on State Innovation Grant Projects ( 80 annually) 1 2 8 2 $596.71 1 , 040 $47,736.80 Final Project Reports on State Innovation Grant Projects ( 5 annually) 4 16 32 8 $2, 9 3 8.0 4 3 00 $14,690.20

TOTAL 6 19 42 10 $3,770.06 4 , 5 40 $250,675.00

PROJECT XL FINAL REPORTING Compile project information and develop final project repor t and closeout (assume 4 annually) 2 6 8 2 $954.54 72 $3,818.16
Consult with EPA to resolve any questions on final report and respond to brief evaluation survey for closeout activities (assume 4 annually) 2 $ 84.18 8 $336.72

TOTAL 2 6 10 2 $1,038.72 8 0 $4,154.88

CONSULTATION WITH STATES ON INNOVATION PILOTING Solicitation of Input from State Environmental Agencies (Assume 20 Respondents ) 1 1 1 $ 193.22 60 $3,864.40 TOTAL 1 1 1 $ 193.22 60 $3,864.40
EXTERNAL BURDEN TOTAL 9 26 53 12 4 ,68 0 $258,694.289

6(b) Estimating Agency Burden and Cost Agency burden hours and costs were based upon estimates provi ded by EPA staff with extensive experience working with innovative pilot project sponsors and States to assess innovative pilot project ideas and proposals. The rate EPA used to estimate agency hourly wage was based upon 20 10 GS

- 13/01 salary (Baltimore

- DC) of $ 89,033 (or $ 42.66 ) with overhead of 110% factored in, resulting in approximately $ 90 /hour. To perform the necessary activities associated with this information collection, EPA estimates that it will require the Agency 315 hours and cost the Agency $ 2 0 , 250 per y ear. Staff in the Office of Environmental Policy I nnovation that work on the development of innovative pilot projects have reviewed the cost findings of the report and found them to be reasonable and sound estimates.

Table 2. Annual Avera ge Burden and Cost to Agency

Collection Activity Costs Labor Total Hours Total Costs Hours Costs EPA Evaluation of State Innovation Grant Project Progress Reports (assume 80 quarterly reports ) 1 $ 90 80 $ 7,200 Evaluation of State innovation Grant Final Reports (assume 5 annually) 8 $ 720 40 $ 3,600 Technical Assistance for Wisconsin State Innovation Grant Pilot project Inspections 33 $ 90 33 $ 2 , 970 Evaluate Project XL

Final Reports (as sume 4 annually) 8 $ 720 32 $ 2,880 Solicit state input on innovation piloting and develop recommendations report 40 $3,600 40 $3,600

INTERNAL BURDEN TOTAL 90 $ 5, 220 315 $ 20 , 25010

6(c) Bottom Line Total Burden and Costs EPA anticipates a total annual burden to all entities (states and tribes, participating private facilities and the Agen cy

itself) of 4,995 hours at an estimated annual cost of $ 278,944

.
Table 3 . Summary of ICR Burdens for Respondent Universe Summary of ICR Burdens and Costs Entity Annual Hours

Required Annual Costs Total Hours Over ICR Lifetime (3 yr) Total Costs Over

ICR Lifetime (3yr) States and Tribes 1,4 0 0 $ 66 , 291.4 0 4, 2 0 0 $ 198 , 874.2 0
Private Facility Participants 3, 280 $ 192 , 402.88 9 , 840 $ 577 , 208.64 PUBLIC BURDEN 4 , 680 $ 258 , 694.28 14 , 040 $ 776 , 082.84 EPA 315 $ 20,250 945 $ 60 , 750 T OTAL BURDEN 4 , 995 $ 278 , 944.28 14 , 985 $ 836 , 832.84

6(d) Reasons for Burden Hour Change With the renewal of this I CR, total annual hours needed to conduct information collection activities described in this I CR will be de creased by 3 ,06 8 hours. Thi s difference is largely a result of the reduced number of Project XL and State Innovation Grant projects reporting as those programs come to a close as well as our improved ability to refine the estimates based upon the number of projects coming to complet ion and almost 15 ye ars of experience promoting regulatory innovation and a better understanding of the burden requirements necessary to develop and submit proposals for innovative pilot projects, and an improved understanding of innovative pilot projects and how to develop them. 7. Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to average 5 hours per response. Burden means the total time, effort, or financial resources expended by

per sons to generate, maintain, retain, or disclose or provide information to or for a Federal agency . This includes the time needed to review instructions; develop, acquire, install, and utilize technology and sy stems for the purposes of collecting, validati ng, and verify ing11

information, processing and maintaining information, and disclosing and providing information; adjust the existing way s to comply with any previously

applicable instructions and requirements; train personnel to be able to respond to a col lection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of informati on unless it display s a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. To comment on the Agency 's need for this information, the accuracy of the provided burden e stimates, and any

suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this I CR under Docket ID Number EPA

- HQ

- AO

- 2010

- 0739 , which is available for online viewing a t www.regulations.gov , or in person viewing at the Office of Administrator (OA) Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday , excluding legal holiday s. The telephone number for the Reading Room is (202) 566

- 1744, and the telephone number for the OA Docket is (202) 566

- 1752. An electronic version of the public docket is available at www.regulations.gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronic ally . When in the sy stem, select “search,” then key

in the Docket I D Number identified above. Also, y ou can send comments to the Office of I nformation and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Att ention: Desk Officer for EPA. Please include the EPA Docket ID Number EPA

- HQ

- AO

- 2010

- 0739 and OMB Control Number 2010

- 0026 in any correspondence.