[Federal Register Volume 63, Number 120 (Tuesday, June 23, 1998)]
[Notices]
[Pages 34170-34176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16399]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-6113-6]


Pretreatment Program Reinvention Pilot Projects under Project XL

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; Solicitation of Local Pilot Pretreatment Program 
Proposals under Project XL.

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SUMMARY: Publicly Owned Treatment Works (POTWs) regulated under the 
National Pretreatment Program are required to identify industrial 
users, issue permits to these users, monitor industrial user activities 
through on-site sampling and inspections, and carry out other 
administrative functions involving extensive recordkeeping and 
reporting.
    Many POTWs have mastered the programmatic aspects of their 
pretreatment programs, and a number of these POTWs feel that their 
programs should be measured against environmental results rather than 
strict adherence to procedural and administrative requirements. These 
POTWs have expressed an interest in being allowed to focus their 
resources on activities that they believe will provide greater 
environmental benefits than are achieved by complying with the current 
requirements.
    The Project XL program, which is discussed in greater detail in 
another document in today's Federal Register, was implemented to 
provide the flexibility to conduct innovative pilot projects to develop 
and test ``cleaner, cheaper and smarter'' programmatic alternatives 
that could yield greater environmental results than those achieved 
under the current regulatory system. EPA is interested in exploring 
alternative environmental performance-based pretreatment programs on a 
pilot basis under the Project XL program.
    Today, EPA is requesting that POTWs interested in pursuing a 
program based on environmental performance measures submit preliminary, 
one to two page proposals explaining what they would include in their 
Local Pilot Pretreatment Programs. These short proposals must include a 
clear description of the alternative program the POTW plans to 
implement, the environmental benefits to be gained by

[[Page 34171]]

the program, the regulatory requirements that need to be revised, and 
how program resources would be modified. POTWs that are interested in 
participating must submit their proposals to their State Pretreatment 
Program Coordinator, EPA Regional Pretreatment Program Coordinator, and 
the Director of EPA's Office of Wastewater Management. EPA will review 
the preliminary proposals and choose those that are most likely to 
achieve measurable improvements in environmental performance.
    The number of proposals selected will be based on available 
Approval Authority resources for reviewing and modifying Approved 
Pretreatment Programs and coordinating pilot program implementation.

EFFECTIVE DATES: POTWs interested in participating in this Project XL 
solicitation have until September 21, 1998 to submit a preliminary 
proposal for consideration.

ADDRESSES: POTWs must submit formal proposals to Mr. Michael B. Cook, 
Director, Office of Wastewater Management (MC 4201), U. S. 
Environmental Protection Agency, 401 M Street, S.W., Washington, DC 
20460. Duplicate copies of your proposal should be sent, concurrently, 
to the appropriate EPA Regional Pretreatment Coordinator and the State 
Pretreatment Program Coordinator providing oversight of your 
pretreatment program. This Federal Register document has been placed on 
the Internet for review and downloading at the following location: 
``www.epa.gov/owm'.

FOR FURTHER INFORMATION CONTACT: Patrick Bradley, U.S. Environmental 
Protection Agency, Office of Wastewater Management (4203), 401 M 
Street, S.W., Washington, DC 20460, telephone number (202) 260-6963.

I. Introduction

In General, What is EPA Requesting?

    EPA is interested in exploring alternative environmental 
performance-based pretreatment programs on a pilot basis under EPA's 
Project XL program. The intent of this effort is to investigate ways of 
increasing the effectiveness of the pretreatment program and thus 
obtaining greater environmental benefit.
    Today, EPA is requesting that interested POTWs submit preliminary 
proposals for implementing Local Pilot Pretreatment Programs. EPA will 
choose the proposals that are most likely to achieve measurable 
improvements in environmental performance. The number of proposals 
selected will be based on available approval authority resources for 
reviewing and modifying approved pretreatment programs and coordinating 
pilot program implementation. EPA expects to implement no more than 
fifteen projects.
    The process for reviewing and choosing acceptable pilot program 
candidates will include input from the POTW's State and EPA Regional 
Pretreatment Coordinators, as well as opportunity for public 
participation. After opportunity for public participation at the local 
level and review of a pilot by the selected POTW's State and EPA 
Regional Office, EPA Headquarters will revise 40 CFR part 403, if 
necessary, to allow the selected Local Pilot Pretreatment Programs to 
be tested, and then the POTW's NPDES permit will be modified to 
authorize the POTW to implement its pilot program instead of its 
current Approved POTW Pretreatment Program. States might first need to 
revise their own regulations or statutes to authorize the pilot 
program.

What Are the Current Pretreatment Program Requirements?

    The minimum requirements for an Approved POTW Pretreatment Program 
are currently found in 40 CFR 403.8(f). POTWs with Approved 
Pretreatment Programs must maintain adequate legal authority, identify 
industrial users, designate which are Significant Industrial Users 
under 40 CFR 403.3(t), and perform required monitoring, permitting and 
enforcement. Other sections of part 403 require POTWs with Approved 
Pretreatment Programs to sample and apply national standards to their 
industrial users. POTWs are also required to develop local limits in 
accordance with 40 CFR 403.5. An environmental performance-based pilot 
program would replace certain programmatic requirements of the POTW's 
Approved Pretreatment Program.

How Do the Current Requirements Relate to Environmental Objectives?

    As described in 40 CFR 403.2, the general pretreatment regulations 
promote three objectives:
    (a) To prevent the introduction of pollutants into POTWs which will 
interfere with the operation of POTWs, including interference with the 
use or disposal of municipal sludge;
    (b) To prevent the introduction of pollutants into POTWs which will 
pass through the treatment works or otherwise be incompatible with such 
works; and
    (c) To improve opportunities to recycle and reclaim municipal and 
industrial wastewaters and sludges.
    These objectives require local programs to be designed so they are 
preventative in nature, and therefore, any pilot program must also 
maintain this preventative approach. The specific requirements for an 
Approved POTW Pretreatment Program are intended to achieve these 
objectives. Individual pretreatment programs, however, are not 
routinely required to report on the achievement of environmental 
measures.
    The 1991 National Pretreatment Program Report to Congress provides 
extensive data related to the sources and amounts of pollutants 
discharged to POTWs, the removal of pollutants by secondary treatment 
technology, and the general effectiveness of the pretreatment program. 
The 1991 Report did, however, point to a serious lack of comprehensive 
environmental data with which to fully assess the effectiveness of both 
the national and local pretreatment programs.

Why is EPA Considering Allowing POTW Local Pilot Pretreatment Programs 
at This Time?

    Some POTWs have mastered the programmatic aspects of the 
pretreatment program (identifying industrial users, permitting, 
monitoring, etc.) and want to move into more environmental performance-
based processes. These POTWs have expressed an interest in being 
allowed to focus their resources on activities that they believe will 
provide greater environmental benefit than is achieved by complying 
with the current requirements. Some POTWs want to be able to make 
decisions on allocating resources based on the risk associated with the 
industrial contributions they receive or other factors. Others want to 
be able to focus more resources on ambient monitoring in their 
receiving waters and/or to integrate their pretreatment programs with 
their storm water monitoring programs. In general, these POTWs want the 
opportunity to redirect limited resources away from currently required 
activities that they do not believe are benefiting the environment and 
toward activities that can achieve measurable improvements in the 
environment.
    The Project XL program was implemented to provide the flexibility 
to conduct innovative pilot projects. This current solicitation 
represents an attempt to spur innovation in the pretreatment program to 
increase environmental benefits and, in conjunction with the 
streamlining proposal, to determine if further streamlining of the 
program is needed,

[[Page 34172]]

and in what direction those future streamlining efforts should be 
directed.

II. Stakeholder Comments

How Have Stakeholders Been Involved in the Development of This Idea?

    EPA has been working with stakeholders to learn how to direct the 
pretreatment program toward the achievement of environmental goals. In 
1993, pursuant to a Cooperative Agreement with EPA, the Association of 
Metropolitan Sewage Agencies (AMSA) assembled a 16-member steering 
committee to explore environmental measures of performance of 
pretreatment programs. The committee consisted of federal and state 
approval authorities, local and state control authorities, industrial 
users, and environmental groups. This committee helped shape the 
original research and reviewed findings to identify appropriate 
measures of performance.
    The Committee identified 18 measures for assessing the performance 
of a pretreatment program. Consistent with the committee's belief that 
an adequate program would need to be judged by environmental trends, 
compliance rates, and procedural or programmatic criteria, the measures 
were separated into the following three categories:
Measures of Trends in Pollutant Loadings and Concentrations
    1. Trends in mass loadings of metal and other toxic compounds and 
nonconventional pollutants in POTW effluent; and comparisons to 
allowable levels in NPDES permits where such limits exist.
    2. Trends in emissions of hazardous pollutants to the air, 
particularly for volatile pollutants from unit processes and metals 
from incineration.
    3. Trends in mass loadings of metals and other toxic contaminants 
in POTW influent, as a total and where possible, divided into domestic, 
commercial, industrial, and storm water contributions to the total; and 
comparison to allowable loadings as calculated during the headworks 
analysis, where such an analysis is available.
    4. Reductions in annual average metals levels in biosolids, with an 
indication of any trend towards or compliance with the most stringent 
nationwide biosolids standards.
Measures of Compliance With Requirements
    5. Percent compliance with NPDES permit discharge requirements.
    6. For each POTW, whether the POTW is failing Whole Effluent 
Toxicity (WET) tests due to industrial sources.
    7. Percent compliance with non-pathogen biosolids quality limits 
for the management method currently used, with sites divided into 
categories based on applicable biosolids regulations.
    8. Percent compliance at each Industrial User with categorical 
limits.
    9. Percent compliance at each Industrial User with all permit 
limits.
    10. Percent of Industrial users in compliance with reporting 
requirements.
    11. For each control authority, the number and percent of 
Industrial Users in a significant noncompliance (SNC) for the current 
year that were also in SNC last year.
Procedural or Programmatic Measures
    12. Whether an effective method is being used to prevent, detect, 
and remediate incidents of violations of the specific pretreatment 
prohibitions attributable to industrial or commercial sources (e.g., 
fire and explosion hazards).
    13. Whether an effective procedure is being used to identify non-
domestic users and to update the list of regulated users.
    14. Number of sample events conducted by the control authority per 
significant industrial user (SIU) per year, and percent of all sample 
events that were conducted by the control authority.
    15. Number of inspections per SIU per year.
    16. Whether the control authority has site-specific, technically-
based local limits, based on the most recent regulatory changes and 
latest NPDES permit requirements; or a technical rationale for the lack 
of such limits.
    17. Whether the POTW or control authority has significant 
activities or accomplishments that demonstrate performance beyond 
traditional goals and standards.
    18. Whether or not POTWs have an effective public involvement 
program in place.
    EPA then funded a second multi-stakeholder peer review group 
assembled by AMSA to evaluate the extent to which POTWs were using or 
collecting data to support these measures. The evaluation consisted of 
site visits to five case study cities. During the site visits, the 
researchers collected data on the current status of performance 
measurement and investigated ways to redirect the pretreatment program 
using a broader array of environmental indicators. The final report 
(Case Studies in the Application of Performance for POTW Pretreatment 
Programs, May 1997), presented ``preliminary conclusions regarding the 
use of environmental indicators within the broader context of 
streamlining the pretreatment program to meet objectives of the Clean 
Water Act while better serving the needs of local communities and the 
nation as a whole.''
    One of the principal findings of the May 1997 report was a 
recommendation for ``Pilot Programs'' to investigate performance 
measures. The report recommended pilot programs as a means to phase-in 
and promote reinvention efforts at low risk. Specifically, the Report 
suggested:

    Under such a strategy, only those wastewater utilities that 
could demonstrate readiness to manage locally directed programs 
would be eligible for a pilot. Once eligible, the exact dimensions 
of each local program would be negotiated with the public and the 
appropriate Approval Authority. Administrative orders or enforcement 
discretion could be used during the pilot to allow local priorities 
to shape local programs in place of strict compliance with national 
program regulations under 40 CFR part 403. Accountability would be 
sustained through agreed upon measures of performance.

    The August 1996 WEF/AMSA Pretreatment Streamlining Workshop also 
recommended creating a fundamentally more innovative and results-
oriented pretreatment program that focussed on environmental endpoints. 
The Workshop's final report recommends a national pretreatment program 
consisting of three different tiers or options for local programs. One 
option would be a performance approach that would provide POTWs with 
flexibility in administering various aspects of their pretreatment 
programs in exchange for evaluating the accomplishments of the programs 
based on a series of designated performance-based measures that had 
been agreed upon by all stakeholders.
    Finally, AMSA hosted a 1997 stakeholder meeting in Chicago where 
more than 20 members of key stakeholder groups, including POTWs, 
federal and state regulators, and industrial users, discussed all of 
these previous efforts and portions of this proposal. The attendees at 
the meeting did not reach consensus on a methodology for addressing 
environmental performance measures, but one recommendation was to 
pursue a change to the regulations that would allow pilot programs to 
test some alternate approaches.

[[Page 34173]]

III. Today's Request for Project Proposals

What is EPA Requesting?

    EPA is requesting that POTWs that are interested in pursuing a 
program based on environmental performance measures submit preliminary, 
one to two page proposals explaining what they would include in their 
Local Pilot Pretreatment Programs. These short proposals must include a 
clear description of the alternative program the POTW plans to 
implement, the environmental benefits to be gained by the program, the 
regulatory requirements that need to be revised, and how resources will 
be modified. POTWs that are interested in participating must submit 
their preliminary proposals within 90 days of the publication date of 
this Federal Register Notice to their State Pretreatment Program 
Coordinator, EPA Regional Pretreatment Program Coordinator, and the 
Director of EPA's Office of Wastewater Management. EPA will then 
contact the POTWs that submitted acceptable proposals and request 
detailed proposals within 90 days which outline exactly how the POTWs 
plan to implement their Local Pilot Pretreatment Programs and how they 
address the Project XL criteria. These proposals will be reviewed by 
EPA.
    EPA encourages interested POTWs to contact EPA early--via their 
Regional Pretreatment Coordinator or their Regional XL Coordinator or 
their State Pretreatment Coordinator--to express their interest in 
submitting a proposal. EPA stands ready to discuss pilot ideas or to 
clarify principles, expectations or guidance for the Pretreatment Pilot 
Program or Project XL.
    The following sections outline what EPA believes should be the 
criteria for determining which POTWs may qualify for administering a 
Local Pilot Pretreatment Program, what would be an adequate Local Pilot 
Pretreatment Program, and what existing pretreatment program 
requirements would not have to be part of an approved Local Pilot 
Pretreatment Program. They also discuss application, approval, 
withdrawal and reporting requirements.

How Would Local Pilot Pretreatment Programs be Selected?

    After consultation with the POTW's State, EPA Regional Office, and 
other Offices in EPA Headquarters, the Director of EPA's Office of 
Wastewater Management will select the pilot projects from the proposals 
that best meet EPA's criteria. If more than fifteen (15) Local Pilot 
Pretreatment Programs meet the criteria generally, EPA will select the 
programs that are likely to achieve the greatest transferable 
environmental benefit.
    Transferable environmental benefit means the methodology is such 
that other POTW programs may be likely to implement the method and also 
achieve increased environmental benefits. EPA will select a proposal 
for further consideration only if the POTW's State and EPA Regional 
Office agree to participate.

Which POTWs May Apply To Run a Pilot Program?

    The pilot program is being limited to POTWs that have demonstrated 
that they have run successful Pretreatment Programs, have available 
significant amounts of environmental performance data (or demonstrated 
ability to collect the necessary data), and are most likely to achieve 
transferable environmental benefits greater than those achieved under 
the current requirements. EPA intends to apply the following criteria 
to determine which POTWs may be considered for a Local Pilot 
Pretreatment Program:
    1. The POTW is administering an Approved POTW Pretreatment Program.
    2. The POTW has a solid record of compliance. In general, this 
means that the POTW must not be the subject of a planned or ongoing 
judicial or administrative enforcement action, be in significant 
noncompliance with applicable requirements, or have outstanding 
obligations under (or be in violation of) an order or consent decree. 
Additionally, a POTW's history of compliance will also be considered; 
POTWs most likely to be included in the pilot program would be those 
which do not have a history or pattern of violations, violations 
resulting in serious threats or harms, or have other recent significant 
compliance problems.
    3. The POTW has five years of influent, effluent, and sludge 
quality data, as well as three years of ambient water quality 
measurements for its receiving water or can demonstrate the ability to 
collect ambient data.

What Are the Project XL Criteria?

    Since this pilot programis being administered under the Project XL 
program, the proposals must address the Project XL criteria:
1. Superior Environmental Performance
    Projects that are chosen should be able to achieve environmental 
performance that is superior to what would have been achieved absent 
the XL project. EPA uses a two-part method of determining whether an XL 
project will achieve superior environmental performance: (1) Develop a 
quantitative baseline estimate of what would have happened to the 
environment absent the project and, then compare that baseline estimate 
against the project's anticipated environmental performance; and (2) 
Consider both quantitative and qualitative measures in determining if 
the anticipated environmental performance will produce a level of 
environmental performance superior to the baseline.
2. Cost Savings and Paperwork Reduction
    The project should produce cost savings or economic opportunity, 
and/or result in a decrease in paperwork burden.
3. Stakeholder Support
    The extent to which project proponents have sought and achieved the 
support of parties that have a stake in the environmental impacts of 
the project is an important factor. Stakeholders may include 
communities near the project, local or state governments, businesses, 
environmental and other public interest groups, or other similar 
entities.
4. Innovation/Multi-Media Pollution Prevention
    EPA is looking for projects that test innovative strategies for 
achieving environmental results. These strategies may include 
processes, technologies, or management practices. Projects should 
embody a systematic approach to environmental protection that tests 
alternatives to several regulatory requirements and/or affects more 
than one environmental medium. EPA has a preference for protecting the 
environment by preventing the generation of pollution rather than by 
controlling pollution once it has been created. Pilot projects should 
reflect this preference.
5. Transferability
    The pilots are intended to test new approaches that could 
conceivably be incorporated into the Agency's programs or in other 
industries, or other facilities in the same industry. EPA is therefore 
most interested in pilot projects that test new approaches that could 
one day be applied more broadly.
6. Feasibility
    The project should be technically and administratively feasible and 
the project proponents must have the financial capability to carry it 
out.

[[Page 34174]]

7. Monitoring, Reporting and Evaluation
    The project proponents should identify how to make information 
about the project, including performance data, available to 
stakeholders in a form that is easily understandable. Projects should 
have clear objectives and requirements that will be measurable in order 
to allow EPA and the public to evaluate the success of the project and 
enforce its terms. Also, the project sponsor should be clear about the 
time frame within which results will be achievable.
8. Shifting of Risk Burden
    The project must be consistent with Executive Order 12898 on 
Environmental Justice. It must protect worker safety and ensure that no 
one is subjected to unjust or disproportionate environmental impacts.
    These criteria are described in detail in the following Federal 
Register documents: 60 FR 27282, May 23, 1995 and 62 FR 19872, April 
23, 1997.

What Environmental Results Must a Local Pilot Pretreatment Program 
Achieve?

    The POTW's Local Pilot Pretreatment Program would have to commit 
the POTW to achieve environmental results consistent with the XL 
program's expectations. As detailed in the Federal Register document of 
April 23, 1997, ``In order to test innovative approaches to reinvent 
environmental protection for the 21st Century, Project XL offers 
potential project sponsors and co-sponsors the opportunity to develop 
and implement alternative strategies that produce superior 
environmental performance, replace specific regulatory requirements, 
and promote greater accountability to stakeholders. The May 23, 1995, 
Federal Register document defining the XL program stated EPA's intent 
to approve only those projects that `achieve superior environmental 
performance relative to what would have been achieved through 
compliance with otherwise applicable requirements.' This document 
further refines the definition of superior environmental performance to 
assist future applicants, stakeholders and those evaluating the 
program.'' The system uses a two tiered approach. The first tier 
establishes an environmental performance benchmark for an XL project. 
This quantifies current performance levels and sets a baseline against 
which the project's anticipated environmental performance can be 
compared. The project benchmark will be set at either the current 
actual environmental loadings (historical environmental data) or the 
future allowable environmental loadings, whichever is more protective. 
Tier two is an examination of factors that lead EPA to judge that a 
project will produce truly superior environmental performance.
    For local POTW Pretreatment Programs, Superior Environmental 
Performance may include:
    (i) Reducing pollutant loadings to the environment or achieving 
some other environmental benefit beyond that currently achieved through 
the existing pretreatment program (including collecting environmental 
performance data and data related to environmental impacts in order to 
measure the environmental benefit. Such information would include data 
on pollutant loadings to the environment, ambient environmental 
conditions and measures of the impact of these conditions on the health 
of ecosystems. The data should be able to support decisions concerning 
the future use of pretreatment program resources),
    (ii) Reducing or optimizing costs related to implementation of the 
pretreatment program with the savings used to attain environmental 
benefits elsewhere in the watershed in any media, and
    (iii) Other environmental benefits gained by allowing pretreatment 
program flexibility.
    EPA's ultimate objective is to gain information on how the 
pretreatment program might be better oriented towards the achievement 
of measures of environmental performance. This objective is consistent 
with the principles of the National Performance Review.
    EPA's intent is to allow Local Pilot Pretreatment Programs to be 
administered by those POTWs that best further those objectives. Each 
pilot program's method of achieving the environmental benefit should be 
transferable so that other programs may be able to implement the method 
and also achieve increased environmental benefits.
    Collecting environmental performance data alone would not be enough 
to qualify as an objective. The data collected must be used to benefit 
the environment. For example, the data collected could help POTWs apply 
enforcement and compliance assistance resources more effectively.
    If the focus of the Local Pilot Program is to reduce the cost of 
administering the Approved POTW Pretreatment Program without reducing 
the local program's environmental effectiveness, the resources saved 
must be dedicated to some other environmental application. In this 
situation, the resources might be used to integrate the Pretreatment 
Program with other local environmental protection programs such as 
storm water monitoring or collection system management or local 
pollution prevention initiatives. In all cases, the benefits of a 
trade-off of resources from existing pretreatment requirements to other 
activities will need to be quantified and tracked.
    A Local Pilot Pretreatment Program could focus resources on program 
integration and then measure the environmental benefits of an 
integrated program. Environmental performance measures can foster 
increased integration of pretreatment programs with other local 
environmental programs and with broader environmental efforts, such as 
watershed or community-based environmental protection.
    It is intended that Local Pilot Pretreatment Programs will provide 
clearer linkages between environmental goals and program implementation 
procedures. This will allow programs to identify the goals that are 
best for their specific situations and to design procedures to reach 
those goals.
    To determine what the environmental focus should be, the POTW 
should conduct community outreach. Through a stakeholder dialogue, the 
POTW may gain additional perspective on what is important to the 
community and may help the POTW to make resource allocation decisions. 
Each pilot POTW would then set its own goals based upon input from the 
local community.
    The POTW would then design a management program (the Local Pilot 
Pretreatment Program) to achieve the environmental goals. The alternate 
program would include specific measures to determine whether or not 
implementation procedures are achieving their desired results.

Which Existing Requirements Would not Have to be Part of Local Pilot 
Pretreatment Programs?

    Local Pilot Pretreatment Programs may not have to implement certain 
currently required pretreatment program elements if they are not 
necessary for the achievement of the POTW's environmental objectives. 
The resources saved from not implementing these program elements could 
then be redirected to other means of achieving and measuring 
environmental performance.
    EPA proposes that a Local Pilot Pretreatment Program would still 
need to include adequate legal authority to identify and control 
industrial users, and the authority to take appropriate and necessary 
enforcement actions.

[[Page 34175]]

These authorities would then be supported by a set of procedures. The 
legal authority and procedures must be clearly explained in the POTW's 
proposal.
    Specifically, the Local Pilot Pretreatment Programs would still be 
required to develop/maintain legal authority and ensure compliance with 
categorical pretreatment standards and local limits, including taking 
necessary enforcement actions. The POTW would be required, at a 
minimum, to identify industrial users that are subject to categorical 
standards, receive and review reports from the categorical users, and 
take enforcement action as appropriate based on the reports received. 
The Local Pilot Pretreatment Programs would also be required to develop 
and implement procedures to operate their programs such as permitting, 
inspection and monitoring, and technically-based local limits. However, 
the procedures would not necessarily have to include the prescriptive 
permitting or reporting requirements in 40 CFR 403.8(f) or 403.12. The 
POTW may not necessarily be expected to permit a specific subset of 
industrial users designated by the federal regulations, but instead 
would have the latitude to decide which industrial users need permits. 
The POTW would be expected to monitor (sample and inspect) industrial 
users, but would be able to decide how often to monitor the users. 
These procedures would likely involve modifying existing program 
procedures rather than developing new procedures.
    Industrial users would continue to be subject to all currently 
applicable requirements; except that, as described above, a Local Pilot 
Pretreatment Program may alter the timing of certain reports and may 
consider certain industrial users that are subject to national 
categorical standards to no longer be SIUs.

What Will Be the Duration of Local Pilot Pretreatment Programs?

    Local Pilot Pretreatment Programs may be approved to operate for 
one five-year period. Prior to the end five-year period (at least 180 
days), the POTW may apply for a renewal or extension of the project 
period. If a POTW is not able to meet the performance goals of its 
Local Pilot Pretreatment Program, the Approval Authority may allow the 
performance measures to be adjusted if the primary objectives of the 
Local Pilot Pretreatment Program will be met. The revised Local Pilot 
Pretreatment Program must be approved in accordance with the procedures 
in 40 CFR 403.18.
    If the primary objectives of the proposal are not being met, the 
Approval Authority shall direct the POTW to discontinue implementing 
the Local Pilot Pretreatment Program and resume implementation of its 
previously approved pretreatment program. The Approval Authority will 
ensure that the POTW's NPDES permit includes a reopener clause with 
this requirement.
    The results of the pilots, including recommendations in POTW pilot 
reports, will be used to determine the direction of future Pretreatment 
Program streamlining and/or reinvention.

Will the Pilot Program POTW Be Required to Submit Periodic Progress 
reports?

    The POTW will be required to periodically report the progress of 
its pilot program. The POTW's periodic report would describe its Local 
Pilot Pretreatment Program activities and accomplishments, including 
activities and accomplishments of any participating agencies and public 
involvement. The report should include an analysis of all environmental 
data collected over the reporting period and activities conducted to 
reduce pollutant loadings to the environment and any other activities 
that address the objectives of the Local Pilot Pretreatment Program.
    The report following the fourth year of pilot program 
implementation must also include the findings of the pilot. This report 
must specifically address all objectives of the pilot program and 
provide measures related to the effectiveness of the program, as 
implemented, in meeting the objectives. The report should also include 
recommendations concerning the implementation of the pretreatment 
program at the local level.
    The minimum report requirements will be detailed in the POTW's 
NPDES permit. This requirement will be similar to the current 
requirement for the POTW to annually report to the Approval Authority 
the status of its Pretreatment Program. See 40 CFR 403.12(i). At the 
discretion of the NPDES permitting authority, the report may be 
required more frequently than once per year.

What Should a Proposal to Implement a Pilot Program Include?

    The POTW should discuss the pilot project with its State and EPA 
Regional Office early in the process of developing a proposal, and 
prior to submitting any proposal to EPA Office of Wastewater 
Management. This should save time for both the Approval Authority and 
the POTW.
    A POTW seeking approval to implement a Local Pilot Program must 
first submit a preliminary, one to two page, written proposal to EPA 
Headquarters (Office of Wastewater Management--MC 4201) with copies to 
its Approval Authority and EPA Regional Office within 90 days of the 
publication of this document. These short proposals must include a 
clear description of the alternative program the POTW plans to 
implement, the environmental benefits to be gained by the program, the 
regulatory requirements that will be revised, and how resources will be 
modified. The request should be mailed to U.S. EPA, Office of 
Wastewater Management (MC 4201), 401 M Street, S.W., Washington, DC 
20460. Telephone inquiries may be directed to Patrick Bradley at (202) 
260-6963.
    If EPA determines the POTW's preliminary proposal meets the 
criteria explained in this document, EPA will request that the POTW 
submit a more detailed proposal in 90 days. The detailed proposal shall 
include a complete draft of the POTW's proposed Local Pilot 
Pretreatment Program, including a description of the specific measures 
to determine whether or not the alternative management procedures are 
achieving their desired results. The proposal shall address all 
necessary modifications to the procedures, legal authority and 
resources of the POTW's existing Approved Pretreatment Program. It must 
also contain commitments from the appropriate municipal officials that 
the POTW will have the necessary legal authority, procedures, personnel 
and resources to implement the pilot program. The proposal should 
include a copy (or drafts) of any statutes, ordinances, regulations, 
agreements, or other authorities that the POTW will rely upon for its 
administration of the Local Pilot Pretreatment Program.
    The POTW's draft pilot program should address all of the major 
pretreatment program elements. It should document how the POTW will 
continue to develop, implement, and enforce its Local Pilot 
Pretreatment Program. For example, it should identify the manner in 
which Pretreatment Standards will be applied to individual Industrial 
Users (e.g., by order, permit, ordinance, etc.). It should also 
identify how the POTW intends to ensure compliance with Pretreatment 
Standards (including categorical Pretreatment Standards) and 
Requirements, and to enforce them in the event of noncompliance by 
Industrial Users. The detailed proposal should also address how the 
Local

[[Page 34176]]

Pretreatment Pilot Program would meet the eight Project XL criteria 
discussed earlier in this notice.
    EPA believes stakeholder involvement in developing Local Pilot 
Pretreatment Programs is crucial to the success of the programs. 
Therefore, as part of the application, the POTW must clearly explain 
its process for involving stakeholders in the design of the pilot 
program. This process should be based upon the guidance set out in the 
April 23, 1997, Federal Register document. The support of parties that 
have a stake in the program is very important.
    Once EPA has accepted a candidate based on its detailed proposal, 
the POTW, EPA, the State and local stakeholders should finalize a Final 
Project Agreement (FPA). The FPA is a non-binding agreement that 
enumerates the conditions of the project. (In order to expedite this 
process, EPA will develop a FPA template for these projects that will 
contain the elements that are anticipated to be common among these 
projects and shall make this available to the candidates.) The actual 
regulatory flexibility will be granted by modifying 40 CFR part 403 to 
allow these specific POTWs to operate Local Pilot Pretreatment 
Programs.
    After an opportunity for public participation at the local level 
and the development of the Final Project Agreement, a selected POTW's 
Approval Authority would approve or disapprove the pilot program using 
the procedures in 40 CFR 403.18. The POTW may implement its Local Pilot 
Pretreatment Program once its NPDES permit has been modified to 
incorporate the program as an enforceable permit element.
    As with any XL Project, EPA intends to work cooperatively with the 
POTWs that submit applications for Local Pilot Pretreatment Programs to 
develop and fine tune the applications. Applicants must recognize that 
EPA retains the ultimate authority to select projects based on a 
qualitative consideration of the criteria described earlier. Since 
these are pilot projects and there are a limited number of pilots that 
can be approved, projects that satisfy many or all of the criteria may 
not be chosen for Local Pilot Pretreatment Programs status. The 
decision of which projects will be selected will be based on an Agency 
decision about which projects are expected to best serve the objectives 
of this program. No person is required to submit a proposal or obtain 
approval as a condition of commencing or continuing a regulated 
activity. Accordingly, there will be no formal administrative review 
available for proposals that are not selected, nor does EPA believe 
there will be a right to judicial review.

    Dated: June 20, 1998.
Michael B. Cook,
Director, Office of Wastewater Management.
[FR Doc. 98-16399 Filed 6-22-98; 8:45 am]
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