Document ID: EPA-HQ-OA-2005-0003-0029
Agency: epa
Document Type: Notice
Title: Report on ECOS-EPA Performance-Based Environmental Programs: Proposed Initial Implementation Actions
Posted Date: 2006-05-15T12:13:59Z

[Federal Register: May 15, 2006 (Volume 71, Number 93)]
[Notices]               
[Page 28026-28030]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15my06-45]                         

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8169-8; EPA-HQ-OA-2005-0003]

 
Report on ECOS-EPA Performance-Based Environmental Programs: 
Proposed Initial Implementation Actions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: This notice seeks public comment about proposed actions 
resulting from a collaborative effort between EPA and representatives 
from the Environmental Council of the States (ECOS). ECOS and EPA have 
developed a series of action recommendations to: identify, develop, and 
implement incentives for top environmental performers that are part of 
state and federal performance-based environmental programs; facilitate 
the integration of performance based programs into EPA and State 
Agencies; and enhance marketing and outreach of performance based 
programs. Today's recommended actions build on preliminary ideas that 
EPA provided for public comment on August 4, 2005 (70 FR 44921), and a 
public meeting held in Chicago, IL on October 19, 2005.

DATES: Comments must be received on or before June 14, 2006.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OA-
2005-0003 by one of the following methods:
     http://www.regulations.gov: Follow the on-line 

instructions for submitting comments.
     E-mail: docket.oei@epa.gov.
     Fax: 202-566-0224.
     Mail: Office of Administrator Docket, Environmental 
Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460.
     Hand Delivery: EPA Docket Center, EPA West, Room B-102, 
1301 Constitution Ave, NW., Washington, DC 20460. Such deliveries are 
only accepted during the Docket's normal hours of operation (8:30 a.m. 
4:30 p.m. M-F), special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OA-2005-
0003. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 

provided, unless the comment includes information

[[Page 28027]]

claimed to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Do not submit 
information that you consider to be CBI or otherwise protected through 
http://www.regulations.gov, or via e-mail. The www.regulations.gov Web site is 

an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov your e-mail address will be 

automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the EPA Docket Center, 

EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, 
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Office of Administrator Docket is (202) 566-1752).

FOR FURTHER INFORMATION CONTACT: Robert D. Sachs, Performance 
Incentives Division, Office of the Administrator, Mailcode 1808T, 
Environmental Protection Agency, 1200 Pennsylvania Avenue, Washington, 
DC 20460, phone number 202-566-2884, fax number 202-566-0966, e-mail 
address sachs.robert@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Today's notice applies to you if you are interested in issues 
regarding performance-based environmental programs, and state and 
federal roles regarding such programs.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

II. Background

    On June 26, 2000, The Environmental Protection Agency (EPA) 
launched the National Environmental Performance Track program 
(Performance Track). The program is designed to recognize and encourage 
top environmental performers who go beyond regulatory requirements to 
attain levels of environmental performance and management that benefit 
the environment. The program design was published in the Federal 
Register on July 6, 2000 (65 FR 41655). On April 22, 2004, EPA 
published a final rule that established certain regulatory incentives 
for Performance Track members (69 FR 21737). On May 17, 2004, EPA 
published a number of changes to the program, including the creation of 
a Corporate Leader designation (69 FR 27922). On April 4, 2006 (71 FR 
16862), EPA published a final rule with certain provisions applying to 
Performance Track Facilities that included alternatives for self-
inspections of certain types of Resource Conservation and Recovery Act 
(RCRA) units. Additional information on Performance Track, including 
up-to-date member information and program criteria, can be found at 
http://www.epa.gov/performancetrack.

    The program's current membership includes about 400 members from 46 
states and Puerto Rico and represents virtually every major 
manufacturing sector as well as public sector facilities at the 
Federal, State, and local levels. Since the inception of the program, 
Performance Track members report that they have collectively reduced 
their water use by more than 1.9 billion gallons--enough to meet the 
water needs of Atlanta, Georgia for more than two weeks. Members have 
conserved close to 9,000 acres of land and have increased their use of 
recycled materials by more than 120,000 tons.
    In addition to EPA, more than 20 states have active state-level 
performance-based environmental programs, and an additional five states 
are currently developing programs. Nine states established programs 
before 2000, with the first program being implemented in 1995. The 
combined number of participants in these state programs is greater than 
800. Many of these programs include dual membership with Performance 
Track at some level, while some exceed the federal program's criteria.
    The fundamental goal of performance-based environmental programs is 
to achieve environmental results greater than those achieved through 
traditional regulatory approaches. As such, these programs tend to 
focus on environmental outcomes such as reduced emissions, generating 
fewer tons of hazardous waste, or lower discharges of toxics to water, 
rather than operationally-based output measures such as the number of 
inspections or permits issued. These programs are designed to provide 
operational flexibility for the purpose of allowing high performers to 
focus their resources on improving their environmental performance 
beyond regulatory requirements. They also provide opportunities for 
State and Federal regulators, as well as the regulated community, to 
more strategically target their financial and human resources in order 
to produce better overall environmental results.

III. Proposed Initial Implementation Actions

Introduction

    During the past year, staff from the Environmental Council of the 
States (ECOS) and the Environmental Protection Agency (EPA) 
collaborated on three workgroups that sought to improve the 
effectiveness and enhance the value of the National Environmental

[[Page 28028]]

Performance Track (Performance Track) program, as well as similar state 
performance-based environmental programs. State and EPA representatives 
participated in workgroups which covered incentives, state integration, 
and outreach and recruiting. Information about, and recommendations 
from, the two workgroups on integration and incentives were highlighted 
in an August 2005 Federal Register Notice (70 FR 44921). The third 
workgroup on outreach and recruiting, which met on an informal basis, 
also offered recommendations and these are included here as well. This 
document identifies the initial actions the collective workgroups 
recommend for EPA and the states to take to work towards improved 
performance-based programs. These recommendations are intended to 
encourage environmental performance beyond regulatory requirements; no 
actions will be undertaken that could pose a threat to public health 
and the environment, or in any way weaken existing environmental laws.
    As an overarching measure, the workgroups recommend that the ECOS 
President and EPA Administrator express their support for the 
workgroups' planned actions via some type of formal communication. More 
specifically, this report recommends a series of actions be taken that 
the workgroups believe will improve the implementation of performance-
based environmental programs, resulting in greater protection to human 
health and the environment beyond those which can be achieved through 
traditional regulatory efforts alone. To ensure that these 
recommendations are effectively implemented, the performance-based 
programs to which these recommendations apply should be able to 
demonstrate measurable environmental results, include a process for 
evaluating the extent to which they are achieving environmental 
outcomes, provide a mechanism for removal of members that fail to meet 
established compliance criteria, and provide meaningful information on 
how such programs can be improved over time (similar to the 
``continuous improvement'' philosophy embodied in environmental 
management systems). Finally, the three individual workgroups recommend 
that the ECOS and EPA performance-based program workgroup members 
continue to work collaboratively in a combined workgroup to implement 
these recommendations for Performance Track and state performance-based 
environmental programs.

Background

    In 2004, the Environmental Council of the States conducted a survey 
to determine the extent of state support for performance-based 
environmental programs. The information ECOS gathered served as the 
basis for its report issued in January 2005 (ECOS Report). The ECOS 
Report acknowledged wide state support for such performance-based 
programs and their important role in supplementing traditional 
regulatory approaches to achieve greater environmental protection and 
encourage facilities to go beyond compliance. The ECOS Report also 
recommended that EPA take action in four areas: (1) Support state 
environmental performance-based programs and state efforts to work with 
Performance Track; (2) assure program support from all EPA program 
offices; (3) provide better incentives to participants faster; and (4) 
conduct more strategic marketing and education of performance-based 
environmental programs.
    Beginning in January 2005, two ``formal'' workgroups (incentives 
and integration), comprised of state and EPA representatives, worked to 
develop specific recommendations that will lead to the outcomes 
envisioned in areas 1 through 3 in the ECOS Report. Recommendations 
from a third ``informal'' workgroup addressing area 4 (marketing and 
education) began later and also are included here. This Report focuses 
on the recommendations that the three workgroups propose initially be 
taken to meet the goals cited by ECOS.
    EPA solicited public comment on the activities and preliminary 
recommendations of the incentives and integration workgroups in an 
August 2005 Federal Register Notice, (70 FR 44921). In addition, EPA 
held a public meeting in Chicago on October 19, 2005, to solicit 
additional input. Comments received and EPA's Response to Comments are 
available in the Federal Government Docket System number: EPA-HQ-OA-
2005-0003 at http://www.regulations.gov/.

Initial Implementation Actions

1. Incorporate Performance Track and State Performance-Based 
Environmental Programs Into EPA-State Planning, Budgeting, and 
Accountability Processes
    States and EPA recognize that performance-based environmental 
programs are an important and necessary tool in encouraging 
environmental performance beyond regulatory requirements, and not a 
tool to roll-back or lower environmental compliance. They further 
recognize that integration of performance-based programs into the 
various planning, budgeting, and accountability systems will facilitate 
their use. As such, we recommend that EPA take the following actions to 
support Performance Track and/or state performance-based environmental 
programs:
    A. Add specific language to the Agency's ``National Environmental 
Performance Partnership System'' (NEPPS) national guidance to encourage 
the inclusion of appropriate state-run performance-based environmental 
programs in Performance Partnership Agreements (PPAs), Performance 
Partnership Grants (PPGs), and/or state-EPA workplans when and where 
such programs are in keeping with Federal and State priorities and 
strategic goals. For compliance-related activities, EPA is engaged with 
the States in addressing where it may be appropriate to recognize and/
or provide resource flexibility for alternative approaches to achieving 
compliance. [February-May 2006]
    B. Include text that supports integration of Performance Track and 
state performance-based program activities into EPA and State Agency 
planning documents; e.g., Strategic Plans, Regional Plans, and National 
Program Guidances. [FY 2006]
    C. Educate EPA NEPPS regional coordinators and state performance-
based program contacts on ways to integrate performance-based 
environmental programs into the EPA-State planning and budgeting 
processes. [FY 2006]
     Conduct a workshop in Denver on January 23, 2006, in 
conjunction with the Innovations Symposium. [Completed, approximately 
80 participants attended]
     Work with those states that did not attend the pre-
symposium workshop to ensure they have a working knowledge of the 
content. [Ongoing]
     Partner with a select number of states to integrate 
performance-based environmental programs into the EPA-State planning 
and budgeting processes for FY07; these will serve as models in future 
years for other interested states. [February-April 2006]
    D. EPA will pilot, with one or two states, a review of the state's 
performance-based program under Element 13 of the State Review

[[Page 28029]]

Framework \1\ that was developed jointly by EPA and ECOS. To be 
eligible for this pilot, the state(s) compliance assurance program must 
have had a successful review under Elements 1-12 of the Framework. EPA 
will work collaboratively with the pilot state(s) in the development 
and review of the proposal. EPA will provide the pilot state(s) with a 
timely and definitive response as to whether the proposals are 
successful. A successful performance-based program review under Element 
13 could result in a state receiving recognition or resource 
flexibility credit in the context of their compliance assurance 
program. The preferred nature of the credit would be identified by the 
state(s) in their proposal, would be determined during the review 
process, and could include a spectrum of recognition and resource 
flexibility credit for performance-based programs that provide 
alternative approaches for assuring and exceeding compliance. 
[Currently under development]
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    \1\ The State Review Framework incorporates twelve mandatory 
elements, based on criteria found in long standing policy agreed to 
by EPA and states. A thirteenth optional element is included in this 
structure to allow states the opportunity to discuss alternative and 
innovative approaches to compliance. (For more information see: 
http://www.epa.gov/enforcement/resources/publications/data/systems/air/2005conf/framework2.pdf
).

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    E. Performance-based environmental programs have been used in 
certain instances to address specific national, state, or regional 
environmental challenges. Use of such performance-based programs should 
be encouraged on a broader scale in cases where a state wants to 
include language in its work plans to describe how its performance-
based program will be used to address a state or regional environmental 
challenge.
     Develop guidance for FY07 on how states can count 
reductions achieved through Performance Track or similar state 
performance-based environmental programs toward the goals of national 
initiatives such as the reduction in priority chemicals under the 
Resource Conservation Challenge. [September 2006]
     Partner with the EPA Region 3 Chesapeake Bay Program to 
develop guidelines providing states within the watershed with credit 
for the nutrient reductions achieved via performance-based programs. 
[FY 2006]
     Encourage the use of ``Challenge Commitments.'' Some EPA 
National Programs and Regional Offices working with their partner 
states have already implemented, or are in the process of identifying 
and implementing, Challenge Commitments in the areas of reductions in 
greenhouse gases, priority chemicals, air emissions, and energy use. 
[Ongoing]
2. Prioritize and Implement High Value Incentives in the Near Term
    EPA will expand its efforts to work with interested states to 
implement expedited permitting, enhance recognition, and facilitate the 
use of existing flexibilities for members of Performance Track and 
state performance-based environmental programs. As part of this effort, 
EPA and the states will work to communicate effectively with each 
other, as well as with the public. This will be accomplished through 
the use of outreach materials targeted at educating staff and the 
public about performance-based environmental programs and the 
development of tools that help to expedite the implementation of 
particular incentives. The combined ECOS-EPA performance-based program 
workgroup (referenced earlier in this report) intends to track interest 
and adoption of individual incentives among state and federal program 
members, as well as to seek and consider appropriate public input. 
Consistent with program criteria for maintaining membership in 
performance-based programs, incentives will not result in a net 
reduction in environmental performance and protection of human health 
and the environment.

Expedite Permitting

    A. Where states are the lead permitting authority, EPA will partner 
with interested states to give Performance Track facilities priority 
placement in the state permitting queue. Georgia, Indiana, Texas, 
Oregon, and other states are either in the process of implementing, or 
have already implemented, expedited permitting initiatives. To 
facilitate identification of Performance Track facilities eligible for 
and interested in expedited priority permitting, EPA will provide 
states with lists of the permits held by Performance Track member 
facilities. Where EPA is the lead permitting authority, and a member of 
a state performance-based program seeks expedited permitting, the state 
shall inform EPA of the facility's eligibility for this initiative. 
[Ongoing]
    B. EPA will reach out to States that did not attend the pre-
symposium workshop in Denver, Colorado, on January 23, 2006, to inform 
them of the workshop's content and to enlist their participation in 
expediting permitting. [February-May 2006]
    C. EPA will issue state and regional NPDES permitting authorities a 
one-permit credit, applied to their backlogged, priority NPDES permits, 
when they expedite review of a NPDES permit re-issuance or modification 
for a Performance Track facility under competitive pressure. EPA is 
also developing an ongoing ``tickler list'' of Performance Track 
facility NPDES permits that will expire within the next 9-12 month 
period to encourage states to consider, at their discretion, expediting 
re-issuance of the permits. (Note: A state would receive credit for 
facilities that are members of its own performance-based program as 
part of the strategy for addressing priority permits that they submit 
to EPA.) [Currently underway]
    D. EPA will be conducting workshops for permit authorities and 
facilities on how to draft flexible air permits and use flexible air 
permitting techniques within existing standards and regulations (http://www.epa.gov/ttn/oarpg/t5/meta/m5279.html
). While any permitted 

facility interested in working with permitting authorities to obtain a 
flexible air permit will be eligible, EPA plans to give priority 
assistance to Performance Track facilities. [Currently under 
development]
    E. EPA will share information with states on expedited processes 
that have been successfully used in states, work to establish expedited 
processes for air permitting in states where they do not currently 
exist, and conduct pilots using innovative components such as 
electronic permitting to facilitate expedited permitting processes. EPA 
will then share the lessons learned from these pilot efforts. [March-
December 2006]

Enhance Recognition

    F. EPA will, and interested States are encouraged to, provide 
congratulatory letters either together or individually to new members 
of Performance Track and state performance-based environmental 
programs. These letters will encourage the facility to apply to its 
respective state or federal program counterpart. [Semi-annually, at 
conclusion of Performance Track application rounds]
    G. EPA and States will work together to collect and publicize state 
program or Performance Track member success stories in the monthly 
Performance Track newsletter. [Ongoing]
    H. States and EPA will coordinate recognition ceremonies when 
appropriate and EPA will communicate to relevant states when EPA 
conducts recognition ceremonies in their area. [Ongoing]

[[Page 28030]]

Facilitate Existing Flexibilities

    I. EPA will collect and publicize examples of flexibility available 
through existing guidance and regulations and, in coordination with 
permitting authorities and state performance-based program contacts, 
encourage performance-based program facilities to utilize them where 
appropriate. [Ongoing]
    Some examples include:
     The Minnesota Pollution Control Agency developed a 
Stationary Source Synthetic Minor permit for IBM: Under this permit, in 
return for meeting lower emissions limits for specified HAPs than 
otherwise required, IBM is eligible for simpler emissions calculations 
and recordkeeping. The IBM permit reduces the frequency of calculating 
and recording emissions from monthly (12-month rolling averages) to 
annually (total calendar year calculations).
     Permitting approach for Steele County, MN, indirect 
dischargers: Under the CWA pretreatment program, the POTW serves as the 
permitting authority for its indirect dischargers. In the Steele County 
project, in return for meeting a 20% effluent reduction goal for 
specified metals, participating indirect dischargers are eligible for 
reduced frequency of monitoring.
    J. EPA will document examples of Performance Track facilities that 
have reached agreement with state permitting authorities to reduce 
their NPDES effluent monitoring frequencies, consistent with existing 
EPA policy, while maintaining a high degree of confidence in their 
monitoring data. EPA will publicize and share these facilities' 
experiences with Performance Track and state performance-based 
environmental program members so that other facilities may consider 
these approaches in consultation with their permitting authorities. 
[February-June 2006]
3. Improve State/EPA Coordination of Strategic Marketing and Education 
of Performance-Based Programs.
    To improve marketing, outreach, and recruitment coordination, ECOS 
and EPA will take the following steps:
    A. EPA and states will share program branding strategies to 
increase information sharing, idea generation, and learning from other 
programs. [Ongoing]
    B. Interested states and EPA's Performance Track staff will sponsor 
a one-day workshop to focus specifically on marketing, outreach, and 
recruitment. The workshop will highlight the importance of these 
functions and how to improve coordination. [May 11, 2006]
    C. EPA and states will explore the possibility of developing a 
brochure, fact sheet, and/or slide presentation materials that states 
can customize for outreach purposes. In addition, EPA will produce 
standard language about Performance Track and state performance-based 
programs that interested states may use in their publications. 
[Ongoing]
    D. EPA and states will develop an online catalog identifying those 
sectors that may be of greatest interest for recruitment each year by 
EPA and states. Sample criteria for selection of sector candidates 
include a strong economic presence or high profile, significant 
progress in improving environmental performance, or opportunities for 
engaging facilities in efforts to address priority environmental 
problems. [Ongoing]
4. Continue Work of ECOS/EPA Performance-Based Environmental Program 
Workgroup
    ECOS and EPA workgroup members will continue to work 
collaboratively to implement the recommendations for Performance Track 
and state performance-based environmental programs. The workgroup will 
be led by the chair of the ECOS Cross-media Committee and EPA's 
Director of the National Center for Environmental Innovation, with 
members drawn from State and EPA program offices, Performance Track, 
and state performance-based environmental programs. The workgroup will 
meet on a regular basis to sustain focus and energy, and will report 
periodically to the ECOS President, EPA Administrator, and EPA's 
Innovation Action Network (IAN), comprised of the Agency's Deputy 
Assistant and Associate Administrators, Deputy Regional Administrators, 
and the Co-chairs of the ECOS Cross-media Committee. In addition, 
workgroup reports will be shared with state performance program staff 
and through regular EPA/state monthly calls.

    Dated: May 10, 2006.
Robert S. Benson,
Acting Director, Office of Business and Community Innovation.
[FR Doc. E6-7333 Filed 5-12-06; 8:45 am]

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