DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
1
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
BACKGROUND
The
work
of
Subgroup
2
 
Better
Incentives
 
is
framed
in
the
context
of
the
overall
goals
stated
in
the
ECOS
Report
submitted
to
USEPA
on
January
13,
2005.
The
work
is
premised
on
the
need
to
strengthen
both
Performance
Track
and
state
programs
and
make
them
core
elements
of
the
environmental
protection
system
in
the
U.
S.
The
performance­
based
programs
can:
 
Encourage
and
reward
strong
and
sustained
environmental
performance
improvement
among
the
regulated
community
that
goes
beyond
compliance
and
addresses
unregulated
environmental
issues;
 
Foster
greater
collaboration
between
environmental
regulatory
agencies
and
highperforming
companies
and
government
facilities
to
achieve
state
and
regional
environmental
goals
and
address
environmental
problems;
 
Support
the
development
of
cost­
effective
approaches
for
achieving
environmental
goals
that
focus
on
performance
results;
and
 
Free
some
agency
compliance
assurance
resources
to
address
higher
environmental
priorities.

The
work
of
Subgroup
2
is
specifically
focused
on
that
portion
of
the
report
which
states:
"
Evaluate
several
specific
ideas
for
incentives
in
2005
that
may
be
of
significant
value
to
current
and
potential
program
participants.
ECOS
has
identified
several
specific
incentive
ideas
that
could
provide
significant
value
to
some
current
and
potential
future
performancebased
program
participants.
In
addition,
during
our
discussions
with
PTPA
representatives
they
identified
three
priority
areas
for
incentives
implementation:
priority
permitting/
streamlined
permitting,
reduced
inspection
frequency,
and
support
for
innovation
alternatives.
In
light
of
input
from
ECOS
and
PTPA
representatives,
we
recommend
that
EPA
evaluate
the
following
ideas
in
2005
as
part
of
the
revitalized
incentive
development
process:

 
Expand
permitting
incentives
that
reduce
time,
uncertainty,
and
administrative
burden,
such
as
expedited
permitting,
expanded
use
of
permitting
techniques
that
afford
operational
flexibility,
streamlined
monitoring,
recordkeeping
and
reporting
provisions;
 
Expand
incentives
that
reduce
inspections
of
participating
facilities
through
the
use
of
risk­
based
targeting
of
inspections;
 
Enable
the
development
of
source
and
sector­
specific
innovation
alternatives
to
conventional
environmental
requirements;
 
Provide
direct
financial
incentives
such
as
access
to
government
environmental
research
grant
money
and
reduced
or
waived
permitting
fees;
 
Establish
financial
and
competitiveness
incentives
through
preferences
for
program
participants
in
federal
and
state
contracting
and
procurement;
and
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
2
 
Promote
the
Performance
Track
program
and
members
in
the
financial
services
sector,
exploring
options
to
better
position
participants
with
regard
to
company
valuation
and
investment,
lending,
and
insurance."

In
pursuit
of
those
goals,
the
Subgroup
identified
6
criteria
(
described
in
more
detail
in
Appendix
A)
that
would
be
applied
to
the
incentives.
Subsequently,
the
incentives
were
further
refined
by
the
subgroup
working
on
the
revitalized
incentives
development
system
and
those
edited
incentives
are
stated
below:
1.
Establishes
continual
environmental
improvement
as
the
performance
paradigm
aligned
with
sustainability.
Continual
improvement
includes
incremental
and
step­
wise
environmental
improvement.
2.
Creates
unique
benefits
for
members
to
enroll
or
remain
enrolled
in
performance­
based
programs.
3.
Creates
agency
value
in
achieving
core
program
goals.
4.
Empowers
collaboration
and
encourages
innovation.
5.
Reduces
burden
and
net
transaction
costs
related
to
program
participation
for
members.
6.
Assists
leadership
facilities
to
achieve
improvement
in
core
environmental
programs.

The
group
developed
10
categories
(
described
in
detail
in
Appendix
B)
of
incentives
derived
from
brainstorming,
a
review
of
existing
incentives
lists
and
a
survey
of
states.
After
a
process
that
applied
the
criteria
and
a
subsequent
discussion,
6
categories
of
incentives
were
selected
for
further
development:
1.
Available
Flexibility
2.
Customized
Incentives
3.
Reporting
Requirements
4.
Agency
Contact
5.
Permit
Renewal
and
Modification
6.
Inspection
Priority
An
additional
category
of
incentives,
enhanced
recognition,
was
added
at
the
end
of
the
drafting
process
based
on
a
desire
to
include
easily
developed
incentives
that
could
be
added
quickly
given
the
existing
capabilities
of
most
leadership
programs.
As
you
read
through
the
recommendations
below,
you
will
see
that
several
have
been
modified
as
they
have
gone
through
the
drafting
and
discussion
process.

SPECIFIC
INCENTIVES
RECOMMENDATIONS
Next
to
each
of
the
major
categories
listed
below
is
a
number
in
parenthesis
that
denotes
the
ranking
which
resulted
from
the
first
application
of
the
criteria
to
the
incentive
categories.

(
1)
Available
Flexibility
Potential
Incentive:
Available
Flexibility
Identify,
publicize,
and
facilitate
the
implementation
of
provisions
of
statutes
and
rules
under
which
regulators
have
discretion
to
approve
alternative/
more
flexible
compliance
provisions
or
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
3
custom
permit
terms
for
leadership
facilities:

1.
Identify
and
publicize
relevant
statutory
and
regulatory
provisions,
referencing
the
provisions,
conditions,
and
commitments
in
the
applicable
regulator
programmatic
and
operating
guidance.

2.
Encourage
leadership
facilities
to
consider
and
apply
for
alternative/
more
flexible
compliance
provisions
or
custom
permit
terms,
pursuant
to
the
provisions.

3.
Obtain
federal
and
state
commitments
to
prioritize
the
review
of
leadership
facilities'
requests
for
alternative
compliance
provisions
or
custom
permit
terms.

Background
and
Description
of
Potential
Incentive:
Existing
State
and
EPA
statutes
and
regulations
sometimes
include
provisions
that
allow
alternative
approaches
to
compliance
subject
to
the
State's/
EPA's
review
and
approval.
Some
allow
a
regulated
entity
(
directly
or
through
its
state
permitting
authority)
to
apply
to
use
alternative
technologies
or
operating
requirements.
Others
specify
minimum
permit
requirements
while
providing
permit
writers
discretion
(
often
subject
to
conditions
or
available
information)
to
exceed
the
stated
"
floor"
as
necessary
while
assuring
compliance.

Facilities
in
leadership
programs
are
often
interested
in
availing
themselves
of
these
provisions
but
may
not
do
so
because
either
they
do
not
know
of
the
provisions
or
are
concerned
over
the
length
of
time
it
may
take
to
for
applications
to
be
approved.
Regulators
and
permit
writers
may
or
may
not
be
aware
of
such
provisions.
When
they
are,
though,
they
may
hesitate
to
raise
them
to
the
attention
of
leadership
facilities
because
they
do
not
deem
doing
so
a
priority/"
my
responsibility"
and/
or
because
they
lack
guidance
on
how
to
do
so.

Prioritizing
leadership
facilities'
applications
for
custom
permit
terms
could
provide
a
significant
incentive
to
facilities
valuing
innovation,
certainty,
and
promptness.
Identifying
and
publicizing
the
statutory
and
regulatory
provisions
under
which
leadership
facilities
may
qualify
for
alternative/
flexible/
customized
compliance
provisions
or
permit
terms,
coupled
with
encouraging
regulator
support
for
their
use,
would
enhance
their
attractiveness
to
leadership
facilities.

Four
examples
of
existing
regulations
that
permit
customization
follow.
To
market
the
authorities
as
leadership
incentives,
program
managers
would
affirmatively
invite
participating
facilities
to
submit
applications
while
encouraging
prioritization
and
support
from
their
agencies.

Example
1:
CAA
MACT
Hazardous
Air
Pollutants
(
HAPs)
"
Equivalency
By
Permit"
(
EBP):
40
CFR
§
63.94
of
the
MACT
rule
allows
for
"
Approval
of
State
permit
terms
and
conditions
that
substitute
for
a
section
112
rule."
As
part
of
the
approval
process,
the
sponsoring
State
must
demonstrate
that
compliance
with
the
alternative
technology
or
operating
requirements
will
provide
equivalent
or
better
environmental
performance
relative
to
the
MACT.

The
MACT
EBP
provisions
were
utilized
recently
by
EPA
and
several
states,
pursuant
to
the
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
4
EPA­
ECOS
Innovation
Agreement,
for
several
International
Paper
(
IP)
mills.
Specifically,
customized
permit
terms
were
developed
for
IP's
Augusta,
Franklin,
Georgetown,
Riegelwood,
and
Roanoke
Rapids
mills.

Developing
EBP
terms
for
the
IP
facilities
required
front­
end
time
and
resources
to
identify,
analyze,
and
(
where
appropriate)
test
proposed
alternative
treatment
methods.
Up­
front
community
input
was
obtained
through
a
public
involvement
process.

Example
2:
CWA
Concentrated
Animal
Feeding
Operation
(
CAFO)
Rule
Effluent
Limit
Guideline
(
ELG):
The
CAFO
rule
ELG
includes
a
section
authorizing
"
Voluntary
Alternative
Performance
Standards."
The
relevant
authority,
40
CFR
§
412.31,
provides
for
case­
by­
case
approval
of
"
Effluent
limitations
attainable
by
the
application
of
the
best
practicable
control
technology
currently
available."

The
CAFO
rule
ELG
allows
a
CAFO
to
apply
for
permission
to
substitute
an
alternative
treatment
method
for
the
containment
and
land
application
of
animal
waste.
An
example
might
be
a
vegetative
treatment
system,
similar
to
a
constructed
wetland,
where
runoff
is
directed
to
grassland
infiltration
areas.
A
CAFO
pursuing
this
option
would
have
its
alternative
method
memorialized
in
a
site­
specific
permit
in
lieu
of
being
covered
by
the
State's
general
permit.

Example
3:
MPCA­
developed
IBM
Stationary
Source
Synthetic
Minor
permit:
Under
the
IBM
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).
IBM
must
also
implement
an
EMS
and
engage
an
independent
3rd
party
auditor
to
do
targeted
compliance
auditing.

Please
note
that
CAA
permits
routinely
address
how
permitted
sources
must
monitor,
calculate,
record,
and
report
compliance
with
emissions
limits.
Establishing
such
terms
is
highly
casespecific
requiring
careful
consideration
of
many
factors.
These
include
potential
impacts
on
the
amount,
quality,
reliability,
and
timeliness
of
monitoring
data
and
whether
other
permit
terms
can
be
modified
to
increase
compliance
confidence,
e.
g.,
lower
emissions
eligibility
limits
In
both
this
example
and
the
one
that
follows,
the
lower
permit
limits
are
eligibility
limits.
Therefore,
the
penalty
for
missing
them
is
returning
to
normally
required
monitoring
and
recordkeeping,
not
enforcement.

Example
4:
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.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
5
The
customized
approach
for
Steele
County's
indirect
dischargers
was
developed
as
an
EPAState
innovative
project
under
EPA's
Project
XL
program.
Other
provided
incentives
included
replacing
the
concentration­
based
compliance
standard
with
an
enforceable
mass­
based
standard.

There
is
also
an
NPDES
Permit
Monitoring
Incentive,
proposed
in
the
Reporting/
Monitoring
Requirements
section
below.

(
2)
Customized
incentives
Two
efforts
are
recommended
for
the
development
of
customized
incentives.
First,
the
group
has
identified
one
specific
area
for
the
development
of
customized
incentives
which
now
exists
for
pretreatment
programs
in
40
CFR
403.20
that
would
allow
a
facility
to
submit
alternate
compliance
requirements
under
a
minor
modification
process
defined
under
403.18.
Second,
in
addition
to
this
specific
item,
the
group
has
also
suggested
potential
modifications
to
the
SIP
approval
process
that
could
result
in
the
development
of
further
customized
incentives
for
both
Performance
Track
and
State
Leadership
Program
participants.

First,
the
concept
behind
the
creation
of
40
CFR
403.20
is
being
cited
as
a
model
that
can
be
used
to
create
a
new
window(
s)
for
customized
incentives
in
state
or
federal
programs.
403.20
was
originally
crafted
under
Project
XL
in
2001
for
EPA's
pretreatment
program
which
provided
for
customized
incentives
(
covering
testing
methods,
enforcement,
inspections,
reporting,
monitoring,
etc.)
by
stating:

"
The
Approval
Authority
may
allow
any
publicly
owned
treatment
works
(
POTW)
that
has
a
final
  
Project
XL''
agreement
to
implement
a
Pretreatment
Program
that
includes
legal
authorities
and
requirements
that
are
different
than
the
administrative
requirements
otherwise
applicable
under
this
part.
The
POTW
must
submit
any
such
alternative
requirements
as
a
substantial
program
modification
in
accordance
with
the
procedures
outlined
in
Sec.
403.18.
The
approved
modified
program
must
be
incorporated
as
an
enforceable
part
of
the
POTW's
NPDES
permit.

The
Approval
Authority
must
include
a
reopener
clause
in
the
POTW's
NPDES
permit
that
directs
the
POTW
to
discontinue
implementing
the
approved
alternative
requirements
and
resume
implementation
of
its
previously
approved
pretreatment
program
if
the
Approval
Authority
determines
that
the
primary
objectives
of
the
Local
Pilot
Pretreatment
Program
are
not
being
met
or
the
  
Project
XL''
agreement
expires
or
is
otherwise
terminated."

To
give
this
process
new
and
immediate
life,
EPA
and
states
could
make
this
concept
and
provision
applicable
to
any
program
in
any
state
whether
it
is
in
air,
water,
or
waste,
This
could
be
done
by
substituting
the
words
for
"
Project
XL"
with
"
Performance
Track"
or
"
State
performance­
based
program,"
and
by
dropping
the
requirement
of
a
having
final
project
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
6
agreement,
and
instead
requiring
membership
in
Performance
Track
or
a
State
performancebased
program.
To
our
knowledge,
this
option:

 
provides
no
legal
barriers,
 
does
not
conflict
with
any
statutory
provisions
because
it
has
to
 
remain
within
existing
statutory
authorities,
 
provides
authority
under
each
major
statute,
 
is
left
to
the
discretion
of
the
permitting
authority
and
facility
 
to
negotiate
their
own
terms,
as
is
the
case
with
any
permit,
 
is
a
regulation,
and
is
enforceable
by
permit
(
where
the
terms
are
 
incorporated),
and
 
provides
for
up­
front
public
notice
and
opportunity
for
comment.

In
looking
at
the
implementation
of
this
concept,
new
required
conditions
could
be
crafted
for
individual
facility
circumstances
and
memorialized
as
a
minor
permit
modification
(
e.
g.
via
letter
in
an
already
existing
permit,
or
via
provision
in
a
new
permit)
or
there
could
be
a
predetermined
menu
of
options
to
choose
from.
Such
a
menu
could
consist
of
alternative
requirements
that
EPA
and/
or
States
deem
appropriate
for
the
member
facilities
in
their
performance­
based
programs
based
on
the
agencies'
degree
of
confidence
in
the
performance
of
the
facilities.
The
menu
could
be
a
living
document,
open
for
potential
new
good
ideas
to
become
incorporated
over
time.
Customization
presents
itself
through
this
option
as
a
way
to
provide
a
broad
range
of
alternative
requirements
to
top
performers
without
EPA
having
to
get
debate
the
minutia
and
merits
of
a
particular
options
with
each
state
or
authority
individually,
and
recognizes
that
most
permitting
authorities
already
have
a
great
deal
of
discretion
in
their
delegated
programs
already
and
that
permitting
authorities
have
a
better
sense
of
the
environmental,
procedural
and
economic
realities
that
their
local
business
communities
face.

At
the
state
level,
Virginia
already
has
a
statutory
base
for
such
a
customized
approach.
In
July
2005,
Virginia's
environmental
excellence
legislation
became
effective.
In
addition
to
codifying
the
Commonwealth's
performance­
based
program,
the
law
establishes
the
ability
for
the
three
citizen
boards
that
govern
pollution
control
regulatory
programs
(
the
Air
Pollution
Control
Board,
the
Waste
Management
Board
and
the
State
Water
Control
Board)
the
ability
to
grant
"
alternative
compliance
methods"
for
facilities
in
the
upper
levels
of
the
Virginia
Environmental
Excellence
Program.
Included
among
the
categories
of
potential
alternatives
in
the
law
are
changes
to
monitoring
and
reporting
requirements
schedules,
streamlined
submission
requirements
for
permit
renewals,
the
ability
to
make
certain
operational
changes
without
prior
approval
and
other
changes
that
would
not
increase
a
facility's
impact
on
the
environment.

Virginia's
test
for
any
proposed
alternative
compliance
method
is
that
a
demonstration
that
it
will:
 
meet
the
purpose
of
the
applicable
regulatory
standard,
 
promote
achievement
of
those
purposes
through
increased
reliability,
efficiency,
or
cost
effectiveness,
and
 
afford
environmental
protection
equal
to
or
greater
than
that
provided
by
the
applicable
regulatory
standard.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
7
In
September
2005,
Virginia's
first
request
for
consideration
of
an
alternate
compliance
method
was
submitted
by
a
facility;
it
is
currently
under
review
by
the
Department
of
Environmental
Quality,
which
serves
as
staff
to
the
three
citizen
boards.
While
this
is
still
early
in
the
development,
this
approach
based
in
law
may
be
the
mechanism
necessary
to
align
the
kind
of
customization
proposed
in
the
water
example
given
and
the
state
level
implementation
of
that
approach.
The
approach
used
in
Virginia
may
also
be
a
way
to
develop
new
incentives
that
can
be
woven
into
the
incentives
of
all
leadership
programs
at
both
the
state
and
federal
level.

Second,
while
not
specific
to
individual
provisions,
the
group
is
suggesting
modifications
to
the
SIP
revisions
process
that
would
more
quickly
and
methodically
accommodate
customized
incentives.
One
of
the
common
attributes
of
the
leadership
programs
is
the
interest
on
the
part
of
the
regulated
community
in
revisions/
incentives
that
make
the
Air
program
more
streamlined
in
its
implementation,
reasonable
in
its
application
and
efficient
in
its
administration.
One
of
the
common
barriers
in
accomplishing
one
or
more
of
those
goals
is
the
process
that
is
currently
employed
for
SIP
revisions.
That
process
presently
seems
to
be
limited
to
the
lengthy
and
at
times
contentious
development
of
site
specific
revisions
along
with
a
general
limitation
on
the
development
of
flexible
provisions.
The
consideration
of
"
customized
incentives"
should
also
be
balanced
with
at
least
some
consideration
of
how
the
SIP
revision
process
might
be
adjusted
to
reflect
differentiation
for
superior
performance
companies.

The
following
is
a
series
of
modifications
that
could
be
responsive
to
one
of
the
most
likely
areas
of
requests
from
superior
performance
companies.
To
put
this
in
context
a
leadership
company
change
which
has
already
yielded
performance
7.5
times
better
than
the
standard
left
one
regulator
grumbling
that
the
results
are
great
but
the
process
was
so
cumbersome
that
we
would
think
long
and
hard
about
doing
something
like
this
again.

Below
are
several
options
for
pursuing
changes
that
produce
results.

1.
Site
specific
SIP
revisions
 
currently
this
is
the
allowed
course
for
development
of
alternative
approaches.
Under
this
alternative,
there
would
be
a
method
that
could
be
used
to
extend
site
specific
revisions
to
leadership
facilities
more
quickly
and
easily.
The
method
would
enable
the
extension
of
flexibility
to
similarly
situated
leadership
companies
and
would
be
supported
by
some
infrastructure
within
headquarters,
a
process
(
analyzed
to
assure
speed
of
execution)
and
a
review
(
examination
for
ways
to
extend
lessons
learned).

2.
Site
specific
SIP
revision
concurrent
with
EPA
permit
review
 
Combine
permit
review
and
SIP
approval
public
comment
into
one
step.
Some
might
argue
that
that
this
would
prejudge
their
reaction
to
a
permitting
facility,
but
if
the
premise
here
is
that
folks
are
going
above
and
beyond,
we
could
start
from
the
assumption
that
the
permit
will
likely
be
ultimately
approvable
and
use
the
public
comment
period
time
as
the
opportunity
to
get
input
on
the
SIP
revision.
While
this
would
not
work
unless
a
permit
is
needed,
this
would
be
faster
than
current
practice
as
well
as
a
significant
change
in
current
practice,
designed
to
encourage
and
ultimately
result
in
improvement.
The
process
does
not
in
and
of
itself
presume
that
the
permit
or
the
SIP
will
be
approved
but
does
recognize
the
shift
to
a
performance
based
relationship
with
leadership
companies
in
which
both
permittee
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
8
and
regulator
have
the
working
relationship
to
simultaneously
address
issues
that
may
arise
in
either
the
SIP
or
permit
processes.

3.
Contract/
Agreement/
Charter
specific
SIP
revisions
 
agreed
upon
enforceable
provisions
that
are
placed
in
the
SIP
in
such
a
way
that
the
provisions
need
not
be
done
for
each
site
but
are
included
generally
in
the
state
plan
so
that
they
can
be
extended
to
other
leadership
companies.
The
understanding
is
that
the
revision
could
also
include
the
level
and
type
of
review
at
both
the
state
and
federal
level
before
the
flexibility
is
extended
to
any
individual
site.
This
would
be
language
that
would
recognize
the
capacity
of
leadership
programs
to
develop
incentives
through
a
variety
of
means
and
done
in
such
a
way
that
performance
track
members
and
leadership
companies
could
avail
themselves
of
these
incentives
without
individual
SIP
revisions
so
long
as
enforceability
conditions
and
transparency
conditions
(
also
contained
in
the
SIP)
are
met.

4.
Provision
specific
SIP
revision
 
EPA
and
the
states
identify
a
series
of
actions
or
areas
that
would
be
available
to
entities
participating
in
the
leadership
programs
where
there
is
a
shared
interest
in
building
value
for
both
the
performance
track
participants
and
the
state
leadership
program
participants.
This
would
provide
a
test
bed
for
ideas
that
may
originate
with
companies,
states,
communities
or
the
federal
agency.
This
would
represent
an
invitation
to
innovate
and
a
safe
place
for
the
innovation
to
occur
with
some
assurance
that
the
innovation
could
move
with
deliberate
speed.
It
is
quite
possible
that
several
of
the
kinds
of
incentives
discussed
elsewhere
in
this
document
could
end
up
in
this
kind
of
process
just
as
other
work
being
done
independently
by
the
various
state
programs
could
end
up
as
a
part
of
an
overall
package.

5.
National
level
SIP
revision
 
this
would
be
something
akin
to
a
national
clearinghouse
that
would
enable
revisions
obtained
in
one
area
to
be
quickly
extended
to
other
areas
of
the
country.
It
would
be
a
common
revision,
quickly
obtained
if
the
state
petitioned
for
extension
to
its
leadership
participants
6.
Program
specific
 
this
could
be
those
things
that
are
done
through
a
common
program,
done
in
a
way
that
if
the
state
enrolls,
demonstrates
that
it
won't
impede
attainment
and
reports
on
the
program
results
that
the
SIP
revisions
are
handled
automatically.

7.
Expedited
SIP
revision
 
this
would
be
a
specifically
designed
process
that
would
be
done
quickly
for
those
changes
that
do
not
affect
attainment
demonstrations
and
ambient
conditions.

8.
State
only
requirements
 
in
many
cases
states
have
portions
of
the
SIP
that
are
not
a
part
of
the
federal
requirements.
Even
though
the
state
may
have
the
ability
to
grant
flexibility
under
state
law,
the
SIP
ends
up
needing
revision
simply
because
it
has
been
included.
The
notion
here
is
that
in
those
instances
that
there
would
be
a
quick
way
to
modify
the
state
plan
to
accommodate
the
flexibility
given
that
the
federal
standards
are
not
affected.
A
variation
on
that
theme
would
be
for
the
states
to
have
a
coordinated
initiative
to
make
a
set
of
revisions
that
would
be
designed
to
build
performance
based
options
at
least
as
a
one
time
shot.
Under
this
variation,
one
or
more
states
would
put
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
9
together
a
package
of
revisions
that
would
be
initiated
for
the
express
purpose
of
building
additional
incentives
for
leadership
programs.

Ultimately,
these
options
are
going
to
need
a
more
thorough
analysis
to
consider
the
strengths
and
weaknesses
which
would
lead
up
to
the
operational
approaches
needed
to
make
the
options
into
realities.
Already,
within
the
Air
Management
Programs,
there
has
been
thoughtful
consideration
given
to
ways
that
these
enumerated
options
could
be
pursued
in
very
practical
ways
to
deliver
value
to
leadership
participants.
There
has
also
been
a
general
interest
in
developing
more
specific
examples
and
providing
additional
detail
which
would
ultimately
be
the
combined
effort
of
EPA
and
State
program
staff
along
with
program
participants
providing
the
operational
detail.

(
3)
Reporting/
Monitoring
requirements
There
are
several
aspects
to
the
potential
simplified
or
streamlined
reporting
requirements
incentive:
reducing
the
monitoring;
reduced
reporting
frequency
of
monitoring
results
(
i.
e.,
facilities
maintain
monitoring
results
on­
site);
and,
eliminating
overlapping
or
duplicative
reporting
requirements.
Two
specific
first
steps
are
described
below.

1.
Reduced/
Modified
Monitoring:
Monitoring
is
viewed
by
environmental
agencies
as
a
fundamental
part
of
the
compliance
and
enforcement
mission
that
is
the
foundation
for
our
work
and,
in
many
respects,
allows
us
to
consider
leadership
programs.
Our
discussions
emphasized
that
any
change
to
the
basic
tenets
of
monitoring
need
to
be
carefully
considered
and
deliberately
implemented
to
assure
that
we
understand
the
nature
and
impact
of
the
change.
As
a
result,
the
recommendation
for
an
incentive
in
the
area
of
monitoring
is
specifically
focused
on
a
single
provision
that
would
be
developed
for
leadership
companies
based
upon
a
measure
of
flexibility
that
has
been
identified
by
the
water
program
for
NPDES
monitoring
requirements.

We
are
recommending
a
NPDES
permit
monitoring
incentive
for
leadership
companies.
For
some
facilities
with
a
strong
compliance
history,
reduced
NPDES
permit
monitoring
frequency
may
be
allowed
according
to
EPA's
"
Interim
Guidance
for
Performance­
Based
Reductions
of
NPDES
Permit
Monitoring
Frequencies,"
released
on
April
19,
1996
(
see
www.
epa.
gov/
npdes/
pubs/
perf­
red.
pdf).
In
addition,
if
a
facility
can
document
upon
permit
reissuance
that
a
pollutant
is
"
not
present
or
is
present
at
only
background
levels
from
intake
water
without
any
increase
of
the
pollutant
due
to
activities
of
the
discharger,"
then
it
could
receive
a
waiver
from
monitoring
for
that
pollutant,
according
to
"
Amendments
to
Streamline
the
National
Pollutant
Discharge
Elimination
System
Program
Regulations:
Round
Two,"
issued
by
EPA
on
May
15,
2000
(
see
www.
epa.
gov/
npdes/
regulations/
round2.
pdf,
pp.
30891­
30896).
Given
EPA's
support
for
reduced
NPDES
monitoring
frequencies
under
specific
circumstances,
Performance
Track
facilities
should
use
this
information
in
an
organized
manner,
supported
by
data
and
documentation,
that
is
suited
to
them.
Furthermore,
State
leadership
programs
should
incorporate
such
procedures
in
their
NPDES
monitoring
programs.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
10
2.
Reduced
Reporting
Frequency
of
Monitoring
Results.
Many
high­
performing
facilities
question
the
necessity
of
their
having
to
frequently
submit
reports
to
the
regulatory
agency,
whether
at
the
local,
state
or
federal
level.
As
noted
above,
there
are
precedents
for
reducing
the
frequency
of
environmental
monitoring
for
high­
performing
facilities,
and
adoption
of
such
an
incentive
will
automatically
lead
to
a
reduction
in
reporting
requirements.
There
are
also
examples
of
facilities
being
rewarded
for
their
performance
by
an
overall
reduction
in
the
frequency
of
their
reporting
requirements.
An
example
of
reduced
reporting
requirements
for
high­
performing
facilities
can
be
found
in
the
City
of
Albuquerque
Pretreatment
Program
Project
XL
Final
Agreement
from
February
3,
2000
(
available
at
www.
epa.
gov/
projectxl/
alb/
index.
htm).
The
City's
project
involved
modifying
otherwise
required
activities
in
three
general
categories
to
redirect
their
limited
resources
toward
activities
that
can
potentially
achieve
measurable
improvement
in
the
environment.
As
outlined
in
the
Final
Agreement,
those
facilities
meeting
the
screening
criteria
for
the
"
Excellent"
and
"
Very
Good"
categories
in
terms
of
their
records
of
compliance,
inspections,
non­
significant
potential
to
violate
limits
or
adversely
impact
the
POTW
and
good
waste
management
programs
in
place
would
be
considered
"
Non­
Significant
Categorical
Industrial
Users"
and
receive
a
number
of
regulatory
benefits,
including
reducing
semi­
annual
required
reporting
to
annual.

(
4)
Agency
Contact
Federal
and
state
staff
would
engineer
a
network
and
protocol
for
the
single
point
of
contact
or
coordinated
contact
depending
upon
the
program
and
scope
i.
e.
someone
or
some
process
to
create
a
better
working
relationship
that
aligns
state,
federal,
company
and
community.
This
would
be
accomplished
through
the
creation
of
an
"
empowered
network"
designed
to
quickly
and
definitively
coordinate
work
on
a
performance
questions,
to
help
align
business
and
environmental
performance.
This
would
function
much
like
the
"
hotel
concierge"
as
experience,
information
and
people
are
brought
together
in
an
organized
way
to
create
a
working
relationship
with
leadership
companies
different
from
the
traditional
regulatory
relationship.

In
reading
through
the
recommendation,
resources
become
an
immediate
question.
The
recommendations
do
not
anticipate
that
this
would
be
a
new
set
of
full
time
jobs.
Rather,
the
recommendations
anticipate
some
modest
investments
to
convene
parties
that
are
already
working
as
a
single
point
of
contact
and
sharing
some
of
the
tools
that
they
are
using
in
a
way
that
leverages
what
they
have
done
into
what
others
might
also
do
and
what
they
might
do
together.
At
the
federal
level,
where
single
point
of
contact
does
not
exist
formally,
the
recommendations
may
mean
re­
defining
some
existing
roles
to
support
the
contacts
and
to
create
capacity
to
work
with
the
state
contacts
to
assure
business
value
for
the
leadership
companies.
The
principal
focus
of
the
recommendations
is
improving
what
we
have
through
collaboration
and
shared
innovation.

A
quick
survey
of
states,
done
by
Industrial
Economics
Corporation,
with
performance
programs
reveals
that
11
states
already
have
"
single
point
of
contact"
in
some
form
as
a
part
of
their
leadership
programs.
Half
of
those
states
have
a
Memorandum
of
Agreement
that
could
serve
as
the
vehicle
for
institutionalizing
the
"
single
point
of
contact"
into
the
delivery
system
for
both
the
state
and
federal
programs.
The
programs
that
are
in
place
appear
to
be
largely
indigenous
and
unconnected.
Some
have
duties
that
are
broadly
defined
such
as
advocating
for
innovations.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
11
Others
have
discreet
roles
dedicated
to
specific
regulatory
relationships
such
as
permitting.
At
the
federal
level,
there
does
not
appear
to
be
a
"
single
point
of
contact"
in
place
but
many
of
the
roles
are
fulfilled
by
various
staff
within
the
Performance
Track
program.

The
question
becomes
whether
it
is
possible
to
unify
the
state
efforts
and
establish
a
federal
presence
that
could
create
value
for
both
the
state
and
federal
program
participants?
That
value
could
come
from
administrative
reciprocity,
shared
advocacy
and
expedited
information
delivery.
Further,
the
potential
exists
for
various
states
to
come
together
by
sharing
resources,
developing
common
roles
and
jointly
developing
approaches
suited
to
leadership
companies.
In
short,
this
latter
capability
is
the
operational
component
designed
to
deliver
a
range
of
service
across
state
boundaries
while
at
the
same
time
developing
a
service
at
the
national
level.

State/
Federal
Administrative
Action:
States
and
USEPA
choose
to
enroll
as
charter
members
for
a
3
part
administrative
action
for
"
single
point
of
contact"
that
is
available
to
performance
track
members
and
state
leadership
program
members.
The
charter
members
are
empowered
to
design
and
implement
3
administrative
actions
which
include:

Part
1:
Administrative
Reciprocity
 
Define
the
actions
that
the
states
and
USEPA
do
for
leadership
companies
that
they
are
prepared
to
do
for
leadership
programs
from
other
jurisdictions
through
the
good
offices
of
the
"
single
point
of
contact"
or
designated
program
coordinators.

Part
2:
Shared
Advocacy
 
Define
a
process
through
which
state
and
federal
single
point
of
contact
will
work
together
to
understand
business
need,
define
how
that
need
can
be
met
and
follow
through
with
the
respective
programs
as
needed.

Part
3:
Expedited
Information
Delivery
"
chit"
system
 
Create
a
method
for
priority
assignment
given
to
information
needs
from
performance
companies.
The
priority
would
be
roughly
equivalent
to
an
administrative
request
for
information,
and
like
the
expedited
permit
option
outlined
below,
could
be
given
in
the
form
of
a
number
of
certificates
that
could
be
used
by
the
company
over
the
term
of
the
agreement.
While
some
of
the
leadership
companies
may
already
be
getting
this
kind
of
service
now
because
they
"
know"
who
to
talk
to.
This
valuable
element
for
small
and
medium
sized
companies
that
periodically
need
access
to
administrative
staff
who
know
the
party
or
parties'
best
suited
to
provide
information.

Single
Point
of
Contact
Network
(
SPOC
NET)
Part
1:
Discovery
 
there
would
appear
to
be
an
opportunity
for
synergy
between
the
parties
that
are
serving
as
the
single
point
of
contact.
Unlike
their
media
program
counterparts,
these
individuals
have
not
had
the
opportunity
to
gather
and
share
experiences
and
have
also
not
had
the
chance
to
develop
some
common
approaches
to
solving
problems.
The
first
step
is
to
pull
together
or
poll
the
practitioners
in
this
emerging
field
to
see
how
we
can
frame
the
staff
level
transformation
from
"
regulator"
to
"
environmental
performance
manager".
The
process
is
to
convene
a
group
of
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
12
these
folks
(
physically
or
virtually).
The
expected
outcome
is
a
vision
of
what
is
possible
with
this
function.
Two
side
benefits
of
the
convening
are
that
the
initial
participants
will
be
the
base
for
the
network
and
the
state
lessons
will
be
captured
to
inform
further
action.

Part
2:
Inventory
 
Most
of
these
functions
have
been
cobbled
together
but
that
has
also
meant
that
the
persons
in
these
positions
have
been
pretty
creative
in
making
something
out
of
nothing.
There
are
data
systems,
informational
material,
event
strategies,
recognition
activities,
free/
low
cost
technical
resources
that
are
used
by
SPOC's
to
deliver
services
that
are
unfunded
or
under
funded.
When
money
has
been
available,
these
folks
have
cleverly
made
a
little
money
and
shared
responsibility
go
a
long
way.
The
inventory
could
produce
a
low
cost
investment
strategy
and
a
catalog
of
no
cost
options
that
could
be
used
to
deliver
value
and
create
the
foundation
for
an
idea
center
for
company
value
and/
or
enhanced
environmental
results.

Part
3:
Partnership
 
Commission
the
exploration
of
a
potential
partnership
with
one
or
more
existing
systems
that
are
designed
to
interact
with
business
and
deliver
business
value.
These
include
OSHA
systems,
Pollution
Prevention
Resource
Exchange,
Business
Development
Centers,
etc.
that
could
with
slight
modification
take
on
a
broader
role
of
connecting
performance
systems
in
several
states
and
aid
in
the
connection
of
performance
managers
and
the
companies
that
they
serve.
Ultimately
a
separate
network
may
need
to
be
established
but
these
may
provide
both
infrastructure
and
identity
for
this
new
function.
Commission
the
development
of
an
operational
protocol
for
use
in
either
the
EnPPA
agreements
or
the
MOA's
that
defines
and
gives
state
and
federal
credibility
to
the
role
of
the
SPOC.
This
would
at
a
minimum
link
the
state
to
a
federal
counterpart
or
entry
point
into
the
federal
systems,
adding
value
for
both
the
state
and
the
companies.

(
6)
Permit
Renewals
and
Modifications
The
initial
focus
of
the
subgroup
was
to
create
a
working
model
for
the
self­
drafting
of
permits
that
could
be
used;
and
subsequently
measured
for
reduced
transaction
costs,
more
effective
ties
to
business
processes,
and
reduced
administrative
overhead.
In
subsequent
discussions,
the
expediting
of
permits
was
added
as
an
element
that
could
be
quickly
achieved
and
yield
benefit
for
both
the
state
and
federal
programs.
The
incentive
developed
has
two
parts:
Expediting
and
Review
Differentiation.

Expediting
Currently,
EPA
HQ
reviews
permit
database
files
of
current
Performance
Track
members
to
determine
which
permits
will
be
(
1)
expiring
in
the
upcoming
year
and
(
2)
which
permit
are
under
competitive
pressure.
The
Regions
(
Performance
Track
Coordinator)
then
work
with
the
program
offices,
who
in
turn
work
with
the
state,
to
assure
that
permits
will
be
issued
in
an
expeditious
manner.
[
Note:
There
is
an
added
incentive/
recognition
for
the
permitting
authority
because
EPA's
Office
of
Water
has
agreed
to
a
one
priority
permit
credit
for
working
on
a
Performance
Track
facility's
permit.]
Also
if
a
Performance
Track
Member
would
like
to
modify
their
permit
they
can
work
through
the
State
and
Regional
Performance
Track
contacts
to
see
if
other
innovative
approaches
can
be
pursued
(
e.
g.,
performance­
based,
consolidated
and/
or
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
13
reduced
reporting,
etc.)
and/
or
if
the
PT
member
needs
priority
attention
for
its
permit
reissuance
(
or
modification).

Below
is
an
outline
of
how
one
state
(
Texas)
is
creatively
implementing
this
incentive.
This
is
a
process
that
is
coordinated
with
the
state's
excellence
office
and
the
permitting
office.

1.
As
part
of
a
facility's
welcoming
package,
they
receive
a
certificate
to
expedite
their
permit,
if
they
wish.
2.
The
facility
notifies
the
state
excellence
office
of
its
request
for
expedited
permitting.
3.
The
facility
attaches
the
expedite
permit
certificate
with
the
renewal
of
permit
application
that
is
sent
to
permitting
office.

Note:
In
order
not
to
increase
a
state's
current
permit
workload
and
to
deliver
this
incentive
for
Performance
Track
members,
EPA
is
allowing
a
one
for
one
trade
for
a
priority
permit
(
backlog,
impaired
water
way,
etc.).

Review
Differentiation
Review
differentiation
means
that
a
leadership
company
is
eligible
for
different
treatment
in
the
review
of
application
materials
and
the
drafting
of
permit
documents.
Currently
there
are
several
permitting
processes
that
involve
qualified
environmental
professionals
in
or
working
for
superior
performance
organizations
that
are
preparing
material
that
is
subsequently
rechecked
by
agency
staff
creating
duplication
and
additional
oversight
for
an
organization
with
a
proven
compliance
record
and
demonstrated
commitment
to
superior
performance.
States
have
taken
various
steps
to
"
empower"
submitting
companies
through
certification
programs
and
through
agency
reviewer
discretion
at
the
time
of
review
to
treat
some
documents
(
applications,
plans
and
specifications,
regulatory
interpretations,
permit
drafts,
etc.)
differently,
specifically
with
less
review
or
oversight.

At
present,
the
level
and
type
of
reviews
for
information
submitted
vary
greatly
depending
upon
the
media
program
generally
and
the
type
of
permit
specifically
so
the
range
of
options
under
this
incentive
are
great.
While
there
may
be
some
specific
requirements
in
law
or
rule
that
specify
"
how"
decisions
are
made,
there
does
appear
to
be
latitude
in
the
use
of
alternative
means
to
reach
the
final
decision
point
on
the
information
submitted
with
the
application.
The
essence
of
the
incentive
is
that
leadership
companies
would
have
the
ability
to
make
some
initial
decisions
during
the
permitting
process,
do
some
of
the
actual
drafting
of
the
permits
and/
or
propose
elements
to
be
managed
by
the
company
or
their
agent
based
on
their
eligibility
as
a
result
of
being
a
leadership
company.

Pre­
qualified
Information/
Calculations
 
At
present,
Wisconsin
has
tested
a
system
in
which
a
facility
runs
their
own
models
as
a
part
of
the
construction
permit
process.
The
modeling
software
is
supplied
to
the
leadership
company
and
the
company
is
trained
in
the
use
of
the
model.
As
a
result
of
running
the
model
the
results
are
summarily
reviewed
as
a
part
of
the
permitting
process
but
the
model
is
not
re­
run
unless
there
is
a
determination
made
within
a
prescribed
period
that
there
is
a
reason
to
consider
other
variables
in
the
permitting
process.
While
not
all
states
require
modeling,
this
is
an
option
in
those
states
that
have
modeling
or
other
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
14
standard
calculations
done
as
a
part
of
the
permitting
process.
Similarly
there
are
tests,
calculations
or
initial
decisions
that
could
be
delegated
to
leadership
companies.
For
example,
Wisconsin
is
in
the
process
of
implementing
a
wetland
delineation
system,
that
anticipates
nonagency
personnel
making
these
initial
decisions
based
upon
education,
experience,
peer
review,
performance
standards,
and
continuing
education
that
would
be
a
part
of
the
superior
performance
commitment
of
the
facility,
company
or
combination
of
entities
making
application
under
the
leadership
program
Permit
Drafting
 
Leadership
facilities
would
be
given
the
option
of
having
their
staff
or
their
consultant
actually
draft
the
permit
rather
than
go
through
lengthy
application,
review
and
documentation
processes
that
precede
the
actual
permit
drafting.
The
superior
performance
facility
would
show
where
they
meet
the
standards
and
where
they
exceed
the
standards
in
the
proposed
permit.
Of
course,
since
issuance
of
permits
is
an
inherently
governmental
function,
the
permitting
authority
will
make
the
final
determination
as
to
the
issuance
of
the
proposed
permit.
Prime
candidates
for
"
self
drafting"
are
NPDES,
Title
V
and
RCRA
Title
C
TSD
permits.
Phase
1
would
be
the
development
of
a
pilot
program
or
pilot
programs
in
those
states
that
currently
have
self
drafting
programs.
Eligibility
to
participate
in
the
pilot
would
be
based
on
the
enrollment
in
the
leadership
program
in
the
state
or
for
those
programs
and
specific
provisions
would
address
how
leadership
companies
would
be
empowered
to
draft
permits
under
the
program.
Pilots
would
have
a
mandatory
component
for
stakeholder
involvement
in
the
drafting
process.
Phase
2
would
be
the
development
of
a
standard
suite
of
self
drafting
options
available
for
leadership
companies
based
on
the
results
of
the
pilots
and
sanctioned
through
a
general
authorization
in
rule
or
guidance
developed
jointly
by
the
states,
EPA
and
stakeholders.

(
10)
Inspection
Priority
and
Coordination
(
10)
Low
Priority
for
Routine
Inspection
and
Inspection
Coordination
Potential
Incentive:
Formation
of
a
State/
Federal
Workgroup
to
design
and
test
a
methodology
for
coordinated
and/
or
multimedia
inspections,
for
facilities
wishing
to
avail
themselves
of
this
incentive.
The
Workgroup
would
also
address
mechanisms
and
communication
strategies
for
enabling
facilities
to
choose
whether
they
want
to
be
considered
low
priority
for
routine
inspections.

Background:
Some
National
Environmental
Performance
Track
program
members
have
expressed
interest
in
exploring
ways
to
coordinate
inspections
conducted
at
their
member
facilities,
when
it
is
time
for
these
facilities
to
receive
an
inspection.
Such
member
facilities,
as
well
as
the
member
facilities
of
some
State
leadership
programs,
are
considered,
as
a
program
benefit,
a
low
priority
for
routine
inspections,
but
the
inspections
they
do
receive
are
not
currently
coordinated
or
consolidated,
across
State
and
federal
agencies,
or
between
media
programs.

Some
other
program
members
have
expressed
their
opinion
that
"
low
inspection
priority"
as
an
across­
the­
board
program
"
benefit"
has
not,
in
fact,
proved
beneficial
to
their
facilities.
They
would
prefer
to
receive
inspections
on
the
usual
routine
cycle,
or
at
least
have
the
option
to
do
so.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
15
It
is
important
to
recognize
that
program
members,
and
potential
members,
hold
very
strong
and
divergent
opinions
about
the
appeal
of
both
coordinated
inspections
and/
or
"
low
priority
for
routine
inspection"
status,
as
described
in
more
detail
below.
If
we
can
enable
facilities
to
opt
in
or
out
of
these
incentives,
according
to
their
views
and
needs,
the
incentives
will
be
much
more
valuable
and
more
motivating.

Description
of
Potential
Incentive:
While
inspection
coordination
does
pose
some
significant
challenges,
State
and
Federal
Agencies
could
certainly
discuss
the
development
of
this
incentive,
possibly
through
the
formation
of
a
focused
workgroup
of
experienced
Federal
and
State
representatives
who
implement
and
are
aware
of
targeting
approaches
and
policies,
which
could
design
and
test
a
methodology
for
coordinated
inspections.
Consolidating
inspections
at
both
the
State
and
Federal
level
will
require
exploration
of
the
best
ways
to
address
and
accommodate
different
time
frames
and
the
various
factors
that
can
affect
inspection
planning
and
implementation.
A
successful
effort
will
likely
also
necessitate
the
development
of
a
flexible
protocol,
to
encourage
and
enable
maximum
coordination.
EPA
and
the
States
regularly
negotiate
during
the
State/
EPA
agreement
process
on
where
and
what
facilities
to
inspect
and
on
how
to
share
work,
and
these
agreements
guide
the
on­
the­
ground
inspection
schedules
for
the
future.
These
negotiations
provide
a
good
opportunity
for
the
State
and
EPA
to
share
information
about
current
membership
rosters
in
their
respective
leadership
programs,
enabling
the
regulators
to
coordinate
appropriately.
Of
course,
inspection
schedules
must
sometimes
change
due
to
compelling
factors
(
e.
g.,
weather,
lack
of
travel
funds,
responses
to
citizen
complaints,
and
emergencies,
inspector
availability,
etc.),
and
a
coordination
protocol
would
need
to
accommodate
these
realities.

One
factor
the
workgroup
should
also
consider
is
whether
all
member
facilities
would
consider
coordinated
inspections
to
be
an
appealing
incentive,
given
the
amount
of
time
and
effort
a
facility
would
need
to
expend
for
a
multi­
media
inspection.
Such
inspections
involve
a
team
of
inspectors
and
may
take
two
weeks
or
more
and
certain
facilities
may
consider
that
to
be
more
burdensome
and
disruptive
than
more
focused,
quicker
visits.
The
workgroup
could
work
with
federal
and
state
inspectors
and
member
facilities
to
better
understand
what
would
make
coordinated
inspections
attractive,
and
the
members'
underlying
reasons
for
their
preferences.
One
option
that
may
address
this
concern
is
to
offer
this
incentive
only
to
those
facilities
that
express
interest,
and
specifically
request
it.
Or,
recognizing
the
challenges
that
coordinated
inspections
may
present
for
State
and
Regional
compliance
monitoring
programs,
and
for
the
facilities
themselves,
another
alternative
is
to
offer
this
incentive
to
facilities
that
are
small,
noncomplex
facilities
that
may
not
have
a
full
spectrum
of
CAA,
CWA,
or
RCRA
permits.
On
the
federal
level,
one
upcoming
opportunity
to
ask
a
representative
group
of
federal
inspectors
to
further
consider
and
explore
the
development
and
implementation
of
this
incentive
idea
would
be
at
the
annual
National
Inspector
Workshop
meeting
in
December
2005.

The
Workgroup
should
also
consider
and
recommend
mechanisms
that
would
allow
member
facilities
to
choose
whether
they
wish
to
be
considered
"
low
priority"
for
routine
inspections.
Facilities
have
varying
but
strong
opinions
about
the
implementation
of
this
incentive,
particularly
as
more
states
adopt
it.
While
some
facilities
view
it
as
a
benefit,
other
member
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
16
facilities
emphatically
value
continued
and
regular
inspector
visits.
Such
visits
can
help
the
facilities
build
relationships
with
inspectors
and
permit
writers,
enhance
the
facilities'
credibility
and
standing
in
the
surrounding
community,
and
provide
opportunities
for
reconfirmation
and
recognition
of
their
compliance
with
environmental
laws.
Additionally,
some
facilities
report
that
their
funding
requests
to
corporate
management
are
greatly
enhanced
by
showings
of
successful
inspections,
or,
conversely,
undercut
by
the
inability
to
demonstrate
that
they
had
handily
"
passed"
their
compliance
inspections
in
the
previous
year.

As
an
aside,
there
is
increasing
recognition
of
an
administrative
and
policy
need
to
better
clarify
how
federal
"
low
priority
for
routine
inspections"
incentive
should
be
interpreted
and
implemented,
as
the
Performance
Track
Program
matures
and
facilities
stay
members
for
many
years.
EPA's
Office
of
Enforcement
and
Compliance
Assurance
is
examining
the
need
to
develop
consistent,
but
media­
specific
approaches
to
honoring
the
Agency's
commitment
to
this
Performance
Track
incentive,
while
accommodating
statutory
and
regulatory
requirements
and
applicable
policy
concerns.

(
8)
Enhanced
Recognition
In
the
course
of
developing
the
incentives
and
making
priority
selections,
enhanced
recognition
did
not
come
to
the
top
of
the
priorities.
However,
in
discussions
about
the
incentives
there
seemed
to
be
an
opportunity
to
take
some
steps
that
would
add
value
to
both
national
and
state
programs
by
suggesting
some
low
investment
actions
that
might
be
accomplished
easily,
thus
complimenting
some
of
the
more
energetic
recommendations.
The
suggested
actions
are
states
are
intended
to
produce
better
and
more
effective
recognition
such
as
joint
participation
in
events,
joint
listing
on
sites,
complimentary/
joint
publications,
etc.
We
offer
the
following
ideas
for
Joint
EPA­
State
Recognition
Activities:

 
Hold
joint
recognition
events:
o
Develop
a
joint
banner/
flag
using
State
program
&
PT
logos
for
combined
ceremonies,
public
meetings,
etc.
o
State/
EPA
Region
host
a
leadership
dinner
to
honor
top
performers.
o
Invite
EPA
and
State
officials
along
with
local
community
and
local
press
to
a
reception
at
a
facility
(
could
be
coordinated
with
PT
Site
Visits)

 
Send
out
congratulatory
letters
to
state
members
that:
o
acknowledge
facilities
for
their
successes
in
state
performance­
based
programs;
and
o
encourage
them
to
apply
for
PT
membership.

 
Hold
individual
facility
recognition
event
where
the
state
plans
and
EPA
(
Region
and
possibly
HQ
leaders)
actively
participate
 
Ask
State
governors
to
send
congratulatory
letters
to
facilities
involved
with
State
programs
/
PT
(
e.
g.,
CA
Governor
Schwarzenegger
letter
congratulating
new
Performance
Track
Participants)
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
17
 
Publish
P­
Track
News
articles
profiling
state
program
/
member
successes,
collaboration
between
State
programs
and
Performance
Track.

SECTOR
INCENTIVES
RECOMMENDATIONS
The
ECOS
report
requested
"
source
and
sector­
specific
innovation
alternatives
to
conventional
environmental
requirements".
While
many
of
the
incentives
above
satisfy
the
source
specific
portion
of
the
recommendation,
the
sector­
specific
portion
is
not
addressed.
Several
states,
such
as
Colorado
and
Wisconsin,
have
strategically
selected
several
sectors
to
build
unique,
comprehensive
and
performance­
based
working
relationships.
Numerous
other
states
have
sector
based
approaches
that
have
evolved
from
long
standing
regulatory
relationships
with
major
sectors.
Similarly,
the
USEPA
has
a
program
that
manages
the
working
relationships
with
12
identified
sectors.
At
both
the
state
and
federal
level,
many
of
these
relationships
have
now
evolved
to
the
point
of
environmental
leaders
emerging
and
a
need
to
engage
the
environmental
leaders
from
within
the
sector.

To
be
clear,
this
is
not
a
replacement
for
changes
in
regulatory
processes
that
need
to
be
streamlined
for
everyone
in
the
sector
and/
or
changes
that
should
be
made
for
numerous
sectors.
The
recommendations
are
intended
to
create
a
package
of
incentives
that
enable
members
of
a
sector
to
aspire
to
superior
environmental
performance.
Further,
this
may
mean
that
there
are
some
incentives
that
are
available
to
the
sector
that
might
not
be
available
to
others
for
good
scientific
reasons
(
e.
g.
the
controls
of
a
constituent
are
better
for
a
given
sector,
mitigating
the
environmental
risk)
or
administrative
reasons
(
e.
g.
the
level
and
type
of
oversight
is
such
that
regulators
have
greater
confidence
that
performance
will
be
managed).
The
recommendations
also
anticipate
that
by
approaching
sectors
that
incentives
may
be
better
developed
in
manageable
chunks
i.
e.
we
can
design
something
for
an
industry
better
than
we
can
for
all
industry.

The
recommendation
is
to
increase
the
level
and
type
of
incentives
for
leadership
programs
by
tailoring
incentives
to
the
particular
needs
and
interests
of
selected
industry
sectors.
Many
sectors
have
performance
based
programs
that
may
justify
a
state/
federal
sector
incentive
effort
for
program
participants.
The
expectation
is
that
the
states
and
performance
track
staff
would
use
each
of
the
specific
recommendations
above
to
build
a
sector
package
in
conjunction
with
the
leadership
program
members.
The
purpose
would
be
to
solidify
the
existing
participants
as
well
as
attract
additional
participants
within
the
sector.
From
an
administrative
perspective,
the
purpose
also
is
to
most
effectively
manage
transaction
costs
by
building
incentives
that
would
be
available
to
numerous
prospective
participants
rather
than
customization
on
a
facility
by
facility
basis.

In
building
these
sector
based
approaches,
an
essential
element
is
to
maintain
basic
program
membership
requirements
for
all
sectors.
While
some
stakeholders
have
suggested
allowing
sector­
based
variations
in
entry
level
requirements
or
incremental
set
of
program
benefits,
the
first
efforts
should
be
within
the
basic
program
requirements.
As
suggested
above,
sector­
based
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
18
incentives
would
be
geared
to
the
needs
and
capabilities
of
top­
performing
facilities
as
opposed
to
other
types
of
regulatory
flexibility
that
should
still
be
used
to
prompt
better
performance
by
all
firms
in
the
sector.

The
recommended
process
for
defining
sector­
based
incentives
would
be
to
approach
the
current
association
partners
in
leadership
programs
and
the
existing
industry
partners
involved
in
the
administration
and
management
of
sector
approaches.
Based
upon
a
determination
of
trade
group
interest,
staff
in
these
programs
would
gather
information
and
ideas
for
consideration
by
the
PTPA,
states,
and
others.
This
would
be
a
brainstorming
exercise,
with
no
obligation
to
change
the
program
and
implement
sector­
specific
incentives
using
a
consensus
driven,
transparent
approach.
Transparency
in
this
instance
means
the
involvement
of
the
public
in
the
incentives
development
and
formally
through
a
public
comment
period
once
the
discrete
sector
approaches
have
been
developed.

A
brief
examination
of
existing
work
with
sectors
at
both
the
state
and
federal
levels
suggests
that
there
several
opportunities
for
focused
discussions
on
incentives
development
for
sectors.
We
would
anticipate
a
process
that
is
both
transparent
through
direct
engagement
of
stakeholders
and
performance
driven
to
find
incentives
that
produce
sector
value
as
well
as
superior
environmental
performance.
Below
are
several
examples
of
sectors
with
ongoing
working
relationship
and
a
demonstrated
interest
in
moving
beyond
compliance.

 
Agribusiness
based
on
Combined
Nutrient
Management
Programs
 
Meat
industry
based
on
the
American
Meat
Institute's
MAPS
performance
program.

 
Construction
&
Shipbuilding
based
on
storm
water
BMP
programs.

 
Forest
products
(
pulp
&
paper)
based
on
multi­
pollutant
emission
reduction
goals
within
a
facility
"
bubble"
which
is
currently
the
subject
of
a
joint
EPA/
AF&
PA
project
(
as
well
as
similar
state
programs)
currently
under
development.

 
Metal
finishing
based
on
a
voluntary
binding
pretreatment
program
in
place
with
POTW's.

 
Producer
Agriculture
based
on
a
multi­
media
approach
to
the
systematic
management
of
environmental
risks
 
Printing
based
on
a
system
that
would
meet
permitting
requirements
and
enables
performance
to
go
beyond
that
which
would
usually
be
achieved
through
traditional
Title
V
processes.

 
Paint
manufacturing
sector
based
on
the
Coatings
Care
program.

While
not
all
of
these
will
develop
incentives
packages
for
leadership
participation,
an
effort
to
select
one
or
two
priority
sectors
in
which
both
state
and
federal
leadership
programs
are
prepared
to
invest
time
and
energy
working
with
both
the
sector
and
the
public.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
19
Appendix
A
Criteria
for
Incentives
1.
Creates
value
sufficient
for
businesses,
sectors
or
groups
of
businesses
(
e.
g.
supply
chain)
to
enroll
or
remain
enrolled
in
performance
based
programs.
2.
Provides
a
net
agency
resource
savings
for
delivering
core
program
services.
3.
Is
consistent
with
establishing
continual
environmental
improvement
as
the
performance
paradigm
aligned
with
sustainability.
4.
Empowers
collaboration
and
encourages
innovation.
5.
Reduces
burden
and
net
transaction
costs
for
participating
companies.
6.
Can
be
systematically
applied
to
achieve
improvement
in
core
environmental
programs,
moving
beyond
random
acts
of
environmental
kindness.
DRAFT
Report:
ECOS/
EPA
Incentives
Workgroup
Subgroup
2
 
Better
Incentives
September,
2005
20
Appendix
B
Incentives
Category
Descriptions
1.
Available
Flexibility
­
Create
guidance
and
a
corresponding
support
system
to
effectively
extend
available
flexibilities
that
may
not
be
allowed
now
to
state
and/
or
federal
leadership
programs
such
as
P2
options,
flexible
air
permits
and
reduced
permit
reporting
frequencies.
2.
Customized
incentives
­
Creates
real
business
value
for
member
facilities
through
flexibilities
such
as
now
exist
in
40
CFR
403.20
that
would
allow
a
facility
to
submit
alternate
procedures
under
a
process
defined
under
403.18
and/
or
similar
customization
from
other
similar
provisions.
The
customized
provisions
would
contain
both
flexibility
and
accountability
provisions
and
could
be
reviewed
through
an
alternate
approval
process
(
starting
initially
with
the
design
of
an
alternate
SIP
approval
process)
3.
Reporting
requirements
­
simplify
through
certifications
of
compliance
that
would
allow
facilities
to
keep
info
on
site,
but
not
have
to
send
it
in.
They
send
in
only
a
notification
saying,
we're
still
in
compliance
and
agencies
retain
the
right
to
periodically
inspect.
4.
Agency
Contact
 
federal
and
state
staff
would
engineer
a
network
and
protocol
for
the
single
point
of
contact
or
coordinated
contact
depending
upon
the
program
and
scope
i.
e.
someone
or
some
process
to
create
a
better
working
relationship
that
aligns
state,
federal,
company
and
community.
This
would
be
accomplished
through
the
creation
of
an
"
empowered
network"
designed
to
quickly
and
definitively
answer
compliance
questions
as
well
as
to
consult
on
a
broad
range
of
performance
questions,
to
help
align
business
and
environmental
performance.
5.
Preferred
providers
/
vendor
eligibility
 
Create
and
implement
a
list
of
state
and
EPA
actions
that
would
result
in
the
identification
of
leadership
companies
with
preferred
status
for
state
and
federal
procurement
decisions
as
well
as
more
broad
opportunities
for
increased
business
or
reduced
expense
as
a
result
of
contacts
with
the
financial
sector.
6.
Permit
renewals
and
modifications
 
create
a
working
model
for
the
self­
drafting
of
permits
that
could
be
used
and
subsequently
measured
for
reduced
transaction
costs,
more
effective
ties
to
business
processes
and
reduced
administrative
overhead.
7.
Assess
whether
there
are
other
parts
of
the
permitting
process
that
can
be
taken
on
directly
by
the
facility
(
in
addition
to
the
self
drafting
cited
above)
or
the
agent
of
the
facility
such
as
the
consultant
in
a
way
that
would
save
time
and/
or
reduce
costs.
8.
Enhanced
Recognition
 
states
and
Performance
Track
Staff
actions
that
will
produce
better
and
more
effective
recognition
such
as
joint
participation
in
events,
joint
listing
on
sites,
complimentary/
joint
publications,
etc.
9.
Customized
variance
­
encourage
innovation
through
a
new
variance
process
derived
from
or
patterned
after
the
Virginia
Law
but
done
in
a
way
that
would
extend
the
incentive
to
Performance
Track
Members
and
crafted
in
collaboration
with
other
states
so
that
it
can
be
applied
to
leadership
participants
in
other
states.
10.
Inspection
Priority
and
Coordination
 
create
a
protocol
to
address
different
time
frames,
uncoordinated
inspections
and
shared
information
in
order
to
effectively
extend
low
inspection
priority
at
both
the
state
and
federal
level.
In
order
to
achieve
more
coordinated
inspections,
identify
a
group
or
groups
that
could
be
used
to
develop
and
test
a
methodology
for
consolidated
inspections.
