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

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Environmental Protection Agency (EPA).




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.


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


Submit your comments, identified by Docket ID No. EPA-HQ-OA-2005-0003 by one of the following methods:

  • Follow the on-line instructions for submitting comments.
  • E-mail:
  • 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, including any personal information provided, unless the comment includes information Start Printed Page 28027claimed 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, or via e-mail. The 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 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 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 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).

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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

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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​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


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 Start Printed Page 28028Performance 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.


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​.

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 Start Printed Page 28029Framework [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]

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 (​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] Start Printed 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.

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Dated: May 10, 2006.

Robert S. Benson,

Acting Director, Office of Business and Community Innovation.

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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:​enforcement/​resources/​publications/​data/​systems/​air/​2005conf/​framework2.pdf).

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[FR Doc. E6-7333 Filed 5-12-06; 8:45 am]