Virginia

Pre-Proposal for State Innovation Pilot Grant Program

August 19, 2002

Project Summary Information

Project Title and Location
Next Generation Performance-Based Environmental Permit Model

Name of Applicant
Virginia Department of Environmental Quality

Project Contact
Harry E. Gregori Jr. AICP
Virginia Department of Environmental Quality
PO Box 10009
Richmond, Virginia 23240-0009
Phone 804-698-4374
Fax 804-698-4264
hegregori@deq.state.va.us

Cooperative Funding
DEQ will investigate the use of Title V and Vehicle Inspection & Maintenance funding for air issues.

Reg. Flex Requirements: To be determined by the research

Affirmation by Director: Robert G. Burnley, Director of the Virginia Department of Environmental Quality, affirms support for the proposal.

Summary Budget Information

EPA
DEQ/Other(DEQ In-Kind)

Total Project Budget
[REDACTED BY EPA]

Project Narrative

Vision: DEQ seeks to address the concept of "next generation permits" by researching an alternative permitting structure for state and federal environmental regulatory agencies and developing specific alternative permitting protocols and format for implementation. DEQ, EPA Region III and EPA HQ will jointly participate in the development of the protocols and format for model performance-based environmental permits for the Clean Water Act, Clean Air Act, and the Resource Conservation and Recovery Act (and their state-level equivalents).

Innovation: The project builds on previous and ongoing work undertaken as a result of the Memoranda of Agreement signed by DEQ and EPA in July 2000 and April 2002, both of which focus on innovation, improved environmental performance and partnerships through the encouragement of environmental management systems and pollution prevention.

Project Goals & Objectives: The goal of the project are to develop, with stakeholder input, a "next generation" permitting structure with a focus on environmental performance and results that complements state and federal environmental excellence/performance track programs. The objectives of the project include the development of 3-6 alternative protocols and format for specific permitting programs, completion of Project Advisory Committee review and comment of all documents developed, and communication of the project's status to stakeholders and the public.

Measurement & Evaluation: Measurement of the project will be done through DEQ's monitoring of the project schedule and deliverables to ensure that the project remains on track throughout the project period. DEQ will integrate the findings of its current environmental measures project with this project. In terms of project evaluation, DEQ will make extensive use of its staff and other stakeholders to assess progress at critical points (i.e., project milestones and completion) throughout the project.

4. Project Schedule and Timeframe

Project Start Date: December 15, 2002
Duration: 3 Years

Milestones

Year 1: Assessment of programs/input from DEQ staff and Project Advisory Committee
Year 2: Development of draft protocols and an electronic format. Electronic format is for solid waste permitting.
Year 3: Review and revision of final protocol document and format

Outcomes: Assessment of existing permitting programs and development of alternative permitting protocols and format.

Products: Three contractor documents (assessment; draft protocols and format; final document protocols and format) and three study committee review documents (assessment review; draft protocols and format review; final protocols and format review).

Key Activities:

Year 1:

DEQ will hire a contractor through a competitive process to complete the project's research , review and development tasks.
DEQ will establish a Project Advisory Committee (PAC) consisting of DEQ technical and policy staff, and relevant Virginia stakeholders (i.e., non-governmental organizations, local governments, state agencies, and business and industry). In addition, representatives of other states will be invited to participate through the appropriate committees of Association of State and Territorial Solid Waste Management Officials (ASTSWMO), Association of State and Interstate Water Pollution Control Administrators (ASIWPCA),State and Territorial Air Pollution Program Administrators (STAPPA) and the Association of Local Air Pollution Control Officials (ALAPCO), the National Pollution Prevention Roundtable (NPPR), the Forum on State and Tribal Toxics Action (FOSTTA), Solid Waste Association of North America (SWANA) and the Environmental Council of the States (ECOS). DEQ will request participation from relevant Congressional and Virginia General Assembly committees at appropriate times during the project.
Determine project area (e.g., watershed, airshed, industry or business sectors, etc.).
Consistent with the MOA between DEQ and EPA signed on April 24, 2002, DEQ will evaluate the Virginia Environmental Excellence Program (VEEP) and EPA's National Environmental Performance Track (PT) to determine whether the programs will support innovative permitting and the linking of environmental performance to innovative permits. DEQ will develop recommendations for changes in VEEP and PT program design if necessary.
DEQ will evaluate existing federal and state innovative permitting programs within the US, including Massachusetts's Environmental Results Program and other "green permitting" state programs such as those in Oregon and Wisconsin. DEQ will also evaluate existing international innovative permitting programs, including the "covenants" used in the Netherlands.
DEQ will develop an electronic permit application template for the waste program and specifications for one existing waste permit protocol and for one next generation waste permit based on exiting prototype DEQ has developed. This will allow the permit applicants to download the applications and specifications, fill out the application on-line, and send it to the Department by email or regular mail on CD. The Department will be able to review the applications on-line, and create the permit on-line once all the technical reviews are completed. The Department will also be able to store the permits on-line and define core users who can open and edit the permits.

Year 2:

DEQ will report on the findings to the Project Advisory Committee for feedback and guidance. The report will include recommendations on elements needed to establish a base line for innovative permitting and operational criteria for each major permitting program. This would include focussing on authority to implement alternative/innovative permitting within existing laws and also suggestions for needed state or federal law/regulation change(s).
DEQ will submit the interim electronic format to the interested industry groups such as SWANA, Virginia Waste Industry Association (VWIA), and Technical Advisory Committee for Solid Waste.
DEQ will narrow the project's focus and determine which of the air, water and waste laws will be developed into the 3-6 alternative permitting protocols and format with pollution prevention program elements. Coordination with compliance and enforcement programs will be included to ensure enforceability in coordination with PAC.

Year 3:

The draft permitting protocols and format (including electronic versions) will be presented to the Project Advisory Committee for review. Based on the Committee's recommendations, DEQ will revise the protocols and format as necessary.
DEQ will submit final report to EPA.

Program Criteria Requirements

Target Priority Environmental Areas
The proposal will address the three major environmental permitting programs (air, water and waste). Implementation through the development of alternative permitting protocols and format is expected to address two or more of the following environmental issues: reduction of greenhouse gases; reduction of smog; improvement in water quality; improved management of toxic waste.

Use of Incentives as a Tool
The proposal builds in the innovative, incentive-based approach of the Virginia Environmental Excellence Program (VEEP). In its first two years of operation, the VEEP has demonstrated that facilities respond to incentives to move beyond compliance requirements to environmental management systems and pollution prevention. DEQ, given its experience with VEEP and close working partnership with EPA related to VEEP/Performance Track coordination, is in a unique position to begin to build on this success and begin to address alternative permitting approaches. DEQ will use its partnerships and networks (e.g., NPPR, ECOS, Performance Track states network, etc.) to build in lessons-learned from previous innovative permitting projects. As noted above, during the first year of the project, the contractor will research such efforts.

Transferring Innovation
DEQ believes that there is significant potential for environmental improvement from the proposed project based on early results of VEEP and Performance Track, two examples of incentive-based programs that have garnered commitments (and in some cases, results) to environmental improvements beyond compliance requirements. The project, with its focus on affecting change in the traditional environmental permitting programs, has the potential to reach a new audience of facilities.

In terms of replicating the tool in other states, DEQ believes that because its environmental permitting programs are similar or identical to other states and Performance Track exists as a national program, there will be an opportunity for widespread application of the permitting protocols and format developed in Virginia.

Finally, DEQ believes that the proposed project is the next logical step in the transformation of the agency that began several years ago and has included the following steps:

Expansion and enhancement of the agency's pollution prevention program technical assistance program;
Development and implementation of the VEEP (including the signing of one of the first ECOS/State Innovations Agreements);
Development and implementation of an agency-wide environmental management system in June of 2001 (the first state environmental agency in the US to do so);
Initiation of an agency-wide project to develop environmental measures for the agency to replace existing activity-based measures (expected to be completed in early 2003);
Inclusion of pollution prevention and environmental management systems objectives in the job descriptions of every DEQ employees in December 2001; and,
Signing of the MOA related to VEEP/PT cooperation and coordination in April 2002 (one of the original four states to do so).

Guaranteeing Measures and Accountability
In terms of evaluating whether the project has met its goals and objectives, DEQ will undertake the following:

Determine whether its objective of developing 3-6 alternative permitting protocols and format have been developed at the end of the 3 year period;
Evaluate the value of the input received from the Project Advisory Committee by reviewing the level of involvement, number of comments received, etc.

DEQ expects that within 2 to 3 years after the completion of the project, there will be adequate experience with the alternative permitting protocols and format that it will see implementation both within Virginia and in other states. Long-term results include the number of alternative permits issued by Virginia, EPA and other states and the environmental results achieved through the alternative approach.

Proposal Budget

The project will be completed in three years.
[REDACTED BY EPA]