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Minnesota Pollution Control Agency (MPCA)

Memorandum of Understanding Between USEPA and MPCA




I. Overview.

This Memorandum of Understanding (MOU) establishes the roles and responsibilities of the United States Environmental Protection Agency (USEPA) and the Minnesota Pollution Control Agency (MPCA) in the selection, implementation, and evaluation of Project XL Final Project Agreements under Section IV below, and Project XL permits under Section V, below. Under this MOU, the MPCA is the lead regulatory agency and is delegated the authority to develop and implement Project XL pilots within Minnesota. As the lead agency, the MPCA will follow the principals for implementing Project XL published in the Federal Register on May 23, 1995, 60 Fed. Reg. 27,282 (1995). The MPCA intends to use the USEPA guidance for developing Project XL Final Project Agreements entitled "Principals for Development of Project XL Final Project Agreements" (Attachment 1). However, the MPCA also understands that as stated in the Federal Register and principals document, the documents were not intended to be prescriptive or hinder other innovative approaches, but instead should be considered the general framework for the development of Project XL pilot agreements.

In a project XL proposal approved on November 3, 1995, the MPCA requested delegation authority to develop and implement three to five Project XL pilot projects. Companies or entities selected to conduct Project XL pilot projects in Minnesota will thereafter be referred to as "pilot project participants" or the "participants". The Project XL pilot projects are to experiment with:

1) innovative regulatory approaches which result in the improvement of the environment;
2) reduce regulatory burden on pilot project participants; and
3) enhanced methods for obtaining stakeholder input.

Project XL pilots will be conducted on a voluntary basis.

Each Project XL pilot project shall require a measurable reduction in environmental impact. The participant will determine how the reduction is accomplished. However, in accomplishing actual reductions of environmental impacts, pilot project participants will be encouraged to implement pollution prevention methods before treatment or control.

The reduced regulatory burden will be accomplished through a Project XL permit containing only requirements necessary to verify compliance with:

1) the agreed upon environmental impact limits; and
2) other requirements when necessary to protect human health and the environment.

The MPCA anticipates each Project XL pilot project will consist of two negotiated documents. The first will be the Final Project Agreement which will be negotiated and signed by the MPCA, the USEPA, other government agencies (as needed), and the participant, hereafter the "signators". The Final Project Agreement will be used at a minimum to identify the procedures needed to measure the success of each pilot and ensure ongoing participation by stakeholder's in the project's evaluation. For additional details on the contents of a Final Project Agreement refer to Section IV below. The Final Project Agreements shall identify stakeholder groups and the role of each group. Stakeholder groups include the MPCA, USEPA, participants, as well as outside stakeholders such as a local community stakeholder group. Stakeholder groups shall have the opportunity to provide input into the development, implementation, and evaluation of the Project XL pilot. However, consensus on issues is only required of the signators.

The second document is a Project XL permit which will also be negotiated by the MPCA, the USEPA, and the participant. The permit will be issued by the MPCA, but also signed by the USEPA, other government agencies (as needed), and the participant to reflect their consent to the terms of the permit. This document will be used to identify monitoring, recordkeeping and reporting requirements needed to verify compliance with the agreed upon environmental impact limits. For additional details on the contents of a Project XL permit refer to Section V below.

In contrast with regulatory agreements of the past, it is the intention of the USEPA and the MPCA to experiment with regulatory agreements that are non-prescriptive, do not use command and control approaches, are based on trust, and are written with the assumption participants will succeed in attaining or exceeding the pilot project goals.

II. Relationship between MPCA and USEPA

The MPCA has been delegated the responsibility to develop and implement the Project XL pilots with Minnesota regulated entities. The MPCA is the lead agency and will handle day to day activities in participant selection, agreement and permit negotiation, project implementation, and evaluation. The MPCA will be a signator on each Final Project Agreement and will issue each Project XL permit. As the lead regulatory agency the MPCA will have the responsibility of coordinating input from stakeholder groups and negotiating consensus on issues between the signators.

The USEPA will provide a supportive role, with USEPA Region V acting as the overall lead and point of contact for the USEPA. USEPA Region V will decide how and when to coordinate issues with USEPA headquarters. USEPA will minimize "hands on" oversight and control of the Minnesota Project XL pilots. It is envisioned that the first Final Project Agreement and the first Project XL permit negotiated may require a higher level of support by the USEPA, and that level of support would diminish as additional pilots are developed.

USEPA will evaluate federal statutes and regulations to identify barriers in implementing Project XL permits. USEPA shall develop, combine and prepare streamlined federal variance procedures as needed to implement Project XL permits in Minnesota.

III. MPCA Participant Selection

The MPCA anticipates the selection of three to five Project XL pilot participants. A pilot project participant may be representatives of an individual facility, a group of related facilities, or an industry sector. USEPA, the MPCA, and 3M have agreed one of the three to five pilot project participants will be a 3M facility located within Minnesota. The MPCA will select other pilot projects based on the following criteria:

a. the company's willingness and ability to commit resources to the development and implementation of the pilot;

b. the company's willingness and ability to reduce overall environmental impact by going beyond compliance with existing regulations;

c. the company's willingness to involve the community and other stakeholders in the pilot project;

d. the transferability to other projects after completion of the pilot project phase;

e. the company's ability and history in complying with regulations;

f. the innovativeness of the proposed project;

g. the desire to have projects representing a variety of facility types, benefiting a variety of media, and from different parts of the state;

h. MPCA staff resource availability; and

i. the availability of information to develop and gain stakeholder agreement on baseline environmental data (e.g., air emissions, water discharges).

The MPCA shall announce to the public, including potential stakeholders and other interested parties, notify the USEPA and the proposer in writing upon formal acceptance of a Project XL proposal within Minnesota.

IV. Final Project Agreement (agreement between USEPA, MPCA, and participant)

The Final Project Agreement (FPA) represents an informal working document used to develop, implement and evaluate Project XL pilot projects. Although the content of the FPA may vary from pilot to pilot, as a minimum, the MPCA shall include the following elements in the FPA

a. Measurements to determine success/failure. Refer to Attachment 2 for a sample of the type of measurements anticipated.

1. Development of a baseline. The MCPA, USEPA, and pilot project participant shall developthe methodology for establishing the current baseline or projected regulatory baseline.

2. Duration of measurements. Unless otherwise negotiated by the parties recording the measurements shall start upon MPCA acceptance of a proposal in writing, and end no more than five years after the execution of the Project XL permit.

b. Identification of stakeholder and roles. Each agreement shall consist of the USEPA, the MPCA, and the pilot project participant as signators. In addition, the pilot project participant in coordination with the MPCA shall identify a local stakeholder group that represents the interest of the local community. For purposes of this agreement a local stakeholder group in most cases means the residents of the local community. However, if there is a good reason for a broader based stakeholder group and the USEPA and the MPCA agree, the pilot project participant may identify this stakeholder group in replacement of a local community stakeholder group.

c. Public input/notice procedures. The MPCA shall coordinate input from the stakeholder groups and interested parties. The MPCA shall keep stakeholder groups and interested parties informed throughout the development of the Final Project Agreement and the Project XL permit. The MPCA intends to experiment with public notification and participation models to enhance affected public awareness, understanding, and input.

The MPCA shall announce to the public the availability of a draft Project XL permit for review and comment. The draft permit shall be available for public comment for a period not less than 30 days. The MPCA may also elect to hold public meetings. The MPCA commissioner shall approve the issuance of Final Project Agreements and Project XL permits. Groups or members of the public may petition the MPCA Board to deny issuance of a contested Project XL permit.

1. Identification of environmental justice issues. In the public notice the MPCA shall identify whether or not environmental justice issues were identified and if so how they were addressed.

2. Final Project Agreement Availability. Availability of a Final Project Agreement as supportive information for the Project XL permit.

d. Confidential information procedures. For information submitted to the MPCA, MPCA confidential information procedures shall be used. In the event confidential information is submitted directly to the USEPA, the USEPA confidential information procedures shall be used.

e. Project XL phase duration. The Project XL pilots can be divided into two phases; the measurement phase and the permit phase.

1. Measurement phase. The measurement phase shall start when the MPCA gives written acceptance of a Project XL proposal, and shall continue for a period negotiated in the Final Project Agreement.

2. Permit phase. The duration of the permit shall be negotiated between the MPCA and the pilot project participant.

V. Project XL Permit

The Project XL permit shall be an enforceable permit issued by the MPCA, and shall be signed by the USEPA, other government agencies (as needed), and the participant to reflect their consent. The minimum elements of a Project XL permit shall be as follows:

a. Baseline definition and superior environmental performance limits. The permit shall clearly identify the required level of performance in each media under the current regulations and compare them to the required superior environmental performance level. The baseline and the superior environmental performance levels shall be developed for the following four media (when applicable):

1. air
2. water
3. hazardous waste
4. solid waste

b. Define required monitoring, recordkeeping and reporting (permit requirements). The permit requirements shall accomplish verification that the superior environmental performance levels are being complied with.

c. ISO 14000 certification. The MPCA shall encourage pilot project participants to become certified under ISO 14000.

e. New standards clause. The MPCA shall include a clause in the Project XL permit that allows for the modification of the permit in the event a more stringent emissions or discharge standard is promulgated on the state or federal level.

f. Regulatory requirements replacement and variance clause. The permit shall include a statement as to what regulatory requirements the Project XL permit will replace. The permit shall also include a statement of which requirements are being varied through issuance of the Project XL Permit

g. Duration. The permit shall identify the expiration date of the permit.

i. Termination. The permit shall contain a provision that allows for termination and a phased re-entry of the pilot project participant in the event the goal of obtaining superior environmental performance is not accomplished.

VI. Amendments to this MOU

Due the experimental nature of Project XL, the parties to this agreement anticipate the need for flexibility and potentially amending terms and conditions of this agreement. Therefore, amendments can be made upon mutual consent of signators to this agreement.

V. MPCA Project XL Enforcement.

USEPA will eliminate real-time oversight of the MPCA's enforcement program.

a. The MPCA will be responsible for identifying and resolving violations.

b. If significant violations are detected, the MPCA will be responsible for reporting on a monthly basis, the significant violations and the method of resolution of the significant violations.

VI. Dispute Resolution and Working Relationship.

Disagreement or deviations resulting for the principals set forth in this MOU will be resolved at the lowest staff level on a case-by-case basis, and will not be pursued in a manner which jeopardize our future relationship.

The MPCA and USEPA will work to strengthen our relationship to enhance the Project XL pilot program in Minnesota by actively supporting, genuinely sharing, and encouraging the success of each other's participation


The following is a the start of a table which outlines the MPCA's proposed measurements for determining the success of pilot under the Project XL approach. To a large extent the criteria listed in the Project XL Federal Register Notice and the Minnesota proposal is used as the main measurement categories. Secondly two subcategories of measurements were identified to be:

1. MOU measurements - non-enforcement agreement between 3M, MPCA, and EPA. More of a short-term document. This is where measures agreed upon to determine the success of a given pilot are described. Once there is sufficient data on a pilot for the MPCA to determine what was successful and what lessons were learned, this document will likely be terminated.

2. Permit/Compliance measurements - enforceable compliance-related measurements. These are the long-term measurements needed to demonstrate the continued beyond compliance status of a facility.

CATEGORY 1 -SUPERIOR ENVIRONMENTAL PERFORMANCE (criteria to become a Project XL pilot)

Current Baseline/3M a. Air
b. Hazardous waste
c. Water
d. Solid Waste
Upcoming Regulations/MPCA and EPA - what things would be required to maintain Project XL status a. Air
b. Hazardous waste
c. Water
d. Solid Waste
(reopen condition)
Beyond Compliance CAP/3M, MPCA and EPA a. Air
b. Hazardous waste
c. Water
d. Solid Waste
Regulatory Relief/3M, MPCA and EPA Report outlining regulatory relief provided for a specific pilot
Measures of Success Report/MPCA Annual report using the measurements to determine success/lessons learned to date. The MPCA will also use this document to determine when to terminate the MOU.

Monitoring, Reporting and Evaluation/3M Compliance measurement (once per 24 hours?)
On-Site compliance records to the level to verify compliance w/CAP
Report exceptions to MPCA and community
Self? Third Party? Audit-annual? (audit of environmental management methods?, self audit as defined by the Environmental Improvement Act?)
Multi-Media P2 Report/3M Prior to recycling and control mass balance information (output x and y on pollution prevention graphic: SW, HW, water, stack & fugitive air; amount in products) - annual ? (NEW) - See attached drawing
Production output/unit of pollution (by chemical, for facility) - monthly ? (calculation using TRI)
After control mass balance information (output z on pollution prevention graphic: as submitted on FormR) - annual (TRI)
ISO 14000 Development, implementation and evaluation of environmental management systems
Increased Public Participation/3M, MPCA and EPA Local stakeholder group:
a. # of meetings
b. representation
c. survey community (before and after)
d. public complaints (before and after)
e. all are the different factions of the community represented?
Pilot Project Committee (PPC) third-party evaluation:
a. # of meetings
b. representation
c. lessons learned
Emissions summary for public
a. internet
b. local news
Evaluation of the relative effectiveness of the local stakeholder group vs a broader (PPC-type)based group

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