Pretreatment Program Reinvention Pilot Projects under Project XL

[Federal Register: June 23, 1998 (Volume 63, Number 120)]
[Notices]
[Page 34170-34176]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jn98-51]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[FRL-6113-6]

Pretreatment Program Reinvention Pilot Projects under Project XL

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; Solicitation of Local Pilot Pretreatment Program
Proposals under Project XL.

-----------------------------------------------------------------------

SUMMARY: Publicly Owned Treatment Works (POTWs) regulated under the
National Pretreatment Program are required to identify industrial
users, issue permits to these users, monitor industrial user activities
through on-site sampling and inspections, and carry out other
administrative functions involving extensive recordkeeping and
reporting.
Many POTWs have mastered the programmatic aspects of their
pretreatment programs, and a number of these POTWs feel that their
programs should be measured against environmental results rather than
strict adherence to procedural and administrative requirements. These
POTWs have expressed an interest in being allowed to focus their
resources on activities that they believe will provide greater
environmental benefits than are achieved by complying with the current
requirements.
The Project XL program, which is discussed in greater detail in
another document in today's Federal Register, was implemented to
provide the flexibility to conduct innovative pilot projects to develop
and test ``cleaner, cheaper and smarter'' programmatic alternatives
that could yield greater environmental results than those achieved
under the current regulatory system. EPA is interested in exploring
alternative environmental performance-based pretreatment programs on a
pilot basis under the Project XL program.
Today, EPA is requesting that POTWs interested in pursuing a
program based on environmental performance measures submit preliminary,
one to two page proposals explaining what they would include in their
Local Pilot Pretreatment Programs. These short proposals must include a
clear description of the alternative program the POTW plans to
implement, the environmental benefits to be gained by

[[Page 34171]]

the program, the regulatory requirements that need to be revised, and
how program resources would be modified. POTWs that are interested in
participating must submit their proposals to their State Pretreatment
Program Coordinator, EPA Regional Pretreatment Program Coordinator, and
the Director of EPA's Office of Wastewater Management. EPA will review
the preliminary proposals and choose those that are most likely to
achieve measurable improvements in environmental performance.
The number of proposals selected will be based on available
Approval Authority resources for reviewing and modifying Approved
Pretreatment Programs and coordinating pilot program implementation.

EFFECTIVE DATES: POTWs interested in participating in this Project XL
solicitation have until September 21, 1998 to submit a preliminary
proposal for consideration.

ADDRESSES: POTWs must submit formal proposals to Mr. Michael B. Cook,
Director, Office of Wastewater Management (MC 4201), U. S.
Environmental Protection Agency, 401 M Street, S.W., Washington, DC
20460. Duplicate copies of your proposal should be sent, concurrently,
to the appropriate EPA Regional Pretreatment Coordinator and the State
Pretreatment Program Coordinator providing oversight of your
pretreatment program. This Federal Register document has been placed on
the Internet for review and downloading at the following location:
``www.epa.gov/owm'.

FOR FURTHER INFORMATION CONTACT: Patrick Bradley, U.S. Environmental
Protection Agency, Office of Wastewater Management (4203), 401 M
Street, S.W., Washington, DC 20460, telephone number (202) 260-6963.

I. Introduction

In General, What is EPA Requesting?

EPA is interested in exploring alternative environmental
performance-based pretreatment programs on a pilot basis under EPA's
Project XL program. The intent of this effort is to investigate ways of
increasing the effectiveness of the pretreatment program and thus
obtaining greater environmental benefit.
Today, EPA is requesting that interested POTWs submit preliminary
proposals for implementing Local Pilot Pretreatment Programs. EPA will
choose the proposals that are most likely to achieve measurable
improvements in environmental performance. The number of proposals
selected will be based on available approval authority resources for
reviewing and modifying approved pretreatment programs and coordinating
pilot program implementation. EPA expects to implement no more than
fifteen projects.
The process for reviewing and choosing acceptable pilot program
candidates will include input from the POTW's State and EPA Regional
Pretreatment Coordinators, as well as opportunity for public
participation. After opportunity for public participation at the local
level and review of a pilot by the selected POTW's State and EPA
Regional Office, EPA Headquarters will revise 40 CFR part 403, if
necessary, to allow the selected Local Pilot Pretreatment Programs to
be tested, and then the POTW's NPDES permit will be modified to
authorize the POTW to implement its pilot program instead of its
current Approved POTW Pretreatment Program. States might first need to
revise their own regulations or statutes to authorize the pilot
program.

What Are the Current Pretreatment Program Requirements?

The minimum requirements for an Approved POTW Pretreatment Program
are currently found in 40 CFR 403.8(f). POTWs with Approved
Pretreatment Programs must maintain adequate legal authority, identify
industrial users, designate which are Significant Industrial Users
under 40 CFR 403.3(t), and perform required monitoring, permitting and
enforcement. Other sections of part 403 require POTWs with Approved
Pretreatment Programs to sample and apply national standards to their
industrial users. POTWs are also required to develop local limits in
accordance with 40 CFR 403.5. An environmental performance-based pilot
program would replace certain programmatic requirements of the POTW's
Approved Pretreatment Program.

How Do the Current Requirements Relate to Environmental Objectives?

As described in 40 CFR 403.2, the general pretreatment regulations
promote three objectives:
(a) To prevent the introduction of pollutants into POTWs which will
interfere with the operation of POTWs, including interference with the
use or disposal of municipal sludge;
(b) To prevent the introduction of pollutants into POTWs which will
pass through the treatment works or otherwise be incompatible with such
works; and
(c) To improve opportunities to recycle and reclaim municipal and
industrial wastewaters and sludges.
These objectives require local programs to be designed so they are
preventative in nature, and therefore, any pilot program must also
maintain this preventative approach. The specific requirements for an
Approved POTW Pretreatment Program are intended to achieve these
objectives. Individual pretreatment programs, however, are not
routinely required to report on the achievement of environmental
measures.
The 1991 National Pretreatment Program Report to Congress provides
extensive data related to the sources and amounts of pollutants
discharged to POTWs, the removal of pollutants by secondary treatment
technology, and the general effectiveness of the pretreatment program.
The 1991 Report did, however, point to a serious lack of comprehensive
environmental data with which to fully assess the effectiveness of both
the national and local pretreatment programs.

Why is EPA Considering Allowing POTW Local Pilot Pretreatment Programs
at This Time?

Some POTWs have mastered the programmatic aspects of the
pretreatment program (identifying industrial users, permitting,
monitoring, etc.) and want to move into more environmental performance-
based processes. These POTWs have expressed an interest in being
allowed to focus their resources on activities that they believe will
provide greater environmental benefit than is achieved by complying
with the current requirements. Some POTWs want to be able to make
decisions on allocating resources based on the risk associated with the
industrial contributions they receive or other factors. Others want to
be able to focus more resources on ambient monitoring in their
receiving waters and/or to integrate their pretreatment programs with
their storm water monitoring programs. In general, these POTWs want the
opportunity to redirect limited resources away from currently required
activities that they do not believe are benefiting the environment and
toward activities that can achieve measurable improvements in the
environment.
The Project XL program was implemented to provide the flexibility
to conduct innovative pilot projects. This current solicitation
represents an attempt to spur innovation in the pretreatment program to
increase environmental benefits and, in conjunction with the
streamlining proposal, to determine if further streamlining of the
program is needed,

[[Page 34172]]

and in what direction those future streamlining efforts should be
directed.

II. Stakeholder Comments

How Have Stakeholders Been Involved in the Development of This Idea?

EPA has been working with stakeholders to learn how to direct the
pretreatment program toward the achievement of environmental goals. In
1993, pursuant to a Cooperative Agreement with EPA, the Association of
Metropolitan Sewage Agencies (AMSA) assembled a 16-member steering
committee to explore environmental measures of performance of
pretreatment programs. The committee consisted of federal and state
approval authorities, local and state control authorities, industrial
users, and environmental groups. This committee helped shape the
original research and reviewed findings to identify appropriate
measures of performance.
The Committee identified 18 measures for assessing the performance
of a pretreatment program. Consistent with the committee's belief that
an adequate program would need to be judged by environmental trends,
compliance rates, and procedural or programmatic criteria, the measures
were separated into the following three categories:
Measures of Trends in Pollutant Loadings and Concentrations
1. Trends in mass loadings of metal and other toxic compounds and
nonconventional pollutants in POTW effluent; and comparisons to
allowable levels in NPDES permits where such limits exist.
2. Trends in emissions of hazardous pollutants to the air,
particularly for volatile pollutants from unit processes and metals
from incineration.
3. Trends in mass loadings of metals and other toxic contaminants
in POTW influent, as a total and where possible, divided into domestic,
commercial, industrial, and storm water contributions to the total; and
comparison to allowable loadings as calculated during the headworks
analysis, where such an analysis is available.
4. Reductions in annual average metals levels in biosolids, with an
indication of any trend towards or compliance with the most stringent
nationwide biosolids standards.
Measures of Compliance With Requirements
5. Percent compliance with NPDES permit discharge requirements.
6. For each POTW, whether the POTW is failing Whole Effluent
Toxicity (WET) tests due to industrial sources.
7. Percent compliance with non-pathogen biosolids quality limits
for the management method currently used, with sites divided into
categories based on applicable biosolids regulations.
8. Percent compliance at each Industrial User with categorical
limits.
9. Percent compliance at each Industrial User with all permit
limits.
10. Percent of Industrial users in compliance with reporting
requirements.
11. For each control authority, the number and percent of
Industrial Users in a significant noncompliance (SNC) for the current
year that were also in SNC last year.
Procedural or Programmatic Measures
12. Whether an effective method is being used to prevent, detect,
and remediate incidents of violations of the specific pretreatment
prohibitions attributable to industrial or commercial sources (e.g.,
fire and explosion hazards).
13. Whether an effective procedure is being used to identify non-
domestic users and to update the list of regulated users.
14. Number of sample events conducted by the control authority per
significant industrial user (SIU) per year, and percent of all sample
events that were conducted by the control authority.
15. Number of inspections per SIU per year.
16. Whether the control authority has site-specific, technically-
based local limits, based on the most recent regulatory changes and
latest NPDES permit requirements; or a technical rationale for the lack
of such limits.
17. Whether the POTW or control authority has significant
activities or accomplishments that demonstrate performance beyond
traditional goals and standards.
18. Whether or not POTWs have an effective public involvement
program in place.
EPA then funded a second multi-stakeholder peer review group
assembled by AMSA to evaluate the extent to which POTWs were using or
collecting data to support these measures. The evaluation consisted of
site visits to five case study cities. During the site visits, the
researchers collected data on the current status of performance
measurement and investigated ways to redirect the pretreatment program
using a broader array of environmental indicators. The final report
(Case Studies in the Application of Performance for POTW Pretreatment
Programs, May 1997), presented ``preliminary conclusions regarding the
use of environmental indicators within the broader context of
streamlining the pretreatment program to meet objectives of the Clean
Water Act while better serving the needs of local communities and the
nation as a whole.''
One of the principal findings of the May 1997 report was a
recommendation for ``Pilot Programs'' to investigate performance
measures. The report recommended pilot programs as a means to phase-in
and promote reinvention efforts at low risk. Specifically, the Report
suggested:

Under such a strategy, only those wastewater utilities that
could demonstrate readiness to manage locally directed programs
would be eligible for a pilot. Once eligible, the exact dimensions
of each local program would be negotiated with the public and the
appropriate Approval Authority. Administrative orders or enforcement
discretion could be used during the pilot to allow local priorities
to shape local programs in place of strict compliance with national
program regulations under 40 CFR part 403. Accountability would be
sustained through agreed upon measures of performance.

The August 1996 WEF/AMSA Pretreatment Streamlining Workshop also
recommended creating a fundamentally more innovative and results-
oriented pretreatment program that focussed on environmental endpoints.
The Workshop's final report recommends a national pretreatment program
consisting of three different tiers or options for local programs. One
option would be a performance approach that would provide POTWs with
flexibility in administering various aspects of their pretreatment
programs in exchange for evaluating the accomplishments of the programs
based on a series of designated performance-based measures that had
been agreed upon by all stakeholders.
Finally, AMSA hosted a 1997 stakeholder meeting in Chicago where
more than 20 members of key stakeholder groups, including POTWs,
federal and state regulators, and industrial users, discussed all of
these previous efforts and portions of this proposal. The attendees at
the meeting did not reach consensus on a methodology for addressing
environmental performance measures, but one recommendation was to
pursue a change to the regulations that would allow pilot programs to
test some alternate approaches.

[[Page 34173]]

III. Today's Request for Project Proposals

What is EPA Requesting?

EPA is requesting that POTWs that are interested in pursuing a
program based on environmental performance measures submit preliminary,
one to two page proposals explaining what they would include in their
Local Pilot Pretreatment Programs. These short proposals must include a
clear description of the alternative program the POTW plans to
implement, the environmental benefits to be gained by the program, the
regulatory requirements that need to be revised, and how resources will
be modified. POTWs that are interested in participating must submit
their preliminary proposals within 90 days of the publication date of
this Federal Register Notice to their State Pretreatment Program
Coordinator, EPA Regional Pretreatment Program Coordinator, and the
Director of EPA's Office of Wastewater Management. EPA will then
contact the POTWs that submitted acceptable proposals and request
detailed proposals within 90 days which outline exactly how the POTWs
plan to implement their Local Pilot Pretreatment Programs and how they
address the Project XL criteria. These proposals will be reviewed by
EPA.
EPA encourages interested POTWs to contact EPA early--via their
Regional Pretreatment Coordinator or their Regional XL Coordinator or
their State Pretreatment Coordinator--to express their interest in
submitting a proposal. EPA stands ready to discuss pilot ideas or to
clarify principles, expectations or guidance for the Pretreatment Pilot
Program or Project XL.
The following sections outline what EPA believes should be the
criteria for determining which POTWs may qualify for administering a
Local Pilot Pretreatment Program, what would be an adequate Local Pilot
Pretreatment Program, and what existing pretreatment program
requirements would not have to be part of an approved Local Pilot
Pretreatment Program. They also discuss application, approval,
withdrawal and reporting requirements.

How Would Local Pilot Pretreatment Programs be Selected?

After consultation with the POTW's State, EPA Regional Office, and
other Offices in EPA Headquarters, the Director of EPA's Office of
Wastewater Management will select the pilot projects from the proposals
that best meet EPA's criteria. If more than fifteen (15) Local Pilot
Pretreatment Programs meet the criteria generally, EPA will select the
programs that are likely to achieve the greatest transferable
environmental benefit.
Transferable environmental benefit means the methodology is such
that other POTW programs may be likely to implement the method and also
achieve increased environmental benefits. EPA will select a proposal
for further consideration only if the POTW's State and EPA Regional
Office agree to participate.

Which POTWs May Apply To Run a Pilot Program?

The pilot program is being limited to POTWs that have demonstrated
that they have run successful Pretreatment Programs, have available
significant amounts of environmental performance data (or demonstrated
ability to collect the necessary data), and are most likely to achieve
transferable environmental benefits greater than those achieved under
the current requirements. EPA intends to apply the following criteria
to determine which POTWs may be considered for a Local Pilot
Pretreatment Program:
1. The POTW is administering an Approved POTW Pretreatment Program.
2. The POTW has a solid record of compliance. In general, this
means that the POTW must not be the subject of a planned or ongoing
judicial or administrative enforcement action, be in significant
noncompliance with applicable requirements, or have outstanding
obligations under (or be in violation of) an order or consent decree.
Additionally, a POTW's history of compliance will also be considered;
POTWs most likely to be included in the pilot program would be those
which do not have a history or pattern of violations, violations
resulting in serious threats or harms, or have other recent significant
compliance problems.
3. The POTW has five years of influent, effluent, and sludge
quality data, as well as three years of ambient water quality
measurements for its receiving water or can demonstrate the ability to
collect ambient data.

What Are the Project XL Criteria?

Since this pilot programis being administered under the Project XL
program, the proposals must address the Project XL criteria:
1. Superior Environmental Performance
Projects that are chosen should be able to achieve environmental
performance that is superior to what would have been achieved absent
the XL project. EPA uses a two-part method of determining whether an XL
project will achieve superior environmental performance: (1) Develop a
quantitative baseline estimate of what would have happened to the
environment absent the project and, then compare that baseline estimate
against the project's anticipated environmental performance; and (2)
Consider both quantitative and qualitative measures in determining if
the anticipated environmental performance will produce a level of
environmental performance superior to the baseline.
2. Cost Savings and Paperwork Reduction
The project should produce cost savings or economic opportunity,
and/or result in a decrease in paperwork burden.
3. Stakeholder Support
The extent to which project proponents have sought and achieved the
support of parties that have a stake in the environmental impacts of
the project is an important factor. Stakeholders may include
communities near the project, local or state governments, businesses,
environmental and other public interest groups, or other similar
entities.
4. Innovation/Multi-Media Pollution Prevention
EPA is looking for projects that test innovative strategies for
achieving environmental results. These strategies may include
processes, technologies, or management practices. Projects should
embody a systematic approach to environmental protection that tests
alternatives to several regulatory requirements and/or affects more
than one environmental medium. EPA has a preference for protecting the
environment by preventing the generation of pollution rather than by
controlling pollution once it has been created. Pilot projects should
reflect this preference.
5. Transferability
The pilots are intended to test new approaches that could
conceivably be incorporated into the Agency's programs or in other
industries, or other facilities in the same industry. EPA is therefore
most interested in pilot projects that test new approaches that could
one day be applied more broadly.
6. Feasibility
The project should be technically and administratively feasible and
the project proponents must have the financial capability to carry it
out.

[[Page 34174]]

7. Monitoring, Reporting and Evaluation
The project proponents should identify how to make information
about the project, including performance data, available to
stakeholders in a form that is easily understandable. Projects should
have clear objectives and requirements that will be measurable in order
to allow EPA and the public to evaluate the success of the project and
enforce its terms. Also, the project sponsor should be clear about the
time frame within which results will be achievable.
8. Shifting of Risk Burden
The project must be consistent with Executive Order 12898 on
Environmental Justice. It must protect worker safety and ensure that no
one is subjected to unjust or disproportionate environmental impacts.
These criteria are described in detail in the following Federal
Register documents: 60 FR 27282, May 23, 1995 and 62 FR 19872, April
23, 1997.

What Environmental Results Must a Local Pilot Pretreatment Program
Achieve?

The POTW's Local Pilot Pretreatment Program would have to commit
the POTW to achieve environmental results consistent with the XL
program's expectations. As detailed in the Federal Register document of
April 23, 1997, ``In order to test innovative approaches to reinvent
environmental protection for the 21st Century, Project XL offers
potential project sponsors and co-sponsors the opportunity to develop
and implement alternative strategies that produce superior
environmental performance, replace specific regulatory requirements,
and promote greater accountability to stakeholders. The May 23, 1995,
Federal Register document defining the XL program stated EPA's intent
to approve only those projects that `achieve superior environmental
performance relative to what would have been achieved through
compliance with otherwise applicable requirements.' This document
further refines the definition of superior environmental performance to
assist future applicants, stakeholders and those evaluating the
program.'' The system uses a two tiered approach. The first tier
establishes an environmental performance benchmark for an XL project.
This quantifies current performance levels and sets a baseline against
which the project's anticipated environmental performance can be
compared. The project benchmark will be set at either the current
actual environmental loadings (historical environmental data) or the
future allowable environmental loadings, whichever is more protective.
Tier two is an examination of factors that lead EPA to judge that a
project will produce truly superior environmental performance.
For local POTW Pretreatment Programs, Superior Environmental
Performance may include:
(i) Reducing pollutant loadings to the environment or achieving
some other environmental benefit beyond that currently achieved through
the existing pretreatment program (including collecting environmental
performance data and data related to environmental impacts in order to
measure the environmental benefit. Such information would include data
on pollutant loadings to the environment, ambient environmental
conditions and measures of the impact of these conditions on the health
of ecosystems. The data should be able to support decisions concerning
the future use of pretreatment program resources),
(ii) Reducing or optimizing costs related to implementation of the
pretreatment program with the savings used to attain environmental
benefits elsewhere in the watershed in any media, and
(iii) Other environmental benefits gained by allowing pretreatment
program flexibility.
EPA's ultimate objective is to gain information on how the
pretreatment program might be better oriented towards the achievement
of measures of environmental performance. This objective is consistent
with the principles of the National Performance Review.
EPA's intent is to allow Local Pilot Pretreatment Programs to be
administered by those POTWs that best further those objectives. Each
pilot program's method of achieving the environmental benefit should be
transferable so that other programs may be able to implement the method
and also achieve increased environmental benefits.
Collecting environmental performance data alone would not be enough
to qualify as an objective. The data collected must be used to benefit
the environment. For example, the data collected could help POTWs apply
enforcement and compliance assistance resources more effectively.
If the focus of the Local Pilot Program is to reduce the cost of
administering the Approved POTW Pretreatment Program without reducing
the local program's environmental effectiveness, the resources saved
must be dedicated to some other environmental application. In this
situation, the resources might be used to integrate the Pretreatment
Program with other local environmental protection programs such as
storm water monitoring or collection system management or local
pollution prevention initiatives. In all cases, the benefits of a
trade-off of resources from existing pretreatment requirements to other
activities will need to be quantified and tracked.
A Local Pilot Pretreatment Program could focus resources on program
integration and then measure the environmental benefits of an
integrated program. Environmental performance measures can foster
increased integration of pretreatment programs with other local
environmental programs and with broader environmental efforts, such as
watershed or community-based environmental protection.
It is intended that Local Pilot Pretreatment Programs will provide
clearer linkages between environmental goals and program implementation
procedures. This will allow programs to identify the goals that are
best for their specific situations and to design procedures to reach
those goals.
To determine what the environmental focus should be, the POTW
should conduct community outreach. Through a stakeholder dialogue, the
POTW may gain additional perspective on what is important to the
community and may help the POTW to make resource allocation decisions.
Each pilot POTW would then set its own goals based upon input from the
local community.
The POTW would then design a management program (the Local Pilot
Pretreatment Program) to achieve the environmental goals. The alternate
program would include specific measures to determine whether or not
implementation procedures are achieving their desired results.

Which Existing Requirements Would not Have to be Part of Local Pilot
Pretreatment Programs?

Local Pilot Pretreatment Programs may not have to implement certain
currently required pretreatment program elements if they are not
necessary for the achievement of the POTW's environmental objectives.
The resources saved from not implementing these program elements could
then be redirected to other means of achieving and measuring
environmental performance.
EPA proposes that a Local Pilot Pretreatment Program would still
need to include adequate legal authority to identify and control
industrial users, and the authority to take appropriate and necessary
enforcement actions.

[[Page 34175]]

These authorities would then be supported by a set of procedures. The
legal authority and procedures must be clearly explained in the POTW's
proposal.
Specifically, the Local Pilot Pretreatment Programs would still be
required to develop/maintain legal authority and ensure compliance with
categorical pretreatment standards and local limits, including taking
necessary enforcement actions. The POTW would be required, at a
minimum, to identify industrial users that are subject to categorical
standards, receive and review reports from the categorical users, and
take enforcement action as appropriate based on the reports received.
The Local Pilot Pretreatment Programs would also be required to develop
and implement procedures to operate their programs such as permitting,
inspection and monitoring, and technically-based local limits. However,
the procedures would not necessarily have to include the prescriptive
permitting or reporting requirements in 40 CFR 403.8(f) or 403.12. The
POTW may not necessarily be expected to permit a specific subset of
industrial users designated by the federal regulations, but instead
would have the latitude to decide which industrial users need permits.
The POTW would be expected to monitor (sample and inspect) industrial
users, but would be able to decide how often to monitor the users.
These procedures would likely involve modifying existing program
procedures rather than developing new procedures.
Industrial users would continue to be subject to all currently
applicable requirements; except that, as described above, a Local Pilot
Pretreatment Program may alter the timing of certain reports and may
consider certain industrial users that are subject to national
categorical standards to no longer be SIUs.

What Will Be the Duration of Local Pilot Pretreatment Programs?

Local Pilot Pretreatment Programs may be approved to operate for
one five-year period. Prior to the end five-year period (at least 180
days), the POTW may apply for a renewal or extension of the project
period. If a POTW is not able to meet the performance goals of its
Local Pilot Pretreatment Program, the Approval Authority may allow the
performance measures to be adjusted if the primary objectives of the
Local Pilot Pretreatment Program will be met. The revised Local Pilot
Pretreatment Program must be approved in accordance with the procedures
in 40 CFR 403.18.
If the primary objectives of the proposal are not being met, the
Approval Authority shall direct the POTW to discontinue implementing
the Local Pilot Pretreatment Program and resume implementation of its
previously approved pretreatment program. The Approval Authority will
ensure that the POTW's NPDES permit includes a reopener clause with
this requirement.
The results of the pilots, including recommendations in POTW pilot
reports, will be used to determine the direction of future Pretreatment
Program streamlining and/or reinvention.

Will the Pilot Program POTW Be Required to Submit Periodic Progress
reports?

The POTW will be required to periodically report the progress of
its pilot program. The POTW's periodic report would describe its Local
Pilot Pretreatment Program activities and accomplishments, including
activities and accomplishments of any participating agencies and public
involvement. The report should include an analysis of all environmental
data collected over the reporting period and activities conducted to
reduce pollutant loadings to the environment and any other activities
that address the objectives of the Local Pilot Pretreatment Program.
The report following the fourth year of pilot program
implementation must also include the findings of the pilot. This report
must specifically address all objectives of the pilot program and
provide measures related to the effectiveness of the program, as
implemented, in meeting the objectives. The report should also include
recommendations concerning the implementation of the pretreatment
program at the local level.
The minimum report requirements will be detailed in the POTW's
NPDES permit. This requirement will be similar to the current
requirement for the POTW to annually report to the Approval Authority
the status of its Pretreatment Program. See 40 CFR 403.12(i). At the
discretion of the NPDES permitting authority, the report may be
required more frequently than once per year.

What Should a Proposal to Implement a Pilot Program Include?

The POTW should discuss the pilot project with its State and EPA Regional Office early in the process of developing a proposal, and prior to submitting any proposal to EPA Office of Wastewater Management. This should save time for both the Approval Authority and the POTW.

A POTW seeking approval to implement a Local Pilot Program must first submit a preliminary, one to two page, written proposal to EPA Headquarters (Office of Wastewater Management--MC 4201) with copies to its Approval Authority and EPA Regional Office within 90 days of the publication of this document. These short proposals must include a clear description of the alternative program the POTW plans to implement, the environmental benefits to be gained by the program, the regulatory requirements that will be revised, and how resources will be modified. The request should be mailed to U.S. EPA, Office of Wastewater Management (MC 4201), 401 M Street, S.W., Washington, DC 20460. Telephone inquiries may be directed to Patrick Bradley at (202) 260-6963.

If EPA determines the POTW's preliminary proposal meets the criteria explained in this document, EPA will request that the POTW submit a more detailed proposal in 90 days. The detailed proposal shall include a complete draft of the POTW's proposed Local Pilot Pretreatment Program, including a description of the specific measures to determine whether or not the alternative management procedures are achieving their desired results. The proposal shall address all necessary modifications to the procedures, legal authority and resources of the POTW's existing Approved Pretreatment Program. It must also contain commitments from the appropriate municipal officials that the POTW will have the necessary legal authority, procedures, personnel and resources to implement the pilot program. The proposal should include a copy (or drafts) of any statutes, ordinances, regulations, agreements, or other authorities that the POTW will rely upon for its administration of the Local Pilot Pretreatment Program.

The POTW's draft pilot program should address all of the major pretreatment program elements. It should document how the POTW will continue to develop, implement, and enforce its Local Pilot Pretreatment Program. For example, it should identify the manner in which Pretreatment Standards will be applied to individual Industrial Users (e.g., by order, permit, ordinance, etc.). It should also identify how the POTW intends to ensure compliance with Pretreatment Standards (including categorical Pretreatment Standards) and Requirements, and to enforce them in the event of noncompliance by Industrial Users. The detailed proposal should also address how the Local

[[Page 34176]]

Pretreatment Pilot Program would meet the eight Project XL criteria
discussed earlier in this notice.
EPA believes stakeholder involvement in developing Local Pilot
Pretreatment Programs is crucial to the success of the programs.
Therefore, as part of the application, the POTW must clearly explain
its process for involving stakeholders in the design of the pilot
program. This process should be based upon the guidance set out in the
April 23, 1997, Federal Register document. The support of parties that
have a stake in the program is very important.
Once EPA has accepted a candidate based on its detailed proposal,
the POTW, EPA, the State and local stakeholders should finalize a Final
Project Agreement (FPA). The FPA is a non-binding agreement that
enumerates the conditions of the project. (In order to expedite this
process, EPA will develop a FPA template for these projects that will
contain the elements that are anticipated to be common among these
projects and shall make this available to the candidates.) The actual
regulatory flexibility will be granted by modifying 40 CFR part 403 to
allow these specific POTWs to operate Local Pilot Pretreatment
Programs.
After an opportunity for public participation at the local level
and the development of the Final Project Agreement, a selected POTW's
Approval Authority would approve or disapprove the pilot program using
the procedures in 40 CFR 403.18. The POTW may implement its Local Pilot
Pretreatment Program once its NPDES permit has been modified to
incorporate the program as an enforceable permit element.
As with any XL Project, EPA intends to work cooperatively with the
POTWs that submit applications for Local Pilot Pretreatment Programs to
develop and fine tune the applications. Applicants must recognize that
EPA retains the ultimate authority to select projects based on a
qualitative consideration of the criteria described earlier. Since
these are pilot projects and there are a limited number of pilots that
can be approved, projects that satisfy many or all of the criteria may
not be chosen for Local Pilot Pretreatment Programs status. The
decision of which projects will be selected will be based on an Agency
decision about which projects are expected to best serve the objectives
of this program. No person is required to submit a proposal or obtain
approval as a condition of commencing or continuing a regulated
activity. Accordingly, there will be no formal administrative review
available for proposals that are not selected, nor does EPA believe
there will be a right to judicial review.

Dated: June 20, 1998.
Michael B. Cook,
Director, Office of Wastewater Management.
[FR Doc. 98-16399 Filed 6-22-98; 8:45 am]
BILLING CODE 6560-50-P

Pretreatment Program Reinvention Pilot Projects under Project XL

Local Navigation