Renewal of an Information collection request for Regulatory Pilot Projects OMB Control No. 2010 0026 EPA ICR No. 1755.07 The United States Environmental Protection Agency September 2005 Table of Contents Title Page 1. Identification of the Information Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1( a) Title of the Information Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1( b) Short Characterization/ Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Need for and Use of the Collection 2( a) Need/ Authority for the Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2( b) Practical Utility/ Users of the Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3. Nonduplication, Consultations, and Other Collection Criteria 3( a) Nonduplication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3( b) Public Notice Required Prior to ICR Submission to OMB . . . . . . . . . . . . . . . . . . . . 3 3( c) Consultations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3( d) Effects of Less Frequent Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3( e) General Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3( f) Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3( g) Sensitive Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4. The Respondents and The Information Requested 4( a) Respondents/ NAICS Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4( b) Information Requested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ( I) Data items, including record keeping requirements ( II) Respondent Activities 5. The Information Collected Agency Activities, Collection Methodology, and Information Management 5( a) Agency Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5( b) Collection Methodology and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5( c) Small Entity Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5( d) Collection Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6. Estimating the Burden and Cost of the Collection 6( a) Estimating Respondent Burden and Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6( b) Estimating Agency Burden and Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6( c) Estimating the Respondent Universe and Total Burden and Costs . . . . . . . . . . . . . . 8 6( d) Reason for Burden Hour Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7. Burden Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1 U. S. ENVIRONMENTAL PROTECTION AGENCY Regulatory Innovation Pilot Projects ( ICR) (# 1755.07)

1. Identification of the information collection 1( a) Title and Number of the Information Collection Title: Regulatory Innovation Pilot Projects, ICR No. 1755.07, OMB Control No. 2010 0026.

1( b) Short Characterization This is a request for renewal of currently approved ICR No. 1755.06, which authorizes the solicitation of proposals for innovative pilot projects. A 60 day comment period for this ICR renewal in the Federal Register concluded on August 9, 2005, during which no comments were received.

In 1995, the U. S. Environmental Protection Agency ( EPA) began to solicit innovative pilot projects in response to a challenge to transform the environmental regulatory system to better meet the needs of a rapidly changing society while maintaining the nation's commitment to protect human health and safeguard the natural environment. Through site specific agreements with project sponsors, EPA is gathering data and project experience that is helping the Agency redesign current approaches in pursuit of improved public health and environmental protection and more efficient use of limited resources.

The intent of innovative pilot projects is to allow EPA to experiment with untried, potentially promising regulatory approaches, both to assess whether they provide superior environmental performance and other benefits at the specific facility affected, and whether they should be considered for wider application. Such pilot projects allow EPA to proceed more quickly than would be possible when undertaking changes on a nationwide basis. EPA may modify rules, on a site or state specific basis, that represent one of several possible policy approaches within a more general statutory directive, so long as the alternative being used is permissible under the statute.

The adoption of such alternative approaches or interpretations in the context of a given project does not, however, signal EPA's willingness to adopt that interpretation as a general matter, or even in the context of other pilot projects. It would be inconsistent with the forward looking nature of these pilot projects to adopt such innovative approaches prematurely on a widespread basis without first determining whether or not they are viable in practice and successful for the particular projects that embody them. These pilot projects are not intended to be a means for 2 piecemeal revision of entire programs. Depending on the results of these projects, EPA may or may not be willing to consider adopting the alternative approach or interpretation again, either generally or for other specific facilities. EPA believes that adopting alternative policy approaches and/ or interpretations, on a limited, site or state specific basis and in connection with a carefully selected pilot project is consistent with the expectations of Congress about EPA's role in implementing the environmental statutes ( so long as EPA acts within the discretion allowed by the statute). Congress' recognition that there is a need for experimentation and research, as well as ongoing reevaluation of environmental programs, is reflected in a variety of statutory provisions.

Innovative pilot project proposals are collected by EPA's Office of Environmental Policy Innovation ( OEPI), which has been given responsibility for implementation of this program. Since 1995, EPA has implemented pilot projects to test innovative ideas working with EPA headquarters, EPA regions, Federal, State, and local government agencies, as well as individual facilities and whole business sectors. The renewal of this ICR is important as it will allow the Agency to work with additional regulated entities who are interested in participating in innovative pilot projects as well as allow the Agency to continue its commitment to innovation and regulatory flexibility with facilities, communities, States, and Tribes in achieving environmental results. The renewal of this ICR will allow OEPI to continue to receive and work with project sponsors on proposals for innovation, including those directly through EPA, as well as other state led mechanisms such as the Joint EPA State Agreement to Pursue Regulatory Innovation. In addition, the renewal of this ICR is necessary to allow EPA to continue its commitments to current projects, including three specified in recently approved ICR amendments: the NYSDEC ICR amendment ( 1755.03), the US Filter ICR amendment ( 1755.04) and the POTWs ICR amendment ( 1755.05).

2. Need for and Use of the Collection 2( a) Need/ Authority for the Collection The information is needed to continue to allow the Agency to work with additional regulated entities who are interested in participating in innovative pilot projects as well as allow the Agency to continue its commitment to innovation and regulatory flexibility with facilities, communities, States and Tribes in achieving environmental results. Under this ICR, EPA is to solicit its coregulators and the regulated entities for their best ideas on regulatory innovation, for pilot projects to test those ideas, and for information that will document the processes and environmental outcomes of pilot testing. Potential project sponsors for new projects will continue to submit proposals to the Office of Environmental Policy Innovation at EPA.

2( b) Practical Utility/ Uses of the Data The proposals to be collected pursuant to this renewal are used to develop full fledged pilot projects and then to document the implementation of the projects. A competitive process ensures that EPA can choose from a pool of useful project ideas. Moreover, a simple and flexible proposal format used allows State co regulators, working with a diversity of regulated entities, small as well 3 as large firms, agencies, and communities, to develop proposals. EPA uses the proposal submissions to screen ideas and select the most promising ones for further project development. Similarly, EPA seeks to document the results of these innovation demonstration projects: to provide accountability reflected in environmental results; to understand the circumstances under which these innovative approaches work best; to fully document the projects and their outcomes in a way that allows other States or Tribes to work with their regulated entities to adopt successful approaches.

3. Nonduplication, Consultations, and Other Collection Criteria 3( a) Nonduplication The information to be obtained under this ICR has not been collected by EPA or any other Federal agency.

3( b) Public Notice Required Prior to ICR 3( c) Consultations This notice was developed by a team consisting of EPA headquarters personnel.

3 ( d) General Guidelines This ICR complies with OMB's general guidelines for the collection of information.

3( e) Confidentiality The nature of the data being requested as part of this information collection is not confidential.

3( f) Sensitive Questions The information gathering activities discussed in this ICR do not involve any sensitive questions.

4. The Respondents and the Information Requested 4 4( a) Respondents/ NAICS Codes EPA works with a variety of businesses, organizations, and communities within the regulated community, as well as Federal facilities, States, Tribes, and local governments. Potential respondents include all entities regulated by EPA pursuant to its authority under the various environmental statutes who wish to participate in innovative pilot projects.

4( b) Information Requested No new proposals are being accepted through Project XL. For new projects in development, EPA currently relies on its State Innovation Grant program as the principal mechanism to support and stimulate innovation testing. Therefore the information collection activities fall generally into three categories within this ICR: ( 1) progress reporting for all projects in implementation under Project XL; ( 2) final reporting for all projects in implementation under Project XL; and ( 3) for new pilot projects under the State Innovation Grant Program, the pre proposal phase.

For projects in implementation under Project XL, EPA anticipates collection of information to allow the Agency to document and evaluate the outcomes of the pilot project, including measurements of environmental outcomes. For implemented projects underway through the auspices of Project XL or the ECOS EPA Joint Agreement on Environmental Innovation, a final project report, as identified in a Final Project Agreement or a project workplan will provide the information required to assess the success and outcomes of each project.

During the pre proposal phase of the State Innovation Grant Program State and Tribal sponsors typically engage in the following information collection activities:

Conduct innovative pilot project proposal development discussions. During these discussions, States and Tribes are asked for their preliminary input on topic areas to be included in a grant solicitation. Further, these discussions will enable the entity to better understand how a potential innovative pilot project idea aligns, or could be aligned, with EPA's environmental priorities. During these dialogues, EPA expects to ask the sponsor to discuss:

General information such as sectors, regulatory programs or facilities of interest.

A general description of the innovative idea including a summary or overview of the potential project and specific project elements.

How the potential project meets Agency innovative pilot project criteria such as superior environmental performance, cost savings, stakeholder involvement, innovation or pollution prevention, transferability, feasibility, evaluation, monitoring, accountability, and shifting of risk burden.

A description of the flexibility from regulations that the sponsor is requesting ( if 5 necessary), an enforcement and compliance profile and project schedule information.

5. The Information Collected. Agency Activities, Collection Methodology, and Information Management.

5( a) Agency Activities Agency activities associated with the collection of information for innovative pilot projects include:

Gather information from sponsors regarding innovative ideas during pre proposal phase;

Evaluate pre proposal ideas with cross Agency team;

Gather additional information from sponsor entities regarding innovative pilot projects ideas to assist sponsor entities in developing proposals;

Distribute proposals across Agency; and

Evaluate proposals with cross Agency team.

5( b) Collection Methodology and Information Management For projects implemented through for all projects under Project XL: progress reports, correspondence, and final reports are submitted by each project sponsor by email or mail and following review these reports are kept in project files by EPA project personnel.

5 ( c) Small Entity Flexibility.

Facilities participating in innovation projects under all projects under Project XL: participate on a voluntary basis and entities can choose not to participate at any time if undue burden exists.

5( d) Collection Schedule.

No new proposals are being accepted through Project XL. For regulatory innovation projects in implementation, progress reporting generally occurs annually and a final project report is required.

6. Estimating the Burden and the Cost of the Collection 6( a) Estimating Respondent Burden and Cost 6 This section presents EPA's estimates of the burden and costs necessary to complete the information collection activities associated with this collection. Burden hours and costs were based upon estimates provided by EPA staff with extensive experience working with innovative pilot project sponsors and States to assess innovative pilot project ideas and proposals.

EPA estimates average hourly respondent labor cost ( including fringe and overhead) for the Project XL pilots ( principally private sector) of $ 85.42 for legal staff, $ 70.16 for managerial staff, $ 24.06 for technical staff, and $ 18.51 for clerical staff. To derive these estimates EPA referred to the Supporting Statement for EPA ICR # 1189.17 ( OMB # 2050 0053), Proposed Revisions to the Hazardous Waste Identification Rule ( HWIR) ( http:// www. epa. gov/ epaoswer/ hazwaste/ id/ headworks/ index. htm) . OSW relied upon 2003 levels using Employment Cost Indexes developed by the U. S. Bureau of Labor Statistics."

In using this analysis it should be remembered not only that all responses to this solicitation are voluntary, but that sponsors have some expected value attached with their participation. Not unlike a contracts based Request For Proposals, one would not expect a response from any entity where the burdens associated with preparing the response outweigh the expected benefits to the sponsor.

EPA anticipates requesting final project reports from 21 XL Projects during the lifetime of this ICR as a means of closing out and documenting the results of these projects and evaluating the further applicability of the ideas tested in these demonstrations.

No capital expenditures are needed by the respondent to complete the interview since the responses can be made using existing equipment ( e. g., telephone). Moreover, no operating and maintenance costs are needed since the activities ( reviewing instructions, writing, discussions, and submissions of proposals) can be conducted in with existing equipment ( e. g., phone, computer).

For progress and final reporting on XL Projects, EPA projects that each project will require up to 20 hours to compile , compose and edit material to fulfill the commitment made by project sponsors in the Final Project Agreement to report fully on the outcomes of these voluntary projects. Thus, approximately 360 hours will be required over the lifetime of this ICR ( 120 hours annually) for these reports. The cost of this is estimated to be $ 4,776 annually.

For activities related to the collection of State input into the design of the innovation grants solicitation target areas, EPA anticipates that States and Tribes may expend up to 32 hours each to develop and submit comment to the Agency for a total annual burden of 768 hours costing approximately $ 35,928. The total burden over the lifetime of this ICR is expected to be approximately 2304 hours with an estimated cost of $ 107,784.

Staff in the Office of Environmental Policy Innovation that work on the development of innovative pilot projects have reviewed the cost findings of the report and found them to be reasonable and sound estimates of current and future costs. 7 Table 1. Average Annual Burden and Cost to Respondents Collection Activity Burden Hours and Individual Costs per Recipient Total Costs Hours per Respondent per Activity Costs per Respond ent per Activity Total Hours for all Responde nts Total Costs for all Responde nts Legal Mgm t Tech Cler STATE INNOVATION GRANT SPONSORS: PRE PROPOSAL PHASE Preliminary discussions with EPA on projects and solicitation strategic focus 8 8 16 $ 1,497 768 $ 35,928 TOTAL 8 8 16 $ 1,497 768 $ 35,928 PROJECT XL FINAL REPORTING Compile project information and develop progress and final project report ( assume 6 annually) 2 6 8 2 $ 748 108 $ 4,488 Consult with EPA to resolve any questions on final report and respond to brief evaluation survey ( assume 6 annually) 2 $ 48 12 $ 288 TOTAL 2 6 10 2 $ 869 120 $ 4,776 Program Total 10 14 26 2 $ 1366 888 $ 40,704 6( b) Estimating Agency Burden and Cost Agency burden hours and costs were based upon estimates provided by EPA staff with extensive experience working with innovative pilot project sponsors and States to assess innovative pilot project ideas and proposals. The rate EPA used to estimate agency hourly wage was based upon 2005 GS 13/ 01 salary of $ 74,782 ( or $ 35.95) with overhead of 110% factored in, resulting in $ 75.50/ hour.

To perform the necessary activities associated with this information collection, EPA estimates that it will require the Agency 232 hours and cost the Agency $ 17,632 per year.

Staff in the Office of Environmental Policy Innovation that work on the development of innovative pilot projects have reviewed the cost findings of the report and found them to be reasonable and sound estimates. 8 Table 2. Annual Average Burden and Cost to Agency Collection Activity Costs Labor Total Hours Total Costs Hours Costs EPA Gather information from potential sponsor entities regarding innovative idea during pre proposal phase through discussions ( assume 60 State and Tribal responses annually) 2 $ 151 120 $ 9,120 Evaluate Project XL and ECOS Joint Agreement Progress and Final Reports ( assume 7 annually) 16 $ 1,216 112 $ 8,512 TOTAL 18 $ 1,367 232 $ 17,632 6( c) Estimating the Respondent Universe and Total Burden and Costs EPA estimates that, annually, 60 State, Tribal, local and other stakeholder respondents1 will be involved in pre proposal concept information collection activities prior to the release of a grants solicitation, for an estimated annual burden of 768 hours at a cost of $ 35,928.

Similarly for projects implemented under earlier categories of regulatory innovation, notably Project XL, EPA anticipates that project sponsors will expend approximately 120 hours to meet their final reporting commitments under those project agreements at a cost of approximately $ 4,776.

Total annual burden for this ICR is 888 hours at a cost of $ 40,704.

6( d) Reasons for Burden Hour Change OMB currently has approved 72,299 burden hours for EPA to solicit ideas and formal proposals to develop innovative pilot projects. This ICR requires 888 hours annually. That is a reduction of 71,411 hours. This difference is largely a result of moving away from individual facility proposals and toward state wide projects, thus reducing substantially the number of pre proposal submissions for testing while focusing on larger, more systems change oriented projects. This difference is also a result of EPA's ability to refine the estimates based upon 10 years of experience promoting regulatory innovation and a better understanding of the burden requirements necessary to develop and submit proposals for innovative pilot projects, and an improved understanding of innovative pilot projects and how to develop them. 9 7. Burden Statement EPA estimates that each project sponsor for projects implemented under Project XL will use 20 hours, or 120 for all respondents, for the development of progress reports and a final project report and to address a small range of evaluation questions from EPA at the close of an individual project. Similarly, EPA anticipates that State Innovation Grants Projects may require States and Tribes that choose to respond to EPA's invitation to comment to expend up 32 hours each, annually, or 768 hours collectively ( average of 24 States and Tribes providing comment) each year in consultation with EPA.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number OA 2005 0004, which is available for public viewing at the Office of the Administrator Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center 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 Reading Room is ( 202) 566 1744, and the telephone number for the Office of the Administrator Docket is ( 202) 566 1752. An electronic version of the public docket is available through EPA Dockets ( EDOCKET) at http:// www. epa. gov/ edocket. Use EDOCKET to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. When in the system, select " search," then key in the Docket ID Number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number OA 2005 0004 and OMB Control Number 2010 0026 in any correspondence.