State Innovation Grant  Program: Michigan
                      Environmental  Results Program (MERP) - Dry Cleaning Sector
                      (2004 Competition)
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efforts led by state environmental agencies to test innovative approaches
for achieving better environmental results and improved efficiency in
permitting programs. Between 2002 and 2007, the State Innovation Grant
program competition awarded over six million dollars to support 35 state
projects that test permitting innovation for a variety of regulated entities
including several small business sectors. Asummary of the awards by year
appears in the table below.
    State Innovation Grant Program Statistics, 2002-2007
 Competition   Proposals  Proposals     Total Program
    Year      Submitted   Selected       Funding ($)
                                        $1.425 Million
                                        $1.479 Million
                                        $1.243 Million
                                        $1.611 Million
                                        $6.376 Million
"Innovation in Permitting" has been the theme of the State Innovation Grant
competition since its inception. In the last three competition cycles states
received awards for projects in the following three categories:
• The Environmental Results Program (ERP) is an innovative
  approach to improving environmental performance based on a system
  of the interlocking tools of compliance assistance, self-certification
  (sometimes, where permissible, in lieu of permitting), and
  statistically-based measurement to gauge the performance of an entire
  business sector. The program utilizes a multimedia approach to
  encourage small sources to achieve environmental compliance and
  pollution prevention. (See:
• Environmental Management System (EMS) is a system involving a
  continual cycle of planning, implementing, reviewing and improving the
  processes and actions that an organization undertakes to meet its
  business and environmental goals. EMSs provide organizations of all
  types with a structured system and approach for managing
  environmental and regulatory responsibilities to improve overall
  environmental performance and stewardship.
• Performance Track is a partnership that recognizes top
  environmental performance among participating US facilities of all types,
  sizes, and complexity, both public and private.
NCEI has provided awards also for projects testing watershed-based
permitting, and for permit process streamlining in past competitions. For
more information on the history of the programs, including information on
solicitations, state proposals, and project awards, please see the EPA State
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Project  Background:
 The dry cleaning industry in the U.S. is subject to
 both federal and state environmental regulations
 pertaining to air, water, and solid and hazardous
 waste generation. In recent years, the Michigan
 Department of Environmental Quality (MDEQ)
 regulatory  divisions recognized  a need to work more
 closely with their local dry cleaning industry to
 improve understanding of and compliance with
 environmental regulations, especially monitoring,
 record keeping and waste characterization
 requirements. So in 2004, MDEQ applied for and
 received State Innovation Grant Program funding
 from the EPA to create a multi-media Environmental
 Results Program (ERP) focused on the dry cleaning
 sector.  The grant for this program is anticipated to
 run through December 2008.

Project  Description
 Since receiving the State Innovation Grant, MDEQ
 has partnered with  EPA Region  5, local trade
 associations (Michigan Institute  of Laundering and
 Dry Cleaning  and the  Korean Drycleaners
 Association of Michigan), and the major dry cleaning
 supplier in the state to develop  and implement the
 ERP. The resulting program, Michigan Environmental
 Results Program (MERP), combines air, water and
 waste requirements for the dry cleaning sector into a
 multi-media,  self-certification,  and compliance
 assistance package, with a statistically valid
 performance measurement system. MDEQ has
 worked with hundreds of small businesses in the dry
 cleaning sector to implement MERP, which is
 currently being piloted  as  a voluntary program.

 MDEQ has taken a multi-media  approach in
 preparing educational  and outreach materials for
 MERP  by  addressing  pollution  prevention, solid and
 hazardous waste generation, and air and water
                          NATIONAL CENTER  FOR
                          ENVIRONMENTAL INNOVATION

pollution at dry cleaners. MERP materials include fact
sheets, a workbook for guidance on how to complete
the self-assessment checklists (in Korean and
English), and other compliance assistance tools.
MDEQ has provided additional training through industry
workshops, which were conducted in the same time
frame as self-assessments.  To supplement the
industry workshops offered, MDEQ also created  an
alternative on-line self-assessment tutorial to aid
industry members who did not participate in the
traditional workshop.  These tools and processes will
be available  as models for other states.

Implementation of MERP begins with an initial
compliance inspection assessment by MDEQ  of a
randomly selected group of dry cleaners to determine
their baseline compliance rate.  MDEQ then provides a
self-certification checklist and outreach materials  to
participating  dry cleaners, which they must complete
and submit to the agency. If a dry cleaner determines
it is out of compliance, the facility must also submit a
return to compliance (RTC) plan to MDEQ;  and correct
the compliance problem(s) identified in the RTC plan
as soon as possible.  The agency then conducts
inspections at a second set of randomly selected
facilities to measure changes in the  group's
compliance performance over time and gauge MERP's
success.  Both the  baseline  and follow-up  inspections
are multi-media inspections.

The MERP is expected to produce a number of
benefits to the state and the  Michigan dry cleaning
sector, including:
  •   A greater level of continuous  compliance;
  •   Increased compliance rates resulting in  a
      reduced environmental and public health
      exposures to toxic substances;
  •   Minimized  traditional inspection times through
      the use of multimedia compliance  and
      enforcement  tools, and
  •   Enhanced  levels of compliance assistance to all
      facilities so that each facility is aware of  its
      compliance status.
 Overall, this program empowers the owners of dry
 cleaning establishments to become more
 knowledgeable about their compliance requirements,
 and better understand how they can reduce pollution
 from their operations.
Connection to EPA's Goals
 This program directly supports EPA's Strategic Goal
 #5, focused on compliance and  environmental
 stewardship, by promoting an innovative approach to
 improve compliance and pollution prevention.  It also
 supports several Cross-Goal  Strategies through
 exploration of  improved compliance assistance
 approaches and promoting innovation and
 collaboration with states.

 Project Contacts:
  For more specific information on the
  Michigan State Innovation Grant, please
  contact one of the individuals  below:
  Jim  Ostrowski
  Michigan Department of Environmental Quality
  Lansing, Ml
               Program  Contact:
                Sherri Walker
                State Innovation Grant Program
                U.S. Environmental Protection Agency
                Washington, DC 20460 (MC1807T)
                (202)-566-2186; FAX (202) 566-2220
  Shari Holloway
  U.S. Environmental Protection Agency
  Region 5
  Chicago, IL
  Scott Bowles
  U.S. Environmental Protection Agency
  National Center for Environmental Innovation
  Washington, DC
United States
Environmental Protection
Office of Policy,
Economics and Innovation
       May 2008