United States
           Environmental Protection
                      Office of the Administrator
                      Washington, DC 20460
                      Mail Code 1802
                                   EPA 100-R-00-013
                                   December 1999
            Project XL Progress  Report
            Massachusetts  Department of
            Environmental  Protection
           On March 16,1995, the Clinton Administration announced a portfolio of reinvention initia-
           tives to be implemented by the U.S. Environmental Protection Agency (EPA) as a part of its
           efforts to achieve greater public health and environmental protection at a more reasonable
           cost. Through Project XL, which stands for excellence and Leadership, EPA enters into
           specific proj ect agreements with public or private sector sponsors to test regulatory, policy,
           and procedural alternatives that will produce data and experiences to help the Agency make
           improvements in the current system of environmental protection. The goal of Proj ect XL is to
           implement 50 proj ects that will test ways of producing superior environmental performance
           with improved economic efficiencies, while increasing public participation through active
           stakeholder processes. As of October 1999,15 XL projects are in the implementation
           phase and 3 5 XL proj ects are under development. EPA Proj ect XL Progress Reports
           provide overviews of the status of XL proj ects that are implementing Final Proj ect Agree-
           ments (FPAs). The progress reports are available on the Internet via EPAs Proj ect XL web
           site at http://www.epa.gov/Project XL. Or, hard copies may be obtained by contacting the
           Office of Reinvention's Project XL general information number at 202-260-7434. Additional
           information on Proj ect XL is available on the web site or by contacting the general informa-
           tion number.


           The Massachusetts Department of Environmental Protection (Massachusetts DEP) is the
           state agency responsible for protecting human health and the environment by ensuring clean
           air and water, the safe management and disposal of solid and hazardous wastes, the timely
           cleanup of hazardous waste sites and spills, and the preservation of wetlands and coastal
           resources. Massachusetts DEP
           has developed the Massachu-
           setts Environmental Results
           Program (ERP), an innovative
           regulatory compliance system
           designed to achieve superior
           environmental results by replac-
           ing the current permit system.
           To date, Massachusetts DEP
           has selected the state's small
           and medium-sized businesses to
           participate in ERP.
                                                        Massachusetts DEP
                                                        XL Project
Major Milestones
  April 23, 1996
Massachusetts DEP XL
 Proposal Submitted
December 23,1996
   Supplement to
 Proposal Submitted
 October 6, 1998
Final Project Agreement
 March 31, 1999
 Draft Addendum for
Dry Cleaners Submitted
 October 6, 2008
Final Project Agreement

Massachusetts DEP XL Project                                                             12-31-99
   Massachusetts DEP developed ERP to reduce the number of state permits applied for, renewed, and issued,
   through a performance-based self-certification program. Senior-level company officials are required to self-
   certify annually that the participating companies are, and will continue to be, in compliance with all applicable
   air, water, and hazardous waste management performance standards throughout their facilities. Massachu-
   setts DEP anticipates that participating firms will achieve superior environmental performance because, by
   converting the permit requirements to performance-based standards, company officials will be aware of their
   environmental obligations before they make decisions about modifying equipment and operations, rather than
   at the end of a long, expensive permitting process. This gives companies more flexibility to choose cost-
   effective compliance strategies for themselves, thereby reducing the "time to market" for new products and
   removing regulatory obstacles to pollution prevention. Superior environmental performance will also be
   enhanced by the outreach and training provided to participating companies that helps to explain and clarify
   their environmental obligations. Finally, superior environmental performance will result from the increased
   frequency with which audits and field inspections can be conducted and enforcement actions carried since
   Massachusetts DEP staff will have to spend less time, thanks to ERP, reviewing plans and writing permits.

   Under ERP, companies are accountable for reporting any releases or exceedances of discharge or emission
   standards to the Massachusetts DEP. Violations are reported, and a Return to Compliance Plan submitted to
   Massachusetts DEP if any such violations are either outstanding at the time of certification or discovered
   thereafter. Beginning with a demonstration proj ect of 18 companies, industry representatives cooperated with
   Massachusetts DEP in establishing criteria for reporting compliance with state standards without developing
   permits for each facility. The first three sectors to participate in ERP are dry cleaners, photo processors, and
   printers. After evaluation and revision, the program may be transferred to other industry sectors throughout

   Massachusetts DEP is undertaking a thorough evaluation of ERP beginning with the dry cleaner and photo
   processor sectors. Key to this evaluation process is the development of Environmental Business Practice
   Indicators (EBPIs), which are industry-specific measures that provide a snapshot of a facility's environmental
   performance. EBPIs can be regulatory requirements (such as putting labels on barrels of hazardous waste) or
   they can be "beyond compliance" measures (such as posting a sign above a sink prohibiting the discharge of
   process chemicals into the sink).

   Massachusetts DEP will compare baseline data (which include EBPIs) collected during random inspections
   before ERP certification to data collected during random inspections after outreach and certification under
   ERP. The data will then be used to calculate facility scores and group scores (such as "before ERP" dry-
   cleaner scores versus "after ERP" dry-cleaner scores), and to track changes in specific behaviors (for
   example, to compare the percentage of dry cleaners that perform leak inspection overtime). By using such
   statistics, Massachusetts DEP will be able to determine whether differences in scores or changes in before
   and after behavior are "significant," that is, whether the differences represent true differences, or are simply
   random variations.

   In addition to this comparison, Massachusetts DEP will also compare results of data collected from facilities
   during random inspections after ERP to the answers on the certification forms from those facilities to deter-
   mine the overall level of accuracy of the certification data.

   The ultimate goal of evaluation is to use the results to best target Massachusetts DEP resources. For ex-
   ample, if dry cleaners are not doing leak checks, then Massachusetts DEP might increase outreach and then
   re-analyze this behavior. Or, if printers score higher than expected, then Massachusetts DEP might skip
   certification for a year.

  Massachusetts DEP XL Project                                                          12-31-99
The Experiment

This proj ect will test a process to streamline permitting and reporting, and improve and better measure compli-
ance rates for several business sectors. The proj ect reduces the reporting burden for affected facilities and the
Massachusetts DEP while fostering superior environmental performance by identifying and encouraging
opportunities for pollution prevention.

The Flexibility

The purpose of the "umbrella" FPA signed under Proj ect XL is to establish an expedited EPA review process
for any changes to Federal regulations or policies that Massachusetts DEP may propose to ensure effective
ERP implementation. Subsequent phases of FPA development will appear as separately negotiated and signed
sector-specific addenda to the umbrella FPA. These addenda will be developed only for those sectors that
need flexibility in Federal regulations or policies. Only those ERP sectors for which a sector-specific adden-
dum is required will be evaluated by U. S. EPA under Proj ect XL.

According to the umbrella FPA, sector-specific addenda will identify

• the flexibility Massachusetts DEP needs to smoothly implement ERP in a specific commercial or industrial
• the superior environmental performance to be gained as a result of extending ERP to that sector; and
• the evaluation process to judge ERP's effectiveness in that particular sector.
Massachusetts DEP will convert most state-only permits to certifications under ERP. Currently, a facility is
excluded from participating in ERP if it is subject to any of the following federally mandated permits: Federal
Air Quality Operating Permits; National Pollutant Discharge Elimination System (NPDES) Surface Water
Permits; Hazardous Waste Treatment, Storage, and Disposal Facility Licenses; and EPA Single-Source State
Implementation Plan (SIP) Revisions. Therefore, EPA does not anticipate providing flexibility in these areas.
The statutory programs, and the EPA offices administering the programs, that will affect the Massachusetts
DEP XL proj ect will be determined by the sector-specific addenda.

Promoting Innovation and System Change

Proj ect XL provides EPA opportunities to test and implement approaches that protect the environment and
advance collaboration with stakeholders. EPA is continually identifying specific ways in which XL proj ects are
helping to promote innovation and system change. The innovations and system changes emerging from the
Massachusetts DEP XL project are described below.

Using Self-Certification as a Means to Improve and Reward Compliance. A key component of ERP
focuses on corporate accountability and self-evaluation. ERP provides a period of outreach and training for
companies on compliance and other performance standards, after which the companies submit a statement in
which they certify compliance with applicable environmental standards and that they will maintain compliance
for the coming year. Self-certifications are signed under the penalties of perjury by the facility's owner, presi-
dent, CEO, or other high-ranking official. If a facility is not in compliance when it self-certifies, it must identify
the existing violations and include a Return to Compliance Plan that specifies how and when compliance will be
achieved. The ERP approach—with clear performance standards written in plain language, targeted compli-
ance assistance, an emphasis on pollution prevention, and required annual self-certifications—promises to yield

Massachusetts DEP XL Project                                                         12-31-99
   environmental results superior to those achieved through traditional permitting. EPA and Massachusetts DEP
   acknowledge that some reasonable amount of time must be allowed to pass before final conclusions about a
   particular sector's response to self-certification can be drawn.

   Alternative Compliance Evaluation. The Massachusetts DEP efforts to measure a sector's performance
   using EBPIs is one of ERP's most significant policy innovations. The number of EBPIs is different for each
   sector. Printers have 26 EBPI measures (including nine pollution prevention measures), dry cleaners have 16
   EBPI measures, and photo processors have eight EBPIs. The number of EBPIs is based on the complexity of
   the industry, the number of multimedia discharges, and the potential for beyond compliance opportunities. The
   use of EBPIs rather than the traditional "single dimension" measures of compliance (e.g., in compliance, out of
   compliance, or significant noncompliance) allows regulatory agencies not only to look at compliance more
   comprehensively but also to offer the opportunity to recognize and potentially encourage "beyond compli-
   ance" techniques for industry leaders.
   Project Commitment Summary
   This section and the environmental performance section will summarize progress made in meeting commit-
   ments described in future sector-specific addenda to the Massachusetts DEP FPA.

   Environmental Performance

   This section will summarize progress in meeting the environmental performance described in future sector-
   specific addenda to the Massachusetts DEP FPA. Specific measurements of environmental performance
   before and after undertaking the XL Proj ect will be presented in these addenda.
   In general, the Massachusetts DEP XL Proj ect intends to achieve superior environmental performance by

   •  promoting pollution prevention through outreach and assistance;
   •  freeing up time for DEP staff, who formerly wrote permits, to inspect facilities and carry out enforcement
   •  giving Massachusetts DEP a better understanding of regulated industries; and
   •  increasing the number of facilities operating within Massachusetts DEP's regulatory programs.
   Massachusetts DEP anticipates superior environmental performance by converting permit requirements into
   industrywide performance standards, since facility managers will be aware of their environmental obligations
   before they make decisions about modifying equipment and operations. This will give companies more
   flexibility to choose cost-effective compliance strategies for themselves, thereby removing regulatory obstacles
   to pollution prevention. For example, Massachusetts DEP estimates that compliance with ERP standards will
   lead to an estimated 43% reduction in perchloroethylene emissions (a total of 500 tons) from Massachusetts
   dry cleaners each year, will yield significant reductions in the use of smog-forming solvents and alcohol used
   by commercial printers, and will reduce wastewater discharges of silver by 99% from photo processors.
   Stakeholder Participation
   Massachusetts DEP worked to ensure the involvement of key stakeholders and the general public in ERP
   When state agencies propose regulations for promulgation, the Massachusetts Administrative Procedures Act
   requires them to give public notice of the regulations' availability for review and the dates, times, and locations

  Massachusetts DEP XL Project                                                         12-31-99
of public hearings. Massachusetts DEP was required to follow this procedure when promulgating ERP regula-
tions for dry cleaners, photo processors, and commercial printers, and will also give public notice in the future
when proposing regulations for other sectors.

Massachusetts DEP developed ERP with the active participation of its ERP Design Team, comprised of
representatives from EPA, other government entities, environmental advocacy groups, business and industry,
consulting firms, and the legal community. For more than a year during the development of the proj ect, mem-
bers of the Design Team met weekly to review and comment on various decision and discussion documents.

Massachusetts DEP kept the ERPs Design Team apprised of its efforts to obtain Proj ect XL designation for
the program and intends to continue to involve the group. Massachusetts DEP also provides the general public
access to information about the ERP XL proj ect development process.  Massachusetts DEP published notices
in several maj or newspapers and on Massachusetts DEP's website (www. state.ma.us/dep) inviting the public
to participate in the January 1998 Design Team meeting that served as the kickoff for public review of and
comment on the umbrella FPA. The FPA document itself was published on Massachusetts DEP's website.

Massachusetts DEP will continue to involve and inform the ERP Design Team, sector-specific advisory
groups, and the general public in the development of ERP sector-specific addenda. Proposed sector-specific
regulations and draft sector-specific addenda will be made publicly available, and interested stakeholders will
be invited to provide input.

Six-Month Outlook

Key focus areas for successful implementation of the FPA over the next 6 months include finalizing the sector-
specific addendum for the dry cleaner sector; and analyzing and reporting on EBPI data collected from dry

Project Contacts

• Steve DeGabriele, Massachusetts DEP, (617) 556-1120.
• Alissa Whiteman, Massachusetts DEP, (617) 556-1001.
• Tara Velazquez, Massachusetts DEP, (617) 348-4040.
• MarthaCurran, U.S. EPA, Region 1, (617)918-1802.
• Ted Cochin, U. S. EPA, Office of Policy and Reinvention, (202) 260-0880.

Information  Sources

The information sources used to develop this progress report include (1) the FPA for the Massachusetts DEP
XL proj ect; (2) an ERP brochure and report entitled Evaluation of the ERP Demonstration Project from
the Massachusetts DEP website; and (3) Project XL background information and a press release dated
October 6,1998, from the U.S. EPA Proj ect XL website.
Air Emissions: Pollution discharged into the atmosphere from smokestacks, other vents, and surface areas of
commercial or industrial facilities; from residential chimneys; and from motor vehicle, locomotive, or aircraft

Massachusetts DEP XL Project
   Air Emission Standard: The maximum amount of air-polluting discharge legally allowed from a single source.

   Baseline: The measure by which future environmental performance can be compared.

   Discharges: Flow of liquid or chemical emissions from a facility into water, air, or soil.

   Final Project Agreement (FPA): The FPA outlines the details of an XL project and each party's commit-
   ments. The proj ect's sponsors, EPA, state agencies, tribal governments, other regulators, and direct partici-
   pant stakeholders negotiate the FPA.

   Hazardous Waste: By-products of society that can pose a substantial or potential hazard to human health or
   the environment when improperly managed. These wastes possess at least one of four characteristics—
   ignitability, corrosivity, reactivity, ortoxicity—or appear on special EPA lists.

   Media: Specific environments-air, water, soil-which are the subj ect of regulatory concern and activities.

   National Pollutant Discharge Elimination System (NPDES): A provision of the Clean Water Act that prohib-
   its discharge of pollutants into waters of the United States unless a special permit is issued by EPA, a state, or
   a tribal government on an Indian reservation.

   Perchloroethylene: A manufactured chemical that is widely used for dry cleaning of fabrics and for metal
   degreasing. It is also used to make other chemicals and is used in some consumer products. Other names for
   perchloroethylene include tetrachloroethylene, PCE, and tetrachloroethene.

   Permit: An authorization, license,  or equivalent control document issued by EPA or an approved state agency
   to implement the requirements of an environmental regulation.

   Reinvention Initiatives: Programs designed by EPA to promote innovation to achieve greater and more cost-
   effective public health and environmental protection.

   Release: Any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
   dumping, or disposing into the environment of a hazardous or toxic substance.

   State Implementation Plans (SIP):  EPA-approved state plans for the establishment, regulation, and enforce-
   ment of air pollution standards.

   Self-certification: The central concept of self-certification is that the regulated community should internally
   certify their compliance with requirements, subject to regulator verification, as a substitute for permit issuance
   and some compliance reporting.

   SIP Revision: A revision of a State Implementation Plan altered at the request of EPA or on a state's initia-

   Solvents: Substances, usually liquid, that can dissolve other substances.

   Wastewater: The used water from a home, community, farm, or industry that contains dissolved or sus-
   pended matter.