State Innovation Grant  Program: Arizona
                      Developing an Automated Permitting Process (2002 Competition)
                        ie innovation urani rrogram 10 support
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
Innovation Grants website at httD://www.eDa.aov/innovation/statear  '
Project  Background:
 In early 2003, the Arizona Department of
 Environmental Quality (AZ DEQ) was facing a
 significant fiscal problem as it worked to undertake
 additional responsibilities in  its stormwater permitting
 program.  Prior to 2003, AZ DEQ typically processed
 approximately 2,000 National Pollution Discharge
 Elimination System (NPDES) permit applications per
 year. However, as part of the Federal Clean  Water
 Act Phase II Storm Water Regulations,  an  EPA rule
 change in  March 2003 lowered the threshold amount
 of land development construction acreage requiring
 an NPDES permit from five acres to one acre. AZ
 DEQ estimated that due to this change it would have
 to address 3,000 to 5,000  construction permit
 applications - roughly doubling  the amount of permit
 work each year - with no increase in staffing levels.

 Under AZ DEQ's Stormwater General Permit program
 for the construction sector, applicants eligible for a
 general permit needed only to file a Notice of Intent
 to Discharge (NOI) 48 hours before construction
 began.  However, the general permit was processed
 by hand, which was time and labor intensive for AZ
 DEQ staff.  Arizona needed to find a way to get
 ahead of the curve, before being overwhelmed by
 the expected huge increases in the number of  NOIs.
 AZ DEQ turned to the  State Innovation Grant Program
 to help fund its transition from a traditional  paper-
 based permit system to  an on-line automated permit
 processing system.

 In 2002, AZ DEQ received a State Innovation Grant
 for the development of a web-based stormwater
 permit application system  under the NPDES. The
 system was designed to streamline the permit
 application  process through information systems
                          NATIONAL CENTER FOR
                          ENVIRONMENTAL INNOVATION

Project  Description
 AZ DEQ began its automated stormwater permit pilot
 project with the hope of saving time and money for
 applicants, while creating a more simplified permitting
 process for the state. The goals of the project, called
 "Smart NOI,"were to:

 •  Develop an internet portal to help publicize the
    general permit and allow potential dischargers to file
    their NOIs online;  and

 •  Streamline the processing of NOIs through the use
    of an automated, Geographic Information System
    (GlS)-based review.
                                  Arum Department of Knvironmcrilal Quality - Sman NOI -1 laae
                                  I Services        Home
                                  Smart HOI
                                  Notice of Termination
                                  Revisions to NOI/Wa.vcr
                                  Interactive Aniorta Map
                                  Return to ADEQ
                                  Ari20na 9 Your Service
This web-based system is
designed to  be user-
friendly for applicants, while
allowing AZ DEQ to more
easily screen applications
through an automated
process to determine
which projects require site-
specific permits or other
detailed review by AZ DEQ

When applicants complete
initial screening questions,
project data  are uploaded
to a secure AZ DEQ site.
There, automated validation
programs evaluate which projects require a full  permit
application by verifying  the  application completeness
and data quality and using CIS to determine if a
proposed construction site impinges on an
environmentally sensitive  area.  Approved  applications
are moved to an AZ DEQ  permitting database, and
flagged applications are sent on for further  review by
the state's permitting staff. This automated  approach
allows AZ DEQ staff to focus their efforts on
construction  sites  that require greater oversight.

Applicants also benefit from  Smart NOI.  After entering
project information,  they receive an instant response
from the Smart NOI system  based on the automated
screening indicating if a more detailed review (through
a permit application) is necessary.  If not, developers
                                                                               Page lofl

 can complete the basic NOI  online immediately and
 start construction after 48 hours.  In cases where a site-
 specific permit is required, the program generates the
 necessary permit application forms for the applicant to
 print, complete, and mail to AZ DEQ.  This process is a
 vast improvement over the previous paper application
 process, where applicants waited several weeks for a
 response before they could  complete the necessary
 permit application paperwork.

 AZ DEQ's Smart NOI  system went live in May 2003,
 and has met many of its program goals including
 reduced permit processing time,  increased  program
                               participation, and
                               improved  response time
                               to customers. With Smart
                               NOI, AZ DEQ reduced its
                               total processing  by 2-5
                               days for basic NOIs.
                               Also,  customers who
                               had to wait 5-7 days
                               under the  old system to
                               hear if their permit
                               required additional
                               follow-up are now
                               notified immediately.
                               Arizona estimates that
                               the new system  helped
                               increase its NOI
                               processing rate from 25
                               per day under the old
 system to several hundred per day with Smart NOI. AZ
 DEQ reached its original goal of 50  percent
 participation by NOI applicants in 2006, two years
 before its target date.

 AZ DEQ continues to  improve the Smart NOI system,
 with features such as  electronic signatures that  allows
 applicants to submit their permit  applications
 electronically, rather than having to print out and mail in
 the permit application. The state  also updated the CIS
 functions of Smart NOI with new  mapping tools  to more
 accurately screen sites  for proximity to environmentally
 sensitive  areas.   The state hopes such upgrades will
 raise participation rates to 80 percent by  2008.
 Thanks to positive reviews from stakeholders,  the state
 of Arizona decided to completely fund ongoing
Welcome to the Smart NOI program Tins site n designed 10 provide you with • quick and
Notice Of intend < NQt| tor ptrrnil covtrage. apply tor a warrtf or fee a Now* of Tetmuiatio
terminal* coverage under the AZPDE& ComIructw Genenl Permit. A2G2W3-Q01

You can u«r the Smart NQl Syllem to

  • Electronically sign your Smart -SO: To create an a-agnaflLife account, 00:0
   From me left column, select Crea:& n MyS*cureA2 Acccunt Enltjf your email a Vi

  operations of the Smart NOI web portal.  Interest in
  the program's success is growing in other states
  such as Minnesota and New Mexico, each
  considering replicating AZ DEQ's Smart NOI system
  for their own stormwater program needs.

Connection to  EPA's  Goals
  The Smart NOI program directly supports EPA's
  Strategic Goal #5, focused on compliance and
  environmental stewardship, by promoting an
  innovative  approach  to improve environmental
  performance through pollution prevention measures.
  The project also supports EPA's Strategic Goal #2,
  to promote clean and safe water through watershed
  protection, as well as EPA's Cross-Goal Strategy of
  promoting innovation and collaboration with states.
              Program Contact:
                Sherri Walker
                State Innovation Grant Program
                U.S. Environmental Protection Agency
                Washington, DC 20460 (MC1807T)
                (202)-566-2186; FAX (202) 566-2220
 Project  Contacts:
  For more specific information on the Arizona
  State Innovation Grant, please contact one of
  the individuals below:

  Wayne  Hood
  Arizona Department of Environmental Quality
  Phoenix, AZ

  John linger
  U.S. Environmental Protection Agency- Region 9
  San Francisco, CA

  Gerald  Filbin
  U.S. Environmental Protection Agency
  National Center for Environmental Innovation
  Washington, DC

  Smart NOI Website
United States
Environmental Protection
Office of Policy,
Economics and Innovation
   February 2008