TITLE 35: ENVIRONMENTAL PROTECTION

SUBTITLE A: GENERAL PROVISIONS

CHAPTER II: ENVIRONMENTAL PROTECTION AGENCY

PART 187

REGULATORY INNOVATION PROJECTS

SUBPART A: PURPOSE; DEFINITIONS AND GENERAL PROVISIONS

187.100 Purpose

187.102 Definitions

187.104 Relation to Other Rules and Regulatory Innovation Programs

187.106 Public Access to Pilot Program Correspondence

187.108 Confidential Business and Trade Secret Information

SUBPART B: PARTICIPATION IN PILOT PROGRAM

187.200 Nature and Duration of Pilot Program

187.202 Eligibility for Participation

SUBPART C: STAKEHOLDER INVOLVEMENT

187.300 Stakeholder Involvement

187.302 Stakeholder Group, Members

187.304 Sponsor Obligations

SUBPART D: PROCEDURES

187.400 Letter of Intent; Agency Response

187.402 Development of an EMSA

187.404 Public Notice, Comment and Hearing

187.406 Criteria for Approval of an EMSA

187.408 Execution of an EMSA

187.410 Performance Assurance

187.412 Modification of an EMSA

187.414 Termination of an EMSA

187.416 Renewal of an EMSA

AUTHORITY: Implementing and authorized by Section 52.3 of the Environmental Protection

Act [415 ILCS 5/52.3].

SOURCE: Adopted at 22 Ill. Reg. 6217, effective March 20, 1998; amended at 26 Ill. Reg.

17734, effective November 27, 2002.

SUBPART A: PURPOSE; DEFINITIONS AND GENERAL PROVISIONS

Section 187.100 Purpose

The purpose of this Part is to implement a voluntary pilot program pursuant to Section 52.3 of

the Act by which the Agency may enter into Environmental Management System Agreements or

EMSAs with persons regulated under the Act to implement innovative environmental measures,

even if one or more of the terms of such agreements are inconsistent with otherwise applicable

statutes or regulations of the State.

Section 187.102 Definitions

For purposes of this Part, the words and terms used in this Part shall have the meanings given

below. Words and terms not defined in this Part, if defined in the Act, shall have the meanings

as ascribed in the Act.

"Act" means the Environmental Protection Act [415 ILCS 5].

"Agency"

means the

Environmental Protection Agency established by the Act.

(Section 3.08 of the Act).

"Director" means the Director of the Illinois Environmental Protection Agency.

"Environmental Management System" means the system by which an entity

achieves continuous environmental improvement by integrating environmental

management into on-going business planning and manages environmental

performance, including, but not limited to, environmental management systems

implementing International Organization for Standardization (ISO) 14001

standard.

"Environmental Management System Agreement (EMSA)" means the agreement

between the Agency and a sponsor that describes the innovative environmental

measures to be implemented, schedules for attaining goals, and mechanisms for

accountability.

"Innovative Environmental Measures" means any procedures, practices,

technologies or systems that pertain to environmental management and are

expected to improve environmental performance when applied.

"Pilot Program" means the program described in this Part that allows the use of

EMSAs to promote innovative environmental measures.

"Pilot Project" means an innovative environmental project covering one or more

designated facilities, designed and implemented in the form of an EMSA executed

by the Agency and a sponsor in accordance with this Part.

"Sponsor" means the proponent of a pilot project that enters into an EMSA with

the Agency.

Section 187.104 Relation to Other Rules and Regulatory Innovation Programs

a) The provisions of this Part shall apply to any pilot project developed pursuant to

Section 52.3 of the Act.

b) Nothing in this Part shall be construed to modify or alter any federal

environmental statute or regulation applicable to a pilot project or its sponsor,

owner or operator. An EMSA that seeks to modify or alter a federal

environmental statute or regulation applicable to a pilot project or its sponsor,

owner or operator must follow any procedures applicable under such law.

c) No EMSA entered into by the Agency may allow a participant in the pilot

program to cause air or water pollution or an unauthorized release in violation of

the Act.

d) Nothing in this Part shall be construed to affect any fees that a sponsor or an

owner or operator of a facility covered by an EMSA may be subject to under any

State or federal environmental statute or regulation.

Nothing in this Section shall limit the authority or ability of a State's Attorney or

the Attorney General to proceed pursuant to Section 43(a) of

the

Act, or to

enforce Section 44 or 44.1 of

the

Act, except that for the purposes of enforcement

under Section 43(a), 44 or 44.1, an

EMSA

shall be deemed to be a permit issued

under

the

Act to engage in activities authorized under the

EMSA. (Section 52.3-

4(e) of Act)

Section 187.106 Public Access to Pilot Program Correspondence

The Agency shall record and maintain a list of all correspondence sent and received by the

Agency relating to participation in the pilot program, and such information, to the extent it does

not constitute confidential business or trade secret information, shall be made available for

review by the public.

Section 187.108 Confidential Business and Trade Secret Information

To the extent practicable, the Agency shall not designate EMSA related data as confidential

business or trade secret information. A sponsor must identify any information in a pilot project

document, including an EMSA, that it claims constitutes confidential business or trade secret

information, and must justify such claim in accordance with 35 Ill. Adm. Code 120 and 2 Ill.

Adm. Code 1827.

SUBPART B: PARTICIPATION IN PILOT PROGRAM

Section 187.200 Nature and Duration of Pilot Program

a) It is within the sole discretion of the Agency to enter into an EMSA under this

Part.

b) The Agency may reject a proposed pilot project at any time prior to execution of

an EMSA, and any decision by the Agency to reject a proposed pilot project is not

appealable. (See Section 52.3-1(c) of the Act.)

c) An initial EMSA under this Part shall be for a term not to exceed 5 years. An

EMSA may, in the Agency's discretion, be renewed for additional appropriate

time periods.

(Source: Amended at 26 Ill. Reg. 17734, effective November 27, 2002)

Section 187.202 Eligibility for Participation

a) Except as provided in subsection (b) of this Section, any person subject to a

requirement of the Act or a regulation promulgated thereunder may participate in

the pilot program.

b) The following persons shall not be eligible to participate in the pilot program:

1) Any person that is currently subject to an environmental enforcement

action under the Act or regulations promulgated thereunder;

2) Any person that has failed to renew any permit, or submit a complete

Clean Air Act Permit Program permit application, as may be required by

the Act or regulations promulgated thereunder; and

3) Any person that has failed to pay a required fee or penalty to the State of

Illinois.

c) In determining whether a person is eligible to participate in the pilot program, the

Agency may consider the person's past environmental performance, including, but

not limited to, pre-enforcement and enforcement actions and previously

adjudicated violations.

SUBPART C: STAKEHOLDER INVOLVEMENT

Section 187.300 Stakeholder Involvement

An EMSA shall provide for productive stakeholder involvement in a pilot project's development

and implementation. The nature and extent of stakeholder involvement will be determined on a

case by case basis, and will be fully described in an EMSA.

Section 187.302 Stakeholder Group, Members

a) A stakeholder group assembled by a sponsor shall represent a cross-section of

persons interested in a proposed pilot project, and may include, though need not

be limited to, representatives from:

1) Community groups, including citizen groups interested in environmental,

economic or sustainable development issues;

2) Economic and business groups, including trade associations and labor

organizations;

3) Academic institutions;

4) Religious organizations; and

5) Federal, State and local governmental entities.

b) Any person interested in a proposed pilot project who has not been selected by a

sponsor to participate in the stakeholder group assembled for the proposed pilot

project may so notify the Agency. The Agency shall consider this notification in

determining whether to enter into an EMSA with the sponsor.

Section 187.304 Sponsor Obligations

a) If a proposed pilot project is technically complex, the sponsor of the pilot project

may be required to provide technical or other assistance, at the sponsor's expense,

in order to promote informed participation by members of the stakeholder group.

Any such technical assistance shall be provided by persons that are acceptable to

both the sponsor and the stakeholder group.

b) A sponsor of a pilot project shall establish, in cooperation with the stakeholder

group, an on-going communication process in order to keep the stakeholder group

informed regarding the status of the pilot project. The process shall include, at a

minimum, annual meetings and periodic distribution of performance information

that clearly conveys the progress of the pilot project, problems that have been

encountered and any corrective action that has been taken in response thereto.

Information pertinent to the pilot project shall be communicated in a clear and

understandable manner. Scientific and other complex information should be

explained in a manner that provides for productive stakeholder involvement.

SUBPART D: PROCEDURES

Section 187.400 Letter of Intent; Agency Response

a) In order to initiate the process of entering into an EMSA, the sponsor of a

proposed pilot project shall submit a letter of intent to the Director that shall

include:

1) A general description of the proposed pilot project;

2) Identification of each environmental statute, regulation and permit that is

applicable to the proposed pilot project and any permit appeals, variances,

or adjusted standard petitions which are currently applicable to the

proposed pilot project or are pending before the Illinois Pollution Control

Board or any court;

3) A statement by the sponsor regarding the compliance status of the

proposed pilot project and its sponsor, owner and operator with all

applicable State and federal environmental statutes and regulations. Any

changes to the compliance status of the proposed pilot project and its

sponsor, owner and operator during development of an EMSA must be

promptly reported to the Agency; and

4) Identification of persons or groups whom the sponsor believes should

serve as members of the stakeholder group in the development and

implementation of the proposed pilot project.

b) The Agency shall respond in writing to a letter of intent within 60 days after

receipt of such letter. Such response shall include a determination of whether the

letter of intent contains the information required by subsection (a) of this Section,

as well as a determination whether development of an EMSA for the proposed

pilot project is warranted.

1) If the Agency determines that the letter of intent does not contain

information required by subsection (a) of this Section, it may identify such

information and provide the sponsor with an opportunity to revise and

resubmit the letter of intent.

2) If the Agency determines that the proposed pilot project, as described in

the letter of intent, does not warrant development of an EMSA, it shall

state the basis for its decision.

3) If the Agency determines that the proposed pilot project, as described in

the letter of intent, contains the information prescribed by subsection (a) of

this Section and warrants development of an EMSA, it shall notify the

sponsor that it may proceed with development of a draft EMSA.

Section 187.402 Development of an EMSA

a) The Agency and the sponsor shall decide upon an acceptable development

schedule for the EMSA and the proposed pilot project.

b) A sponsor shall submit to the Director a draft EMSA. At a minimum, the draft

EMSA shall include:

1) Identification of the sponsors;

2) Identification of all State and federal environmental statutes and

regulations applicable to the proposed pilot project and the owner or

operator of the proposed pilot project;

3) Identification of any State or federal environmental statutes and

regulations which are inconsistent with the terms of the draft EMSA and

would cease to be applicable should the EMSA be approved;

4) A description of the innovative environmental measures being proposed as

part of the pilot project;

5) An explanation of the manner in which the proposed pilot project will

achieve the stated purposes in subsection (b) of Section 52.3-1 of the Act;

6) Identification of those members of the general public, representatives of

local communities, and environmental groups who have an interest in the

proposed pilot project;

7) A description of the manner in which the EMSA will provide for

productive involvement by the stakeholder group in the design and

implementation of the proposed pilot project;

8) A description of the measures or techniques that will be used to

demonstrate ongoing compliance with the EMSA, including, at a

minimum, an annual evaluation of the pilot project;

9) Terms and conditions for voluntary termination of the pilot project; and

10) An explanation of the process by which statutory or regulatory

environmental requirements that become applicable to the pilot project or

its sponsor, owner or operator after the effective date of the EMSA shall

be addressed.

c) Upon submittal of the initial draft EMSA, a sponsor shall provide an executive

summary of the initial draft EMSA and proposed pilot project described and

submitted in accordance with subsection (b) of this Section to the following

persons and inform them that they may obtain the complete document from either

the Agency or the sponsor:

1) Members of the Illinois General Assembly representing the legislative

districts in which the pilot project is located;

2) The Illinois Attorney General; and

3) The State's Attorney of the county in which the pilot project is located.

d) A sponsor shall provide notice, by publication on a single date in a newspaper of

general circulation in the area in which the proposed pilot project is located, that it

has submitted an initial draft EMSA for consideration by the Agency. Such

notice shall include a statement that interested persons may contact the sponsor to

request that they be named to the stakeholder group in the development and

implementation of the proposed pilot project. The notice shall be provided within

7 calendar days from the date the initial draft EMSA has been submitted to the

Agency in accordance with subsection (b) of this Section.

e) The Agency shall give preference to and allow greater incentives in an EMSA for

pilot projects that include provisions for operating sustainably through continuous

improvements in products and processes. Desirable components of a pilot project

include, but are not limited to, the following:

1) Incorporating source reduction into core business practices;

2) Avoiding the production of waste and pollution in products and processes;

3) Accounting for total environmental impact throughout the life cycle of

products and services;

4) Improving efficiency in the use of raw materials, energy, water or other

resources;

5) Employing planning processes or techniques to identify source reduction

and product stewardship opportunities;

6) Training and encouraging employees to identify opportunities for

environmental improvement;

7) Protecting and enhancing natural resources; and

8) Ensuring that information and reporting systems track progress toward

goals and document improvements.

f) The Agency shall encourage the development and use of Environmental

Management Systems as part of a pilot project.

g) The Agency shall reject proposed pilot projects that generate adverse

environmental consequences, particularly those stimulating intermedia pollutant

transfers without providing a net environmental gain.

Section 187.404 Public Notice, Comment and Hearing

Prior to entering into an EMSA, the Agency shall provide notice to the public, including an

opportunity for public comment and hearing in accordance with the procedures set forth at 35 Ill.

Adm. Code 164. All costs associated with such notice, comment and hearing shall be paid by the

sponsor of the proposed pilot project. Public comments on a proposed pilot project and an

EMSA may be submitted to the Agency at any time prior to the public notice and comment and

hearing provided for by 35 Ill. Adm. Code 164.

Section 187.406 Criteria for Approval of an EMSA

a) In accordance with Section 52.3-1 of the Act, the Agency may approve an EMSA

only if the sponsor demonstrates that the proposed pilot project would:

Achieve emissions reductions or reductions in discharges or wastes

beyond the otherwise applicable statutory and regulatory requirements

through pollution prevention or other suitable means; or

Achieve real environmental risk reduction or foster environmental

compliance by other persons regulated under

the Act in a manner that is

clearly superior to the existing regulatory means

b) An EMSA under this Part shall contain adequate provisions to ensure that its

terms and conditions are performed by the sponsor. Performance of the terms and

conditions of an EMSA must be measurable and verifiable, and shall be

monitored, documented and reported by a sponsor in a clear and complete

manner.

Section 187.408 Execution of an EMSA

a) An EMSA developed in accordance with this Part, and which has been approved

by the Director, shall become effective upon signature by the sponsor and the

Director.

b) An EMSA shall operate in lieu of all applicable environmental requirements

under Illinois statutes, regulations, and existing permits that are identified in the

EMSA. Any environmental statute, regulation or condition in an existing permit

that differs from a term or condition in an EMSA shall cease to apply from the

effective date of an initial or renewed EMSA until it is terminated or expires.

c) An EMSA executed in accordance with this Part shall be made publicly available

and shall be distributed to all members of the stakeholder group.

Section 187.410 Performance Assurance

a) The Agency is authorized to monitor compliance with the EMSA and may access

and enter the facilities, buildings or property that are the subject of the pilot

project for purposes of monitoring compliance, and to require such recordkeeping

and reporting as it deems appropriate, including a final report assessing the

environmental, regulatory and economic results of the pilot project.

b) The sponsor of an EMSA shall specify the manner in which performance of the

terms and conditions of an EMSA shall be assured. The Agency shall consider

the following in determining whether an EMSA contains adequate provisions to

assure performance:

1) The technical complexity of the proposed pilot project;

2) The environmental risk associated with the proposed pilot project; and

3) The uncertainty that the proposed innovative environmental measures

authorized by the EMSA will be successful.

c) A sponsor's performance of the terms and conditions of an EMSA shall be

assessed not less than annually, and such assessment may include an evaluation of

the sponsor's performance by a third party acceptable to the Agency and qualified

to make such an evaluation.

d) Notification of Nonperformance

1) A sponsor shall notify the Agency and all members of the stakeholder

group of any nonperformance of a term or condition of an EMSA. A

notification under this subsection (d) shall include a description of any

activity performed by the sponsor to cure or mitigate the effects of the

nonperformance.

2) The Agency shall investigate and monitor a sponsor to determine whether

the sponsor has responded adequately to any nonperformance, and shall

notify all members of the stakeholder group of the results of its

investigation.

e) Upon identification of nonperformance of the terms or conditions of an EMSA,

the Agency may, consistent with this Part, enforce the terms of such EMSA.

f) An EMSA may contain provisions for alternative dispute resolution.

Section 187.412 Modification of an EMSA

a) An EMSA executed under this Part may be amended by mutual agreement

between the Agency and a sponsor, provided all members of the stakeholder

group have received prior written notice and an opportunity to comment on a

proposed modification to the EMSA. An EMSA may be amended without public

notice as specified under Section 187.402(d) or 187.404 of this Part.

b) Either the Agency or a sponsor may request modification of an EMSA at any

time. If an agreement cannot be reached on a proposed modification within 60

calendar days, the party requesting the proposed modification may initiate

proceedings to terminate the EMSA.

Section 187.414 Termination of an EMSA

a) Termination by the Agency

In the case of deficient performance of any term or condition in an EMSA

that prevents achievement of the stated purposes in subsection (b) of

Section 52.3-1 of the Act, the Agency may terminate the EMSA and the

owner or operator of a pilot project

may be subject to enforcement in

accordance with the provisions of Section 31 or 42 of

the Act.

(Section

52.3-4(b) of the Act)

If the EMSA is terminated

pursuant to this subsection (a), the owner or

operator of a pilot project

shall have sufficient time to apply for and

receive any necessary permits to continue the operations in effect during

the course of the EMSA. Any such application shall also be deemed a

timely and complete application for renewal of an existing permit under

applicable law.

(Section 52.3-4(c) of the Act)

The Agency shall follow procedures for involuntary termination

established by the Board.

b) Termination by the Sponsor

1) A sponsor may terminate an EMSA at any time upon written notice to the

Agency and members of the stakeholder group. Notice must be given at

least 90 days prior to termination; provided, however, that a sponsor may,

with the Agency's approval, immediately terminate an EMSA upon notice

to the Agency if continuing to operate under the EMSA would cause air or

water pollution or an unauthorized release in violation of the Act.

2) Upon termination of an EMSA pursuant to this subsection (b), a sponsor

shall be subject to, and shall comply with, all applicable State, federal and

local environmental statutes, regulations and ordinances.