E-Enterprise Project Update:ePermitting Return on Investment ...

E-Enterprise Project Update: ePermitting Return on Investment Calculator Bob Zimmerman, Delaware Department of Natural Resources & Environmental Control David Nicholas, US EPA Office of Land and Emergency Management June 27, 2017 Inception & Background 2015 ePermitting scoping study commissioned by EELC, Georgia EPD and OLEM co-chair Workgroup members: GA VA CO DE SC MD AR IA OR OH, EPA: OW OAR OLEM GA conducted survey, responses from 35 states Recommendation: develop ROI metrics to enable state adoption of ePermitting systems 2016 Supplemental report: ROI metrics

Methods/sources to calculate metrics and baselines State experiences, academic literature & public data Validated baselines & methods w/EPA NCEE 2017 ROI Calculator: Action Item from 4/16 EELC meeting to OLEM/CO, MA, DE co-chairs Tool for States to estimate potential increased economic activity, efficiency from ePermitting 2 The ROI Calculator For States IS Intended for states; to help gauge impacts of potential streamlining efforts Includes 3 metrics:

Primary: Time to Market Additional: Trusted Transactions Additional: Right Info, Right Time Captures economic impacts to industry & public from ePermitting or other process reforms (beyond cost and burden savings to agency) Uses publicly-available economic (BEA) and labor rates data Generates clear reports with estimates tailored to the states and industries chosen by the state user Tribes can use the tool by selecting a bordering state to estimate impacts in their programs The ROI Calculator is NOT o A data flow to EPA o A formal cost-benefit analysis Scenario analysis tool o A way to estimate cost savings/burden reductions to internal State agency or EPA budgets

Focus is on macroeconomic benefits to industry & public AND it is not onerous to use Enter available data and/or tailor the national averages provided For data users do not have, tool will provide evidencebased baselines and estimates based on user-entered values. Primary ROI Metric: Time to Market Time to Market: Estimate gains in economic activity associated with reduced permit processing times. In which state is your project being implemented? Select a state from the drop down list by clicking in the cell below. Select 'United States' to use national-level data. State: What industry does the permit in question aff ect? This tool assesses the time to market benefits associated with proj ects that reduce processing times f or a given permit. Select the industry regulated by your permit from the dropdown list in the cell below. Commercial Construction If your permit addresses multiple sectors or if you are not sure which sector(s) is

most applicable, the model recommends that you select "commercial construction" as a default proxy for economic activity. Commercial construction is a reasonable indicator of "typical" economic activity in this context because: How does it work? 1) it is similar in scale (size, in percentage of GDP) to other key sectors that require environmental permitting, such as the waste remediation sector; Based on World Bank assessment of permit processing time as a barrier to economic activity Suggests use of commercial construction permits as default industry: in all 50 states, requires permits, used by World Bank as proxy, comparable in size to other sectors requiring environmental permits User enters: e.g., Colorado State Industry (if improved process targets permits affecting e.g., Commercial specific industry)construction e.g., 50% Number of facilities / percent of industry affected e.g., 80 days Pre-improvement permit processing time e.g., 40 days

Post-improvement permit processing time(50% reduction) Output 2) it is present in all 50 states; 3) it explicitly requires permits to begin operation at most sites; 4) it is used by the World Bank as a consistent metric for the intersection between economic activity and permitting. If you know that your permit affects a specific industry, select that industry from the dropdown list below to obtain an estimate of economic activity associated with that industry. If your permit does not aff ect a specific industry, or you would like to obtain a general estimate comparable to environmental permitting costs, select commercial construction f rom the dropdown list below. Industry: Select an industry f rom the drop-down list by clicking in the cell above How much of the industry is aff ected by the permit in question? Most permit programs affect only a portion of commercial or industrial activity in any one year. To measure the number of facilities affected by permitting each year: (A) OR: (B)

Enter the percent of the industry that is subj ect to permit requirements each year: Enter as a whole number (e.g., "50" f or 50%) Enter the number of permit applications as a whole number you wish to analyze: What is (was) the initial average permit processing time for your permit program? Prior to your proj ect being implemented, enter the TOTAL average time in days, starting with submission and ending with approval of a permit application. Include time related to typical correspondence and revisions. For example: The average processing time for construction permits in the U. S. is 81 days from submission to approval, according to the World Bank's Doing Business report. Days for permit approval: What will be your new permit processing time, after youve streamlined the process? Estimate the total time (in days) to process a permit AFTER your process improvement is implemented, beginning with submission and ending with final approval. Include time associated with typical correspondence and revisions. For example: If the average processing time for construction permits in the U. S. were reduced by 25% , the new permit processing time would be 61 days (81 [25% 81] = 61). Days for permit approval:

Additional ROI Metrics Two metrics that describe economic benefits (cost savings) to the regulated community and the public from ePermitting streamlining. Trusted Transactio ns Gains in productive value-added time for industry when uncertainty in the review process is reduced Right Info, Right Time Increased economic activity from efficiency in requesting and accessing information Trusted Transactions: quantifies the value to regulated entities of realigning compliance staff to additional value-added use due to reductions in uncertainty in information exchanges and indeterminate schedules Key inputs: compliance staff wage rates; number of interactions Sources & Literature: Thomson Reuters, Cost of Compliance 2015; U.S. Census Bureau, Statistics of U.S Businesses fully-loaded wage rate for compliance officers. Right Info, Right Time: estimates benefits of reducing time spent by public/industry on searching for/accessing data (e.g., online drivers license renewals vs. in-person) Key inputs: number of transactions/requests, average wage rate, % reduction in time to complete transaction/request

Sources & Literature: Deloitte, Digital Government Transformation (for Australia), 2015; Bureau of Labor Statistics, National Occupational Employment and Wage Estimates. Access the Tool ePermitting Beyond ROI Metrics Calculator Primary Metric TIME TO MARKET click here Estimate gains in economic activity associated with reduced permit processing times. Additional Metrics These metrics describe two types of economic benefits (and cost savings) to the regulated community and the public that often result from improved permitting systems. These metrics expand on traditional ROI measures because they are not typically considered in direct cost savings estimates, which tend to focus on immediate savings to agencies and applicants. Trusted Transactions Right Info, Right Time

click here click here Gains in productive valueadded time for industry when uncertainty in the review process is reduced Increased economic activity from effi ciency in requesting and accessing information Questions and Discussion Comments welcome by July 13 to: David Nicholas, US EPA OLEM [email protected] 202.566.1927 9

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