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Statement of Need: EPA is required by the Government Paperwork Elimination Act (GPEA) of 1998 to provide electronic reporting and recordkeeping as an option to its regulated community by 2003. To meet this deadline and comply with GPEA, the legal framework for electronic reporting must be in place by that time. The CROMERR rule is necessary to establish the legal framework to: 1) remove legal obstacles to electronic reporting and record-keeping under most EPA regulations; and 2) assure that these electronic documents will have the same legal and evidentiary force as their paper counterparts. Electronic Reporting is also a capstone of the Administration's Reinventing Government Initiative and the Administrator's Integrated Information Initiative (I3).

Summary of the Legal Basis: 1) Government Paperwork Elimination Act (GPEA) of 1998. GPEA requires federal agencies to provide electronic reporting and recordkeeping to its regulated community by 2003. 2) Electronic Signature National and Global Commerce Act (ESIGN), June 30, 2000. This law eliminates legal barriers to the use of electronic technology to form and sign contracts, collect and store documents, and send and receive notices and disclosures. ESIGN applies broadly to Federal statutes and regulations governing private sector (including business-to-business and business-to-consumer) activities. In general, it does not cover activities that are primarily governmental, which are governed by GPEA. ESIGN begins to take effect on October 1, 2000.

Alternatives: The alternative to an EPA cross-media rule that applies to most compliance reports under 40 CFR, would be individual rulemakings by each of the program offices. EPA's past experience with such rulemakings has demonstrated that such a course of action would not bring EPA in compliance with GPEA by the 2003 deadline.

Anticipated Costs and Benefits: The cost-benefit analysis prepared for the proposed rule indicates that CROMERRR could produce an average annual savings of $52.3 million per year for regulated entities, $1.2 million per year for EPA, and $1.24 million for each of the 30 states that were assumed to implement electronic reporting/record-keeping programs under CROMERRR over the eight years of the analysis. Three forms of electronic reporting were considered ? web forms, electronic data interchange (EDI), and extensible mark-up language (XML) ? and it was assumed that 77 percent of all reports would be prepared and submitted electronically at full implementation. The costs of electronic reporting for entities using web forms would be negligible, as EPA intends to provide the web forms and signature capabilities needed. For EDI and XML, EPA anticipates that entities would incur additional up-front cost, but the savings would be larger over time, as these entities could more fully automate their reporting to EPA. Qualitative benefits of electronic reporting were also identified, including: enhanced data quality, faster public access to submitted data, better tracking of compliance submissions, and opportunities for re-engineering current paper processes. In considering electronic records, the assessment indicated an average annual cost of $40,000 to implement a new electronic record-keeping system; therefore it was assumed that only 0.5 percent of regulated entities would elect to acquire new electronic record-keeping systems to implement the CROMERRR. For those entities, the net average annual cost savings for operating the electronic records system would be $23,080. The baseline of current costs for paper-based reporting and record-keeping was established by analyzing EPA?s official information collection request (ICR) submissions that would be subject to the CROMERRR rule, as well by developing detailed cost estimates for major EPA systems. In addition to the ICR analysis, the assessment considered the general costs and benefits of electronic reporting experienced by commercial and government agencies, and included an in-depth analyses of business processes and associated costs for several major EPA programs. Given the rapidly changing technology environment as well as the public comments received on the NPRM, the cost/benefit analysis is being revised for the final rule.

Risks: The risks are undetermined.