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Statement of Need: EPA is required by the Government Paperwork Elimination Act (GPEA) of 1998 to make the option of electronic reporting and recordkeeping available, where practicable, to its regulated community by 2003. To meet this deadline and comply with GPEA, EPA believes that it needs to put a new legal framework in place for electronic reporting. A final ER rule would provide for this legal framework by: (1) Removing legal obstacles to electronic reporting posed by explicit references to paper and paper-based processes in EPA regulations; and (2) assuring that electronically submitted documents will have the same legal and evidentiary force as their paper counterparts, whether the submission is directly to EPA or under an EPA-authorized program.

Summary of the Legal Basis: Government Paperwork Elimination Act (GPEA) of 1998. GPEA requires Federal agencies to provide, where practicable, the option of electronic reporting and recordkeeping to their regulated communities by 2003.

Alternatives: One alternative to an EPA cross-media ER 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 program-by-program ER rulemakings has demonstrated that such an approach would be more costly and take much longer to complete. EPA also considered the use of guidance instead of rulemaking, but rejected this alternative based principally on a concern that program enforceability depends greatly on the ability to mandate a certain level of functionality for systems that will be used to receive electronic reports and other electronic documents.

Anticipated Costs and Benefits: EPA received a number of comments on the assumptions used to generate the cost and benefit estimates for the electronic reporting components of proposed CROMERRR; based on this feedback, EPA decided to develop a new analysis of the costs and benefits for the final ER rule. As a part of this effort, EPA has conducted extensive follow-up interviews with commenters, reevaluated existing sources of information, and conducted new market research on ER technologies. The results have led EPA to revise certain assumptions associated with the CROMERRR proposal that bear on the ER rule's costs and benefits to regulated entities and to Federal, State, and local governments. Proposed CROMERRR had assumed that the costs and benefits of electronic reporting under authorized programs could be attributed entirely to the rule. EPA has since learned that a significant number of electronic reporting systems already operate under such programs; correspondingly, the ER rule cannot take credit for the costs and benefits of electronic reporting in such cases, but only for the costs or benefits that result from changes that occur as a result of the rule. With respect to regulated entities, EPA has had to adjust a number of assumptions associated with electronic signature requirements, including those related to the number of registered signature-holders at each facility, and the availability of acceptable alternatives to Public Key Infrastructure-based electronic signature approaches in many instances. EPA is also refining its estimate of the number of potentially affected regulated entities. With respect to the Federal government, EPA has reconsidered the general costs and benefits of electronic reporting based on experience operating EPA's Central Data Exchange and other EPA systems, and based also on an in-depth analysis of business processes and associated costs for several major EPA programs implementing electronic reporting. Based on these and other revisions to our assumptions, EPA has developed preliminary new cost/benefit results. They indicate that regulated entities and State and local government agencies will incur modest net costs from the ER rule; EPA will experience modest net benefits. 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. Finally, comments on the CROMERRR also indicated the need for substantial reworking of the cost and benefit analyses with respect to the electronic recordkeeping components of the proposal. Given EPA's current focus on electronic reporting, EPA will defer additional economic analysis in this area until the Agency resumes work on electronic recordkeeping.

Risks: The risks are undetermined.