[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Proposed Rules]
[Pages 49072-49110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15845]
[[Page 49071]]
Vol. 81
Tuesday,
No. 143
July 26, 2016
Part V
Environmental Protection Agency
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40 CFR Parts 262, 263, 264 et al.
Hazardous Waste Management System; User Fees for the Electronic
Hazardous Waste Manifest System and Amendments to Manifest Regulations;
Proposed Rule
Federal Register / Vol. 81 , No. 143 / Tuesday, July 26, 2016 /
Proposed Rules
[[Page 49072]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 262, 263, 264, 265, and 271
[EPA-HQ-OLEM-2016-0177; FRL-9940-99-OLEM]
RIN 2050-AG80
Hazardous Waste Management System; User Fees for the Electronic
Hazardous Waste Manifest System and Amendments to Manifest Regulations
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA or the Agency)
proposes its user fee methodology applicable to electronic and paper
manifests submitted to the national electronic manifest system (or e-
Manifest system) that is being established by EPA under the Hazardous
Waste Electronic Manifest Establishment Act. After the implementation
date for the e-Manifest system, certain users of the hazardous waste
manifest would be required to pay a prescribed fee for each electronic
and paper manifest they use and submit to the system in order for EPA
to recover its costs of developing and operating the national e-
Manifest system. The final rule that EPA develops in response to public
comments on this action's proposed fee methodology will include the
final fee methodology. In addition, EPA will include the initial fee
schedule and the implementation date for the e-Manifest system in the
preamble to the final rule.
This action also proposes several amendments to the regulations
governing the use of electronic hazardous waste manifests and the
completion of manifests. These amendments propose: to change EPA's
longstanding regulations regarding transporter changes to shipment
routing information on the manifest during transportation, to specify a
process by which receiving facilities may submit manifest data
corrections to the e-Manifest system, and to modify a provision of the
current electronic manifest use requirements that precludes the use of
mixed electronic and paper manifests by those users desiring to make
use of electronic manifests in settings where not all users are able to
participate electronically. This action is expected to result in net
cost savings amounting to $34 million per year when discounted at 7%
and annualized over 6 years. Further information on the economic
effects of this action can be found in section VII of this preamble.
DATES: Comments must be received on or before September 26, 2016. Under
the Paperwork Reduction Act (PRA), comments on the information
collection provisions are best assured of consideration if the Office
of Management and Budget (OMB) receives a copy of your comments on or
before August 25, 2016.
ADDRESSES: For this rule, EPA is requesting comments be submitted
electronically on a comment platform being piloted at https://epa-notice.usa.gov. Alternatively, commenters may choose to submit comments
by postal mail or electronically through Regulations.gov. For comments
submitted via postal mail or Regulations.gov, EPA is further requesting
comments be submitted using comment headings. Please see SUPPLEMENTARY
INFORMATION, section I.E. (Submitting Comments) for more information on
the pilot, use of comment headings, and other general instructions for
submitting comments.
FOR FURTHER INFORMATION CONTACT: For further information regarding
specific aspects of this document, contact Richard LaShier, Office of
Resource Conservation and Recovery, (703) 308-8796,
[email protected], or Bryan Groce, Office of Resource Conservation
and Recovery, (703) 308-8750, [email protected].
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does this action apply to me?
The hazardous waste manifest affects approximately 80,000 federally
regulated entities and an equal or greater number of entities handling
state-only regulated wastes in at least 45 industries. These industries
are involved in shipping off-site, transporting, and receiving several
million tons \1\ annually of wastes that are hazardous under the
Resource Conservation and Recovery Act (RCRA) or state-only regulated
wastes that are subject to the tracking of their movements with the
RCRA hazardous waste manifest. EPA estimates that these entities
currently use between 3 and 5 million hazardous waste manifests (EPA
Form 8700-22) and continuation sheets (EPA Form 8700-22A) to track RCRA
hazardous and state-only \2\ regulated wastes from generation sites to
receiving facilities for their management. The affected entities
include hazardous waste generators, hazardous waste transporters, and
owners and operators of treatment, storage, and disposal facilities
(TSDFs), as well as the corresponding entities that handle state-only
regulated wastes subject to tracking with the RCRA manifest.
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\1\ The 2011 RCRA Biennial Report discloses that RCRA large
quantity generators (LQGs) alone shipped about 6.2 million tons of
waste in 2010. Small quantity generators and state regulated wastes
subject to manifesting would likely produce several million more
tons of wastes each year to be tracked with manifests.
\2\ EPA uses the term ``state-only regulated wastes'' to refer
to all types of wastes that are required under state law to be
tracked with the RCRA hazardous waste manifest, though they exceed
the coverage (i.e., beyond the scope) of the listed and
characteristic wastes that are regulated federally as RCRA hazardous
wastes.
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However, as explained in section III.B.3 of this preamble, this
proposed rule would primarily affect the several hundred commercial
TSDFs that receive hazardous and state-only regulated wastes from off-
site for management at their permitted or interim status facilities.
Under this proposed rule, these commercial TSDFs would be the focal
point for the payment and collection of the user fees under the
proposed rule. EPA has tentatively concluded that payment of this
proposal's user fees by the several hundred commercial TSDFs is the
most efficient and expedient means for implementing a user fee
requirement for the national e-Manifest system. Potentially affected
categories and entities include, but are not necessarily limited to:
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Examples of
NAICS Description NAICS Code potentially affected
entities
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Transportation and Warehousing.... 48-49 Transportation of
hazardous waste.
Waste Management and Remediation 562 Facilities that
Services. manage hazardous
waste.
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This table provides a guide for readers regarding entities likely
to be regulated by this action. This table lists the types of entities
that EPA is aware could potentially be regulated by this action. Other
types of entities not listed in the
[[Page 49073]]
table could also be regulated. To determine whether your entity is
regulated by this action, you should carefully examine the
applicability criteria found in title 40 of the Code of Federal
Regulations (CFR) parts 263, 264, and 265. If you have questions
regarding the applicability of this action to a particular entity,
consult the persons listed in the FOR FURTHER INFORMATION CONTACT
section.
B. What action is the agency taking?
The EPA is requesting comment on its proposed fee formula and
methodology for implementing a user fee to recover costs incurred in
developing, operating, maintaining, and upgrading a national e-Manifest
system, including any costs incurred in collecting and processing data
from any paper manifest submitted to the e-Manifest system after the
date on which the system begins to operate. The EPA is also requesting
comment on its proposed changes to modify its current regulations
regarding transporter changes to shipment routing information on the
manifest during transportation.
C. What is the agency's authority for taking this action?
The authority to propose this rule is found in sections 1002,
2002(a), 3001-3004, and 3017 of the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act (RCRA), and as
amended by the Hazardous and Solid Waste Amendments, 42 U.S.C. 6901,
6906 et. seq., 6912, 6921-6925, 6937, and 6938, and further amended by
the Hazardous Waste Electronic Manifest Establishment Act, Public Law
112-195, section 6939g.
D. What is the scope of this proposed rule?
This proposed rule addresses several key policy issues related to
the implementation of user fees to recover and fund the costs of
developing and operating a national e-Manifest system, including:
1. Which users of manifests and manifest data will be charged user
fees?
2. What will be the transactional basis for assessing user fee
obligations?
3. How will users be expected to pay their owed fees?
4. What model or formula will EPA rely upon for the determination
of users' fees?
5. How will the rule address fee trajectory and fee schedule
revisions?
6. Which, if any, manifest transactions warrant a fee premium?
7. What sanctions are being proposed to induce prompt payment of
user fees?
8. How will EPA conduct the financial tracking and reporting
functions essential to the proper calculation and determination of fees
and to the oversight of the e-Manifest fee program?
In addition, the proposed rule addresses several regulatory
amendments related to the use of electronic manifests and the
completion of manifests. These additional regulatory proposals are not
user fee related, and address these issues: (1) A proposal that would
allow certain changes to the routing of a hazardous waste shipment
indicated on the manifest, while the shipment is in transportation; (2)
a proposal that would allow hazardous waste receiving facilities to
make corrections electronically to previously submitted manifest data;
and (3) a proposal that would allow a manifest user, in certain
instances, to execute and use a hazardous waste manifest that combines
the use of a paper manifest with the use of an electronic manifest.
E. Submitting Comments
1. Notice and Comment Pilot
EPA partnered with the General Services Administration's 18F Team
to pilot a platform for submitting comments on this rule. The new
platform is designed to assist readers in understanding the rule and
proposed regulatory changes, as well as to assist EPA in collecting
structured comments. EPA is requesting commenters to use the new
comment platform, which can be found at https://epa-notice.usa.gov. The
pilot comment platform is a federal application supporting the EPA in
its rulemaking process. Comments filed through the pilot comment
platform are filed to the official docket for this rule. EPA will
process comments submitted through the pilot using the same rules and
restrictions (https://www.epa.gov/dockets/commenting-epa-dockets#rules)
that apply to comments received from any other method. If a comment
meets the aforementioned requirements, then the comment will be
publically posted to Regulations.gov. Commenters, that use the pilot to
submit comments, do not need to submit duplicative comments through
another method (e.g., Regulations.gov or postal mail).
The use of the pilot comment platform is optional; Commenters may
still choose to submit comments by postal mail or electronically
through Regulations.gov.
2. Comment Headings
For comments not submitted through the pilot comment platform, and
instead submitted via postal mail or Regulations.gov, EPA is requesting
commenters to identify their comments on specific issues by using the
appropriate number and comment heading listed below. If your comment
covers multiple issues, please use all the heading numbers and names
that relate to that comment. As an example of this optional method,
where one individual comment relates to issue #1 and a second
individual comment pertains to issues #2 and #3, a set of comments
would be submitted as follows, where the number and comment headings
are underlined:
1. Data Access Services
Your comment here. . .
2. Billable Event; 3. Fee Methodology
Your comment here. . .
The list below also contains the proposed rule section numbers with
which you can find more information on each issue. Similarly,
throughout the proposed rule, parentheticals in italics have been added
to identify the heading number and name to be used when commenting on
the specific issues. The description following each comment heading
summarizes the individual issues. More detailed descriptions of the
issues and issue-specific questions can be found in the indicated
sections of the rule.
Although submission of your comments using the aforementioned
format is not required at this time, it is encouraged so as to not only
assist the Agency in efficiently and effectively considering and
responding to comments received, but also provide commenters more
effective means of informing environmental decision making.
Comment Headings
1. Data Access Services--EPA requests comment on the proposal for
TSDF user fees to cover cost of public data access services. (See
Section III.A.2)
2. Billable Event--EPA requests comment on the proposal to use the
final manifest submission by the TSDFs as the billable event for
purposes of assessing user fees. (Section III.B.3)
3. Fee Methodology--EPA requests comment on the proposed fee
formula, alternative fee formulas, transition period for application of
different formulas, amortization period for costs, possible omitted
costs, incentivizing material management behavior through the fee
methodology, and other fee formula related issues. (Section III.C.6)
4. Disallow Postal Mailed Manifests--EPA requests comment on
another approach under which TSDFs would be
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restricted to submitting their paper manifest data to EPA by electronic
means only, that is, by uploading image files to EPA, or by uploading a
data file (e.g., XML file) of manifest data accompanied by an image
file. (Section III.C.6)
5. Inflation Adjuster--EPA requests comment on the proposal for an
inflation adjustment factor predicated on the use of the CPI-U, for all
items, not seasonally adjusted, as a sufficiently representative
inflationary index and a means to adjust e-Manifest user fees for
inflation between the first year and second year of the two-year fee
schedules. (Section III.D.3.a and Section III.D.4)
6. Revenue Recovery Adjuster--EPA is requesting comment on the
inclusion of a revenue recovery adjuster in the proposed fee trajectory
methodology and on the emphasis on inflation, manifest usage estimates,
and uncollectable manifests as the key sources of revenue instability
that the adjusters should address in the trajectory methodology.
(Section III.D.3.b and Section III.D.4)
7. Two-Year Fee Schedule Revision Cycle--EPA is requesting comment
on the proposed two-year fee schedule revision cycle. (Section III.D.4)
8. 90-Day Lead Time for Fee Schedule Changes--EPA is requesting
comment on the proposal to have EPA publish the fee schedule changes to
the e-Manifest Web site 90 days prior to the effective date of fee
schedule changes. (Section III.D.4)
9. Stray and Extraneous Documents--EPA is requesting comment on
proposed fee premiums for processing stray and extraneous documents.
(Section III.E.2.a.v)
10. Paper Manifest Corrections--EPA is requesting comment on
proposed fee premiums for processing a correction to a paper manifest.
(Section III.E.2.a.vi)
11. Incentivize Electronic Manifest Use--EPA is requesting comment
on a proposal to rely on the fee formula itself to incentivize
electronic manifest use, and not to include a distinct monetary penalty
to discourage paper manifest use. (Section III.E.2.a.vii)
12. Payment Options--EPA requests comment on the proposed monthly
invoicing approach and the alternative options. (Section III.F.6)
13. Fee Dispute Resolution--EPA requests comment on the proposed
informal fee dispute resolution and appeals process. (Section III.G)
14. Financial Sanctions--EPA requests comment on the proposal to
incorporate the financial interest and penalty charges set out in the
Federal claims collection statutes as the first and second tier of e-
Manifest fee payment sanctions. (Section III.H.2.a)
15. Delinquent Payors List--EPA requests comment on the inclusion
of a Delinquent Payors List among the sanctions that would be available
to the Agency in the event of serious, continued delinquency of e-
Manifest user fee payments. (Section III.H.2.b)
16. Denial of Service Sanction--EPA requests comment on the
appropriateness and means by which EPA could deny access to e-Manifest
services to those users who are exceedingly delinquent in their
manifest fee payments. (Section III.H.2.d)
17. Suspension of Facility Authorization--EPA requests comment on
possible authorization sanctions on facilities that are delinquent on
e-Manifest payments. (Section III.H.2.d)
18. Changing Transporters en Route--EPA requests comment on the
proposal to modify its current regulations regarding transporter
changes to shipment routing on the manifest. (Section IV.B)
19. Submission of Manifest Data Corrections--EPA requests comments
on the proposed approach for the submission of manifest data
corrections to the system, and the fees to be assessed for such
corrections. (Section V.C)
20. Hybrid Approach--EPA requests comment on the proposal for mixed
paper and electronic manifest transactions. (Section VI.B)
21. RIA--In total, discounting at 7% over six years, the annualized
baseline costs of the paper manifest system are estimated to be $183
million. EPA would appreciate any information to improve the accuracy
of this estimate. (Section VII.C)
22. ICR--EPA requests comments on the Agency's need for information
under ICR 0801.21, the accuracy of the provided burden estimates and
any suggested methods for minimizing respondent burden to the EPA.
NOTE: You may also send your ICR-related comments to OMB's Office of
Information and Regulatory Affairs via email to
[email protected], Attention: Desk Officer for the EPA. Since
OMB is required to make a decision concerning the ICR between 30 and 60
days after receipt, OMB must receive comments no later than 30 days
after publication in the Federal Register. (Section IX.B)
23. OTHER--any comments not falling under one of the preceding
categories should be identified using `OTHER' as the comment header.
3. General Information for Submitting Comments
Comments submitted through Regulations.gov (at http://www.regulations.gov) or submitted by postal mail should be identified
by Docket ID No. EPA-HQ-OLEM-2016-0177. For comments submitted through
Regulations.gov, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
Regulations.gov. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Multimedia submissions (audio,
video, etc.) must be accompanied by a written comment. The written
comment is considered the official comment and should include
discussion of all points you wish to make. For the full EPA public
comment policy, information about CBI or multimedia submissions, and
general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
Please note the Agency will not accept comments submitted via email
or fax.
II. Background
A. Enactment of Electronic Manifest Legislation
In 2012, Congress enacted the Hazardous Waste Electronic Manifest
Establishment Act, Public Law 112-195 (hereafter, the e-Manifest Act or
Act). The goal of this legislation was to provide the users of the
hazardous waste manifest with a much more efficient and modern option
to the 6-copy paper manifest forms that have been used for more than 30
years to track hazardous waste shipments from ``cradle-to-grave.'' The
e-Manifest Act directed EPA to establish a national electronic manifest
system that would enable users, at their option, to obtain and submit
electronic manifests to track waste shipments involving either RCRA
hazardous wastes or certain state-only regulated wastes subject to
manifesting requirements under federal or state law. It was the intent
of the Act that a data repository would be established within the e-
Manifest system, and that this national data repository would collect
and retain waste shipment data from the electronic manifests obtained
from the system, as well as from processing the data from any paper
manifests that continued in use after the deployment of the e-Manifest
system.
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Of particular significance to this proposed rule are the funding
provisions of the e-Manifest Act. While section 2(i) of the Act
authorized Congress to appropriate funds to cover start-up activities
and costs, Congress intended that the e-Manifest system would
ultimately be self-sustaining once deployed. Under section 2(c) of the
Act, EPA was authorized to impose and collect reasonable service fees
(user fees) necessary to pay the costs of developing, operating,
maintaining, and upgrading the e-Manifest system, including any costs
incurred in collecting and processing paper manifests submitted to the
system. Section 2(d) of the Act further authorized the establishment of
a special System Fund in the U.S. Treasury for the deposit of collected
service fees. By the terms of sections 2(d)(2) and 2(c)(4) of the Act,
funds deposited in the System Fund could be transferred from Treasury
to EPA at the Administrator's request and spent for system related
costs to the extent of and in the amount provided in advance in
appropriations Acts. The fees collected and deposited in the System
Fund would be used to fund the system's operating costs and other
system related costs, as well as to offset any appropriated funds
authorized under section 2(i) of the Act to seed the start-up
activities and system development costs.
In particular, section 2(c) of the Act confers broad discretion to
EPA to determine the user fees to be imposed on users of the system.
This provision states that EPA ``may impose on users such reasonable
service fees as the Administrator determines to be necessary to pay
costs in developing, operating, maintaining, and upgrading the system,
including any costs incurred in collecting and processing data from any
paper manifest submitted to the system after the date on which the
system enters operation'' (emphasis supplied).
On the issue of timing of fee collections, section 2(c)(2)(A) of
the Act provides EPA discretion to collect fees from users either in
advance of services being provided, or, as reimbursement for the
provision of system-related services by EPA.
The user fee provisions of the Act further speak to the matter of
fee adjustments. Under section 2(c)(3)(B) of the Act, EPA shall, in
consultation with the Board,\3\ increase or decrease the amounts of the
fees so that the amounts collected and aggregated in the System Fund
are sufficient (and not more than reasonably necessary) to cover
current and projected system costs, including necessary upgrades.
Moreover, the fees should be maintained at levels that minimize, to the
maximum extent practicable, the accumulation of unused amounts \4\ in
the Fund. Where the timing of fee adjustments is concerned, section
2(c)(3)(B)(iii) of the Act specifies that the fee schedule shall be
adjusted initially when start-up costs have been recovered, and
periodically thereafter, whenever an annual audit report on the
system's finances discloses a significant disparity between fees
collected in a fiscal year, and expenditures made for system related
services during that fiscal year.
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\3\ ``Board'' refers to the e-Manifest System Advisory Board, a
9-person Federal Advisory Committee of stakeholders that EPA must
establish pursuant to the Federal Advisory Committee Act to advise
EPA on the effectiveness of the system, to consult with EPA on
service fee adjustments, and to make recommendations relating to the
system.
\4\ The Act provides an exception whereby a revenue surplus not
exceeding $2 million may be accumulated in the Fund over the initial
3-year period of system operations.
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B. Issuance of First e-Manifest Regulation in February 2014
In response to the e-Manifest Act's mandate \5\ to issue
regulations authorizing electronic manifests within one year of
enactment of the statute, EPA issued its first final regulation
pertaining to e-Manifest on February 7, 2014 (79 FR 7518-7563). Because
of the mandate to issue this final regulation within one year of the
statute, EPA refers to this regulation as the e-Manifest One Year Rule.
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\5\ This mandate appears in section 2(g)(1)(A) of the Act, which
directs EPA to promulgate final regulations to carry out the Act
within one year of enactment of the Act, after consultation with the
Secretary of Transportation. EPA consults regularly with the
Department of Transportation (DOT) on its manifest requirements and
other transportation related actions, since the manifest is a
shipping paper that is grounded on the joint authority of RCRA Sec.
3002(a)(5) and DOT's hazardous materials regulations or HMRs.
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The purposes of the One Year Rule were to codify key provisions of
the Act touching upon the scope of users and manifests eligible to
participate in e-Manifest, to codify the provisions of the Act
requiring consistent implementation of electronic manifests in all the
states, to finalize EPA's decision to establish a national electronic
hazardous waste manifest system, and to announce policy decisions
related to using and implementing electronic manifests. Fundamentally,
the One Year Rule provides clarity with respect to the validity of
electronic manifests. The Rule explains that the electronic manifest
format obtained from and supported by the national e-Manifest system
shall be the one electronic manifest format authorized for national
use, that electronic manifests obtained from and submitted to the e-
Manifest system in accordance with the One Year Rule are the legal
equivalent to paper manifests in all relevant respects, and that all
authorized states must respect the validity of the national electronic
manifest and revise their authorized programs to allow the use of
electronic manifests. The One Year Rule also clarified that manifest
data could not be subject to confidential business information claims
or protections, and explained how e-Manifest and the recommended
electronic signature methods discussed in the Rule's preamble would
comply with EPA's electronic reporting policies as articulated in the
Agency's Cross Media Electronic Reporting Rule or CROMERR (70 FR 59848,
October 13, 2005). Thus, the One Year Rule announced the legal and
policy framework governing the authorization and use of electronic
hazardous waste manifests within EPA's national e-Manifest system.
While the One Year Rule addressed fundamental scope and policy
issues related to the use of electronic manifests, it did not speak to
user fees to any significant extent. When developing the One Year Rule,
EPA realized it would not be in a position to determine in that rule's
timeframe all the various components of the e-Manifest information
technology system and their costs, and thus would not be able to
determine the program's initial schedule of user fees as a part of the
One Year Rule. Moreover, the issues raised and determined in the One
Year Rule had been noticed for public comment in previous proposals and
regulatory notices, while the content of the Fee Rule had not yet been
scoped out and noticed for public comment. Therefore, EPA concluded
that the development of an e-Manifest user fee methodology and fee
schedules would be undertaken as a separate rulemaking. This proposed
rule is thus the means by which EPA will solicit comment from the
public on our proposed Fee Rule methodology, suggest the likely range
of fees that will result, identify our economic models and assumptions,
and propose for comment the related scope and other policy issues
related to determining and collecting e-Manifest user fees.
C. Federal User Fee Design Guidance
The development of this action was influenced greatly by two
federal guidance documents that apply to user fee design and
implementation by executive department agencies. They
[[Page 49076]]
are: (1) OMB Circular A-25, a Memorandum for Heads of Executive
Departments and Establishments addressing the subject of ``User
Charges,'' and (2) the United States Government Accountability Office
(GAO) Report No. GAO-08-386SP, Federal User Fees, A Design Guide, (May
2008).
1. OMB Circular A-25
The purpose of Circular A-25 is to establish federal policy
regarding user charges or fees assessed for government services under
the Independent Offices Appropriations Act or IOAA, 31 U.S.C. 9701, and
31 U.S.C. 1111. It explains for executive agencies the scope and type
of activities subject to user charges and the basis on which user
charges should be set. It also provides guidance for agencies on the
implementation of user charges or fees and on the disposition of fee
collections. The guidance presented in Circular A-25 applies to user
fees implemented generally under the IOAA, as well as to
implementations of user fees that are governed specifically by a
statute, such as the e-Manifest Act, to the extent that Circular A-25
is not inconsistent with the e-Manifest Act.
The Circular A-25 guidance that is most relevant to this action
includes the following points:
User charges should be assessed against identifiable
recipients that receive special benefits derived from federal
activities beyond those received by the general public.
When the provision of special benefits to identifiable
recipients also results in an incidental benefit to the general public,
an agency need not allocate any costs to the public and should seek to
recover the cost of providing the services from the identifiable
recipients of special benefits.
User charges should be set so as to recover the ``full
cost'' to the Federal Government of providing the good or service,
where ``full cost'' includes all direct and indirect costs to any part
of the government of providing the good or service.
The relevant direct and indirect costs to be recovered by
user charges include, but are not limited to, an appropriate share of:
[cir] Direct and indirect personnel costs, including salaries and
fringe benefits such as medical insurance and retirement costs,
[cir] Physical overhead, consulting, and other indirect costs
including material and supply costs, utilities, travel, and rents or
imputed rents on land, buildings, and equipment,
[cir] Management and supervisory costs, and
[cir] Costs of enforcement, collection, research, establishment of
standards and regulations, including environmental impact statements.
It is general policy that user charges will be instituted
through the promulgation of regulations.
In their implementation of user charges, agencies should:
[cir] Review all sources of statutory authority, in addition to the
IOAA, that may authorize the implementation of user charges; \6\
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\6\ The e-Manifest Act clearly authorizes user charges, and the
Act's provisions on user fees must be accommodated with Circular A-
25 policies.
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[cir] Make every effort to keep the costs of collection to a
minimum;
[cir] Initiate and adopt user charge schedules consistent with the
policies of the Circular;
[cir] Review the user charges for agency programs biennially, to
provide assurance that existing charges are adjusted to reflect
unanticipated changes in costs or market values;
[cir] Ensure that internal control systems and appropriate audit
standards are applied to collection; and
[cir] Maintain readily accessible records of the information used
to establish charges, the specific methods used to determine them, and
the collections from each user charge imposed.\7\
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\7\ Circular A-25, Section 8(g), provides that this information
should be provided on request to OMB in accordance with OMB Circular
No. A-11.
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2. The GAO Federal User Fees Design Guide
The May 2008 GAO User Fees Design Guide presents a very useful
analytical framework for addressing the equity, efficiency, and cost
allocation issues posed by setting user fees. The User Fees Design
Guide identifies and discusses at length four key design questions, and
sub-questions for each, that agencies should address when establishing
user fees for a good or service provided by the government:
How are user fees set? What total program costs are
considered and allocated among beneficiaries? Does the beneficiary pay
principle apply, or are there special considerations, such as
particular beneficiaries' ability-to-pay, that affect the setting of
fees? If exemptions are established for one class of beneficiaries, how
are their costs recovered?
How are user fees collected? How is the proper balance
struck between ensuring compliance with fees and minimizing
administrative costs?
How are user fees used by the government? What is the
balance between Congressional oversight/appropriations controls and
agency flexibility? Are fees dedicated only to the related agency
program, or, are they deposited in the general fund of the Treasury?
How are user fees reviewed and updated? Are the fee rates
aligned with actual program costs and activities, and how are they
adjusted for changes in program costs? What opportunities are there for
stakeholder input in fee reviews and how does this affect acceptance?
In addressing the key design questions, the GAO Guide explains that
the design of user fees typically involves a balancing of several
outcomes, including:
The economic efficiency of user fees, including a
consideration of the alignment of users' costs with the social costs of
providing the services, and any incentives for reducing costs;
The equity of the fee system, which may involve trade-offs
between the principle that all beneficiaries of services should ``pay
their fair share,'' and considerations of ability-to-pay;
The adequacy of resulting revenues, insofar as revenues
being sufficient to cover all known program related costs (direct and
indirect) as well as to keep pace with inflation and other increases to
program costs, and
The administrative burden of the fees, which requires a
consideration or balancing of the compliance burden imposed by fee
administration and collection, as well as the costs of collection and
enforcement of fees.
Circular A-25 and the GAO User Fees Design Guide contain a wealth
of information that is relevant to the administrative processes of
setting, revising, collecting, and reporting fees. As EPA discusses its
rationale for setting e-Manifest fees in the remainder of this
preamble, the Agency will rely heavily on the policies and principles
identified in these two federal guidance documents.
III. Detailed Discussion of the Proposed Rule
A. Which users of manifests and manifest data will be charged user
fees?
1. Background
Under Circular A-25 policy, user fees should be designed to recover
all system related costs that arise from the development and operation
of the e-Manifest system. EPA recognizes that there are two distinct
classes of entities that might be considered as users with respect to
the e-Manifest system: (1) The class of users who represent the waste
handlers that must actually use the
[[Page 49077]]
waste manifest in connection with tracking wastes that they generate,
transport, or receive as RCRA designated facilities; and (2) the class
of data consumers who do not use the manifest for regulatory
compliance, but who might wish to access e-Manifest to obtain data on
others' waste movements or activities. The latter class could include
members of the general public, law firms, trade associations, and
research organizations. This class of data users also includes state or
tribal officials that may not have access to an internal tracking
system for manifest data. While EPA believes that the preponderance of
system related costs would arise in connection with the provision of
manifest services to those using the manifest for waste shipment
tracking or regulatory compliance purposes, there would likely be
additional costs associated with providing members of the public with
access to manifest data. For example, EPA might develop a public facing
module within the e-Manifest system for the very purpose of
distributing manifest data to the general public, or, EPA might expend
resources distributing such data to the public through another data
distribution service, such as the Envirofacts data warehouse or similar
service. How should these costs be recovered under a user fee system?
Of relevance to this issue is the statutory definition of ``user''
included in the e-Manifest Act. In section 2(a)(5), the Act defines
``user'' to mean a hazardous waste generator, a hazardous waste
transporter, an owner or operator of a hazardous waste treatment,
storage, recycling, or disposal facility, or any other person that:
Is required to use a manifest to comply with any Federal
or State requirement to track the shipment, transportation, and receipt
of hazardous waste or other material that is shipped from the site of
generation to an off-site facility for treatment, storage, disposal, or
recycling, and
Elects to use the system to complete and transmit an
electronic manifest format, or submits to the system for data
processing purposes a paper copy of the manifest (or data from such a
paper copy) in accordance with such regulations as the Administrator
may promulgate to require such a submission.
EPA incorporated this statutory definition of ``user'' within the
terms of the February 2014 One Year Rule, which included in 40 CFR
260.10, a definition of ``user of the electronic manifest system'' that
is consistent with the statutory definition. Both the statutory and
regulatory definitions focus on the members of the regulated community
that are required to use the manifest to comply with a federal or state
requirement to track the generation, transportation, and receipt of
waste shipments.
2. What is EPA proposing on this issue?
As a threshold issue, EPA is proposing to limit the imposition of
user fees to only the members of the regulated community that must use
the manifest as a matter of regulatory compliance for tracking the
generation, transportation, or receipt of hazardous waste or other
regulated waste shipments (e.g., state-only regulated wastes or special
wastes) that are subject to a manifest requirement under federal or
state law. EPA is not proposing to charge members of the general
public, nor officials from federal, state, or tribal agencies, any
service fees for their accessing manifest data from the e-Manifest
system.\8\
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\8\ EPA notes that public requests for information that are
submitted to EPA pursuant to the Freedom of Information Act or FOIA
may give rise to distinct FOIA imposed fees under FOIA requirements.
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This proposal is based on the Agency's belief that by defining the
term ``user'' with reference only to the members of the regulated
community who must use the manifest for regulatory compliance with
waste shipment tracking requirements, Congress similarly intended that
the imposition of user fees would be limited to the class of ``users''
as defined under the Act.
EPA also believes that this proposal is supported by OMB Circular
A-25 policy, as well as by principles of the GAO User Fees Design
Guide. While the establishment of e-Manifest will provide significant
benefits to waste handlers, the EPA believes the general public should
also benefit from e-Manifest. These benefits, however, will likely be
incidental to those afforded to the regulated waste handlers. Thus,
under section 5.A.3 of Circular A-25, it would not be appropriate to
allocate system costs to the public by charging members of the public a
user fee to access e-Manifest data.
Therefore, EPA is proposing to limit the imposition of user fees to
the class of hazardous or other regulated waste handlers who must use
the manifest for tracking waste shipments. User fees will not be
assessed against members of the general public for their access to
manifest data. As a result, the costs of providing the public with
access to manifest data will be recovered through user fees applicable
to the members of the regulated community who are defined as ``users''
under the e-Manifest Act. There will be a small, incremental increase
in the resulting user fees to cover the cost of the incidental
provision of data access services. EPA requests comment on this
proposal (If submitting comments on this issue, please use comment
header: 1. Data Access Services).
B. What will be the transactional basis for assessing user fee
obligations?
1. Background
Section 2(c)(1) of the e-Manifest Act provides EPA authority to
``impose on users such reasonable service fees as the Administrator
determines to be necessary to pay the costs incurred in developing,
operating, maintaining, and upgrading the system.'' This authority to
impose such fees extends to electronic manifest activities and to the
processing of data from paper manifests that continue in use after e-
Manifest is implemented. Moreover, under section 2(c)(2) of the Act,
EPA may collect fees from users in advance of, or as reimbursement for,
the provision of system-related manifest services. Apart from this
direction, however, the Act provides EPA with broad discretion insofar
as determining the amounts of applicable fees, and determining what
system activities should give rise to a fee.
EPA believes that an important scoping consideration for e-Manifest
user fees is determining what transactions should be the basis for
manifest fees. This issue involves both the matter of what manifest-
related event should be the trigger or ``billable event'' for assessing
a user fee, and it also involves where in the manifest business process
this event occurs, and which user entity should thus be responsible for
paying the fee. There is also the issue of whether the fee should be
assessed on a per manifest basis, necessitating numerous fee payments
of relatively small amounts, or, whether there should be a larger,
aggregate payment paid perhaps in advance, based on recent manifest
usage as perhaps the best indicator of likely current usage.
In determining this issue for this proposed rule, EPA will follow
the principles of the 2008 GAO User Fee Design Guide. The Agency will
attempt to balance: (1) The economic efficiency of the fees so that the
fees align with the costs of providing services; (2) the equity of the
resulting fee system by considering ``beneficiaries pay their fair
share'' and ``ability-to-pay'' principles; and (3) assuring adequacy of
resulting
[[Page 49078]]
revenues, while minimizing the administrative burden of implementing
the fee.
2. What options did EPA consider?
EPA considered several options for determining the transactional
basis for e-Manifest fees. Obviously, there appears to be a natural
linkage between the system costs that accrue and the number of manifest
transactions engaged in by the users. Thus, all options involve a
consideration of manifest usage as a determining factor in assessing
user fees. The options here differ in terms of what event in the
manifest business process triggers the fee, and which entity is thus
responsible for that fee.
While the consideration of the transactional basis for fee
assessments might also consider the question of whether fees should be
collected as a lump sum payment vs. collected from multiple manifest
transactions, that issue is addressed later in this preamble in section
III.F, dealing with how fee payments will be made and collected. The
remainder of this section addresses the appropriate event in the
manifest business process for assessing fees and which of the regulated
community users of the manifest should therefore be responsible for e-
Manifest fee payments.
As a first option, EPA considered imposing a per manifest fee on
the hazardous waste generators at the time they initiate their
manifests in the system. The system would track manifest usage by each
generator, and payments could be collected either at the time of
provision of manifests to the generators, or, these generators could be
billed for their usage on a monthly basis. This option would ensure
that all manifest users, including the many generators that initiate
the manifest and that are responsible for much of the manifest content,
pay their fair share for the services they would use. However, this
option would also entail establishing 100,000 or more payment accounts
for the many hazardous waste and state-only regulated waste generators
and engaging in invoicing and collection activities with all those
accounts. Thus, the ``all pay their fair share'' principle must be
balanced against the administrative efficiency of assessing fees from
the many generators in the system.
The alternative option considered would also impose a per-manifest
fee, but the billable event under this option would be the submission
of the final manifest by the TSDF to the system. While this option
necessarily entails providing manifest services to waste handlers prior
to the final copy submission by the TSDF, it involves the significant
advantage that there are only a few hundred commercial or captive TSDFs
that receive waste from off-site and that would be submitting final
manifests to the system. Thus, there would be far fewer parties
responsible for paying fees under this approach. Many more manifests
would be concentrated among these several hundred TSDFs, so the fee
collections would be far more efficient than pursuing 100,000 or more
generators for payments of smaller amounts. Also, with the TSDFs
primarily responsible for payment of user fees to EPA, these facilities
would be able to pass their fee costs through to their generator
customers as part of their waste management service charges, if so
desired. When this option was discussed with the waste industry
members, they appeared to accept this option as the preferred approach
for dealing with fees and their customer relations. Industry members
were particularly supportive of this option if it were implemented with
a monthly billing cycle, under which they would be billed each month
for the prior month's actual usage, rather than being assessed fees for
estimated levels of usage.
3. What is EPA proposing on this issue?
EPA is proposing the second option, under which the submission of
the final manifest to the e-Manifest system by the TSDF would be the
billable event for calculating per manifest fees. This proposal is
driven by the far greater administrative efficiency of dealing with a
much more manageable base of several hundred TSDFs with payment
accounts and collection activity in the system, rather than having to
establish and deal with 100,000 or more generator accounts and the
attendant administrative costs of billing and collecting from so many
more entities. This option could pose some additional revenue stability
risk, if the EPA elects to collect fees monthly as accounts receivable
after providing facilities with manifest services. Under this approach,
EPA might provide TSDFs with a month of manifest services at
significant cost prior to billing the TSDFs on a monthly cycle for
their actual manifest usage. Thus, credible sanctions to induce prompt
fee payments would appear to be a necessary feature to support this
option. Such fee sanctions are discussed in section III.G of this
preamble.
EPA requests comments on the merits of treating the final manifest
submission by TSDFs as the transactional basis or billable event for
purposes of assessing user fees in e-Manifest (If submitting comments
on this issue, please use comment header: 2. Billable Event). Do
commenters agree with EPA's assessment that the more manageable number
of commercial and captive TSDFs submitting manifests to the system,
relative to the number of generators that might initiate manifests, is
an appropriate analysis for the adoption of the policy that the final
TSDF submission should be the billable transaction in e-Manifest? Is
there another option available that is equally or more effective than
this preferred option, insofar as providing a rational means for
charging users for their manifest activity in the system, while
minimizing the administrative costs of collection?
In the February 2014 final regulation on electronic manifests
(i.e., the One Year Rule), EPA codified language in parts 262, 263, and
264/265 that would authorize the Agency to impose reasonable user fees
on hazardous waste generators, transporters, and receiving facilities
or TSDFs. EPA included this broad authority to impose electronic
manifest user fees on all classes of users, as this was consistent with
the broad grant of authority to impose such fees in the e-Manifest Act.
In this proposal, EPA is clarifying that its preferred option would be
to limit electronic manifest user fee payments and collections to the
receiving facilities, thereby excluding generators and transporters
from fee payments and collections. If the final rule adopts this
approach, and there are no other issues presented that suggest a need
for a broader fee collection system, EPA intends to delete the current
parts 262 and 263 provisions that now extend fee collection authority
to generators and transporters.
C. What model or formula will EPA use to calculate fees?
1. Background
In this section, EPA is presenting for comment its proposed
methodology for determining the fees that TSDFs will be assessed based
on their usage of manifests in the system. As discussed previously in
this proposed rule, EPA believes that assigning fees to TSDFs based on
a per-manifest charge is the most equitable and efficient means for
allocating system costs to users. By relying on a per-manifest charge,
users will bear the costs of developing and supporting the system in
proportion to their usage of it. The TSDF users would be expected to
bear the burden and realize the benefits of the system in proportion to
their usage, and because TSDFs can pass their fee expenses
[[Page 49079]]
through to their generator customers if desired, the system costs can
be efficiently shared across the manifest user community.
The proposed fee model or methodology must, of course, fully
recover EPA's costs to design, build, operate, maintain, upgrade, and
manage the e-Manifest system and program. This will ensure that the
Agency can manage the e-Manifest system and program without funds from
other appropriations, and avoid the possibility of Anti-Deficiency Act
violations. Therefore, the development of a proposed methodology is all
about determining first, what are all the activities related to
developing and operating e-Manifest, and what are the costs of these
activities? Second, once the total costs of developing and supporting
e-Manifest have been documented, we then must determine how these costs
will be allocated over all the manifests that will be submitted to the
system. While at the most basic level, one might determine a per
manifest fee by simply dividing total system costs by the total number
of manifests in use. There are advantages to parsing the fees based on
the type of manifest (i.e., electronic or paper types), since some
system costs are uniquely associated with paper manifests, while others
tend to follow electronic manifest usage. Thus, it may be possible to
allocate system costs more equitably to the manifest types that bear
their related costs, and perhaps incentivize electronic manifest usage
more than would be possible if costs were simply allocated to all
manifests equally.
2. System Related Cost Categories
There are several categories of costs under which e-Manifest
system-related costs may be grouped and explained. First among these
groupings, it is important to distinguish between the System Setup
Costs and costs that are described as Operations and Maintenance Costs.
a. System Setup Costs. EPA considers System Setup Costs to include
all system-related costs, intramural and extramural, prior to the time
the e-Manifest system is fully operational. Intramural costs are those
costs related to the efforts exerted by EPA staff and management in
developing, operating, and managing e-Manifest. Extramural costs are
those costs related to the acquisition of contractors to develop and
operate the e-Manifest system. EPA will track System Setup Costs
distinctly from post-activation Operations and Maintenance (O&M) Costs,
since the e-Manifest Act requires that the System Setup Costs, which
are to be funded initially by seed appropriations, be offset eventually
by user fee collections and repaid to the Treasury. Thus, System Setup
Costs will be tracked distinctly for the period of system development,
which EPA anticipates will require three to five years of effort.
EPA will amortize the System Setup Costs over an initial period of
system operations. EPA is proposing an amortization period for System
Setup Costs of five years, which EPA believes provides sufficient time
to recover the System Setup Costs, while not significantly increasing
the fees for the user community.\9\ Once the system is operational, all
system costs will be tracked as O&M Costs in EPA's fee calculations and
in its accounting of system expenditures. Once the five-year
amortization period has elapsed, EPA will drop the factor in the fee
formula representing the amortization of System Setup Costs from the
formula, and will thereafter track all costs as O&M Costs.
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\9\ EPA analyzed the effects of a payback period of three, five,
and ten years, and found that varying the amortization period had
little effect on the total costs, resulting fee levels, or the
efficiency of the proposed fee levels. EPA found that its total
system costs are affected much less by the fixed costs of system
development than by O&M costs, particularly, the marginal costs of
processing manifests submitted to the system and the operations and
maintenance costs for the system itself. The Agency's analysis of
amortization options showed only a nominal effect on total fixed
costs and on how the system's fixed costs would be collected each
year in user fees. The impacts of amortization period on total costs
and their recovery with the proposed rule's fee levels are
overshadowed by the impact of other fee design elements.
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Within the broad category of System Setup Costs, EPA will track and
calculate fees based on two distinct sub-categories of costs: (1)
System Procurement Costs; and (2) EPA Program Costs dedicated to
developing the system. The Procurement Cost sub-category is
straightforward and includes all the IT-related contracting costs
associated with the acquisition and development of the actual e-
Manifest IT system and all e-Manifest related IT system services (i.e.,
accounting, billing, collection, and reporting systems).
The EPA Program Cost sub-category can be described as the EPA Full
Time Equivalent (FTE representing EPA's staffing/labor costs) and the
non-IT contracting costs to the Agency for developing, running, and
managing the system. EPA Program Costs are included in either Setup
Costs or O&M Costs based on the year they are incurred. It is the EPA
Program Costs that are incurred before the system activation date that
we are including in this discussion of Setup Costs. These are EPA staff
and non-IT \10\ contract costs necessary to the design and development
of the e-Manifest system itself and to the development of the overall
e-Manifest program. Thus, these costs would include the costs of EPA
staff and contracts used for the system planning and design effort, for
development of the system architecture, for development of the program
regulations, including this user fee regulation, for conducting program
outreach and oversight prior to activation, for developing the Help
Desk, for developing the FACA Advisory Committee required by the e-
Manifest Act, for conducting Capital Planning and Investment Control
(CPIC) and other budget related activities for the program, for
conducting program management, and other costs related to establishing
the e-Manifest system and program prior to the system's activation. All
of these types of costs would be EPA Program Costs and included in the
System Setup Cost category as they are incurred prior to the system
activation date.
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\10\ EPA is tracking closely its e-Manifest program costs by the
date the costs are incurred, which is relevant to their
classification as System Setup or as O&M costs. Likewise, EPA will
establish distinct codes for tracking its contract tasks and their
costs so that EPA can accurately distinguish its IT contracting
costs (tracked either as System Procurement Costs and Electronic
System O&M Costs depending on date incurred) from its non-IT
contracting costs, which will be tracked in the formula as EPA
Program Costs.
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b. Operations and Maintenance Costs. The Operations and Maintenance
(O&M) Costs include all system-related costs incurred after the e-
Manifest system is activated. Important components of O&M costs are the
costs of operating the electronic IT system to which electronic
manifests will be submitted and all manifest data collected, and the
costs of operating the paper manifest processing center that EPA will
establish to meet the e-Manifest Act's and One Year Rule's requirements
that EPA collect and process the data from any paper manifests that
continue in use after the implementation of e-Manifest. In addition to
the costs of running the electronic system and the paper processing
center, O&M costs also include the same types of costs described
previously as EPA Program Costs (EPA FTE and non-IT contract costs),
when these costs are incurred after the e-Manifest system activation
date. Other components of O&M Costs include Help Desk Costs necessary
to run the e-Manifest Help Desk that will be established to provide
technical support to system users; life-cycle enhancements to all e-
Manifest system related services, such as the services
[[Page 49080]]
required for e-Manifest billings and collections; and the CROMERR
Costs, which are the costs of implementing solutions for e-Manifest
that meet the requirements for electronic reporting to EPA under the
Agency's Cross Media Electronic Reporting Rule or CROMERR. The latter
costs include certain registration requirements for users and
signatories, the requirements for identity proofing (when required) e-
Manifest signatories, the costs of collecting, processing, and
maintaining Electronic Signature Agreements executed by signatories,
and the requirements for producing and retaining copies of record of
electronic manifests submitted to the system.
c. Indirect costs. Indirect costs are the intramural and extramural
costs that are not captured in any of the previously defined cost
categories, but that are necessary to capture because of their
necessary enabling and supporting nature, and so that our proposed user
fees will accomplish full cost recovery. Indirect costs typically
include such cost items as physical overhead, maintenance, utilities,
and rents on land, buildings, or equipment. As discussed in section
2(c)(3)(A) of the statute, the indirect costs include the EPA costs
incurred from the participation of EPA offices and upper management
personnel outside of the immediate program office (the Office of
Resource Conservation and Recovery or ORCR) that is primarily
responsible for implementing the e-Manifest program. These other EPA
offices and upper management personnel provide support to all aspects
of the e-Manifest program, including promulgating the e-Manifest
implementing and fee regulations, supporting the IT system planning and
system acquisition, and participating in the e-Manifest Advisory Board
and the related Federal Advisory Committee Act (FACA) processes.
Indirect costs are disparate and more difficult to track than the other
cost categories, because they are typically incurred as part of the
normal flow of work (e.g., briefings and decision meetings involving
upper management) at many offices across the Agency and cannot be
attributed directly to the activity they support. Also, the level of
indirect costs incurred by a particular office is also likely to change
as the e-Manifest program develops and its needs change. For these
reasons, it is not practical to account for indirect costs in the same
manner as the other categories of e-Manifest costs.
EPA will account for indirect costs in the proposed e-Manifest user
fee formulas by the inclusion of an indirect cost factor. This rate is
multiplied by the base fee that accounts for the program's direct
costs. The product of the indirect cost rate and the base fee is then
added to the base fee to determine the final, comprehensive user fee.
The Agency-wide indirect cost rate is determined for all EPA user
fee programs by the Agency's Office of Financial Management, according
to that Office's indirect cost methodology, and as required by Federal
Accounting Standards Advisory Board's Statement of Federal Financial
Accounting Standards No. 4: Managerial Cost Accounting Standards and
Concepts. The Office of Financial Management publishes annually an
indirect cost rate for each of the Agency's Regional Offices and for
each of the Assistant Administrator-level program offices within EPA
Headquarters. An indirect cost rate customized for the e-Manifest
program will be developed, based on consideration of the EPA's existing
indirect cost methodology and other indirect costs required to support
the e-Manifest program.
Therefore, once the appropriate indirect cost rate for e-Manifest
is developed, then the indirect costs for e-Manifest would be captured
by our proposed fee formulas as the product of the base fee times that
indirect cost factor.\11\ The result is that the total or comprehensive
user fee is simply the base fee formula times the expression (1 +
indirect cost rate).
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\11\ The EPA is developing an indirect cost rate for the e-
Manifest Program. The FY 2015 Interagency Agreement (IA) indirect
cost rate for OLEM is 19.74%. This rate is recalculated each year
and is therefore subject to change and consideration regarding its
applicability to e-Manifest. EPA will calculate the fees with the
Final Rule using the then applicable-Manifest Program indirect cost
rate, which will be based on a consideration of the OLEM IA indirect
cost rate and other appropriate indirect costs attributable to e-
Manifest.
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3. Types of Manifests and Fee Categories
Another piece of information relevant to determining applicable e-
Manifest user fees is the type of manifest that is being submitted to
the system. In this regard, there are electronic manifests that will be
completed by users electronically and submitted electronically to the
system, and there are several types of paper manifests that will be
received and processed by the e-Manifest system's paper processing
center.\12\
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\12\ Unlike electronic manifests, paper manifest copies (or the
scanned images and data from paper manifests) are to be submitted to
the national e-Manifest system for data processing purposes only,
and are not submitted as copies of record intended to replace paper
manifests as valid and enforceable documents. The ink-signed paper
manifest copies that are retained at waste handler sites remain the
enforceable copies of record where paper manifests continue in use
to track waste shipments. The paper copies (or scanned images and
data from them) submitted for data processing purposes require no
CROMERR related processes or electronic signatures to accompany
their submission.
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Under the One Year Rule, EPA indicated that it would accept paper
manifest data from final manifest copies submitted by TSDFs by several
modes of delivery. First, paper manifests could be mailed by TSDFs
directly to EPA's processing center, where personnel staffing that
center would open the mail, scan the paper forms to create image files,
and manually key in the data to the national data repository. These
paper manifests would likely undergo a significant level of Quality
Assurance (QA) activity as well, as the experience of EPA's state
partners with manifest tracking systems suggests that a significant
number of paper manifests will present legibility issues, typographical
errors, missing data, or other errors requiring follow-up with
submitters to clarify or correct. Also, state partners advise EPA that
they frequently find extraneous documents or mis-directed mail included
with manifests mailed to their systems, and these require clerical
attention to sort and return to their senders.
Second, the One Year Rule allows TSDFs to submit scanned images of
paper manifests to the processing center in lieu of mailing paper forms
to EPA. These scanned image submissions involve less clerical effort
insofar as opening mail and returning extraneous mailings, but still
require clerical effort to conduct QA activities and to key the data
into the data repository.
Third, the One Year Rule provided TSDFs with the alternative of
submitting the data from paper manifests to EPA as an image file and
data file (e.g., XML file) that can be uploaded into the data
repository. The receipt of data files from the TSDFs would involve less
processing effort for EPA, as the data could be loaded to the data
repository and merged with e-Manifest data directly with little, if
any, QA or manual data entry.
Thus, for purposes of this proposed rule, EPA believes there would
be four distinct types of manifests that may be submitted to the system
for processing. These are electronic manifests submitted in accordance
with the national electronic format supported by the system, and three
possible types of manifest submissions arising from the continued use
of paper manifests: Paper manifests mailed to the EPA system operator,
scanned images of paper manifests uploaded to the system, and an upload
of both an image file produced from a paper manifest and a
[[Page 49081]]
corresponding data file produced by the TSDF's data system.
As explained in detail later in this document, EPA believes that
the several types of manifest submissions discussed here would involve
differing effort and burden for EPA or its system operator to process.
Indeed, since the premise of this proposed rule is that e-Manifest user
fees should be charged on a per manifest basis, the Agency believes
that the varying processing burden associated with these four distinct
types of manifest submissions would be the key differentiating factor
insofar as determining the appropriate user fee for manifests that
would be submitted to the system. The varying processing effort
involves varying manual labor and other costs arising from each type of
submission. These varying human labor and related costs can be thought
of as the marginal costs of entering the data from each method of
submission and ultimately merging the information into the national e-
Manifest data system. Therefore, in the several user fee formula
options that EPA considered for this action, we focus on this differing
marginal cost per manifest submission type as a significant factor
distinguishing the fees calculated by the proposed formula. As further
explained in the discussion of the proposed formula, another key factor
distinguishing the amount of the calculated fees would be the extent to
which the different manifest types are assumed to share in the other
O&M costs associated with operating the electronic manifest system and
also the paper processing center. The result would be a fee schedule
that would announce four distinct per-manifest fee categories based on
the four types of manifest submissions, and the varying extent to which
marginal labor costs and other system O&M costs would be allocated to
each of the submission types by the formula.
4. What formula options did EPA consider?
EPA considered three distinct fee formula options, which vary by
the extent to which they distribute the marginal manifest processing
costs and other system O&M costs across the different manifest
submission types. As a result, the three fee formula options vary by
the extent to which they differentiate the applicable fees for each of
the four manifest submission types.
The fee formula options can be compared on the basis of three
important characteristics: Simplicity, Equity, and Resilience.
Simplicity refers to the presence or absence of fees differentiated by
manifest type. Equity refers to the extent to which a fee formula
generates fees that reflect the true costs of each manifest type.
Resilience refers to the extent to which uncertainty in the component
variables of a formula affects its ability to assess accurate fees, and
by extension realize full cost recovery.
Each fee formula option entails a different trade-off between these
characteristics, with no formula option outperforming the other two on
every characteristic. The first option, the average cost fee,
prioritizes simplicity over equity and resilience. The second option,
the marginal cost fee, prioritizes resilience and equity over
simplicity. The third option, the marginal cost highly differentiated
fee, is the most equitable but at the loss of resilience and
simplicity. The three fee formula options are explained in greater
detail in the following sections.
a. Average Cost Fee Option. The first option is a basic ``average
cost fee'' formula. Under this option, all the manifest submission
types would pay the same average fee. This option first calculates a
weighted average marginal cost for processing all manifest submission
types. To this weighted marginal cost is added another factor which
distributes all other system setup and O&M costs equally across all
manifests expected to be in use. In other words, under this option,
marginal costs are averaged, setup and O&M costs are allocated equally
to all manifest types, and there is no attempt to use the fee formula
to differentiate among the manifest types.
The mathematical expression of the Average Cost Fee Option is as
follows:
[GRAPHIC] [TIFF OMITTED] TP26JY16.003
Where:
[GRAPHIC] [TIFF OMITTED] TP26JY16.004
System Setup Cost = Procurement Cost + EPA Program Cost
O&M Cost = Electronic System O&M Cost + Paper Center O&M Cost + Help
Desk Cost + EPA Program Cost + CROMERR Cost + LifeCycle Cost to
Modify or Upgrade eManifest System Related Services
This option has the advantage of simplicity, as it results in one
average or standard fee to be paid on a per-manifest basis for all four
of the manifest submission types. However, it is quite sensitive,
meaning it may not collect sufficient revenue, since the use of a
weighted average marginal cost assumes that EPA can accurately predict
the prevalence of each manifest submission type each year. If the
actual distribution of manifest types differs from these projections,
then this formula will likely under- or over-collect fee revenue
relative to program costs.
Additionally, this option is not very equitable. There is
simplicity in using this formula to arrive at a standard fee, but it
results in this option permitting a portion of the costs of paper
manifest use to be subsidized by electronic manifests. Paper manifest
submission types will almost certainly bear greater marginal costs than
fully electronic manifests, but this formula does not recognize such
differential costs when it prescribes one average fee for all
manifests. Therefore, this option would not be very helpful in
effectuating the Agency's goal of promoting the greater use of
electronic manifests in the system.
b. Marginal Cost Differentiated Fee Option. The second option
considered by EPA would attempt to differentiate among the different
manifest submission types by focusing most on the varying marginal or
human labor cost of processing each manifest submission type into the
national e-Manifest data system. As a part of the economic analysis EPA
conducted for these fee formula options, EPA
[[Page 49082]]
developed estimates of the marginal, human labor cost of processing
paper manifests received in the mail, processing image files uploaded
to EPA, processing data (XML) files uploaded to EPA with image files,
and processing fully electronic manifests into e-Manifest. This option
keys off the differing marginal cost of processing manifests as the
factor that differentiates the resulting manifest user fees. Otherwise,
it addresses System Setup Costs and O&M Costs in the same manner as
Option 1, that is, by amortizing system setup costs over five years,
and by otherwise distributing setup costs and O&M costs from overall
systems operations equally across all manifest submission types.
The mathematical expression of the Marginal Cost Differentiated Fee
Option is as follows:
[GRAPHIC] [TIFF OMITTED] TP26JY16.005
Where:
System Setup Cost = Procurement Cost + Program Cost
O&M Cost = Electronic System O&M Cost + Paper Center O&M Cost + Help
Desk Cost + EPA Program Cost + LifeCycle Cost to Modify or Upgrade
eManifest System Related Services + CROMERR Cost
This fee formula option is premised on our belief that the
marginal, human labor costs of opening mail, conducting QA on paper
submission types, and conducting data key entry on the paper submission
types (other than XML file uploads that load directly into the system)
are the costs that most clearly and significantly differentiate
manifest submissions for purposes of determining fees. This option
further assumes that since data from all manifest types will be entered
into the e-Manifest system's data repository, it is appropriate for all
paper submission types to contribute to the electronic system's setup
and O&M costs. The option is the most resilient as it does not involve
any projections of the prevalence of manifest types such as is involved
with the calculation of a weighted average marginal cost under Option
1, so it is less likely to under- or over-collect revenue should such
projections not pan out. Another significant advantage of this option
is that because it would result in higher differential fees for paper
manifest submission types, it is consistent with our goal of promoting
the greater use of electronic manifests.
A potential weakness in this option is that it may not be
sufficiently aggressive insofar as requiring paper manifest types to
bear the full differential costs associated with managing paper
manifest submissions. Under this option, for example, electronic
manifests share in the costs of establishing the paper processing
center and in the O&M costs (other than labor costs) of running the
paper center. EPA believes that this option could represent a useful
bridge toward the greater use of electronic manifests, particularly in
the initial years of e-Manifest program implementation. It will likely
require several years for the full transition to electronic manifesting
to occur, as manifest users will need to acquire the hardware and
capability to participate in e-Manifest, and they will need to gain
confidence in the reliability of electronic manifests relative to the
paper forms that are so familiar and have served the needs of the
program for many years. When EPA discussed fee options with the
hazardous waste management community during the development of this
proposed rule, industry members confirmed that they anticipated a
transition to electronic manifesting, with perhaps a period of time
when industry members may first submit XML data file uploads to EPA
from their customers' paper manifests, and over time, acquire the
technology and systems to migrate to supplying fully electronic
manifests for their customers' use. EPA heard concerns from industry
members that the fee formula should be sensitive to the need for a
period of transition, and that there should not be too great a premium
fee for paper manifest use at the outset.
Thus, EPA believes that this second fee option reflects these
concerns, and is consistent both with encouraging electronic manifest
use, while recognizing that a transition from paper submissions to XML
file submissions may be the course that e-Manifest implementation
follows on its ultimate path to electronic manifest use. However, EPA
does remain concerned that, over time, the Marginal Cost Differentiated
Fee Option may not be effective to promote the full transition to
electronic manifesting, and could instead result in the interim
arrangements--the submission of XML files produced from paper
manifests--becoming the end result. While such an outcome would produce
a robust data base of manifest data from designated facilities, it
would perhaps leave in place a regime in which inefficient and
burdensome paper manifests remain in wide circulation among all
manifest users.
c. Marginal Cost Highly Differentiated Fee. As a third option for
determining the e-Manifest user fee, EPA also considered an approach
that goes further than the previous option in requiring paper manifest
submission types to bear more of the program costs arising from the
continued use of paper manifests. This third fee formula option, the
Marginal Cost Highly Differentiated Fee option, is structured similarly
to the second option, but with one key difference. Under the third
option, the O&M costs of running the paper processing center are
allocated only to paper manifest submission types, and not shared
equally with the electronic manifests. The premise of this option is
that since fully electronic manifests will have no contacts or dealings
with the paper processing center, then these fully electronic manifests
should bear no part of the costs of operating the paper center. Thus,
in addition to the marginal, human labor costs of processing paper
manifest types that are allocated to paper manifest submissions under
Option 2, this option more fully allocates the program costs of
managing paper manifests to the paper submission types, by adding the
other non-labor O&M costs of the paper center to the cost burden to be
borne by paper submission types. This also may encourage industry users
to migrate to electronic manifests more expeditiously, since it will
not mask the true costs of processing paper manifests by subsidizing
the non-labor costs of the paper processing center, as occurs with
Option 2.
This option does not present the simplicity of Option 1, as the
fees it would produce clearly differentiate among several manifest
submission types. This option would also appear to be the most
equitable of the options, as it would require paper manifest
submissions to bear both the labor and non-labor costs of the paper
processing center, rather than sharing the non-labor costs with
electronic submissions. However, the equity of this option is achieved
at the expense of resiliency, as
[[Page 49083]]
this option would require that EPA estimate with precision the number
of electronic manifest and the number of paper-variant manifests in
order to properly assign non-labor paper center O&M costs to paper
manifests. Thus, as a result of uncertainties affecting the numbers of
electronic and paper submission, this fee option is more likely to
over- or under-recover revenue than Option 2. Moreover, because this
option is somewhat more aggressive than the second option in allocating
program costs to paper manifest types, it could be more effective than
Option 2 in promoting the greater use of electronic manifests. However,
this option could be perceived by users as imposing initially too great
of a premium fee on paper manifest types, before electronic manifesting
is widely available to and embraced by users.
Mathematically, the Marginal Cost Highly Differentiated Fee option
can be expressed as follows:
[GRAPHIC] [TIFF OMITTED] TP26JY16.006
Where:
System Setup Cost = Procurement Cost + Program Cost
O&M fully electronic
= Electronic System O&M Cost + EPA Program Cost
+ CROMERR Cost
+ LifeCycle Cost to Modify of Upgrade eManifest System Related
Services
O&M all other
= Electronic System O&M Cost + Paper Center O&M Cost + Help Desk
Cost
EPA Program Cost + CROMERR Cost
+ LifeCycle Cost to Modify or Upgrade eManifest System Related
Services
5. What fee formula is EPA proposing?
EPA's preferred option for this proposed rule is actually a
combination of the second and third options discussed earlier. In other
words, EPA is proposing that it would initially implement the Marginal
Cost Differentiated Fee Option (2nd option), but would reserve the
ability to transition to the Marginal Cost Highly Differentiated Fee
Option (3rd option), should a triggering condition included in this
rule be actuated, suggesting that a more aggressive fee formula is
needed to promote greater levels of electronic manifest use.
By proposing this combined or hybrid option, EPA acknowledges that
the second option represents a useful compromise between promoting
electronic manifest use initially, while recognizing that a transition
from paper submissions, to XML submissions, to fully electronic
submissions may be a useful path for industry and the e-Manifest system
to pursue. EPA believes that the Marginal Cost Differentiated Fee
Option is consistent with such a transition approach. Indeed, if the e-
Manifest option is fully adopted by most hazardous waste handlers, the
fee formula represented by this option may be the only fee formula
necessary to determine fees for the e-Manifest program.
However, EPA is concerned that after the desired transition period
has run, that it may require some additional incentives to effectuate a
fuller migration to electronic manifest usage. Under the second formula
option, the fee differential between electronic manifests and those
paper manifest submissions uploaded by TSDFs as XML files is not very
great, with the XML submissions bearing fees that are perhaps only 15%
greater than the electronic manifests. Paper manifests mailed to EPA
for processing would incur a per-manifest fee about 88% greater than
the fee for electronic manifests. Thus, there is a possibility that the
transition to XML file submissions from paper manifest use could become
a plateau in the program implementation that is difficult to move
beyond without greater fee incentives. So, upon an appropriate
triggering condition, EPA believes it would be useful to change the fee
formula to the third formula option, so that the paper submission types
bear a fuller share of the program costs related to using and
processing paper manifests.
Another issue for this proposed rule, therefore, is what is the
appropriate condition that should trigger the implementation of the
Marginal Cost Highly Differentiated Fee Option after a transition
period? For several years, EPA has indicated to stakeholders and to the
program's overseers that the Agency believed that it could accomplish
significant paperwork burden reductions and cost savings if 75%
electronic manifest usage could be attained after program
implementation. Based on very preliminary estimates of possible program
adoption rates, EPA further postulated that under favorable conditions,
adoption of electronic manifesting by some of the larger manifest user
companies might bring about a 75% use rate after a period of about five
years. That being the estimate or goal previously announced, EPA
believes that this stated goal, with a slight modification to comport
with our proposed two-year cycles \13\ for reviewing and revising our
fee schedules, could represent a useful trigger condition for this
proposed rule. Therefore, EPA is proposing that the e-Manifest user fee
schedule would be initially developed using the second option's
Marginal Cost Differentiated Fee formula for the base fee. EPA is also
proposing that if, however, EPA finds after four years of e-Manifest
system operations that electronic manifest usage has not yet reached
our goal of 75% penetration, then EPA will thereafter use the third
option's Marginal Cost Highly Differentiated Fee formula for developing
the applicable user fee schedules.
---------------------------------------------------------------------------
\13\ The proposal to publish revised fee schedules at two-year
intervals is discussed in the following section III.D, of this
preamble. Because we propose to revise the fee schedules at two-year
intervals, it makes sense to examine whether electronic manifest use
has reached a 75% adoption rate after four years, rather than five
years.
---------------------------------------------------------------------------
6. Request for Comment
EPA requests comment on its preferred option that would initially
calculate per-manifest fees based on the Marginal Cost Differentiated
Fee formula, and then transition to the Marginal Cost Highly
Differentiated Fee formula should electronic manifests not attain a 75%
usage rate after four years of system operations (If submitting
comments on this issue, please use comment header: 3. Fee Methodology).
Do commenters agree that the combination of these two formula options
is superior to the other options alone? Do commenters agree with EPA's
strategy of starting with the less aggressive fee formula in the
initial years of program implementation, to foster a smoother
transition from paper manifest use to electronic manifesting? Do
commenters agree that after an initial period of transition, it makes
sense to adopt a fee formula that more aggressively allocates paper
manifest management costs to the paper manifest submission types that
remain in use? Has EPA proposed a sensible trigger condition for
shifting between the fee formulas? Is the goal of 75% electronic
[[Page 49084]]
manifest penetration a reasonable goal, and if not, why not? Would some
other period be preferable for EPA to measure electronic manifest
implementation progress? If so, what is that period of time and why
would it be preferable? Is the third fee formula option sufficiently
aggressive to accomplish this purpose, and will it likely promote the
adoption of higher levels of electronic manifest usage?
In addition, EPA would appreciate comments addressing these fee
formula questions (If submitting comments on any of the questions in
the following seven bullets, please use comment header: 3. Fee
Methodology).
Is the proposed fee formula sufficiently clear insofar as
identifying the program costs that will be allocated among manifests,
and explaining how the fee amounts will be determined? How can the
clarity of the fee formula be improved?
Do commenters agree with the general premise of the fee
formula that per-manifest fees should be charged to manifests based on
the type of manifest submission, and that the marginal cost (human
labor cost of data key entry and QA activities) should be a significant
factor in determining the appropriate fees? What other bases are there
for differentiating manifest fees?
Do commenters agree with the proposed fee methodology that
first determines the marginal human labor cost for processing each
manifest submission type, and then adds to that cost estimate a factor
that distributes setup and O&M costs over the numbers of manifest in
use? Are there other fee models that would more effectively and
equitably allocate program costs to users and determine appropriate
fees for the various manifest submission types?
Do commenters agree that a five-year amortization period
is an appropriate period of time over which to recover system setup
costs? Is there another amortization period that EPA should adopt for
this purpose, and if so, why?
Do commenters agree with EPA's analysis of the options
considered, and that EPA has selected the most desirable fee option?
Does the proposed fee approach promote EPA's goals of accomplishing
full program cost recovery and promoting electronic manifest use?
Has EPA omitted any program costs that should be included
in our determination of e-Manifest user fees?
In developing its fee methodology, EPA has not proposed
any specific fee or other incentives to promote desirable materials
management behaviors, such as waste minimization or recycling of
hazardous secondary materials. In many instances, our hazardous waste
regulations provide manifest exemptions for hazardous secondary
materials, so in one sense, the user fee costs that this action would
impose on shipments subject to the manifest may provide some additional
incentive for recycling or waste minimization. Are there other
incentives that could be included in this user fee regulation that
would promote greater recycling of these materials? If such incentives
would involve fee discounts or monetary incentives, how should EPA
allocate the revenue effects of such incentives among the manifest
users who would pay fees under this action? Are there other incentives
that EPA could consider for this user fee regulation? EPA welcomes
comments on these matters.
Finally, EPA emphasizes that this proposal addresses the submission
of paper manifests by adopting a fee approach that assigns fees to
paper manifest submissions from TSDFs based upon the difference in
marginal costs of processing the various paper manifest types. The
submission of paper forms to EPA by mail would bear the highest fees,
while submission of image files, or data and image files, would involve
less processing effort and thus reduced fees under the proposed fee
methodology.
EPA has heard from TSDFs that they generally would prefer to submit
data files from their paper manifests to EPA, rather than incurring the
costs of mailing paper forms to EPA for full processing. However, EPA
has consulted primarily with a trade association (the ETC) that is
comprised of larger TSDFs, so we do not know whether mid-size or
smaller TSDFs would be similarly inclined to submit data files and
scanned images of manifests to EPA and avoid mailing paper forms to EPA
for processing. The differential fee approach we propose should itself
discourage TSDFs from submitting large numbers of manifests by mail.
However, it is difficult for EPA to project with confidence how many
paper manifests will be mailed to the Agency in the initial years of e-
Manifest operations. This is a concern for EPA, as the processing of
mailed forms could involve significant personnel and contractor costs
for opening and screening mail, for data key entry, document archiving,
and for QA activities related to resolving data quality issues. Paper
processing costs could dominate the O&M costs in the early years of
operation, and if mail submissions occur in unexpectedly large numbers,
EPA may need to increase fees or consume more of its appropriated funds
than anticipated to process mailed manifests. Therefore, EPA is
requesting comment on another approach under which TSDFs would be
restricted to submitting their paper manifest data to EPA by electronic
means only, that is, by uploading image files to EPA, or by uploading a
data file (e.g., XML file) of manifest data accompanied by an image
file (If submitting comments on this issue, please use comment header:
4. Disallow Postal Mailed Manifests). Would TSDFs support an option
that precluded their mailing paper manifest forms to the Agency, as
this would reduce EPA's processing costs and the associated user fees?
Are there TSDFs that would find this approach objectionable, because it
requires the capacity to scan documents and upload data to EPA, or for
other reasons? Is the proposed differential fee approach for paper
manifest types sufficient to regulate the number of mail submissions to
EPA, or is a more forceful approach (i.e., restricting paper copy data
submissions to digital methods only) necessary to keep the paper
processing costs and fees in check? Are the processing efforts related
to mailed paper manifests that different from the effort related to
processing image files sent to the Agency? \14\ EPA requests specific
comments on the merits of an approach that would restrict TSDFs to
submitting their paper manifest data to the Agency by digital methods
only, and not by mailing hard copies to the EPA system.
---------------------------------------------------------------------------
\14\ EPA anticipates that fees for processing mailed manifests
will be about 20-25% greater than for scanned images, because
manifests delivered by mail will need to be opened, sorted for
errant submissions, logged, stored and retrieved prior to
processing, scanned by paper center personnel, and then disposed of
after scanning.
---------------------------------------------------------------------------
7. Illustrative Range of User Fees Using the Proposed Fee Formula
EPA has developed illustrative ranges of user fees based on varying
the system development costs and allocating such costs across a large
range of possible manifest usage numbers. These illustrative ranges are
intended to show the relative difference in possible fee amounts among
the various manifest submission types. The illustrative ranges also
suggest generally the users' possible exposure to fees, and show the
effect on fees of varying the overall system-related costs and the
numbers of manifests that will share in these costs when fees are
assessed. The result is a possible or illustrative range of user fee
estimates that are displayed in the following tables. Since EPA's fee
determination model was based on the varying marginal cost of
processing the
[[Page 49085]]
several types of manifest submissions, we have included a distinct
table presenting illustrative fee ranges for fully electronic manifests
and each of the three paper manifest submission types.
Per Manifest Fee, Fully Electronic Manifests
------------------------------------------------------------------------
System procurement costs
(millions $)
Number of manifests (millions) -----------------------------
10 15 20
------------------------------------------------------------------------
5......................................... 9.00 9.00 9.50
4.5....................................... 10.00 10.00 11.00
4......................................... 11.50 11.50 12.00
3.5....................................... 13.00 13.00 14.00
3......................................... 15.00 15.50 15.50
2.5....................................... 18.00 18.50 19.00
2......................................... 23.00 23.50 24.00
------------------------------------------------------------------------
Per Manifest Fee, XML Submissions From Paper Manifests
------------------------------------------------------------------------
System procurement costs
(millions )
Number of manifests (millions) -----------------------------
10 15 20
------------------------------------------------------------------------
5......................................... 11.50 11.50 12.00
4.5....................................... 12.50 12.50 12.50
4......................................... 14.00 14.00 14.50
3.5....................................... 15.00 15.50 15.50
3......................................... 17.50 18.00 18.00
2.5....................................... 20.50 21.00 21.50
2......................................... 24.50 25.00 25.50
------------------------------------------------------------------------
Per Manifest Fee, Image File Submissions from Paper Manifests
------------------------------------------------------------------------
System procurement costs
(millions )
Number of manifests (millions) -----------------------------
10 15 20
------------------------------------------------------------------------
5......................................... 17.00 17.00 17.50
4.5....................................... 18.00 18.00 18.50
4......................................... 19.00 19.00 20.00
3.5....................................... 20.50 21.00 21.50
3......................................... 23.00 23.50 23.50
2.5....................................... 25.50 26.50 27.00
2......................................... 30.50 31.00 31.50
------------------------------------------------------------------------
Per Manifest Fee, Postal Mail Manifests
------------------------------------------------------------------------
System procurement costs
(millions )
Number of manifests (millions) -----------------------------
10 15 20
------------------------------------------------------------------------
5......................................... 21.00 21.00 21.50
4.5....................................... 22.00 22.00 22.00
4......................................... 23.50 23.50 24.00
3.5....................................... 24.50 25.00 25.00
3......................................... 27.00 27.50 27.50
2.5....................................... 30.00 30.50 31.00
2......................................... 34.00 34.50 35.50
------------------------------------------------------------------------
D. How does the proposal address fee trajectory issues?
1. Background
The topic of fee trajectory is concerned with the actions that EPA
will take to adjust e-Manifest user fees to inflationary or other
program cost changes, so that fee schedules and resulting revenues keep
pace with program costs. In the document, Federal User Fees, A Design
Guide, GAO emphasized the significance of this issue in ensuring that a
user fee program is able to maintain full cost recovery. GAO noted that
if fees are not reviewed and adjusted regularly, programs will run the
risk of overcharging or undercharging users, while also raising equity,
efficiency, and revenue adequacy concerns. GAO further noted that the
questions affecting fee trajectory and revisions include:
What are the fixed and variable costs of fee-funded
activities?
What are the timing and pattern of program spending?
How quickly can the program adjust fee rates in response
to changes in collections or costs?
Are there other sources of funding or authority for a
reserve that may mitigate shortfalls?
Can the Agency update its fees more frequently by rule,
and if so, how will the Agency enhance stakeholders' trust in its
revision methodology?
The e-Manifest Act does speak to several of these matters. Sections
2(c)(1) and 2(c)(3)(B) of the Act clearly confer discretion on EPA to
set and periodically adjust e-Manifest fees to ensure alignment with
program costs. The latter section authorizes EPA to consult with the
System Advisory Board on fee revisions, and to increase or decrease the
amount of fees to a level that results in the collection of revenue
that is sufficient, but not more than reasonably necessary, to cover
current and projected system related costs (including upgrades). Fee
adjustments are also required to maintain revenues at a level that will
minimize the accumulation of unused amounts in the System Fund.\15\
---------------------------------------------------------------------------
\15\ EPA must recover the system development costs and repay the
Treasury for the funds advanced for system development work. EPA
will amortize development costs over 5 years, and while the fee
collections corresponding to these development costs may accumulate
in the System Fund, they would not be counted toward any surplus.
---------------------------------------------------------------------------
On the question of the timing of fee revisions, the Act provides
that an initial adjustment to user fees shall be made at the time at
which initial system development costs have been recovered, and
periodically thereafter, upon receipt of information in annual
financial accounting or audit reports, disclosing a significant
disparity between fee collections for a fiscal year and expenditures
made that year for program related costs. Thus, EPA does have
discretion to revise fees as necessary to maintain balance between
revenues from fee collections and program costs as changes occur over
time. The e-Manifest Act authorizes EPA to accumulate a revenue surplus
of not more than $2 million over the initial three-year period of
operations, presumably out of recognition that there might be
imprecision in cost estimates and revenue forecasts in the initial
period of system operations.
EPA attaches great significance to the role of the System Advisory
Board in consulting with EPA on fee revisions. As the Board will be
comprised of a cross-section of program stakeholders, EPA believes that
this consultation role will be very important to maintaining trust in
EPA fee setting and revision methodology. Financial reports and audits
will be shared with the Advisory Board, and current and projected
program budgets and their effects on proposed fee revisions will be a
regular agenda item for EPA's discussions with the Advisory Board.
Therefore, it is essential that these discussions, our fee setting
methodology, and our fee revision methodology be rational and
transparent to our stakeholders. Thus, this section of the preamble is
intended to explain the fee revision methodology and schedule we
propose to follow in our regular efforts to maintain balance between
fee collections and program costs.
Additional Federal guidance relating to fee revisions appears in
OMB Circular A-25. In Section 8.e. of this Circular, addressing Agency
responsibilities, OMB states that each agency will review the user
charges for agency programs biennially to include, among other things,
``assurance that existing charges are adjusted to reflect unanticipated
changes in costs or market values.'' Thus, it is the objective of this
action to propose a fee trajectory or revision methodology that
implements the direction provided by the e-Manifest Act, as well as the
applicable guidance in Circular A-25 and the GAO Design Guide.
2. What methodology and process is EPA proposing for e-Manifest fee
revisions?
EPA is proposing a fee revision methodology under which the Rule's
fee formula would be re-run at two-year intervals, with the most recent
program cost and manifest usage numbers being
[[Page 49086]]
used in running the fee formula to calculate the fees for each manifest
submission type. The result would be a fee schedule that announces the
fees for each of the next two years. EPA would publish the revised fee
schedules at the e-Manifest program's Web site, and would also provide
a link to users when they access the e-Manifest system so that they
could be immediately notified of and directed to the new fee schedules.
We would provide this type of actual notice to system users (via a link
to the publication at the program's Web site) 90 days prior to the
effective date of the new fee schedule. This proposal would require
revisions to several provisions of the One Year Rule that EPA issued in
February 2014. In the One Year Rule, EPA stated in several regulatory
provisions that it would update e-Manifest user fees from time to time,
and that fee schedules would be published as an appendix to 40 CFR part
262. This proposed rulemaking would instead publish the fee schedules
and their revisions to users at the e-Manifest program's Web site, and
not codify the fee schedules in an appendix to part 262. Therefore,
this proposed rule would delete the requirement to codify fee schedules
in a part 262 appendix from the current regulations at 40 CFR
262.24(g), 263.20(a)(8), 264.71(j), and 265.71(j).
Thus, while EPA would develop the initial fee schedule under this
action using notice-and-comment rulemaking procedures, it is not EPA's
intent to issue the subsequent fee schedule revisions through notice-
and-comment proceedings. Rather, EPA is proposing its methodology for
fee calculations and revisions in this rulemaking, and when we finalize
this rule in response to comments, our final methodology will be
announced and used to calculate the initial set of program fees.
However, with each two year fee revision cycle thereafter, EPA will re-
run the fee calculations using the latest program costs and manifest
numbers, but will not subject the revised fee schedules to notice-and-
comment proceedings, as long as the fee revision calculations are based
on the same fee methodology that we develop with this action. Our
intent is to develop a fee setting and revision methodology that would
be durable and could be used repeatedly over the coming years, with
adjustments to fees being announced consistently with the formulas and
adjusters included in this methodology. However, if EPA alters
significantly its methodology for calculating or adjusting fees, or the
fees are affected by significant new program costs not anticipated in
the formulas we include in our initial fee-setting methodology, then
EPA would follow notice-and-comment procedures before announcing any
revised fees based on a significantly new fee methodology.
EPA also considered a process under which the Agency would run the
fee formula with the most recent costs and manifest usage numbers on an
annual basis. While this option would appear to be most responsive to
program cost changes, it is not our preferred option for this proposal.
EPA is instead proposing a two-year cycle for re-running the fee
formula and publishing fee schedules, because we believe that a two-
year cycle strikes a better balance between revenue accuracy, process
burdens, and fee program stability for users. With a two-year cycle,
the user community will know and be able to budget for the fees that
will be owed for each manifest submission over a more stable period of
two years, rather than having to deal with a fee schedule that is
constantly under revision. For EPA, there will also be advantages, in
that the Agency will not need to incur the administrative costs of re-
issuing fee schedules and publishing them each year, and explaining the
resulting fee changes to the Advisory Board and user community.
Moreover, EPA believes that a two-year cycle for issuing fee schedule
revisions is consistent with the guidance of OMB Circular A-25, which
requires agencies to conduct biennial reviews of its user fees,
including adjustments in fee charges.
3. What adjusters would be included in the proposed fee revision
methodology?
Obviously, with each re-running of the fee setting formula at our
proposed two-year interval, the fees that are so determined will have
been ``adjusted'' to reflect the most recent program costs from each of
the cost categories discussed in the formula, and to reflect the number
and type of manifest submissions. Nevertheless, we are proposing
additional adjusters to further enhance our ability to keep fee
revenues in balance with program costs.
a. Inflation Adjuster. First, since fee schedules will be announced
for each of the two years following the issuance of the new fee
schedule, we believe it may be necessary to include an adjuster to
account for inflationary effects between the first and second years of
each fee schedule. While inflation has been very modest in recent
years, and it may not seem worthwhile at existing inflation rates to
adjust for inflation in the second year's schedule, it is not clear
that the recent experience with marginal rates of inflation will
continue into the future. Since EPA desires to establish a durable fee
revision methodology that will service the program's needs for several
years, we believe it is prudent to include an inflation based factor to
deal with inflationary impacts to program costs between the two years
covered by each fee schedule.
One such inflation based adjustment would make use of the Consumer
Price Index (CPI) or similar index of price or labor cost changes to
represent the impact of inflation in changing the program costs to be
recovered from user fees. It is not uncommon for the CPI that is
published by the Bureau of Labor Statistics (BLS) to be used in fee
programs such as e-Manifest to represent the impact of inflation on
program costs generally. Given the manner in which the CPI is
determined by BLS, the CPI may not be an entirely accurate measure of
the changes in the costs of labor and IT services and commodities that
are being purchased to support the e-Manifest project. However, absent
a demonstration that there is another index that is more specific to
and more representative of program costs changes for e-Manifest, the
Agency is proposing to rely on the use of the CPI as a sufficiently
representative index for our fee adjustment purposes.
According to BLS, the CPI is intended as a measure of the average
change over time in the prices paid by urban consumers for a so-called
``market basket'' of consumer goods and services. The CPI market basket
is determined from surveys of the purchases and spending habits by
several thousand urban families from around the country. For this urban
population, the CPI market basket represents goods and services
purchased for consumption from more than 200 categories of items drawn
from eight major groups: Food and beverages, housing, apparel,
transportation, medical care, recreation, education and communication,
and other goods and services. Charges for certain government services,
such as water and sewer charges, auto registration fees, and vehicle
tolls are also included in the calculation of the CPI. The broadest and
most comprehensive CPI published by the BLS is known as the All Items
Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City
Average, 1982-84 = 100. Many other CPI indices are published, involving
various seasonal or regional adjustments or to specifically include or
exclude certain goods or services. However, for purposes of e-Manifest
fee inflation adjustments, EPA proposes to rely on the CPI based on all
items, and not seasonally adjusted.
[[Page 49087]]
The CPI is certainly a commonly relied upon measure of inflation,
which has been defined as a process of continuously rising prices or of
the continuously falling value of money. The CPI is skewed toward
consumer goods and services, so it does measure inflation as
experienced by consumers in their day-to-day living expenses. However,
it is not the only measure of inflation that is available as a gauge of
inflation's possible effects on e-Manifest program costs. There is also
a Producer Price Index (PPI) for measuring inflation at earlier stages
of the production process; there is an Employment Cost Index (ECI) to
measure the effects of inflation in the labor market; and there is a
Gross Domestic Product Deflator to measure inflation experienced by
both consumers and governments and other institutions providing goods
and services to consumers. There are also other more specialized
measures that could be used for this purpose as well. However, other
federal user fee programs tend to use the CPI as the means to measure
inflationary impacts on their program costs, and barring persuasive
evidence that there is a more suitable index for e-Manifest, we believe
that the CPI should be sufficient for this purpose.
A CPI-based adjuster used to adjust the second year of e-Manifest
fees in a two-year fee schedule could be structured as follows:
FeeiYear 2 = FeeiYear1 x
(CPIYear2-2/CPIYear2-1),
Where
FeeiYear2 is the Fee for each type of manifest submission
``i'' in Year 2 of the fee cycle,
FeeiYear1 is the Fee for each type of manifest submission
``i'' in Year 1 of the fee cycle, and
CPIYear2-2/CPIYear2-1 is the ratio of the CPI
published for the year two years prior to Year 2 to the CPI for the
year one year prior to Year 2 of the cycle.
Thus, by factoring the Fee for Year 1 for each manifest submission
type by the ratio of the two most recent years' CPI's, the result would
represent the second year fee amount corrected for inflation under this
proposed rule.
In summary, EPA is proposing an inflation adjustment factor
predicated on the use of the CPI-U, for all items, not seasonally
adjusted, as a sufficiently representative inflationary index and a
means to adjust e-Manifest user fees for inflation between the first
year and second year of the two-year fee schedules that EPA will
develop and publish to the e-Manifest program Web site. We request
comment on this aspect of the proposed rule (If submitting comments on
this issue, please use comment header: 5. Inflation Adjuster).
b. Revenue Recovery Adjusters. In addition to an inflation
adjuster, EPA is proposing an additional adjuster that would be aimed
at recapturing revenue that was lost on account of imprecision in
estimating the numbers and types of manifest submissions that would be
processed by the e-Manifest system. We also are proposing an adjuster
that would recover revenue lost on account of manifest submissions that
were uncollectable from the users that submitted manifests but did not
pay their fees when due or in response to collection actions. Unlike
the inflation adjuster, which operates to adjust fees between the first
and second years of each two-year fee cycle, these two adjusters would
be ``look back'' adjusters that would look back to the previous two-
year fee cycle, and attempt to recover revenue losses from that
previous cycle through adjustments to the fee schedules for the new
cycle. The revenue recaptured through these adjusters would be added to
the O&M Costs in the fee calculation formula, so that this recaptured
revenue would be re-allocated like other program operation costs to the
fees charged on a per-manifest basis.
In support of this user fee regulation, EPA has developed a model
that provides estimates over several years of assumed adoption rates
for each manifest type, of call center costs, of electronic system O&M
costs, of paper center costs, of system setup costs, of EPA Program
Costs, of CROMERR implementation costs, of e-Manifest related system
enhancement costs, and of the marginal costs of each manifest
submission type. These cost categories are the major elements of
program costs that our user fees will allocate to users through the
development of per manifest unit charges or fees. As EPA develops more
current information on actual program and system procurement costs
incurred in developing and operating e-Manifest, these actual cost
figures will be inserted in the fee formulas to develop our initial and
subsequent fee schedules. However, an area of high sensitivity for the
accuracy of e-Manifest fees that are determined on a per manifest basis
is the accuracy of our projections about manifest usage. Particularly
at the outset of the e-Manifest program, when we are capturing fee
revenue based on unproven projections about how many total manifests
and how many manifests of each type will be submitted, there is a risk
of revenue instability for the program if these initial projections are
not accurate.
To address this revenue stability risk, EPA is proposing an
adjuster that would add to the revenues to be collected in a new fee
cycle the revenues lost in the previous cycle on account of imprecision
in the manifest usage numbers used as assumptions in the development of
the previous fee amounts. This manifest number adjuster could be
expressed as follows:
Revenue Recapturei = [(NiYear1 +
NiYear2)Actual (NiYear1 +
NiYear2)Est] x
[Feei(Ave of Yrs1and2)],
Where:
Revenue Recapturei is the amount of fee revenue to be
recaptured for each type of manifest submission ``i'';
(NiYear1 + NiYear2)Actual
(NiYear1 + NiYear2)Est is the
difference between actual manifest numbers submitted to the system
for each manifest type during the previous two-year cycle and the
numbers estimated when we developed the previous cycle's fee
schedule; and
Feei(Ave) is the average fee charged per manifest type
over the previous two-year cycle.
By factoring the average fee times the difference between manifest
numbers actually collected and the manifest numbers estimated, the
proposed adjuster would return to the program the revenues that were
lost to the program because our estimates of manifest usage did not
match actual experience during the two-year fee cycle. Of course, it is
possible that this adjuster could also result in a negative adjustment
and reduce fee revenues in the next fee cycle, because the Agency
underestimated manifest numbers in the prior cycle and actually
generated surplus revenue from the greater numbers actually submitted.
In either case, this look back adjuster would attempt to reconcile
actual manifest usage with estimates used to develop fee schedules, so
as to restore revenue balance. EPA requests comment on the inclusion of
this adjuster in the proposed fee trajectory methodology (If submitting
comments on this issue, please use comment header: 6. Revenue Recovery
Adjuster).
A second revenue recapture adjuster we are proposing in this fee
regulation is an adjuster aimed at recovering revenues lost on account
of ``uncollectable'' manifests, that is, manifests for which the fees
were not paid by the user when due or after fee collection activities.
While EPA expects that most TSDFs will be current with their e-Manifest
fee obligations, there is a possibility that despite the Agency's best
efforts at collection of fees, and despite imposition of sanctions for
non-payment, some manifest fee obligations may remain uncollectable.
This revenue stability risk becomes more significant should fee
payments occur predominantly as accounts receivable
[[Page 49088]]
for reimbursement of services, rather than as advance payments for
manifest related services. Therefore, in order for EPA to ensure that
we are able to maintain a fee program that accomplishes full cost
recovery, we are proposing an adjuster that would recover revenue lost
from the previous two-year fee cycle on account of uncollectable fees.
This proposed adjuster for uncollectable fees would be expressed as
follows:
Uncollectable Revenuei = (NiYear1 +
NiYear2)UNCOLLECTABLE x Feei(Ave),
Where:
(NiYear1 + NiYear2)UNCOLLECTABLE is
the sum of the number of uncollectable manifests of each type ``i''
over the previous two-year cycle, and
Feei(Ave) is the average fee charged for each manifest
type ``i'' during the previous two-year cycle.
4. Requests for Comment
EPA requests comment on the uncollectable manifest adjuster and the
other adjusters and processes included in the proposed fee trajectory
methodology. In particular, EPA requests comments responding to these
questions:
Do commenters generally agree with the trajectory
proposal's emphasis on inflation, manifest usage estimates, and
uncollectable manifests as the key sources of revenue instability that
the adjusters should address? Are there other sources of revenue
instability that are not addressed or could be addressed better by
another methodology? (If submitting comments on this issue, please use
comment header: 6. Revenue Recovery Adjuster)
Do commenters agree that a two-year fee schedule revision
cycle is desirable and practical for keeping pace with program cost
changes? Do commenters agree that stability and avoidance of
administrative burden are sound reasons for not adjusting fees annually
or at some other frequency? Should fees be adjusted less frequently
than every two years? (If submitting comments on this issue, please use
comment header: 7. Two-Year Fee Schedule Revision Cycle)
Do commenters agree that EPA's publication of fee schedule
changes to the e-Manifest site 90 days prior to the effective date of
fee schedule changes is sufficient notice to users of fee revisions?
(If submitting comments on this issue, please use comment header: 8.
90-Day Lead Time for Fee Schedule Changes)
Do commenters agree with the use of the CPI-U to measure
inflationary impacts on program costs between the first and second year
of each fee schedule? Is there a different index or another measure of
cost changes that would more accurately reflect the changes in the
labor and IT commodities and services costs that are more
representative of our e-Manifest program costs than the ``market
basket'' of consumer goods and services which BLS tracks with the CPI?
(If submitting comments on this issue, please use comment header: 5.
Inflation Adjuster)
Do commenters agree that uncollectable manifests are
appropriate for inclusion in a revenue adjuster to be paid for as fee
increments by those users who are timely with their fee payments? How
else can EPA ensure full cost recovery in the face of the instability
posed by those who might become delinquent in their payments? (If
submitting comments on this issue, please use comment header: 6.
Revenue Recovery Adjuster)
E. What manifest transactions warrant fee premiums?
1. Background
The consideration of fee premiums touches upon several of the user
fee design principles discussed previously. Specifically, the EPA must
balance economic efficiencies of user fees (align users' fees with the
costs of providing services) and the equity of the fee system
(beneficiaries pay their fair share vs. ability to pay considerations),
while assuring the adequacy of resulting revenues and minimizing the
administrative burden of the fee system. Consequently, EPA prefers to
keep the fee structure as simple as possible and balance the
desirability of any fee premiums with the resulting complexity to the
fee system and any resulting equity issues. Therefore, the EPA does not
strongly favor adding fee premiums to the fee structure, unless there
is a compelling basis for such premiums. The EPA believes fee premiums
could be appropriate to recover e-Manifest system related costs where:
The activity benefits a particular user to a significant
extent;
It is more equitable to charge that user for a service
than to have the costs shared collectively;
The cost of the premium service can be estimated
accurately, and is not outweighed by collection costs; and
The premium could deter undesirable activities or produce
other favorable policy outcomes.
2. What fee premiums has EPA considered?
Based on the factors discussed earlier, EPA has considered the
following as candidates for e-Manifest user fee premiums:
Complex manifest transactions that incur greater cost
(e.g., rejections and discrepancies, consolidated loads, split loads),
Submission to and return of stray documents from the paper
center,
Help desk encounters,
Manifest Q/A and correction submissions, and
An additional paper manifest use penalty.
a. Complex Manifest Transactions. Complex manifest transactions
typically require use of more than one manifest to effectively track
and closeout the original manifest. There are several variations of
complex manifests, some of which \16\ are detailed as possible
candidates for fee premiums.
---------------------------------------------------------------------------
\16\ EPA did not include imports or exports, as we do not
believe that completing the Item 16 data for international shipments
introduced significant processing costs. Also, continuation sheets
were not included as a candidate for a premium, as each sheet
submitted as a continuation sheet would be charged a separate per
manifest fee.
---------------------------------------------------------------------------
i. Consolidated Shipments. Consolidated shipments or split loads
often require use of one or more manifests to effectively track and
closeout the original manifest for the hazardous waste shipment. For
instance, consolidated shipments require manifest users to link
individual manifests from consolidated loads to a new manifest to
present the overall description. The original manifests for such
shipments must be linked and carried forward so that they may be closed
out on receipt to the original generators. EPA has concluded that
manifest activities for consolidated shipments do not necessitate fee
premiums, because the multiple manifest nature of these transactions
will itself provide for ample fees to be collected. Therefore, the EPA
will not assess any additional fee premium for such shipments. Instead,
EPA will assess a per manifest charge for each original manifest that
is consolidated, plus an additional per manifest charge for the
``cover'' manifest that provides linkages to the original manifests and
describes the total quantities of waste that are shipped.
ii. Split or Breakdown Shipments. This type of complex shipment
occurs when a larger shipment of waste is divided into smaller
shipments for transport, such as a rail car cargo that is off-loaded
and reshipped on several truck shipment manifests. Thus, the larger
shipment is considered to be ``split'' into or ``broken down'' into
several smaller shipments that require individual, separate tracking.
These
[[Page 49089]]
split shipments may occur at either permitted facilities or at non-
permitted RCRA 10-day transfer facilities.\17\ EPA has concluded that a
distinct fee premium is not needed for split or breakdown shipments.
Again, because the tracking of these shipments will itself require the
use of multiple manifests, the per manifest fees that result are ample
to cover the costs of these complex tracking transactions. At a
permitted facility, for example, the EPA would assess a fee for the
original manifest when it is closed out at the permitted facility and
also assess a separate per manifest fee for each resulting split load
that is recorded on a new manifest. Further, if split shipments occur
at a transfer facility, then the original manifest would be amended to
indicate lesser quantities for a portion of the split load while
another manifest(s) would be prepared for any remaining hazardous
wastes. Thus, EPA would assess a per manifest charge for the amended
original manifest and any additional manifests prepared for the split
waste shipments when processed at a transfer facility. In such cases,
no useful cost recovery purpose would be served by assessing any
premium fee.
---------------------------------------------------------------------------
\17\ These types of shipments may also occur at intermodal
facilities, a specific type of permitted or transfer facility at
which waste materials are transferred between modes of
transportation, e.g., truck to rail.
---------------------------------------------------------------------------
iii. Hazardous Waste Rejections or Regulated Residues. These
complex manifest transactions occur when a designated facility receives
a hazardous waste shipment but does not accept it, either because of
restrictions in the facility's permit, capacity limitations, or other
reasons. A partial rejection occurs if a designated facility accepts a
portion of the shipment but rejects the remainder. Container residues,
on the other hand, are hazardous wastes that remain in regulated
amounts in containers such as drums and in tank vehicles used for
transport, after most of the contents have been removed. The rejected
hazardous wastes or regulated residues often are forwarded on new
manifests that are linked to the original manifests. While the manifest
tracking procedures for these shipment are complex, the EPA has
determined that such transactions do not warrant a distinct premium
fee, because EPA will assess a per manifest charge for the original
manifest and a per manifest charge for the new manifest used to forward
the full or partial shipment, or residue shipment.
In some instances, however, hazardous wastes rejections are
forwarded on the original manifests and do not require use of a new
manifest to forward the shipment or return it to the generator. EPA
acknowledges that that in these limited cases, the original manifest
may be used to forward or return full rejections, and that additional
data elements will need to be supplied to track such shipments. EPA,
however, has concluded for this proposal that a premium is not
necessary for such transactions. While completion of Item 18b to track
continued shipping of rejected wastes on the original form will
necessitate additional data entries, the intent of Item 18b is to
enable continued tracking without completing a new form. EPA believes
that it would be counter-productive to charge a fee premium for
continuing the original form. In addition, the EPA does not believe
significant costs to EPA would result from processing the additional
Item 18b entries.
iv. Help Desk Encounters. A help desk will be established to assist
e-Manifest users with technical issues (e.g., password, log-on,
troubleshooting system connectivity issues) that arise in connection
with their use of electronic manifests. Currently, the proposed Fee
Formula discussed in Section III.C of the preamble includes help desk
costs among the O&M costs that will be allocated generally to each
manifest in the system. Help desk costs are a type of intervention for
which there is some rationality in charging a per encounter fee to the
users. This is particularly valid if it is found that certain users
utilize the help desk excessively, thereby obtaining more than their
``fair share'' of services, and depriving others of help desk services.
Despite the logic for charging a premium for help desk encounters, the
EPA has determined at this time that the agency will not assess fee
premiums for help desk costs. EPA intends to aggregate and apportion
help desk costs as system O&M costs on a per manifest basis, as
intended by the current fee calculation formula. Further, it is not
clear whether a per encounter charge or a charge based on time utilized
would be more equitable for any premium. Given the uncertainties of
pricing and collecting these types of fees, the EPA believes it makes
greater sense to spread help desk costs across all manifests by
aggregating these costs as part of system O&M costs.
v. Submission and Return of Stray Documents. Based on consultations
with the states, the EPA has discovered that states frequently (about
25% of incoming mail) receive extraneous documents that are forwarded
to their tracking programs along with the required manifests for
processing. These extraneous documents can include cover letters, Land
Disposal Restriction (LDR) or other regulatory documents, and even
miscellaneous flyers or other documents of no relevance to the
manifest. While the EPA will not collect and process these documents in
the e-Manifest system, the agency has some obligation to return such
stray documents to their senders. Therefore, the Agency intends to
return stray documents (other than cover letters) to the senders
without processing their content and initially retain the envelopes to
enable their return. The effort to sort and return these documents by
mail to their senders will introduce costs that EPA believes should be
recovered by a fee premium.
The EPA has made this determination for a couple of reasons. First,
the EPA believes that the administrative costs to the agency would be
significant for scanning or retaining envelopes, weeding out stray
documents for return, and for the postage and clerical costs of
returning these items to senders. Consequently, the EPA believes it
would be more appropriate for the agency to assess a premium fee per
stray document for such activities rather than apportion them across
all manifests by aggregating these costs as part of system O&M costs.
Second, the EPA believes a fee identified with these submissions should
help to deter these submissions from occurring prospectively. Based on
these two factors, the EPA is proposing to assess a premium fee per
stray document to TSDF users who include extraneous documents in their
submissions. The EPA also proposes to charge the fee at the time of
paper manifest submission, so stray document premium fees could be
added to the regular per manifest fee without difficulty. EPA requests
comment on this proposed fee premium and on the point in the process
for which the fee would be assessed (If submitting comments on this
issue, please use comment header: 9. Stray and Extraneous Documents).
vi. Manifest QA and Correction Submissions. Based on consultations
with several states with relatively robust manifest programs, EPA has
learned approximately 10-20% of all manifests require corrections
following submission to the states. Each state has its own method for
conducting QA/QC with specific validation rules.
The most common issue found during state validation is illegible
handwriting on the paper manifest, which seems to be the focal point of
each state's QA/QC process. Some states will validate the handler IDs
on the manifest against their database housing RCRA IDs. Other states
attempt to identify typos or
[[Page 49090]]
obvious errors with quantities, units of measure, and the handler
information. Currently, if a manifest fails the state's QA/QC process,
the state will notify the facility through official notice of
correction, phone, or email of the needed correction along with any
appropriate fines. In response, the facility will return the correction
to the state, along with appropriate payments. Some states, such as
California, have regulated processes for submitting signed correction
letters with the corrected manifest. Other states may accept
corrections verified by the handler via phone or email.
Because EPA will collect both electronic manifests and paper
manifests that continue in use, the e-Manifest program must assume some
responsibility in the QA/QC manifest process. The states also expect
that the EPA would run some type of federal QA/QC on manifests
received, such as several basic validation rules. Following the EPA's
QA/QC process, the states would then execute their state-specific QA/
QC, as desired. Currently, the EPA is actively engaged in the
development of the EPA system, and will establish the validation rules
as part of system design. Prior to system launch, the EPA will request
input from both industry and state stakeholders on the validation rules
that would be used to identify manifest errors or share the validation
rules with industry to help mitigate invalid manifests sent to EPA.
Additionally, EPA could develop a validation engine that could be used
by industry prior to submitting manifests.
Although EPA continues in its efforts for system planning and has
not made final decisions regarding system design, the agency believes
that that there should be some submission required by TSDF users to
execute manifest corrections in the e-Manifest data system. In section
III.V of this preamble, the Agency in fact proposes such a data
correction submission and process for initiating manifest data
corrections. The regulatory requirements for such correction submission
are proposed at Sec. Sec. 264.71(l) and 265.71(l) of this proposed
rule. In addition, the EPA anticipates that it would not receive
manifest corrections by postal mail but would instead receive all
manifest correction related submissions electronically. The section
III.V corrections process discussed later in this preamble and in the
proposed regulations would require all such corrections to be submitted
electronically by facilities.
The Agency believes that it should not incur significant
administrative costs resulting from electronic manifest corrections.
For electronic manifests, manifest edit checks and corrections would
primarily occur prior to submission. The e-Manifest system would apply
validation rules that could be executed automatically, and the system
could alert the user of any errors. Thus, the EPA is proposing at this
time that it will not assess fee premiums for processing corrections
submissions for electronic manifests. Instead, QA/QC process costs for
electronic manifests would be spread among the O&M costs that will be
allocated generally to each manifest in the system.
While the EPA anticipates to also use some automated validation
rules for all paper submission types (i.e., XML, postal mail, image
file), the automated QA/QC checks in some instances would occur after
manifest submission, particularly for postal mail submissions. Thus,
the EPA believes it is likely that significant administrative costs
will result to EPA for processing corrections to paper submissions.
Thus, the EPA believes the paper manifest corrections process would
involve allocable system costs in responding to the correction
submissions and re-keying data to correct previous entries made in the
system. For that reason, the EPA is proposing to assess fee premiums
for processing corrections submissions for paper manifests. The EPA
requests comment on the proposed premium fee for processing a
correction submission for paper manifests. In addition, the agency
requests comment on when in the paper processing operation such premium
fees should be assessed and collected (If submitting comments on this
issue, please use comment header: 10. Paper Manifest Corrections).
vii. Paper Use Penalty. As discussed previously in Section III.C of
the preamble, EPA is proposing to assign a differential fee to each
manifest type (fully electronic, XML, image, paper) based on the
varying labor costs to EPA to process data from each type into the
system. In addition, should electronic manifest adoption lag (not
achieve 75% use in four years), EPA is proposing to transition to a fee
calculation formula that would allocate the paper center's operation
and maintenance costs only to the paper manifest submission types. The
cost-based approach of the proposed fee calculation formula for
allocating system development and operating costs would already result
in a higher differential fee assessed for paper manifest use than for
electronic manifests. For example, under the proposed fee formula, the
EPA now estimates paper manifests mailed to the system carry a per
manifest charge about 88% greater than electronic manifests, while the
paper manifests submitted as XML files would carry per manifest charges
about 15% greater than fully electronic manifests. Thus, there is
already a ``premium'' associated with paper manifest types, based
solely on the formula's cost considerations. Moreover, the fee formula
as proposed could become even more aggressive in elevating paper
manifest fees in four years. Therefore, the EPA at this time does not
believe that paper manifest usage necessitates a distinct or additional
fee premium. Instead the EPA will defer any additional paper manifest
premium until we see how actual implementation unfolds, and how the
proposed fee formula itself operates as an incentive for greater
electronic manifest use. The EPA requests comment on this proposal to
rely on the fee formula itself to incentivize electronic manifest use,
and not to include a distinct monetary penalty to discourage paper
manifest use (If submitting comments on this issue, please use comment
header: 11. Incentivize Electronic Manifest Use).
F. How will fee payments be made?
1. Background
The e-Manifest Act provides EPA the authority to collect fees for
both electronic manifests and paper manifests that continue in use. The
Act also granted EPA broad discretion to collect such fees in advance
or as reimbursement services. Because Congress intended that the fees
fully fund the e-Manifest system, EPA must institute a fee collection
process that facilitates prompt payment of fees to ensure that the
agency produces a stable revenue stream that will fully recover program
developmental and operational costs. The EPA has considered several
options to address how the e-Manifest system can most effectively and
efficiently collect a large number of small value fees from TSDFs.
Specifically, EPA examined existing user programs within the agency
to ascertain how these programs determine and revise their fee
schedules, and to identify features or experiences in these programs
that are takeaways for e-Manifest. For instance, the Toxics Substance
Control Act (TSCA) authorizes fees for the Office of Chemical Safety
and Pollution Prevention's (OCSPP's) lead abatement program. TSCA
section 402(a)(3) authorizes fees for the accreditation of lead
contractor training programs and certification of contractors engaged
in activities that disturb lead-based paint during painting,
renovation, remodeling, and repair of target
[[Page 49091]]
housing. The original fees for the Lead-based Paint Activities program
(the lead abatement program) were established in 1999.
The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
amendments passed by Congress in 2004 authorized a registration fee
program to defray EPA's costs in reviewing and approving applications
for specific pesticide registrations, amended registrations, and
associated tolerance actions. The goal of this fee system is to create
a more predictable evaluation process for affected pesticide decisions
and to couple the collection of individual fees with specific decision
review periods. The 2004 amendments are also known as the Pesticide
Registration Improvement Act of 2003 (PRIA).
Section 217 of the Clean Air Act authorizes EPA to collect fees to
recover Agency costs related to various activities (i.e. new vehicle or
engine certifications, compliance monitoring, testing, etc.) incurred
by the Office of Air and Radiation to administer its motor vehicle and
engine compliance program (MVECP). Unlike the e-Manifest program, these
programs receive additional appropriated funds, unrelated to the fees,
to fund their program operations.
In addition, EPA consulted with the ETC, a trade association of
commercial environmental firms that recycle, treat and dispose of
industrial and hazardous waste. EPA conferred with ETC and its members
in April 2015 to gather feedback on several of the fee collection
issues and options discussed in this proposed rule, as its members
would be primary users of the system and responsible for fee payments.
Based on examination of existing fee programs and our consultations
with ETC, EPA is considering several fee collection approaches for e-
Manifest. Specifically, the Agency is considering pre-payment options
based on projected or historic use, and an invoicing option under which
users would be invoiced for fees based on their actual manifest usage
during the previous billing cycle.
2. Payment Collection Options Under Consideration
a. Pre-payments Based on Projected or Historic Use. EPA examined
two variations of advance payments. Under the first approach, TSDF
users would pay in advance one lump sum annual fee for their projected
manifest usage for an entire year. Under the second approach, TSDFs
would make monthly recurring payments of an advance, fixed amount.
There is precedent for advance payments of user fees in several of
EPA's existing user fee programs. For example, the EPA's Office of
Chemical Safety and Pollution Prevention and Office of Air and
Radiation fee programs typically require advance payment prior to
administering program services involving the review of applications for
the various certifications and registrations administered by those
programs. Under the first advance payment approach, TSDFs would pay a
one-time annual fee for the entire year. TSDFs users would self-declare
on a fee calculation form provided by EPA the number of manifests they
expect to use based on the prior year's usage amounts. In addition,
TSDFs would be expected to apportion manifest usage between electronic
and paper manifests. EPA would charge and collect the lump sum fee
based on these projections. EPA would either credit TSDFs for
overpayment (if their actual usage was less than predicted by previous
year's usage), or invoice facilities at the end of the year for a
reconciliation payment for any actual underpayment, should actual usage
exceed the estimates based on the previous year's usage.
Under the second pre-payment approach, EPA would charge TSDF users
a fixed one-twelfth payment amounts on the first of each month, with
the payments occurring as a pre-authorized Automated Clearinghouse
(ACH) debit from a facility's commercial account. Like the lump sum
advance payment option, TSDFs would be expected to self-declare the
number of manifests they expect to use (based on prior year's usage) on
a fee calculation form provided online by EPA. Facilities would also
apportion their manifest usage between electronic manifests and paper
manifests. In addition, the TSDFs would then divide their annual use
projections by twelve to calculate the number of electronic and paper
manifests projected per month. The appropriate monthly fee for
electronic and paper manifests would be calculated, and from this
calculation, the amount of the recurring monthly debit would be
determined. The EPA would either credit TSDFs for overpayment (if their
actual usage was less than predicted by previous year's usage), or
invoice the facilities at the end of the year for a reconciliation
payment for any underpayment, should actual usage exceed the estimates
based on the previous year's usage.
b. Invoicing Users Monthly for Actual Usage. Under this approach,
EPA would allow TSDF users to use manifests for a monthly period and
then electronically invoice users for their actual manifest use over
that billing month. Precedent exists at EPA for invoicing user fees,
particularly in the Office of Pesticide Program's pesticide maintenance
fee program, which invoices holders of active pesticide registration
each year for the fees necessary to maintain their registrations.
The invoice for e-Manifest services would provide the following
information:
The TSDF's name, address and EPA ID Number;
The total number of paper and electronic manifests
transactions during the billing cycle;
The manifest ID numbers and dates of service for each
paper and electronic manifest used during the billing cycle;
The billing cycle dates and invoice due date; and
Any premium fees assessed during the billing cycle.
Unlike the aforementioned pre-pay options, the fees collected under
this option in the first year and beyond are not based on projections
from previous year's usage data, and are more precise in matching fee
liability to a facility's actual manifest usage.
3. What methods of payment will be accepted?
TSDF users could use any payment method of their choice supported
by the Department of the Treasury's Pay.gov \18\ electronic payment
collection services (or any applicable alternative or successor to
Pay.gov developed by Treasury) as long as EPA's financial tracking
systems are able to obtain and process the selected method of payment.
Specifically, TSDFs would be expected to create payment accounts in
Pay.gov and use one of the electronic payment methods currently
supported by Pay.gov (e.g., Automated Clearing House debits (ACH) from
bank accounts, credit card payments, debit card payments, or PayPal or
Dwolla). Because Pay.gov does not accept paper checks as an approved
method of payment, EPA will not accept paper checks as payment for e-
Manifest services.
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\18\ The URL for Pay.gov is http://www.pay.gov.
_____________________________________-
EPA will either develop with e-Manifest system activity data an
invoice based on manifest usage, or, the Agency will transmit usage
information to Pay.gov, which will generate electronic bills for
facilities using Pay.gov's e-Billing Service. Thus, either EPA or
Pay.gov will send notifications regarding bills electronically to
facilities, and not by postal mail. Regardless whether the e-Manifest
system or Pay.gov sends the electronic bill notification, it will
direct the TSDF users to go to the Pay.gov payment site to obtain their
invoices, and to make
[[Page 49092]]
their electronic payment using one of the aforementioned electronic
payment methods.
In the case of advanced payments, TSDF users would have to
authorize EPA to debit their commercial banking accounts automatically,
for the amount of the one lump sum payment in advance for the entire
year of projected manifest usage. EPA would then invoice the TSDF user
for a second or reconciliation payment, or credit its account for
overpayment, at the end of the year.
Similarly, under the monthly pre-payment approach, TSDF users would
have to pre-authorize EPA to debit their commercial banking accounts
for the amount payable to EPA through Pay.gov automatically so that the
recurring one-twelfth fixed payment amount could be debited each month.
EPA would invoice a final reconciliation payment to a TSDF user, or
credit its account for overpayment, at the end of the year so that
actual usage and fee obligations could be squared with the projected
usage figures used to generate the advance fee payments.
4. Analysis of Payment Collection Options
EPA believes the pre-payment options as well as the monthly
invoicing (reimbursement for services) option detailed peviously are
authorized by statute, attractive and implementable for e-Manifest.
However, each option has distinct characteristics that create risks or
complexities for either EPA or industry stakeholders. As mentioned
previously, the user fees are intended to provide the resources
necessary to enable full funding of the e-Manifest program without the
need for additional sources of funding.
On an administrative level, the pre-payment options are
advantageous, as they allow for the collection of fees in advance of
manifest services, which is administratively efficient on the front-end
of the collection process. Such an approach could also provide a more
stable revenue stream to cover system costs throughout the year,
because of the nearly automatic, scheduled nature of the payments. This
feature of the advanced payment option could also generate revenue more
promptly for the initial year of system operations, facilitating EPA's
ability to pay promptly its system related expenses, and also reduce
the revenue stability risks posed by late or non-payments. However, the
advance payment options would entail a greater administrative burden on
the back-end of the collection process, because of the necessity to
bill or invoice users at the end of the year for a reconciliation
payment to square actual usage with estimated payments, or to process a
credit in the case of overpayments. If users do not monitor their
monthly payment records and track closely their actual manifest usage
levels over the course of the year, disparities could develop that
might produce unexpected billing amounts or possibly disputes at the
end of the year. Finally, the monthly advance payment option has the
advantage of harmonizing with the fixed, recurring electronic payment
option supported by Treasury through Pay.gov. Currently, a recurring
monthly payment to Pay.gov can occur as an ACH electronic payment, but
only if the recurring monthly payment is for a fixed amount. EPA has
aligned the advance monthly payment option, with its estimated monthly
payment calculation, with the Pay.gov fixed recurring payment approach
in order to take advantage of the nearly automatic nature of this
specific electronic payment process.
Under the monthly invoicing (reimbursement) option, developing and
executing invoices each month for several hundred facilities will
entail more of an administrative burden on the front-end of the
collections process, as EPA would need to process and each facility
would receive and respond to 12 monthly invoices each year, rather than
one reconciliation invoice at the end of each year. However, this
option would eliminate the need for an annual reconciliation process at
the end of the year, and any billing surprises that might arise if
estimated payments and actual usage should diverge during the year. For
users, the monthly invoicing option also avoids the necessity for TSDFs
to complete their application at the start of each year that computes
the amount of their monthly fixed payment amount. Finally, the monthly
invoicing (reimbursement) option is advantageous for users, as it bills
facilities based on their actual manifest usage and their actual
involvement with electronic and paper manifests. This approach does not
raise issues of imprecision in revenue collection, as it would bill
facilities for exactly the amounts due from the actual numbers and
types of manifests submitted. However, the flipside of this advantage
is that it potentially creates some revenue vulnerability to the e-
Manifest program if payments are not made regularly and on time. In
that event, EPA would be forced to engage in collection activities and
pursue sanctions against delinquent fee payers, entailing additional
administrative costs to the Agency.
In consultations with the ETC, the Agency learned that ETC members
generally favor the invoicing approach to the advance payment options.
ETC members advised that there are variations in manifest usage from
year to year, and billing for actual usage avoids the imprecision of
trying to estimate fees based on a previous year's usage. ETC members
did indicate that with respect to advance payments, that option could
be more attractive if the advance payments were paid monthly rather
than as a lump sum, and if there were incentives (e.g., cost savings)
tied to using this method.\19\
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\19\ In a preliminary analysis of potential cost savings
performed by EPA's Research Triangle Park Finance Center, it was
estimated that an advance monthly payment option might result in
cost savings to EPA of several hundred thousand dollars, primarily
because of lesser staffing (FTE) needs for the reduced invoicing
effort associated with this option. If these cost savings were
distributed across all manifests, user fees under the advance
monthly payment option could be reduced by perhaps 10 to 20 cents
per manifest.
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5. What is EPA proposing for its fee collection methods?
While EPA requests comment on both the advance monthly fixed
payment approach and the monthly invoicing approach discussed
previously, EPA is proposing to implement e-Manifest user fee payments,
at least initially, by invoicing users monthly for their actual
manifest usage activity in the prior month. EPA believes that there are
advantages to billing monthly for actual usage, rather than for
estimated usage from prior years' activities, and that this proposal
will result in revenues matching system activity by users more
precisely. The e-Manifest system will maintain records of manifest
submission activity by users, and these records should provide a solid
foundation for accurate billing and payment collections. However, the
proposed approach will entail significant administrative effort by EPA
to generate monthly invoices for all receiving facilities, and the
potential for additional effort pursuing collection activities for any
delinquent payments. These administrative efforts from invoicing
facilities for monthly payments will result in additional operational
costs that will need to be captured by the e-Manifest user fees.
Despite the administrative effort and cost of invoicing monthly, the
Agency believes that the monthly invoicing approach is a sound option
for e-Manifest to implement initially.
While EPA is proposing the monthly invoicing option, we are also
soliciting comment on the advance monthly payment option and an
alternative option that combines these two approaches to payment
collection.
[[Page 49093]]
Under this alternative or combined option, EPA would initially invoice
TSDFs in the first year (or longer period) based on their actual
monthly manifest usage. EPA understands that during the initial period
of the system's operations, there might be too many uncertainties about
manifest usage rates and the numbers of electronic vs. paper manifests
in use to enable the advance payment method to be used with confidence.
However, after more is known about facilities' actual manifest usage,
these concerns could diminish. Therefore, EPA is requesting comment on
an approach to fee collections where after conducting monthly invoicing
for the initial year (or other period) of system operations, the Agency
would then transition users to the use of payment plans enabling
facilities to authorize a debit from a commercial account of a fixed,
monthly advance ACH payment. This alternative is premised on the
assumption that developing a baseline of manifest usage data from a
year or more of invoicing activity would be helpful to projecting
future manifest usage, and that such information would be sufficient to
develop estimated monthly payments under an advance fixed payment
method. As discussed earlier, this option would enable users to take
advantage of a nearly automatic monthly electronic payment that could
be scheduled and debited on the same day each month. Any deviation
between projected and actual usage and fees would be addressed by the
reconciliation process at the end of the year, resulting in an
electronic bill for the amount owed or a credit.
6. Request for Comment
EPA requests comment on the proposed monthly invoicing approach and
the alternative options (If submitting comments on this issue, please
use comment header: 12. Payment Options). Do commenters agree that a
monthly invoicing approach based on actual manifest usage is preferred
to the other options, even though it may entail additional
administrative effort and cost to implement? If there are concerns with
the proposed approach, what are those concerns, and what payment
option(s) would commenters prefer to the proposed approach?
With respect to the advance monthly fixed payment option, EPA
requests comments on the perceived advantages and drawbacks of this
option. Is there sufficient attractiveness to users in being able to
make a nearly automatic monthly payment rather than having to respond
to an invoice? Are the TSDF receiving facilities able and willing to
authorize automatic ACH debits, e.g., on the 1st of each month, from
their commercial bank accounts to cover a fixed, monthly e-Manifest fee
payment? Are the differential costs and savings from using advance
monthly payments sufficient as an incentive to encourage their use?
What other features or incentives could be included in this payment
approach to make it more agreeable to users? What risks might this
payment method pose to users if implemented?
With respect to the alternative or combined option, EPA requests
comment on the merits of a transition to advance payments after an
initial period of experience with monthly invoicing. The Agency asks
also for comments whether the one year timeframe discussed previously
would provide adequate time for TSDF users to develop a reliable
baseline of manifest usage. Is there some other timeframe that would be
more suitable to support the transition to advance monthly ACH
payments? If comments should disclose significant support for advance
monthly payments, and there are cost savings under this approach,
should EPA promote or require the transition from invoicing to advance
payments?
If EPA were to decide in the final rule to offer both an advance
monthly payment option and an option with monthly invoicing or
reimbursement for services, should EPA impose a differential fee or
premium fee reflecting the different administrative cost of processing
payments under the two approaches? The Agency solicits comment on these
matters.
G. How will EPA address user fee disputes?
EPA recognizes that over the course of invoicing many facilities
for their manifest fee obligations, errors may occasionally be made,
and such errors may give rise to disputes concerning the amount of a
user fee payment that is due in response to an invoice. In this regard,
EPA emphasizes that the fee disputes relevant to this discussion are
instances in which a facility questions the amount of an invoice
because of an error in applying the fee formula to the facility's
reported manifest activities. These disputes are not related to
questions about the fee formula itself, or the underlying methodology
EPA is proposing in this notice to determine the fee levels that apply
to manifest related transactions. There are regulatory or judicial
processes available for participating in or challenging such regulatory
decisions. In addition, the Agency will conduct regular meetings with
the e-Manifest Advisory Board to discuss any concerns with the fee
setting process, the program's fee levels, and the financial reports of
the system's revenue collection and expenditure activities.
Therefore, the issues that EPA considers to qualify as fee disputes
for purposes of this discussion are those that arise when a facility's
monthly invoice presents the facility with a fee amount that the
facility challenges, because the invoice does not accurately describe
the numbers of manifests submitted in the prior billing period, because
the invoice does not accurately describe the types of manifests (paper
types vs. electronic) submitted by the facility in the prior billing
period, or, because the invoice appears to have made a mathematical
error in generating the amount of fees due under the invoice.
EPA is not proposing a formal dispute resolution process governed
by explicit and detailed regulatory provisions and processes. Rather,
EPA intends to address e-Manifest fee disputes through a more informal
process that EPA believes will be sufficient and less burdensome than a
formal process.
EPA will post on the e-Manifest Web site a phone number and an
email address where users may take up any questions they may have about
the accuracy of a monthly user fee invoice. Whether a fee dispute claim
is asserted over the phone, or by email, EPA expects the facility to
provide sufficient information to support its claim that an invoice is
in error. At a minimum, EPA expects that fee dispute claimants will
provide the following information to the system's billing
representatives:
The claimant's name, the facility where the claimant is
employed, the EPA Identification Number of the affected facility, the
date and/or other information to identify the particular invoice that
is the subject of the dispute, and a phone number or email address
where the claimant can be contacted;
Sufficient supporting information or calculations to
identify the nature and amount of the fee dispute, including:
[cir] Whether the error results from the types of manifests
submitted being inaccurately described in the invoice,
[cir] Whether the error results from the number of manifests
submitted being inaccurately described in the invoice,
[cir] Whether the error results from a mathematical error made in
calculating the amount of the invoice, or
[cir] Other information described by the claimant that explains why
the invoiced amount is in error and what the fee amount invoiced should
be if corrected.
[[Page 49094]]
EPA's system billing representatives will be expected to respond to
all such billing disputes within ten days of receipt of a claim. In
their response, the system's billing representative will indicate
whether the claim is accepted or rejected, and if accepted, the
response will indicate the amount of any fee adjustment that will be
refunded or credited to the facility. If the claimant is not satisfied
with the response of the EPA system's billing representative, the
claimant may appeal its claim to the Office Director for the Office of
Resource Conservation and Recovery.
EPA further emphasizes that the assertion of a fee dispute claim
through this informal process does not excuse the requirement to make
timely electronic payments of the invoiced fee amounts. Fee adjustments
will be handled as refunds or credits of amounts paid, and the
existence of a claim does not justify withholding payment of invoiced
fees.
Finally, EPA is clarifying that once a claim has been addressed by
the Agency under this informal dispute resolution and appeal process,
the resolution that is reached after appeal to the Office Director
concludes the matter and is non-reviewable by any other Agency official
or in any other Agency proceeding.
EPA requests comment on the proposed informal dispute resolution
process (If submitting comments on this issue, please use comment
header: 13. Fee Dispute Resolution).
H. How does the Proposed Rule address fee sanctions?
1. Background
In this section of the proposed rule preamble, EPA discusses the
sanctions that will be included in the e-Manifest fee program to induce
manifest users to pay their fee obligations promptly. Particularly
because e-Manifest fees may be collected as accounts receivable or as
reimbursement for manifest services provided, it is important that the
fee program include a set of credible and significant sanctions, so
that delinquent payments will be discouraged. Otherwise, if delinquency
or non-payments were to be commonplace,\20\ the e-Manifest fee program
would become vulnerable to revenue instability. Such instability would
quickly jeopardize our ability to operate the e-Manifest system on a
self-sustaining basis and to meet our user fee and financial
obligations.
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\20\ EPA expects that most RCRA TSDFs will in fact stay current
with their e-Manifest fee obligations, and that delinquent or non-
payment issues involving the user community will be relatively rare.
Nevertheless, the Agency must be prudent and develop the necessary
sanction tools that will provide it with the remedies to ensure the
credibility of the e-Manifest fee program.
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EPA finds relevant to this topic this additional federal user fee
design guidance from the GAO that speaks to the need for fee payment
sanctions as a necessary means to promote revenue stability in user fee
programs.\21\ In a section of this September 2013 report addressing
remittance compliance, the GAO noted that penalties and other tools may
be necessary to ensure timely fee remittance. GAO provided examples
that included interest charges and denial of agency services.\22\ In
addition, in another report reviewing the U.S. Customs and Border
Protection's (CBP's) international air passenger inspection program,
the GAO observed that agencies should develop fee remittance sanctions
that are ``strong enough to deter unwanted behavior, but not so severe
that they cannot practically be imposed.'' \23\ Thus, drawing from the
experience and guidance reported by the GAO, the challenge for the
Agency in proposing e-Manifest user fee sanctions is to propose a mix
of sanctions which are strong enough to ensure prompt payment of fees
and revenue stability, while avoiding sanctions that are so severe that
they are unlikely to be imposed and are thus perceived as not credible
by manifest users.
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\21\ U. S. Government Accountability Office, Federal User Fees,
Fee Design Options and Implications for Managing Revenue
Instability, pp. 28-29, September 2013.
\22\ The examples cited in this section by GAO included denial
of landing rights to airlines by Customs and Border Patrol (CBP) for
non- or late payments of international air passenger inspection
fees, and withholding Federal Communications Commission action on
licensing proceedings involving delinquent licensees until
arrangements made for payment of fees.
\23\ GAO-07-1131, Federal User Fees, Key Aspects of
International Air Passenger Inspection Fees Should be Addressed
Regardless of Whether Fees are Consolidated, pp. 32-33, September
2007. GAO noted that the sanction that would deny landing rights to
airlines for delinquent or non-paid fees had only been invoked 4
times in 20 years, suggesting that the sanction was perceived as too
severe to be credible.
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2. What fee payment sanctions are being proposed by EPA?
For the purpose of ensuring timely payment of e-Manifest user fees,
EPA is proposing a mix of financial, publication, and RCRA enforcement
sanctions, and requesting comment on denial of services and the
suspension of a facility's authority to receive wastes as other
possible sanctions. Our aim in announcing these proposed sanctions is
to develop a plausible mix of available sanctions that can be scaled to
the degree of the offense caused by delinquency or non-payment. That
is, we intend to develop sanctions that will ratchet up in their
severity based on the degree and duration of the delinquency.
a. Financial Claims Collection Penalties. There are financial
penalties that will apply to delinquent e-Manifest fee payments, under
the authority included in existing federal claims collection statutes.
Under 31 U.S.C. 3717, there are included interest and additional
financial penalties that may be imposed on outstanding or delinquent
debts arising under a claim owed by a person to the U.S. Government.
Specifically, under 31 U.S.C. 3717(a)(1), agencies shall charge a
minimum annual rate of interest equal to the average investment rate
for Treasury tax and loan accounts for the 12-month period ending
September 30th of each year, rounded to the nearest whole percent.\24\
Under EPA's implementing Policy Number 2540-9-P2, accounts are
considered delinquent when EPA does not receive payment by the due date
specified on a bill or invoice. EPA expects and is proposing that the
due date for e-Manifest fee payments would be 30 days from the date of
invoicing. EPA is proposing that its e-Manifest fee sanctions will cite
to this federal claims interest charge authority as the first tier of
e-Manifest fee payment sanctions.
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\24\ This rate of interest is known as the Current Value of
Funds Rate or CVFR, and is published prior to November 30th of each
year by Treasury. At the time this notice was written in 2016, the
rate was set at 1.00%.
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Second, under 31 U.S.C. 3717(e), authority is provided to agencies
to collect an additional penalty charge of not more than 6% per year
for failure to pay any part of a debt more than 90 days past due, as
well as additional charge to cover the cost of processing delinquent
claims. Under Policy Number 2540-9-P2, the EPA Finance Centers are
responsible for issuing demand notices and conducting collection
efforts for the Agency. The EPA Finance Centers will assess interest,
handling, and penalty charges in 30 day increments for late payments,
and will assess the 6% penalty with the 3rd demand letter or
notice.\25\
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\25\ Under EPA policy, claims that are 150 days delinquent are
referred to the Agency's Cincinnati Claims Officer, who can refer
these debts to Treasury for further collection.
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EPA therefore proposes to include this additional 6% financial
penalty charge for e-Manifest user fee debts that are more than 90 days
past due. This would be the second tier of sanction authority under
this proposal's set of fee payment sanctions, and would be implemented
if the first tier of interest
[[Page 49095]]
charges (assessed for fees 30 days past due) is not effective in
causing a delinquent fee payer to make their payments current.
The Agency requests comment on the proposal to incorporate the
financial interest and penalty charges set out in the previously
referenced Federal claims collection statutes as the first and second
tier of e-Manifest fee payment sanctions (If submitting comments on
this issue, please use comment header: 14. Financial Sanctions).
b. Publication of a Delinquent Payor's List. As the third tier of
proposed fee payment sanctions, this action would include a list or
registry of payors whose user fee payments remain delinquent even after
the imposition of financial penalties and opportunities to cure the
delinquency. Consistent with the policy of ratcheting sanctions, EPA
proposes that facilities would become eligible for inclusion in the
list of delinquent fee payors when the period of their delinquency
extends to 120 days or greater. EPA believes that the negative
publicity of being included on such a list would motivate payors to pay
their fees promptly. Under this proposal, the List of Delinquent Payors
would be maintained by EPA at its e-Manifest program Web site. The
listing would indicate the name of the delinquent facility, its EPA ID
Number, and the amount of the delinquency at the time of the listing.
EPA would remove such facilities from the Delinquent Payor's List once
it has been determined that the delinquency has been cured to the
satisfaction of the Agency.
EPA requests comment on the inclusion of a Delinquent Payor's List
among the sanctions that would be available to the Agency in the event
of serious, continued delinquency of e-Manifest user fee payments (If
submitting comments on this issue, please use comment header: 15.
Delinquent Payors List). Will the publicity resulting from the
publication of a facility's delinquent payment status be an effective
inducement to pay fees promptly? Is 120 days past due an appropriate
period of time to demarcate the more serious fee delinquencies that
merit this sanction? Are there other measures that should be included
in this sanction that would cause it to be more effective as a possible
sanction?
c. RCRA Enforcement. This proposed rule defines a fully completed
manifest as one that has been submitted to the system either as an
electronic manifest or in one of its paper submission types, and for
which the assessed fees for submission and/or correction have been paid
when due. EPA contends that if any manifests remain incomplete because
of owed fees, then the facility may be in violation for failure to
fully complete a manifest per proposed Sec. 264.1315(d) and/or Sec.
265.1315(d). EPA could enforce this violation under RCRA section 3008.
The magnitude of fees unpaid, and the duration of their delinquency,
are factors to be considered by enforcement officials in determining an
enforcement response to this proposed regulatory violation. Any
enforcement action taken would be separate from the fee collection
process under 31 U.S.C. 3717, if the enforcement action results in the
payment of a penalty rather than an order demanding the payment of fees
owed to the government.
d. Denial of Service and Other Sanctions.
EPA also requests comment on the appropriateness and means by which
EPA could deny access to e-Manifest services to those users who are
exceedingly delinquent in their manifest fee payments (If submitting
comments on this issue, please use comment header: 16. Denial of
Service Sanction). In those instances in which the proposed financial,
publication, and enforcement sanctions do not cure delinquent payments,
is it appropriate at some point for the Agency to mitigate its revenue
losses and cut off e-Manifest services to delinquent fee payors? Should
denial of services extend to access to and submission of electronic
manifests, to submission of paper manifests for processing by the
system, or perhaps to both? Would the ``exceedingly delinquent''
payment behavior warranting such a severe sanction be determined by the
dollar amount of the delinquency, or, by the length of time that
payments remain delinquent? What dollar amounts and time periods for
delinquencies would be appropriate conditions to impose on this type of
sanction? Would a delinquency of 150 days, 180 days, or some other
period of delinquency warrant the imposition of such a sanction? What
types of notice and opportunities to cure should be provided prior to
the imposition of a denial of service sanction? To what extent should
the cutting off of e-Manifest services be combined and announced with
the publication of the list of delinquent payors? The Agency requests
comment on these matters.
Finally, EPA requests comment on other possible sanctions that
might be considered as we develop our final user fee regulation (If
submitting comments on this issue, please use comment header: 17.
Suspension of Facility Authorization). While the Agency has requested
comment on a denial of e-Manifest services sanction, there are other
sanctions that could be targeted more directly on a delinquent
facility's operations as an authorized facility to receive hazardous
wastes from off-site for management. At what point does the fact of
significant, delinquent payments call into question the ability of the
facility to continue as a viable commercial facility? Is there a
rational connection between non-payment of manifest fees and a
facility's being authorized to continue managing hazardous wastes? If
this is a legitimate concern for this regulation, what administrative
actions should EPA have available to mitigate the harm posed by such
facilities continuing to receive hazardous wastes? Should EPA be able
to suspend or withdraw such facilities' EPA ID numbers, so that they
cannot be listed as designated facilities on others' manifests? Are
there other means by which EPA could prevent such facilities from
receiving wastes from others during the time that they remain
egregiously delinquent in paying their e-Manifest user fees? What
amount or period of delinquency would be the appropriate trigger for
this type of sanction? If a facility wishes to dispute the invoices
presented to it for payment, how should this be done in the context of
the proposed sanctions? What administrative process (i.e., notice,
opportunity for hearing or cure) would need to be followed in
administering such a sanction and any fee dispute process? EPA requests
comment on these issues.
IV. Transporter Changes on the Manifest While En Route to the
Designated Facility
A. What is the EPA proposing to change?
The EPA is proposing to modify its current regulations regarding
transporter changes to shipment routing on the manifest. Specifically,
the EPA is proposing to revise the manifest regulations at 40 CFR
263.21 by revising existing paragraphs (a) and (b) of that section so
that transporters that act as agents of the generator can change en
route the transporters designated on the manifest without prior,
explicit approval from the generator, provided that their contract with
the generator grants them explicit authority to make such routing
changes as agent of the generator. The Agency is limiting this change
to only allow the generator's agent to make changes on the generator's
manifest and to only allow the generator's agent to change a
transporter designated on the manifest, or to add a new transporter,
without
[[Page 49096]]
explicitly consulting with and obtaining prior approval from the
generator each time a change occurs. This proposed regulation does not
authorize any broader grant of agency authority to a transporter to act
``on behalf of'' generators with respect to other generator
responsibilities. For example, a transporter cannot assume broad agency
authority to substitute for the generator a different designated
facility or alternate facility, or, for exports, the receiving facility
outside the U.S designated by the generator, without consulting the
generator. Nor could a transporter assume the responsibility to
maintain a generator's manifest records and submit Exception Reports or
resolve discrepancies on behalf of the generator. These are control and
oversight functions that must remain with the generator.
In addition, this proposed regulatory change with respect to
manifest changes during transport does not grant transporters (acting
as agents for generators) the authority to correct the waste
description data (e.g., quantities, types, shipping names, waste codes)
entered on the manifest. If such changes are necessary, then the
transporter must consult with the generator and revise the manifest
according to the generator's instructions. The EPA recognizes that data
quality could be improved if transporters corrected errors during
transport, but the agency believes that it is inappropriate for
transporters to make such changes, because the generator has already
certified with its signature that the contents of the shipment are
``fully and accurately described.'' Transporters typically have had
ample opportunity to verify the shipment data with the generator at the
time of waste shipment pick-up, and thus should have corrected any
errors in shipment data and descriptions prior to beginning transport.
Further, EPA believes the reexamination of the container contents or
shipping descriptions for accuracy of the shipment data should be
performed by the designated facility, rather than transporters, as they
are responsible by regulation to reconcile and report discrepancies
related to a generator's shipment.
Finally, this proposed regulation also would not affect EPA's
adoption of DOT's Hazardous Materials rules and policies in the March
2005 Manifest Revisions rule pertaining to ``offerors'' and pre-
transportation functions for hazardous waste shipments. Unlike this
proposed transporter regulation, the offeror language adopted in that
rule applies only to pre-transport functions, such as preparing the
manifest and shipment for the generator. The offeror authority does not
apply to activities that occur during transport. Therefore, a
generator's transport contractor can act on behalf of the generator in
its capacity as offeror for pre-transport functions, and under this
proposed regulation, the generator's transport contractor could modify
the manifest on behalf of the generator during transportation, but only
to modify the transporter designations pursuant to authority granted by
the generator in its contract for this purpose. The transporter granted
such contract authority must note in Item 14 of the manifest that it is
authorized by the generator by contract to designate new or additional
transporters as necessary.
B. Why is EPA proposing changes to 40 CFR 263.21(a) and (b)?
The EPA's current regulations regarding transporter changes to
shipment routing assumes that the generator alone is responsible for
identification of the complete chain of transportation and must,
therefore, be consulted on and approve of all deviations from the
routing plan (June 26, 1991, EPA letter from Sylvia Lowrance, OSW
Office Director, to Brian Engel; RCRA Hotline Response # 13781, March
1, 1996). In accordance with the current manifest regulations at 40 CFR
263.21(a) and (b), transporters must deliver the entire quantity of
hazardous waste accepted from a generator or transporter to the
designated or alternate facility, the next designated transporter, or
the designated export destination. Transporters who cannot deliver
hazardous waste according to the generator's designation because
emergency conditions prevent delivery must contact the generator to
have them designate another facility or transporter. In each case, the
delivery options are limited to the facilities or transporters
designated on the generator's manifest unless an emergency condition
prevents delivery to the designated facility or the next transporter.
Thus, any changes to the routing plan, including changes to
transporters designated on the manifest, require generator consultation
and approval.
More recently, however, the transporter industry has argued that
agency authority granted to transporters in contracts with their
generator customers allows them to sign or act ``on behalf of'' and
change the routing for the generator without specific consultation with
the generator on each such change. The transportation industry contends
that transportation efficiency often necessitates such changes,
particularly at transfer facilities, and that the transporters and
brokers have far more expertise than generators in arranging the
logistics of hazardous waste shipments. Thus, from the perspective of
the transporter industry, generators should be allowed to authorize
transporters or brokers, by contract, to fulfill their generator
responsibilities. According to the transporter industry, any
transporter requirement to consult with the generator regarding routing
changes is satisfied when a transporter, acting as agent of the
generator, makes a transporter substitution or addition ``on behalf
of'' the generator pursuant to such a contractual provision.
In addition, since the enactment of the e-Manifest Act in October
2012, the EPA has conducted several outreach efforts including face-to-
face public meetings with industry stakeholders to ascertain and define
current and future manifest workflow and system requirements to help
facilitate e-Manifest adoption by current paper manifest users once the
system is established and made available for use. Based on
conversations with industry, the EPA has learned that generators rely
very heavily on transporters or brokers to prepare the shipments and
arrange shipment logistics on their behalf. In fact, many generators
have contracts with transporters or brokers, which explicitly authorize
them to:
Identify potential transporter(s) to carry the waste
shipment;
Schedule the transportation;
Assist the generator in completing the manifest;
Ensure that manifest paperwork is properly handled and
distributed during and after transportation;
Obtain the generator's signature on the manifest or sign
it as the offeror or on behalf of the generator; and
Assist the generator in the DOT packaging, labeling,
marking requirements.
Based on these factors, the EPA is proposing to change its
regulations for several reasons. First, we recognize that the current
regulation is inconsistent with what appears to be common industry
practice regarding transporter changes to the routing of a shipment.
The adoption of the 1980 final manifest regulation was based on
prominent pre-RCRA incidents in which transporters and brokers often
acted unscrupulously by diverting hazardous waste shipments to
unauthorized sites involving ``roadside'' or ``midnight'' dumping.
Thus, the 1980 regulation reflected EPA's intent at that time that the
generator should bear primary responsibility for designating the
routing of its waste on the manifest and
[[Page 49097]]
for ensuring delivery of its waste to proper waste management
facilities. Since that time, however, EPA further understands that
brokers and transporters, not the hazardous waste generators, typically
have the greater expertise in arranging the logistics and routing of
hazardous waste shipments, and often must make certain transporter
changes for logistical purposes when the shipment is already en route.
Many hazardous waste generators, particularly small quantity
generators, are quite willing to authorize brokers and transporters,
through contracts, to act as their agents to fulfill generators'
manifest requirements. Therefore, EPA is proposing to change its
regulations related to transporter designations on the hazardous waste
manifest during transport to align it more closely with the current
industry practice that enables such changes to be made for
transportation efficiency pursuant to contractual authority granted by
the generator. Proposing this change in regulations would help to
maintain a consistent national position on the manifest, particularly
as the agency continues its efforts to establish the e-Manifest system.
EPA regulations will now more closely reflect industry practice, and
EPA can develop technical requirements for the e-Manifest system that
are consistent with this proposal.
As a result of the proposal, changes in the description of
transporters could be made: (1) To address an emergency; or (2) to
accommodate transportation convenience or safety, e.g., to allow more
efficient transport from a transfer facility or enable the substitution
of a transporter that is the sub-contractor of the designated
transporter. In addition, as a result of this proposal, a change in
transporter designation on the manifest could be effectuated by: (1) A
consultation with the generator and generator approval of the change;
or (2) a contractual provision authorizing the transporter to make such
a change on behalf of the generator.
The regulatory changes proposed to effectuate transporter changes
would recognize two distinct classes of transporters involved in such
changes. Proposed Sec. 263.21(b)(2) would apply to those transporters
that lack contractual (agency) authority to act on behalf of the
generator in making any transporter substitutions or additions. For
such transporters, the proposed rule would continue the prior
requirement to consult with the generator and obtain the generator's
explicit approval of the proposed changes in the shipment's routing.
Proposed Sec. 263.21(b)(3) would apply to those transporters that have
contractual authority to act as the agent of the generator with respect
to adding or substituting other transporters while hazardous waste is
in transport. The transporter making such changes must describe its
contractual authorization in Item 14 of each manifest for which such a
change is made. In addition, proposed Sec. 263.21(b)(4) would clarify
that any such grant of authority by a generator to a transporter to act
on the generator's behalf in making changes to transporter designations
does not affect the generator's liability or responsibility for
compliance with the generator requirements of RCRA Subtitle C.
The existing provisions of Sec. 263.21(a)(1), (2), and (4),
addressing the conditions and process by which a generator must, under
an emergency situation, be consulted on and approve any change to the
designated facility, the alternate designated facility, or the place
outside the United States designated by the generator for delivery of
export shipments, are not altered by these proposed regulatory changes.
The EPA requests comment on its proposal (If submitting comments on
this issue, please use comment header: 18. Transporter Changes en
Route).
V. Manifest Data Corrections
A. Background
EPA is including in this action a proposal that would address the
process and requirements by which facilities may make corrections to
manifest data after the delivery of wastes to a facility under the
manifest. At the time of delivery of wastes to a facility by a
hazardous waste transporter, the facility owner or operator signs the
manifest to certify to the receipt of the waste materials shipped under
the manifest, or, to indicate discrepancies. While in many instances,
this may be the last action taken by the receiving facility with
respect to the waste shipment, the Agency is aware that there are other
instances, perhaps involving as many as 20% of received shipments,
where a correction must later be made with respect to the information
shown on a manifest that was previously signed by the receiving
facility.
In our discussions with industry and state stakeholders, we have
heard that there are many instances where a waste handler
identification number, or a hazardous waste code, is entered
incorrectly or is interpreted incorrectly on account of legibility
issues with the manifests. Such inaccuracies may not be caught by the
waste handlers while the hazardous waste shipment is en route, but may
be flagged by the receiving facility or by state regulators after
delivery when they are keying the manifest data into their data
systems. There should be a process to correct such data in e-Manifest,
so that the appropriate generator sites, transporters, or receiving
facilities are identified with the waste shipment in the companies' and
agencies' data systems.
There are also a variety of reasons why waste quantity and type
data entered on the manifest might require corrections after the
delivery of hazardous wastes under the manifest. As we have noted
previously, the use of the manifest in practice does not always result
in precision in determining the types and quantities of wastes
received, particularly at the time of delivery by the transporter.
Generators and offerors may provide estimates of quantities of wastes
shipped on the manifest, such as by indicating the shipment of three
drums of a hazardous waste, and indicating the quantity shipped by
using the container capacity as an estimate. Since the piece count
(i.e., number of containers) is accurate, the receiving facility could
sign for the receipt of the containers, and there would not be a
``significant discrepancy'' within the meaning of the manifest
regulations. However, several hours, days, or perhaps weeks after
receipt, the facility may discover on closer inspection that the
containers are only partially filled, and that the actual quantities of
wastes received and managed differs from the generator's estimates.
Similarly, bulk waste shipments may also be shipped under a manifest
showing the quantities estimated by the generator or offeror. However,
after receipt at the facility, it may be determined that the actual
weight or quantity of bulk waste differs from the generator's or
offeror's estimates, but not perhaps at the 10% level or greater that
would trigger a ``significant discrepancy'' that would be required to
be noted on the manifest. Even with respect to waste types,\26\ there
are instances where the types of wastes received may be found to differ
from those indicated as shipped on the manifest by the generator or
offeror, but either were not obvious at the time of receipt, or could
not be determined until well after delivery when the containers were
opened and waste analysis was performed on the container contents by
the facility. These are just several examples illustrating how
inaccuracies in data may arise in connection with the use of the
manifest
[[Page 49098]]
in tracking waste shipments and deliveries. However the inaccuracies
arise, the e-Manifest system should provide an orderly process for
effectuating changes to the data in the e-Manifest system post-
delivery.
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\26\ Instances for which differences in waste types or
significant discrepancies in bulk waste receipts are not discovered
until after delivery may require discrepancy reporting as well. For
purposes of this discussion, we are focusing only on the post-
delivery process for correcting the manifest data that are found to
be inaccurate.
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B. Why is manifest data correction important?
EPA considers the correction of manifest data to be an important
system objective for a couple reasons: (1) Our state partners need
accurate waste handler and waste receipt data in order to assess
accurate waste management fees from the generators and receiving
facilities that may be subject to such fees in the states; and (2) EPA
needs quality waste receipt information from manifests in order to
comply with the-Manifest Act's mandate that EPA integrate e-Manifest
with waste receipt reporting for the RCRA Biennial Report.
As regards the state interest in waste management revenues, EPA is
aware that there are about 23 states that currently maintain state-
specific manifest tracking programs. While these manifest tracking
programs are useful for a variety of program management and compliance
monitoring functions, many of these states depend on the data from
hazardous waste manifests to support their assessment of taxes or fees
related to waste management activities in their states. Several of
these states impose taxes or fees on waste generators based on the
amount of hazardous or other state-only regulated wastes that these
entities generate in the states. Additional states with tracking
programs impose such taxes or fees on their receiving facilities based
on the amount of hazardous or other state-only regulated wastes that
they receive for management at facilities within these states. In
either case, the accuracy of these tax or fee assessments is dependent
on the quality of the manifest data available to the state tracking
programs. As e-Manifest will assume manifest collection functions now
performed by these states, with EPA sharing the data collected by e-
Manifest with these states, EPA believes it has a responsibility to the
states and industry submitters to ensure that the system retains data
of sufficient quality to support this function. The e-Manifest Act, in
section 2(e)(3), states that a primary measure of a successful e-
Manifest system is the development of a system that ``meets the needs
of the user community, including States that rely on data contained in
manifests.''
As regards the EPA's interest in the Biennial Report, EPA's efforts
here are governed by section 2(e)(3)(iv) of the Act, which states that
an additional measure of a successful e-Manifest effort is the
development of a system that ``provides the waste receipt data
applicable to the biennial reports required by [RCRA] section
3002(a)(6).''
Manifests are by their nature records of off-site shipments of
wastes and their receipts at authorized receiving facilities. Thus,
manifest data are a good starting point for any effort to determine
biennially what waste types and quantities were received at particular
waste management facilities for disposition. The manifest collects for
each off-site shipment the information on the quantities and types of
wastes shipped, information identifying by site ID the particular
generator and receiving facility, and the management method codes
describing the intended management process for each waste. However, as
suggested earlier, there are known issues surrounding the quality of
the data entered on manifests, and these data quality issues touch upon
data related to the accurate identification of generator sites and
receiving facilities, and to the data related to the accuracy of waste
type and quantity information. In scoping out the effort of integrating
e-Manifest and the waste receipt reporting functions of the biennial
report, EPA understands that a fundamental task that must first be
accomplished is an orderly and consistent correction or clean-up
process for the data entered on manifests. The objective of such
manifest data correction must be to produce final data points that have
been sufficiently vetted by the receiving facilities and other
interested persons, so that the receiving facility would be satisfied
with supplying the corrected manifest data as accurate and complete
waste receipt data for biennial reporting purposes.
C. What is EPA proposing for manifest data corrections?
EPA is proposing that all manifest corrections will be submitted by
facilities (TSDFs) electronically, regardless whether the data
undergoing correction arises from a paper or electronic manifest. Only
the receiving facilities would be permitted to make manifest data
corrections in the e-Manifest system. Such corrections or changes could
be made by the facility on its own initiative after conducting its own
Quality Assurance (QA) activities, or, after notice from another waste
handler, or notice from EPA or a state, of an apparent data quality
issue with one or more manifests.
Under the approach proposed, facilities would be able to make
corrections on-line directly via the e-Manifest system web-based
application, or, the facilities could make corrections by uploading a
correction submission using a submission format (e.g, XML file)
prescribed by the Agency relating to one or a batch of previously
submitted manifests. For those corrections made directly via the e-
Manifest system web application, EPA would require the person
responsible for the correction to execute a CROMERR-compliant
electronic signature prior to completing their correction submission
(i.e. clicking on the ``submit'' button). Likewise, for those
corrections made through a correction submission relating to one or a
batch of manifests, the submission would include and require the
execution of a CROMERR-compliant electronic signature. The electronic
signatures associated with manifest correction submissions would have
the facility's representative certify, under penalty of law, that to
the best of their knowledge and belief, the corrections that are
included in the submission will cause the manifest data for each
affected waste shipment and receipt to be true, accurate, and complete.
In the case of batch corrections, only one certification need be
executed for all the manifests and corrections involved in the batch
submission.
The web application or the prescribed format for correction
submissions would collect information from the facility that includes
the Manifest Tracking Number and Date of Facility Receipt of the
original manifest that is being corrected, the Item #s of the original
manifest that are subject to correction, and for each Item # corrected,
the data previously entered and the corresponding data as corrected by
the correction submission. Items from the original manifest that are
not subject to correction should be omitted from the correction
submission, and will be presumed to be unchanged.
EPA is also proposing that all corrections to manifest data in e-
Manifest must be completed by the date 90 days from the date of receipt
by the facility of the waste shipments recorded on the original
manifest. EPA previously determined in the One Year Rule of February,
2014, that the e-Manifest system would not disclose any manifest data
to the public until 90 days after the date of receipt of manifested
wastes, unless otherwise required by federal law. EPA further explained
that the reason for delaying public disclosure for 90 days was the
Agency's recognition that manifests are frequently corrected after
waste receipts occur, and that EPA considered manifests to be ``in
process'' and excluded from public disclosure until the 90-day window
for dealing
[[Page 49099]]
with discrepancies, exceptions, and other corrections had elapsed.
Consistent with this determination, EPA is now proposing that this 90-
day window would be the general deadline for correcting and thus
finalizing manifest data. Thus, after the 90-day window of the One Year
Rule has elapsed, this proposal would clarify that not only would EPA
consider manifest data to be open to disclosure to the public, but also
to be presumptively final and complete data for all regulatory
purposes, including the compilation of waste receipt reports per the
RCRA biennial report.
Finally, EPA believes that there should be an orderly process in
place for completing all manifest data corrections within the proposed
rule's 90-day window. EPA is proposing that all initial correction
related notices, whether a voluntary correction submission by the TSDF,
or a notice of a data error from another interested person (i.e., other
waste handler, EPA, or a state), must be provided no later than 60 days
from the date of receipt of the wastes shipment under the affected
manifest(s).
For corrections initiated by the facility, once the initial
correction submission is entered by the TSDF, other waste handlers and
appropriate states would be notified of the facility's corrections, and
these persons would have 15 days to respond to the TSDF's corrections.
If a facility's correction should elicit a response from one or more of
these persons, then the facility must reconcile by day 90 any responses
it receives by either altering the corrected data accordingly, or
affirming the correction as initially made by the facility.
For corrections initiated on account of notice received by day 60
from another waste handler or from EPA or a state, the facility would
have 15 days to respond to such notice by either entering a correction
submission responding to the notice given, or, by affirming that the
data originally entered is accurate and needs no correction. While
other interested persons, may respond to the TSDF's initial response to
the request for data corrections, the reconciliation of all such
comments and responses must be concluded by the facility by day 90.
EPA previously indicated that it was proposing a user fee charge
for the Q/A and data key entry effort that necessarily would accompany
the submission of corrections to the system. Since the proposed
approach would rely upon either a direct web application entry of
corrections by the TSDF or an XML-based batch upload of corrected data,
EPA believes that the per manifest fee that would be charged for XML-
based manifest submissions is a fair approximation of the cost and
therefore the appropriate fee to charge for manifest data corrections.
Thus, this fee would be assessed for each manifest affected by a
correction submission, EPA requests comments on the proposed approach
for the submission of manifest data corrections to the system, and the
fees to be assessed for such corrections (If submitting comments on
this issue, please use comment header: 19. Submission of Manifest Data
Corrections).
VI. Mixed Paper and Electronic Manifest Transactions
A. Background
In the One Year Rule, EPA determined not to allow mixed paper and
electronic manifest transactions. This decision was codified in 40 CFR
262.24(c), which addresses restrictions on the use of electronic
manifests. The final regulation at Sec. 262.24(c) states that a
hazardous waste generator may prepare an electronic manifest for
tracking waste shipments ``only if it is known at the time the manifest
is originated that all waste handlers named on the manifest participate
in the electronic manifest system.''
In developing the One Year Rule, EPA initially considered allowing
some types of mixed electronic and paper manifests, in the interest of
maximizing the number of manifests that could be executed
electronically, and thereby leveraging additional paperwork burden
reductions. For example, EPA considered an option under which the
generator and receiving TSDF might participate and transmit shipment
data electronically, with perhaps intermediate transporters being
allowed to continue to carry paper forms and execute ink signatures, if
such transporters were not able to participate electronically. However,
after fleshing out further what steps would be required to maintain a
complete log of the custody chain and the entire record of the waste
shipment using mixed manifests, EPA rejected the mixed manifest option.
See 79 FR 7518 at 7549 (February 7, 2014). EPA explained this decision
by observing that there would be too many manual processing steps
required of receiving facilities to maintain a complete record of the
shipment and sustain a mixed process, and that these additional manual
steps (i.e., noting the details of manual signatures on electronic
manifests and merging the electronic and paper manifest data in the
system) would likely overwhelm any paperwork burden reductions that
might otherwise result from using electronic manifests. Id. We also
noted that such mixed electronic and paper manifest transactions could
pose significant enforcement challenges, as the enforceable record
would consist of both paper and electronic components. Id.
B. Discussion
EPA is reevaluating whether there are instances in which a mixed
electronic and paper manifest might be beneficial, particularly in the
early years of e-Manifest implementation. Such a mixed or ``hybrid''
electronic manifest might be one means to overcome initially the
challenges posed by implementing electronic manifesting at certain
hazardous waste generator sites that lack the means to participate
electronically.
For a variety of practical and administrative reasons, the use of
electronic manifests by waste generators poses special challenges for
EPA in implementing e-Manifest. First, many waste generators ship small
quantities of wastes, and may ship such wastes infrequently. These
smaller, occasional generators may operate from sites that lack a live
network connection, thus necessitating support for off-line manifest
completion. Moreover, these smaller, occasional generator sites may
find password-based electronic signatures to be particularly
challenging to execute, as they may not only be off-line at the sites
where manifest signatures must be executed, but they may not be able to
recall or locate their passwords or challenge question responses when
they encounter e-Manifest infrequently. Second, as there are tens of
thousands of generator sites within the RCRA universe, and each such
site may employ several individuals with manifest responsibilities,
there will be substantial administrative requirements related to
registering generator personnel as authorized users and signatories,
identity proofing each such generator signatory, supporting CROMERR
copy of record processes that involve individual signatories in
responding to post-signature notifications, and otherwise meeting the
CROMERR electronic reporting standards as they relate to generators.
After consideration of these challenges at generator sites, EPA is
reevaluating whether the current restriction on mixed electronic and
paper manifests is an appropriate policy for e-Manifest. Our concern is
that the current restriction allows no exceptions,
[[Page 49100]]
and could unnecessarily rule out implementation flexibility at sites
where a phase-in of electronic manifesting may be useful.
For example, EPA is exploring with the user community whether there
may be merit to a mixed paper/electronic manifest option whereby some
generators may choose to complete the initial generator copy of the
manifest as a conventional paper manifest that would be signed in ink
by the generator and the initial transporter. The transporter and
receiving facility would, however, complete the remainder of the
manifest transaction electronically. This ink signed copy could then be
left with the generator as its initial generator copy, such as occurs
under the existing manifest process. The transporter would deliver the
waste to the next transporter or to the designated facility, and at
delivery could present the electronic manifest on its portable device
to the next handler for its electronic signature. Once the TSDF has
signed electronically for waste receipts, the final electronic copy
could then be distributed electronically through the e-Manifest system
to the various waste handlers and to interested state agencies. Thus,
with the exception of the initial copy that is signed in ink and left
at the generator site, the remainder of the transaction would be
executed electronically, and many of the desired efficiencies and
burden reductions from electronic manifesting could still occur across
the remainder of the manifest completion and distribution chain.
EPA believes the scenario discussed in this example could be
particularly advantageous as an initial or interim phase of e-Manifest
implementation. From our initial planning work on e-Manifest, the
Agency believes that the implementation challenges posed at such
generator sites may be among the most vexing issues to resolve,
particularly with respect to conducting electronic manifesting off-
line, to complying with the CROMERR requirements for user and signatory
registrations, to conducting identity proofing of signatories, to
complying with copy of record processes, and to executing valid
electronic signatures. The suggested hybrid approach might circumvent
these difficult compliance issues for generators by allowing such
generators to execute and retain a paper copy bearing conventional ink
signatures.
Therefore, EPA is proposing to amend Sec. 262.24 by modifying the
paragraph (c) restriction on mixed electronic and paper manifest
transactions. The proposed modification would leave in place the
general rule that an electronic manifest may be used only when it is
known that all waste handlers may participate electronically, but would
create an exception in proposed Sec. 262.24(c)(1) to authorize the
generator only to sign by hand and retain a paper copy of the manifest
signed by hand by the initial transporter for its records. This
proposal would thus excuse generators from participating
electronically, while still allowing others in the manifest chain of
custody to participate in the electronic manifest. EPA requests comment
on this proposal (If submitting comments on this issue, please use
comment header: 20. Hybrid Approach). Are there other scenarios that
would benefit from flexibility on this issue, in addition to the
example cited here of generator sites and the unique challenges these
sites pose to a fully electronic process? Do commenters agree that the
generator site scenario is a good candidate for a mixed or hybrid
manifest approach? Can such an approach be implemented with simplicity,
avoiding the concerns raised in the One Year Rule that mixed processes
might entail additional manual processing steps that might defeat the
benefits of electronic manifesting? If commenters believe there are
other scenarios that might benefit from a mixed manifest approach,
please explain such scenarios in detail, and discuss in your comments
how the complete chain of custody could be documented and accessed
easily, without the implementation complexities that gave rise to the
ban of mixed manifest processes that we announced in the February 2014
regulation.
VII. The Projected Economic Impacts of the Electronic Manifest
A. Introduction
EPA estimated the costs and benefits of the proposed rule in a
Regulatory Impact Analysis (RIA) which is available in the docket for
this action. The RIA estimates costs and costs savings attributable to
electronic manifests. Cost savings are presented against estimated
baseline costs of the existing RCRA hazardous waste paper manifest
system. The RIA also qualitatively describes un-monetized benefits of
electronic manifests.
B. Count of RCRA Hazardous Waste Manifests
The RIA estimates paper manifest system baseline costs and
electronic manifest costs savings at the per-manifest level. Per-
manifest costs and cost savings are then scaled up to arrive at
national estimates of paper manifest costs and electronic manifest cost
savings. Because costs and cost savings are estimated at the per-
manifest level, the count of manifests used drives costs and cost
savings estimates in the RIA analysis.
Because all RCRA manifests will be processed centrally by EPA, the
RIA estimated the entire scope of manifest usage. While the federal
RCRA manifest (EPA forms 8700-22 and 8700-22A) has been the sole
manifest accompanying shipments of hazardous waste since the 2005
Uniform Hazardous Waste Manifest form rule, the manifest has two
applications. The first is to accompany shipments of hazardous wastes
listed in the federal RCRA regulations. The second is to accompany
shipments of state-only regulated wastes listed in various state RCRA
regulations. A total count of manifests which include both federal and
state applications was estimated in the RIA. EPA estimated an average
annual count of hazardous waste manifests used by extrapolating from
data on the generation of hazardous waste, data on the number of
shippers of hazardous waste, and by making assumptions about the likely
shipping frequency of hazardous and state-only regulated wastes. EPA
corroborated this estimate through consultations with companies that
print and sell copies of the hazardous waste manifest. The average
annual count of hazardous waste manifests used is estimated to be 3.2
million. EPA would appreciate any information to improve the accuracy
of this estimate.
C. Baseline Cost of the Paper Manifest System
EPA estimated baseline costs for all aspects of the existing paper
manifest system which will be affected by electronic manifests. EPA
estimated six categories of costs accruing to: industrial users of
paper manifests, state governments that collect paper manifests, and
EPA. The six categories of costs are:
Paper manifest costs accruing to industry for federal
manifests,
Paper manifest costs accruing to industry for state
manifests,
EPA burden to process paper manifests,
State government burden to process paper manifests,
Industry burden to comply with hazardous waste Biennial
Report requirements, and
State government burden to comply with hazardous waste
Biennial Report requirements.
In total, discounting at 7% over six years, the annualized baseline
costs of the paper manifest system are estimated
[[Page 49101]]
to be $183 million. EPA would appreciate any information to improve the
accuracy of this estimate (If submitting comments on this issue, please
use comment header: 21. RIA).
D. Costs Savings and Other Benefits of Electronic Manifests
EPA estimated both monetized cost savings and other, non-monetized,
benefits of electronic manifests. Cost savings are the difference
between the pre-rule cost of manifesting and the post-rule cost of
manifesting. They are estimated to accrue to both industrial and state
government users of electronic manifests. Over the six year period of
analysis modeled in the RIA, the annualized post-rule costs of
manifesting were estimated to be $149 million when discounting at 7%.
Since the pre-rule cost of manifesting is estimated to be $183 million,
annualized cost savings from electronic manifests are estimated to be
$34 million.
EPA expects that electronic manifests will enhance many
stakeholders' ability to track and extract data on waste shipments by
storing and distributing this data in a central, accessible location.
EPA has identified six stakeholder groups that may benefit from better
access to manifest shipping data:
Members of industry that use the manifest for tracking
waste shipments should know the status of their shipments faster than
under the current paper based system. They should also benefit from the
increased legibility of electronic manifest records compared to current
paper manifests.
Federal and state government RCRA enforcement officials,
who use manifest data in the course of their investigations of RCRA
compliance should benefit from the centralized storage of manifest data
and the greater accessibility of these data under e-Manifest.
Emergency responders should benefit from increased access
to data on the generation, shipment, and storage of hazardous wastes in
the event that a spill or other accident involving hazardous waste
occurs.
Foreign governments of countries that ship hazardous waste
to, or receive hazardous waste from, the U.S. should benefit from the
greater availability of manifest data. They may desire this data for
safety, security, and programmatic reasons similar to those of the U.S.
federal and state governments.
Research institutions from academia to industry may find
novel uses for manifest data.
Communities near RCRA facilities will have better
information on the generation, shipment, treatment, storage, and
disposal of hazardous waste near their communities.
EPA has not attempted to quantify the value of this benefit.
Summary of Estimated Costs and Cost Savings
[Annualized and discounted at 7% over six years]
------------------------------------------------------------------------
Pre-rule costs ($ Post-rule costs ($ Cost savings ($
million) million) million)
------------------------------------------------------------------------
183 149 34
------------------------------------------------------------------------
VIII. State Implementation
A. Applicability of Rules in Authorized States
Under section 3006 of RCRA, EPA may authorize qualified States to
administer their own hazardous waste programs in lieu of the federal
program within the state. Following authorization, EPA retains
enforcement authority under section 3008, 3013, and 7003 of RCRA,
although authorized states have primary enforcement responsibility. The
standards and requirements for state authorization are found at 40 CFR
part 271.
Prior to the enactment of the Hazardous and Solid Waste Amendments
of 1984 (HSWA) and of the Hazardous Waste Electronic Manifest
Establishment Act, a state with final RCRA authorization administered
its hazardous waste program entirely in lieu of EPA administering the
federal program in that state. The federal requirements no longer
applied in the authorized state, and EPA could not issue permits for
any facilities in that state, since only the state was authorized to
administer the program and issue RCRA permits. When new, more stringent
federal requirements were promulgated, the state was obligated to enact
equivalent authorities within specified time frames. However, the new
federal requirements did not take effect in an authorized state until
the state adopted the federal requirements as state law.
In contrast, with the adoption of RCRA section 3006(g), which was
added by HSWA, new requirements and prohibitions imposed under the HSWA
authority take effect in authorized states at the same time that they
take effect in unauthorized states. EPA is directed by section 3006(g)
to implement HSWA-based requirements and prohibitions in authorized
states until the state is granted authorization to do so. While states
must still adopt HSWA related provisions as state law to retain final
authorization, EPA implements the HSWA provisions in authorized states
until the states do so.
The e-Manifest Act contains similar authority to HSWA with respect
to federal and state implementation responsibilities in RCRA authorized
states. Section 2(g)(3) of the e-Manifest Act, entitled Administration,
provides that EPA shall carry out regulations promulgated under the Act
in each state unless the state program is fully authorized to carry out
such regulations in lieu of EPA. Also, section 2(g)(2) of the Act
provides that any regulation promulgated by EPA under the e-Manifest
Act shall take effect in each state (under federal authority) on the
same effective date that EPA specifies in its promulgating regulation.
Thus, the result is that regulations promulgated by EPA under the e-
Manifest Act, like HSWA-based regulations, are implemented and enforced
by EPA until the states are authorized to carry them out.
Authorized states generally are required to modify their programs
when EPA promulgates federal requirements that are more stringent or
broader in scope than existing federal requirements. However, as EPA
explained previously when adopting manifest form revisions to fully
standardize the RCRA manifest, the hazardous waste manifest is not
governed by these requirements. Rather, the RCRA manifest requires
strict consistency in its implementation, so that any EPA changes to
federal manifest requirements must be implemented consistently in the
states, regardless whether the change might be considered more
stringent or broader in scope than existing requirements. See 70 FR
10776 at 10810 (March 4, 2005).
The proposed e-Manifest user fee requirements in subpart FF of 40
CFR parts 264 and 265 would be promulgated under the authority of the
e-Manifest Act. However, the user fees addressed in this proposed rule
are a uniquely federal requirement that EPA, and not states, must
administer. All e-Manifest system fees are to be paid only to EPA, to
be deposited in the e-Manifest System Fund, from which EPA may spend
such amounts that are appropriated by Congress to offset the system's
development and operation costs. Therefore, states cannot be authorized
to collect and administer these user fees in lieu of EPA.
Although states cannot receive authorization to administer the
federal government's e-Manifest program user fees, state programs would
still be required to adopt the user fee provisions of this proposed
rule in order to
[[Page 49102]]
maintain consistency with the federal program. When a state adopts the
user fee provisions of this proposed rule (if finalized), the state
must not replace federal or EPA references with state references or
terms that would suggest the collection or implementation of these user
fees by the state. Again, the user fee provisions of this proposed
rule, if final, would take effect (under federal authority) in all
states on the effective date announced in the final rule, and would be
administered solely by EPA, and not by the states.
In addition, this proposed rule includes a conforming change to 40
CFR 271.12, that would clarify that authorized state programs must
include requirements for hazardous waste management facilities to pay
user fees to EPA to recover all costs related to the development and
operation of an electronic hazardous waste manifest system (e-Manifest
system).
Finally, EPA notes that several authorized state programs operate
manifest tracking programs that collect manifest data from the
manifests that arise in connection with waste generation or waste
receipts at sites within their states. Several of these states assess
their own fees to offset the costs of administering their state
manifest tracking programs, or they may assess waste generation or
management fees to support state programs, based on manifest data in
their state tracking systems. It is likely that some state manifest
tracking programs and related fees may continue for the foreseeable
future. However, it is likely that in the future state tracking
programs will obtain their manifest data from the e-Manifest system,
rather than directly from regulated waste handlers. EPA emphasizes that
the federal user fees that are the subject of this regulation are
solely to offset EPA's costs in developing and operating the e-Manifest
system. It is not the purpose of this regulation to suspend, reduce, or
otherwise impact the existing state fees that support states' manifest
tracking programs or the fees levied by state programs on waste
generation or management. The e-Manifest system is intended to enhance
overall efficiency. As such, state tracking programs will likely rely
on the e-Manifest system to provide the manifest data to support their
program management needs and their waste generation or management fee
collections. EPA is not now in a position to predict what, if any,
impact this federal user fee regulation may have on any such state fee
collection programs.
IX. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review because it may
raise novel legal or policy issues. Any changes made in response to OMB
recommendations have been documented in the docket for this action. The
EPA prepared an economic analysis of the potential costs and benefits
associated with this action, which is available in the docket.
B. Paperwork Reduction Act (PRA)
The information collection activities in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the PRA. The Information Collection Request (ICR) document
that the EPA prepared has been assigned EPA ICR number 0801.21. You can
find a copy of the ICR in the docket for this rule, and it is briefly
summarized here.
This implementation of the e-Manifest and this Fee Rule will impose
new information collection requirements on the regulated community,
although we expect that the net effect will be to significantly reduce
the paperwork burden relative to the paper manifest system. Although
the primary effect of the e-Manifest implementation will be to replace
current paper-based information requirements with electronic-based
requirements to submit or retain the same shipment information, there
could be minor additions or changes to the information collection
requirements, such as information that may be provided to establish
user accounts and fee payment accounts, information submitted for
identity management, as well as waste profile or other information that
may be useful for the creation and submission of electronic manifests.
Additionally, EPA did not update the information collection burden
associated with the regulatory changes to the manifest system announced
in the ``One Year Rule.'' While EPA acknowledged that the adoption of
e-Manifest will change the manner in which information will be
collected and transmitted, the system was not currently available and
consequently the ``One Year Rule'' did not change the information
collected by the hazardous waste manifest, nor the scope of the wastes
that are now subject to manifesting. EPA indicated that it would update
the information collection burden and benefit estimates in this user
fee rule.
Respondents/affected entities: Private waste handlers.
Respondent's obligation to respond: Mandatory (RCRA 3002(a)(5)).
Estimated number of respondents: 56,306.
Frequency of response: On occasion.
Total estimated burden: 2,002,841 hours (per year). Burden is
defined at 5 CFR 1320.3(b).
Total estimated cost: $91,674,429, includes $25,554,370 annualized
capital or operation & maintenance costs.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for the
EPA's regulations are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the
accuracy of the provided burden estimates and any suggested methods for
minimizing respondent burden to the EPA using the docket identified at
the beginning of this rule (If submitting comments on this issue,
please use comment header: 22. ICR). You may also send your ICR-related
comments to OMB's Office of Information and Regulatory Affairs via
email to [email protected], Attention: Desk Officer for the
EPA. Since OMB is required to make a decision concerning the ICR
between 30 and 60 days after receipt, OMB must receive comments no
later than August 25, 2016. The EPA will respond to any ICR-related
comments in the final rule.
C. Regulatory Flexibility Analysis
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden or otherwise has a positive economic effect on the small
entities subject to the rule.
The Regulatory Impact Analysis (RIA) conducted for this rulemaking
found that the e-Manifest rule would significantly reduce the
compliance burden associated with manifesting shipments of hazardous
waste. The RIA estimates that in the initial six years
[[Page 49103]]
after the e-Manifest system is operational, annualized savings from
manifest related burden reduction would equal approximately $34 million
per year when discounted at 7%. The RIA estimates that these savings
would accrue to firms of all sizes that adopt electronic manifests as
well as to firms that adopt one of the two paper manifest submission
options other than postal mail submissions. The RIA estimates that the
vast majority of manifests will be submitted electronically and
therefore concludes that savings from e-Manifest will accrue to small
and large firms. Because the e-Manifest rule will relieve regulatory
burden for small firms, the RIA concludes it will not have a
significant adverse economic impact on a substantial number of small
entities.
As a precaution, the RIA also estimates the impacts of the e-
Manifest rule under the unlikely hypothetical scenario in which small
firms do not adopt e-Manifest but instead continue to submit paper
manifests via postal mail. As a consequence, these firms might not
realize any savings from the e-Manifest rule but could instead face
increasing costs from e-Manifest fees. Even under these unlikely and
highly conservative assumptions, the RIA finds that the rule will not
have a significant adverse economic impact on a substantial number of
small entities. The RIA, in particular Section 7.2, describes how EPA
assembled a universe of small entities, how EPA estimated the
hypothetical impacts of the e-Manifest rule under these conservative
assumptions, and the criteria EPA used in this instance to determine
significant adverse economic impacts on a substantial number of small
entities. The RIA is available in the docket for this rulemaking.
D. Unfunded Mandates Reform Act
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. The action imposes
no enforceable duty on any state, local or tribal governments or the
private sector.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. It will not impose any new requirements on
tribal officials nor will it impose substantial direct compliance costs
on them. This action will not create a mandate for tribal governments,
i.e., there are no authorized tribal programs that will require
revision and reauthorization on account of the e-Manifest system and
regulatory program requirements. Nor do we believe that the e-Manifest
system and this Fee Rule will impose any enforceable duties on these
entities. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action is proposing user fees for
use of an electronic system, which will not have a significant effect
on the supply, distribution or use of energy.
I. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes that this action does not have potential
disproportionately high and adverse human health or environmental
effects on minority populations, low-income populations and/or
indigenous peoples, as specified in Executive Order 12898 (59 FR 7629,
February 16, 1994), because it does not affect what facilities,
materials, or activities are subject to RCRA. Thus, this action does
not affect the level of protection provided to human health or the
environment. When implemented, the e-Manifest system could improve
access for minority, low-income or indigenous populations and
communities to information on waste movements to, from, or through
neighborhoods where these populations live and work. Thus, the system
could only have beneficial effects on such populations and communities.
List of Subjects
40 CFR Part 262
Environmental protection, Exports, Hazardous materials
transportation, Hazardous waste, Imports, Labeling, Packaging and
containers, Reporting and recordkeeping requirements.
40 CFR Part 263
Environmental protection, Electronic reporting requirements,
Hazardous materials transportation, Hazardous waste.
40 CFR Part 264
Environmental protection, Electronic reporting requirements,
Hazardous waste, Packaging and containers, Reporting and recordkeeping
requirements, Security measures, User fees.
40 CFR Part 265
Environmental protection, Electronic reporting requirements,
Hazardous waste, Packaging and containers, Reporting and recordkeeping
requirements, User fees.
40 CFR Part 271
Environmental protection, Administrative practice and procedure,
Electronic reporting requirements, Hazardous materials transportation,
Hazardous waste, Reporting and recordkeeping requirements.
Dated: June 27, 2016.
Gina McCarthy,
Administrator.
For the reasons set forth in the preamble, EPA proposes to amend 40
CFR parts 262, 263, 264 and 265, and 271 as follows:
PART 262--STANDARDS APPLICABLE TO GENERATORS OF HAZARDOUS WASTE
0
1. The authority citation for Part 262 is revised to read as follows:
Authority: 42 U.S.C. 6906, 6912, 6922-6925, 6937, 6938 and
6939g.
0
2. Section 262.24 is amended by revising paragraphs (c) and (g) to read
as follows:
[[Page 49104]]
Sec. 262.24 Use of the electronic manifest.
* * * * *
(c) Restriction on use of electronic manifests. A generator may use
an electronic manifest for the tracking of waste shipments involving
any RCRA hazardous waste only if it is known at the time the manifest
is originated that all waste handlers named on the manifest participate
in the use of the electronic manifest, except that:
(1) A generator may sign by hand and retain a paper copy of the
manifest signed by hand by the initial transporter, in lieu of
executing the generator copy electronically, thereby enabling the
transporter and subsequent waste handlers to execute the remainder of
the manifest copies electronically.
(2) [Reserved]
* * * * *
(g) Imposition of user fee. A generator who is a user of the
electronic manifest may be assessed a user fee by EPA for the
origination of each electronic manifest. EPA shall maintain and update
from time-to-time the current schedule of electronic manifest user
fees, which shall be determined based on current and projected system
costs and level of use of the electronic manifest system.
PART 263--STANDARDS APPLICABLE TO TRANSPORTERS OF HAZARDOUS WASTE
0
3. The authority citation for Part 263 is revised to read as follows:
Authority: 42 U.S.C 6906, 6912, 6922-6925, 6937, 6938, and
6939g.
0
4. Section 263.20 is amended by revising paragraph (a)(8) to read as
follows:
Sec. 263.20 The manifest system.
* * * * *
(a)(8) Imposition of user fee for electronic manifest use. A
transporter who is a user of the electronic manifest may be assessed a
user fee by EPA for the origination or processing of each electronic
manifest. EPA shall maintain and update from time-to-time the current
schedule of electronic manifest user fees, which shall be determined
based on current and projected system costs and level of use of the
electronic manifest system.
* * * * *
0
5. Revise Sec. 263.21 to read as follows:
Sec. 263.21 Compliance with the manifest.
(a) Except as provided in paragraph (b) of this section, the
transporter must deliver the entire quantity of hazardous waste which
he or she has accepted from a generator or a transporter to:
(1) The designated facility listed on the manifest; or
(2) The alternate designated facility, if the hazardous waste
cannot be delivered to the designated facility because an emergency
prevents delivery; or
(3) The next designated transporter; or
(4) The place outside the United States designated by the
generator.
(b)(1) If the hazardous waste cannot be delivered in accordance
with paragraph (a)(1), (a)(2), or (a)(4) of this section because of an
emergency condition other than rejection of the waste by the designated
facility or alternate designated facility, then the transporter must
contact the generator for further instructions and must revise the
manifest according to the generator's instructions.
(2) Transporters without agency authority. If the hazardous waste
is not delivered to the next designated transporter in accordance with
paragraph (a)(3) of this section, and the current transporter is
without contractual authorization from the generator to act as the
generator's agent with respect to transporter additions or
substitutions, then the current transporter must contact the generator
for further instructions prior to making any revisions to the
transporter designations on the manifest. The current transporter may
thereafter make such revisions if:
(i) The hazardous waste is not delivered in accordance with
paragraph (a)(3) of this section because of an emergency condition; or
(ii) The current transporter proposes to change the transporter(s)
designated on the manifest by the generator, or to add a new
transporter during transportation, to respond to an emergency, or for
purposes of transportation efficiency, convenience, or safety; and
(iii) The generator authorizes the revision.
(3) Transporters with agency authority. If the hazardous waste is
not delivered to the next designated transporter in accordance with
paragraph (a)(3) of this section, and the current transporter has
authorization from the generator to act as the generator's agent, then
the current transporter may change the transporter(s) designated on the
manifest, or add a new transporter, during transportation without the
generator's prior, explicit approval, provided that:
(i) The current transporter is authorized by a contractual
provision that provides explicit authority for the transport to make
such changes on behalf of the generator,
(ii) The transporter describes such authorization in Item 14 of
each manifest for which such a change is made, and
(iii) The change in designated transporters is necessary to respond
to an emergency, or for purposes of transportation efficiency,
convenience, or safety.
(4) The grant by a generator of authority to a transporter to act
as the agent of the generator with respect to changes to transporter
designations under paragraph (b)(3) of this section does not affect the
generator's liability or responsibility for complying with any
applicable requirement under this chapter.
PART 264--STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE
TREATMENT, STORAGE, AND DISPOSAL FACILITIES
0
6. The authority citation for Part 264 is revised to read as follows:
Authority: 42 U.S.C. 6905, 6912(a), 6924, 6925, and 6939g.
Subpart E--Manifest System, Recordkeeping, and Reporting
0
7. Section 264.71 is amended by revising paragraph (j) and adding a
paragraph (l) to read as follows:
Sec. 264.71 Use of manifest system.
* * * * *
(j) Imposition of user fee for electronic manifest use. An owner or
operator who is a user of the electronic manifest format may be
assessed a user fee by EPA for the origination or processing of each
electronic manifest. An owner or operator may also be assessed a user
fee by EPA for the collection and processing of paper manifest copies
that owners or operators must submit to the electronic manifest system
operator under Sec. 264.71(a)(2)(v) of this part. EPA shall maintain
and update from time-to-time the current schedule of electronic
manifest system user fees, which shall be determined based on current
and projected system costs and level of use of the electronic manifest
system.
* * * * *
(l) Post-receipt manifest data corrections. After facilities have
certified to the receipt of hazardous wastes by signing Item 20 of the
manifest, any post-receipt data corrections must be completed by the
owners or operators of the receiving facilities within 90 days of the
receipt of manifested shipments of hazardous waste.
(1) Receiving facilities must enter all corrections to manifest
data by
[[Page 49105]]
electronic submission, either by directly entering corrected data to a
web based service provided in e-Manifest for such corrections, or by an
upload of a data file (e.g., XML file) containing data corrections
relating to one or more previously submitted manifests.
(2) Each correction submission must include the following
information:
(i) The Manifest Tracking Number and date of receipt by the
facility of the original manifest(s) for which data are being
corrected;
(ii) The Item Number(s) of the original manifest that is the
subject of the submitted correction(s); and
(iii) For each Item Number with corrected data, the data previously
entered and the corresponding data as corrected by the correction
submission.
(3) Each correction submission shall include a statement that the
facility representative submitting the corrections certifies, under
penalty of law, that to the best of his or her knowledge or belief, the
corrections that are included in the submission will cause the
information reported about the previously received hazardous wastes to
be true, accurate, and complete.
(i) The certification statement must be executed with a valid
electronic signature.
(ii) A batch upload of data corrections may be submitted under one
certification statement.
(4) Manifest data corrections initiated by the receiving facility
should be initiated by a facility's correction submission no later than
60 days from the date receipt of the hazardous wastes under the
affected manifest(s).
(i) Upon receipt of the facility's correction submission, other
interested persons (other waste handlers on the manifests, EPA,
appropriate states) will be provided electronic notice of the
facility's proposed corrections.
(ii) Other interested persons shall have 15 days to respond to the
facility's proposed corrections with any comments or suggested changes.
(iii) By the date 90 days after receipt of the original manifests
for which data are being corrected, the facility must reconcile any
comments received from other interested persons, and must either alter
its correction submission accordingly, or affirm the accuracy of the
initial correction submission.
(5) Manifest data corrections may be initiated by notice of a
suspected data error provided to the facility by other interested
persons.
(i) Any notice of a suspected data error from an interested person
must be provided to the facility by email or other form of electronic
notice no later than the date 60 days after receipt of the original
manifests affected by the suspected errors.
(ii) If timely notice of suspected data errors is provided to the
facility, the facility shall have 15 days to provide its response to
such notice by either submitting a correction submission with
responsive data corrections, or by affirming that the data originally
submitted are accurate and need no correction.
(iii) The facility must finally reconcile all notices or comments
regarding data errors and corrections by the date 90 days after receipt
of the affected hazardous waste manifests.
0
8. Subpart FF is added to read as follows:
Subpart FF--Fees for the Electronic Hazardous Waste Manifest
Program
Sec.
264.1300 Applicability.
264.1310 Definitions applicable to this subpart.
264.1311 Manifest transactions subject to fees.
264.1312 User fee calculation methodology.
264.1313 User fee revisions.
264.1314 How to make user fee payments.
264.1315 Sanctions for delinquent payments.
Sec. 264.1300 Applicability.
(a) This subpart prescribes:
(1) The methodology by which EPA will determine the user fees which
owners or operators of facilities must pay for activities and manifest
related services provided by EPA through the development and operation
of the electronic hazardous waste manifest system (e-Manifest system);
and
(2) The process by which EPA will revise e-Manifest system fees and
provide notice of the fee schedule revisions to owners or operators of
facilities.
(b) The fees determined under this subpart apply to owners or
operators of facilities whose activities receiving, rejecting, or
managing federally- or state-regulated hazardous wastes or other
materials bring them within the definition of ``user of the electronic
manifest system'' under Sec. 260.10 of this chapter.
Sec. 264.1310 Definitions applicable to this subpart.
The following definitions apply to this subpart:
Consumer Price Index means the consumer price index for all U.S.
cities using the ``U.S. city average'' area, ``all items'' and ``not
seasonally adjusted'' numbers calculated by the Bureau of Labor
Statistics in the Department of Labor.
CROMERR Costs are the sub-category of Operations and Maintenance
costs that are expended by EPA in implementing electronic signature,
user registration, identity proofing, and copy of record solutions that
meet EPA's electronic reporting regulations as set forth in the Cross
Media Electronic Reporting Rule (CROMERR) as codified at 40 CFR part 3.
Electronic Manifest Submissions means manifests that are initiated
electronically using the electronic format supported by the e-Manifest
system, and that are signed electronically and submitted electronically
to the e-Manifest system by facility owners or operators to indicate
the receipt or rejection of the wastes identified on the electronic
manifest.
EPA Program Costs mean the Agency's intramural and non-information
technology extramural costs expended in the design, development and
operations of the e-Manifest system, as well as in regulatory
development activities supporting e-Manifest, in conducting its capital
planning, project management, oversight and outreach activities related
to e-Manifest, in conducting economic analyses supporting e-Manifest,
and in establishing the System Advisory Board to advise EPA on the
system. Depending on the date on which EPA Program Costs are incurred,
these costs may be further classified as either system setup costs or
operations and maintenance costs.
Help Desk Costs mean the costs incurred by EPA or its contractors
to operate the e-Manifest Help Desk, which EPA will establish to
provide e-Manifest system users with technical assistance and related
support activities.
Indirect Costs mean costs not captured as Marginal Costs, System
Setup Costs, or Operations and Maintenance Costs, but that are
necessary to capture because of their enabling and supporting nature,
and to ensure full cost recovery. Indirect costs include, but are not
limited to, such cost items as physical overhead, maintenance,
utilities, and rents on land, buildings, or equipment. Indirect costs
also include the EPA costs incurred from the participation of EPA
offices and upper management personnel outside of the lead program
office responsible for implementing the e-Manifest program.
Manifest Submission Type means the type of manifest submitted to
the e-Manifest system for processing, and includes electronic manifest
submissions and paper manifest submissions.
[[Page 49106]]
Marginal Labor Costs mean the human labor costs incurred by staff
operating the paper manifest processing center in conducting data key
entry, QA, scanning, copying, and other manual or clerical functions
necessary to process the data from paper manifest submissions into the
e-Manifest system's data repository.
Operations and Maintenance Costs mean all system related costs
incurred by EPA or its contractors after the activation of the e-
Manifest system. Operations and Maintenance Costs include the costs of
operating the electronic manifest information technology system and
data repository, CROMERR Costs, Help Desk Costs, EPA Program Costs
incurred after e-Manifest system activation, and the costs of operating
the paper manifest processing center, other than the paper processing
center's Marginal Labor Costs.
Paper Manifest Submissions mean submissions to the paper processing
center of the e-Manifest system by facility owners or operators, of the
data from the designated facility copy of a paper manifest, EPA Form
8700-22, or a paper Continuation Sheet, EPA Form 8700-22A. Such
submissions may be made by mailing the paper manifests or continuation
sheets, by submitting image files from paper manifests or continuation
sheets, or by submitting both an image file and data file (e.g., XML)
in a format supported by the e-Manifest system's paper processing
center.
System Setup Costs mean all system related costs, intramural or
extramural, incurred by EPA prior to the activation of the e-Manifest
system. Components of System Setup Costs include the procurement costs
from procuring the development and testing of the e-Manifest system,
and the EPA Program Costs incurred prior to e-Manifest system
activation.
Sec. 264.1311 Manifest transactions subject to fees.
(a) Fees shall be assessed on a per manifest basis for the
following manifest submission transactions:
(1) The submission of each electronic manifest that is
electronically signed and submitted to the e-Manifest system by the
owners or operators of receiving or designated facilities; and
(2) The submission of each paper manifest submission to the paper
processing center by owners or operators of receiving or designated
facilities;
(b) Supplemental fees shall be assessed on a per transaction basis
for the following manifest related transactions:
(1) The sorting, recovery, and return to sender of extraneous
documents or other information submitted to the paper processing center
with mailed copies of paper manifests by owners or operators of
receiving or designated facilities, and
(2) The processing of manifest data correction submissions by
owners or operators of receiving or designated facilities, for the data
entry, QA, and other activities necessary to process corrected data
into the e-Manifest system.
Sec. 264.1312 User fee calculation methodology.
(a) The fee calculation formula or methodology that EPA will use
initially to determine per manifest fees is as follows:
[GRAPHIC] [TIFF OMITTED] TP26JY16.007
System Setup Cost = Procurement Cost + EPA Program Cost
O&M Cost = Electronic System O&M Cost + Paper Center O&M Cost + Help
Desk Cost + EPA Program Cost + CROMERR Cost + LifeCycle Cost to
Modify or Upgrade eManifest System Related Services
Where:
Feei represents the per manifest fee for each manifest
submission type ``i,''
Nt refers to the total number of manifests completed in a year, and
(b) If after 4 years of system operations, electronic manifest
usage does not equal or exceed 75% of total manifest usage, EPA will
transition to the following formula or methodology to determine per
manifest fees:
[GRAPHIC] [TIFF OMITTED] TP26JY16.008
System Setup Cost = Procurement Cost + EPA Program Cost
O&M fully electronicCost = Electronic System O&M Cost + Help Desk
Cost + EPA Program Cost + CROMERR Cost + LifeCycle Cost to Modify or
Upgrade eManifest System Related Services
O&Mall otherCost = Electronic System O&M Cost + Paper Center O&M
Cost + Help Desk Cost + EPA Program Cost + CROMERR Cost + LifeCycle
Cost to Modify or Upgrade eManifest System Related Services
Ni refers to the total number of one of the four manifest submission
types ``i'' completed in a year.
O&Mi Cost refers to the differential O&M Cost for each manifest
submission type ``i.''
Sec. 264.1313 User fee revisions.
(a) EPA will revise the fee schedules for e-Manifest submissions
and related activities at two-year intervals, by utilizing the
applicable fee calculation formula prescribed in Sec. 264.1312 and the
most recent program cost and manifest usage numbers based on fiscal
year data for the fiscal year beginning on October 1 of odd numbered
years.
(1) The fee schedules will be published to users through the e-
Manifest program Web site by March 1 of each even numbered year, and
will cover the two-year period beginning on June 1 of that year and
ending on May 31 of the next even numbered year two years later.
(b) Inflation adjuster. The second year fee schedule shall be
adjusted for inflation by using the following adjustment formula:
FeeiYear 2 = FeeiYear1 x
(CPIYear2-2/CPIYear2-1),
Where
FeeiYear2 is the Fee for each type of manifest submission
``i'' in Year 2 of the fee cycle,
FeeiYear1 is the Fee for each type of manifest submission
``i'' in Year 1 of the fee cycle, and
CPIYear2-2/CPIYear2-1 is the ratio of the CPI
published for the year two years prior to Year 2 to the CPI for the
year one year prior to Year 2 of the cycle.
(c) Revenue recovery adjusters. The fee schedules published at two-
year intervals under this section shall include adjustments to
recapture
[[Page 49107]]
revenue lost in the previous two-year fee cycle on account of imprecise
estimates of manifest usage and of uncollectable manifests.
(1) The adjustment for imprecise estimates of manifest usage shall
be calculated using the following adjustment formula to calculate a
revenue recapture amount which will be added to O&M Costs in the fee
calculation formula of Sec. 264.1312:
Revenue Recapturei = (NiYear1 +
NiYear2)Actual -- (NiYear1 +
NiYear2)Est x Feei(Ave),
Where
Revenue Recapturei is the amount of fee revenue recaptured for each
type of manifest submission ``i,''
(NiYear1 + NiYear2)Actual --
(NiYear1 + NiYear2)Est is the
difference between actual manifest numbers submitted to the system
for each manifest type during the previous 2-year cycle, and the
numbers estimated when we developed the previous cycle's fee
schedule, and
Feei(Ave) is the average fee charged per manifest type
over the previous two-year cycle.
(2) The adjustment for uncollectable manifests shall be calculated
using the following adjustment formula to calculate an Uncollectable
Revenue recovery amount, which will be added to O&M Costs in the fee
calculation formula of Sec. 264.1312:
Uncollectable Revenuei = (NiYear1 +
NiYear2)UNCOLLECTABLE x Feei(Ave),
Where
(NiYear1 + NiYear2)UNCOLLECTABLE is
the sum of the number of uncollectable manifests of each type ``i''
over the previous two-year cycle, and
Feei(Ave) is the average fee charged for each manifest
type ``i'' during the previous cycle.
Sec. 264.1314 How to make user fee payments.
(a) All fees required by this subpart shall be paid by the owners
or operators of the receiving or designated facility (the facility) in
response to an electronic invoice or bill identifying manifest-related
services provided the user during the previous month and identifying
the fees owed for the enumerated services.
(b) All fees required by this subpart shall be paid to EPA by the
facility electronically in U.S. dollars, using one of the electronic
payment methods supported by the Department of the Treasury's Pay.gov
online electronic payment service, or any applicable additional or
successor online electronic payment service offered by the Department
of Treasury.
(c) All fees for which payments are owed in response to an
electronic invoice or bill must be paid within 30 days of the date of
the invoice or bill.
Sec. 264.1315 Sanctions for delinquent payments.
(a) Interest. In accordance with 31 U.S.C. 3717(a)(1), delinquent
e-Manifest user fee accounts shall be charged a minimum annual rate of
interest equal to the average investment rate for Treasury tax and loan
accounts (Current Value of Funds Rate or CVFR) for the 12-month period
ending September 30th of each year, rounded to the nearest whole
percent.
(1) E-Manifest user fee accounts are delinquent if the accounts
remain unpaid by the due date specified in the invoice or other notice
of the fee amount owed.
(2) Due dates for invoiced or electronically billed fee amounts
shall be 30 days from the date of the electronic invoice or bill.
(b) Financial penalty. In accordance with 31 U.S.C. 3717(e), e-
Manifest user fee accounts that are more than 90 days past due shall be
charged an additional penalty of 6% per year assessed on any part of
the debt that is past due for more than 90 days, plus any applicable
handling charges.
(c) Publication of delinquent payors' list. If e-Manifest user fee
accounts remain past due for 120 days or more, EPA may include the
facility responsible for the delinquent account on a List of Delinquent
Payors that the Agency will maintain on the program's Web site or
similar medium where e-Manifest program information is provided.
(1) The information about delinquent payors shall include the name
of the facility, the facility's EPA ID Number, and the amount of the
delinquency at the time of the facility's inclusion on the List.
(2) The facility shall be removed from the List of Delinquent
Payors when it has been determined that the delinquency has been cured
to the satisfaction of the Agency.
(d) Compliance with manifest completion requirement. A manifest is
fully complete when:
(1) The manifest has been submitted by the owner or operator to the
e-Manifest system, as either an electronic submission or a paper
manifest submission, and
(2) All user fees arising from the submission or correction of the
manifest have been fully paid.
PART 265--INTERIM STATUS STANDARDS FOR OWNERS AND OPERATORS OF
HAZARDOUS WASTE TREATMENT, STORAGE, AND DISPOSAL FACILITIES
0
9. The authority citation for Part 265 is revised to read as follows:
Authority: 42 U.S.C. 6905, 6906, 6912, 6922, 6923, 6924, 6925,
6935, 6936, 6937, and 6939g.
Subpart E--Manifest System, Recordkeeping, and Reporting
0
10. Section 265.71 is amended by revising paragraph (j) and by adding a
paragraph (l) to read as follows:
Sec. 265.71 Use of manifest system.
* * * * *
(j) Imposition of user fee for electronic manifest use. An owner or
operator who is a user of the electronic manifest format may be
assessed a user fee by EPA for the origination or processing of each
electronic manifest. An owner or operator may also be assessed a user
fee by EPA for the collection and processing of paper manifest copies
that owners or operators must submit to the electronic manifest system
operator under Sec. 265.71(a)(2)(v). EPA shall maintain and update
from time-to-time the current schedule of electronic manifest system
user fees, which shall be determined based on current and projected
system costs and level of use of the electronic manifest system.
* * * * *
(l) Post-receipt manifest data corrections. After facilities have
certified to the receipt of hazardous wastes by signing Item 20 of the
manifest, any post-receipt data corrections must be completed by the
owners or operators of the receiving facilities within 90 days of the
receipt of manifested shipments of hazardous waste.
(1) Receiving facilities must enter all corrections to manifest
data by electronic submission, either by directly entering corrected
data to a web based service provided in e-Manifest for such
corrections, or by an upload of a data file (e.g., XML file) containing
data corrections relating to one or more previously submitted
manifests.
(2) Each correction submission must include the following
information:
(i) The Manifest Tracking Number and date of receipt by the
facility of the original manifest(s) for which data are being
corrected;
(ii) The Item Number(s) of the original manifest that is the
subject of the submitted correction(s); and
(iii) For each Item Number with corrected data, the data previously
entered and the corresponding data as corrected by the correction
submission.
(3) Each correction submission shall include a statement that the
facility representative submitting the corrections certifies, under
penalty of law, that to the best of his or her knowledge or belief, the
corrections that
[[Page 49108]]
are included in the submission will cause the information reported
about the previously received hazardous wastes to be true, accurate,
and complete.
(i) The certification statement must be executed with a valid
electronic signature.
(ii) A batch upload of data corrections may be submitted under one
certification statement.
(4) Manifest data corrections initiated by the receiving facility
should be initiated by a facility's correction submission no later than
60 days from the date receipt of the hazardous wastes under the
affected manifest(s).
(i) Upon receipt of the facility's correction submission, other
interested persons (other waste handlers on the manifests, EPA,
appropriate states) will be provided electronic notice of the
facility's proposed corrections.
(ii) Other interested persons shall have 15 days to respond to the
facility's proposed corrections with any comments or suggested changes.
(iii) By the date 90 days after receipt of the original manifests
for which data are being corrected, the facility must reconcile any
comments received from other interested persons, and must either alter
its correction submission accordingly, or affirm the accuracy of the
initial correction submission.
(5) Manifest data corrections may be initiated by notice of a
suspected data error provided to the the facility by other interested
persons.
(i) Any notice of a suspected data error from an interested person
must be provided to the facility by email or other form of electronic
notice no later than the date 60 days after receipt of the original
manifests affected by the suspected errors.
(ii) If timely notice of suspected data errors is provided to the
facility, the facility shall have 15 days to provide its response to
such notice by either submitting a correction submission with
responsive data corrections, or by affirming that the data originally
submitted are accurate and need no correction.
(iii) The facility must finally reconcile all notices or comments
regarding data errors and corrections by the date 90 days after receipt
of the affected hazardous waste manifests.
0
11. Subpart FF is added to read as follows:
Subpart FF--Fees for the Electronic Hazardous Waste Manifest
Program
Sec.
265.1300 Applicability.
265.1310 Definitions applicable to this subpart.
265.1311 Manifest transactions subject to fees.
265.1312 User fee calculation methodology.
265.1313 User fee revisions.
265.1314 How to make user fee payments.
265.1315 Sanctions for delinquent payments.
Sec. 265.1300 Applicability.
(a) This subpart prescribes:
(1) The methodology by which EPA will determine the user fees which
owners or operators of facilities must pay for activities and manifest
related services provided by EPA through the development and operation
of the electronic hazardous waste manifest system (e-Manifest system);
and
(2) The process by which EPA will revise e-Manifest system fees and
provide notice of the fee schedule revisions to owners or operators of
facilities.
(b) The fees determined under this subpart apply to owners or
operators of facilities whose activities receiving, rejecting, or
managing federally- or state-only regulated wastes or other materials
bring them within the definition of ``user of the electronic manifest
system'' under Sec. 260.10 of this chapter.
Sec. 265.1310 Definitions applicable to this subpart.
The following definitions apply to this subpart:
Consumer Price Index means the consumer price index for all U.S.
cities using the ``U.S. city average'' area, ``all items'' and ``not
seasonally adjusted'' numbers calculated by the Bureau of Labor
Statistics in the Department of Labor.
CROMERR Costs are the sub-category of Operations and Maintenance
costs that are expended by EPA in implementing electronic signature,
user registration, identity proofing, and copy of record solutions that
meet EPA's electronic reporting regulations as set forth in the Cross
Media Electronic Reporting Rule (CROMERR) as codified at 40 CFR part 3.
Electronic Manifest submissions means manifests that are initiated
electronically using the electronic format supported by the e-Manifest
system, and that are signed electronically and submitted electronically
to the e-Manifest system by facility owners or operators to indicate
the receipt or rejection of the wastes identified on the electronic
manifest.
EPA Program Costs mean the Agency's intramural and non-information
technology extramural costs expended in the design, development and
operations of the e-Manifest system, as well as in regulatory
development activities supporting e-Manifest, in conducting its capital
planning, project management, oversight and outreach activities related
to e-Manifest, in conducting economic analyses supporting e-Manifest,
and in establishing the System Advisory Board to advise EPA on the
system. Depending on the date on which EPA Program Costs are incurred,
these costs may be further classified as either system setup costs or
operations and maintenance costs.
Help Desk Costs mean the costs incurred by EPA or its contractors
to operate the e-Manifest Help Desk, which EPA will establish to
provide e-Manifest system users with technical assistance and related
support activities.
Indirect Costs mean costs not captured as Marginal Costs, System
Setup Costs, or Operations and Maintenance Costs, but that are
necessary to capture because of their enabling and supporting nature,
and to ensure full cost recovery. Indirect costs include, but are not
limited to, such cost items as physical overhead, maintenance,
utilities, and rents on land, buildings, or equipment. Indirect costs
also include the EPA costs incurred from the participation of EPA
offices and upper management personnel outside of the lead program
office responsible for implementing the e-Manifest program.
Manifest Submission Type means the type of manifest submitted to
the e-Manifest system for processing, and includes electronic manifest
submissions and paper manifest submissions.
Marginal Labor Costs mean the human labor costs incurred by staff
operating the paper manifest processing center in conducting data key
entry, QA, scanning, copying, and other manual or clerical functions
necessary to process the data from paper manifest submissions into the
e-Manifest system's data repository.
Operations and Maintenance Costs mean all system related costs
incurred by EPA or its contractors after the activation of the e-
Manifest system. Operations and Maintenance Costs include the costs of
operating the electronic manifest information technology system and
data repository, CROMERR Costs, Help Desk Costs, EPA Program Costs
incurred after e-Manifest system activation, and the costs of operating
the paper manifest processing center, other than the paper processing
center's Marginal Labor Costs.
Paper Manifest Submissions mean submissions to the paper processing
[[Page 49109]]
center of the e-Manifest system by facility owners or operators, of the
data from the designated facility copy of a paper manifest, EPA Form
8700-22, or a paper Continuation Sheet, EPA Form 8700-22A. Such
submissions may be made by mailing the paper manifests or continuation
sheets, by submitting image files from paper manifests or continuation
sheets, or by submitting both an image file and data file (e.g., XML)
in a format supported by the e-Manifest system's paper processing
center.
System Setup Costs mean all system related costs, intramural or
extramural, incurred by EPA prior to the activation of the e-Manifest
system. Components of System Setup Costs include the procurement costs
from procuring the development and testing of the e-Manifest system,
and the EPA Program Costs incurred prior to e-Manifest system
activation.
Sec. 265.1311 Manifest transactions subject to fees.
(a) Fees shall be assessed on a per manifest basis for the
following manifest submission transactions:
(1) The submission of each electronic manifest that is
electronically signed and submitted to the e-Manifest system by the
owners or operators of receiving or designated facilities; and
(2) The submission of each paper manifest submission to the paper
processing center by owners or operators of receiving or designated
facilities;
(b) Supplemental fees shall be assessed on a per transaction basis
for the following manifest related transactions:
(1) The sorting, recovery, and return to sender of extraneous
documents or other information submitted to the paper processing center
with mailed copies of paper manifests by owners or operators of
receiving or designated facilities, and
(2) The processing of manifest data correction submissions by
owners or operators of receiving or designated facilities, for the data
entry, QA, and other activities necessary to process corrected data
into the e-Manifest system.
Sec. 265.1312 User fee calculation methodology.
(a) The fee calculation formula or methodology that EPA will use
initially to determine per manifest fees is as follows:
[GRAPHIC] [TIFF OMITTED] TP26JY16.009
System Setup Cost = Procurement Cost + EPA Program Cost
O&M Cost = Electronic System O&M Cost + Paper Center O&M Cost + Help
Desk Cost + EPA Program Cost + CROMERR Cost + LifeCycle Cost to
Modify or Upgrade eManifest System Related Services
Where:
Feei represents the per manifest fee for each manifest
submission type ``i,''
Nt refers to the total number of manifests completed in a year, and
(b) If after 4 years of system operations, electronic manifest
usage does not equal or exceed 75% of total manifest usage, EPA will
transition to the following formula or methodology to determine per
manifest fees:
[GRAPHIC] [TIFF OMITTED] TP26JY16.010
System Setup Cost = Procurement Cost + EPA Program Cost
O&Mfully electronicCost = Electronic System O&M Cost + Help Desk
Cost + EPA Program Cost + CROMERR Cost + LifeCycle Cost to Modify or
Upgrade eManifest System Related Services
O&Mall otherCost = Electronic System O&M Cost + Paper Center O&M
Cost + Help Desk Cost + EPA Program Cost + CROMERR Cost + LifeCycle
Cost to Modify or Upgrade eManifest System Related Services
Ni refers to the total number of one of the four manifest submission
types ``i'' completed in a year.
O&Mi Cost refers to the differential O&M Cost for each manifest
submission type ``i.''
Sec. 265.1313 User fee revisions.
(a) EPA will revise the fee schedules for e-Manifest submissions
and related activities at two-year intervals, by utilizing the
applicable fee calculation formula prescribed in Sec. 265.1312 and the
most recent program cost and manifest usage numbers based on fiscal
year data for the fiscal year beginning on October 1 of odd numbered
years.
(1) The fee schedules will be published to users through the e-
Manifest program Web site by March 1 of each even numbered year, and
will cover the two-year period beginning on June 1 of that year and
ending on May 31 of the next even numbered year two years later.
(b) Inflation adjuster. The second year fee schedule shall be
adjusted for inflation by using the following adjustment formula:
FeeiYear2 = FeeiYear1 X (CPIYear2-2/
CPIYear2-1),
Where:
FeeiYear2 is the Fee for each type of manifest submission
``i'' in Year 2 of the fee cycle,
FeeiYear1 is the Fee for each type of manifest submission
``i'' in Year 1 of the fee cycle, and
CPIYear2-2/CPIYear2-1 is the ratio of the CPI
published for the year two years prior to Year 2 to the CPI for the
year one year prior to Year 2 of the cycle.
(c) Revenue recovery adjusters. The fee schedules published at two-
year intervals under this section shall include adjustments to
recapture revenue lost in the previous two-year fee cycle on account of
imprecise estimates of manifest usage and of uncollectable manifests.
(1) The adjustment for imprecise estimates of manifest usage shall
be calculated using the following adjustment formula to calculate a
revenue recapture amount which will be added to O&M Costs in the fee
calculation formula of Sec. 265.1312:
Revenue Recapturei = (NiYear1 +
NiYear2)Actual - (NiYear1 +
NiYear2)Est x Feei(Ave),
Where:
Revenue Recapturei is the amount of fee revenue
recaptured for each type of manifest submission ``i,''
(NiYear1 + NiYear2)Actual-
(NiYear1 + NiYear2)Est is the
difference between actual manifest numbers submitted to the system
for each manifest type during the previous 2-year cycle, and the
numbers estimated when we developed the previous cycle's fee
schedule, and
[[Page 49110]]
Feei(Ave) is the average fee charged per manifest type
over the previous two-year cycle.
(2) The adjustment for uncollectable manifests shall be calculated
using the following adjustment formula to calculate an Uncollectable
Revenue recovery amount, which will be added to O&M Costs in the fee
calculation formula of Sec. 265.1312:
Uncollectable Revenuei = (NiYear1 +
NiYear2)UNCOLLECTABLE x Feei(Ave),
Where:
(NiYear1 + NiYear2)UNCOLLECTABLE is
the sum of the number of uncollectable manifests of each type ``i''
over the previous two-year cycle, and
Feei(Ave) is the average fee charged for each manifest
type ``i'' during the previous cycle.
Sec. 265.1314 How to make user fee payments.
(a) All fees required by this subpart shall be paid by the owners
or operators of the receiving or designated facility (the facility) in
response to an electronic invoice or bill identifying manifest related
services provided the user during the previous month and identifying
the fees owed for the enumerated services.
(b) All fees required by this subpart shall be paid to EPA by the
facility electronically in U.S. dollars, using one of the electronic
payment methods supported by the Department of the Treasury's Pay.gov
online electronic payment service, or any applicable additional or
successor online electronic payment service offered by the Department
of Treasury.
(c) All fees for which payments are owed in response to an
electronic invoice or bill must be paid within 30 days of the date of
the invoice or bill.
Sec. 265.1315 Sanctions for delinquent payments.
(a) Interest. In accordance with 31 U.S.C. 3717(a)(1), delinquent
e-Manifest user fee accounts shall be charged a minimum annual rate of
interest equal to the average investment rate for Treasury tax and loan
accounts (Current Value of Funds Rate or CVFR) for the 12-month period
ending September 30th of each year, rounded to the nearest whole
percent.
(1) E-Manifest user fee accounts are delinquent if the accounts
remain unpaid by the due date specified in the invoice or other notice
of the fee amount owed.
(2) Due dates for invoiced or electronically billed fee amounts
shall be 30 days from the date of the electronic invoice or bill.
(b) Financial penalty. In accordance with 31 U.S.C. 3717(e), e-
Manifest user fee accounts that are more than 90 days past due shall be
charged an additional penalty of 6% per year assessed on any part of
the debt that is past due for more than 90 days, plus any applicable
handling charges.
(c) Publication of delinquent payors' list. If e-Manifest user fee
accounts remain past due for 120 days or more, EPA may include the
facility responsible for the delinquent account on a List of Delinquent
Payors that the Agency will maintain on the program's Web site or
similar medium where e-Manifest program information is provided.
(1) The information about delinquent payors shall include the name
of the facility, the facility's EPA ID Number, and the amount of the
delinquency at the time of the facility's inclusion on the List.
(2) The facility shall be removed from the List of Delinquent
Payors when it has been determined that the delinquency has been cured
to the satisfaction of the Agency.
(d) Compliance with manifest completion requirement. A manifest is
fully complete when:
(1) The manifest has been submitted by the owner or operator to the
e-Manifest system, as either an electronic submission or a paper
manifest submission, and
(2) All user fees arising from the submission or correction of the
manifest have been fully paid.
PART 271--REQUIREMENTS FOR AUTHORIZATION OF STATE HAZARDOUS WASTE
PROGRAMS
0
12. The authority section for part 271 is revised to read as follows:
Authority: 42 U.S.C. 6905, 6912(a), 6926, and 6939g.
0
13. Section 271.12 is amended by adding paragraph (k) to read as
follows:
* * * * *
(k) Requirements to pay user fees to EPA to recover EPA's costs
related to the development and operation of an electronic hazardous
waste manifest system.
[FR Doc. 2016-15845 Filed 7-25-16; 8:45 am]
BILLING CODE 6560-50-P