$6.30
                                                                          $6.49
                                                                          $7.11
                                                                          $7.98
                                                                          $7.90
                                                                          $7.95
                                                                          $43.7
                                       8
Additional indirect costs[a]
                                                                          $2.09
                                                                          $2.16
                                                                          $2.36
                                                                          $2.65
                                                                          $2.62
                                                                          $2.64
                                                                          $14.5
                                       9
                                                                          Total
                                                                          $8.39
                                                                          $8.65
                                                                          $9.48
                                                                          $10.6
                                                                          $10.5
                                                                          $10.6
                                                                          $58.3
a Calculated as 33.22 percent of all other costs incurred in a given year, based on the most recent indirect cost rate for EPA OLEM published by EPA OFM.

Operations costs, inclusive of indirect costs, range from approximately $8.4 million to $10.6 million annually in the six-year period following system launch, and are approximately $10.6 million annually thereafter. These costs vary based on the cumulative and incremental (i.e., relative to the previous year) adoption of the e-Manifest system in a given year. For example, costs in Year 4 are marginally higher than costs in Years 5 and 6 due to higher incremental adoption of e-Manifest in that year leading to higher CROMERR-related costs associated with initial user registrations. Overall, operations costs across this six-year period total approximately $58 million, inclusive of indirect costs.

5.3 Manifest Processing Costs to EPA

In addition to the design, development, and implementation of the e-Manifest system, under the final rule, EPA will collect and process all manifests created and submitted by the hazardous waste industry. The e-Manifest system will be designed in such a way that manifests submitted electronically through the system ("electronic manifests") will not require any additional effort or activity from EPA in order for their data to be fully captured by the system. However, as the rule continues to allow for submission of non-electronic manifests in various formats, EPA will incur costs associated with receiving and processing these manifests and entering their data into the e-Manifest system.

In Section 4.5, this RIA estimated that approximately 1.8 million manifests, or approximately 54 percent of the total estimate of 3.3 million annual manifests used by the hazardous waste industry, are currently collected and processed by states. Therefore, under the final rule, EPA will assume responsibility for processing these 1.8 million manifests, in addition to the 1.5 million manifests not currently verified as collected or processed by states. While increasing costs to EPA, this has the effect of reducing costs to states (see Section 5.6 for additional information).

To estimate the costs associated with EPA manifest processing activities, this RIA uses the 2014 paper processing cost model also used in Chapter 4 to estimate the state burden associated with manifest processing. The details of this model are discussed in Appendix D. This model identifies ten distinct activities in the manifest receipt and processing process (e.g., preparation: sorting mail and separating supplemental documents, corrections, scanning of manifest documents, electronic archiving, etc.) and five "failure scenarios" necessitating additional follow-up (e.g., invalid identifying information for generator, transporter, or TSDF receiver, unresolved corrections, etc.), and assigns hourly cost estimates to each activity and failure scenario. Not every activity and failure scenario applies to every manifest: for example, the model assumes that only six percent of manifests have supplemental documentation requiring additional effort.

Additionally, in accordance with Section 5.1.2, this chapter estimates manifest collection and processing costs under three distinct manifest submission formats: the paper format, the image format, and the XML format. Specifically, paper variant manifest processing applies the same assumptions from the paper processing cost model as this RIA used to estimate state manifest processing burden in Chapter 4, while image and XML variant manifests result in lower overall burden to account for the additional information submitted with these manifests, which lowers processing time and the incidence of certain failure scenarios. Lastly, given the assumed design of the e-Manifest system, this RIA does not estimate any cost to EPA associated with the processing of electronic manifests, which will directly provide their data to the e-Manifest system without the need for additional actions by EPA staff.

The paper processing cost model assigns all standard manifest activities to a basic level of program staff; in Chapter 4, this RIA used the Biennial Report ICR fully-loaded rates for state clerical labor, but this section applies fully-loaded EPA clerical labor rates from the HWMS ICR ($24.37 per hour), for consistency with the remainder of the RIA where EPA costs are estimated. Similarly, fully-loaded EPA technical labor rates from the HWMS ICR ($57.11 per hour) are used for activities associated with failure scenarios. The EPA labor rates from the HWMS ICR are higher than the state labor rates applied in Section 4.5.2 ($22.94 per hour for clerical staff and $35.96 per hour for technical staff).

The assumptions and calculations within the paper processing cost model indicate that per-manifest processing burdens vary across manifest format, as follows:

 Paper variant  -  approximately 0.26 hours of clerical labor and approximately 0.096 hours of technical labor (consistent with Chapter 4); overall per-manifest cost of $11.82 under EPA fully-loaded labor rates from the HWMS ICR.

 Image variant  -  approximately 0.19 hours of clerical labor and approximately 0.036 hours of technical labor; overall per-manifest cost of $6.69 under EPA fully-loaded labor rates from the HWMS ICR.

 XML variant  -  approximately 0.056 hours of clerical labor and 0.014 hours of technical labor; overall per-manifest cost of $2.16 under EPA fully-loaded labor rates from the HWMS ICR.

Based on the adoption rates used in this chapter, the overall manifest processing cost to EPA varies based on the number of manifests of each type (variant) received. As the adoption rate of the e-Manifest system increases, paper manifest processing costs to EPA are expected to drop sharply. Exhibit 5-6 details the annual costs based on the per-manifest costs described above and the adoption rate scenario from Section 5.1.3.

 Exhibit 5-6
Summary of Manifest Processing Costs to EPA by Manifest Variant
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                              (Years 1 through 6)
                                       1
Paper Manifest Process
Paper submission
                                                                          $20.7
                                                                          $14.7
                                                                          $4.42
                                                                         $0.492
                                                                         $0.492
                                                                         $0.492
                                                                          $41.4
                                       2

Scanned image submission
                                                                          $1.04
                                                                          $4.12
                                                                          $2.47
                                                                         $0.275
                                                                         $0.275
                                                                         $0.275
                                                                          $8.46
                                       3

XML schema submission
                                                                          $2.68
                                                                          $1.34
                                                                          $1.61
                                                                         $0.179
                                                                         $0.179
                                                                         $0.179
                                                                          $6.16
                                       4
e-Manifest System Process (electronic manifest)
                                                                         $0.00
                                                                         $0.00
                                                                         $0.00
                                                                         $0.00
                                                                         $0.00
                                                                         $0.00
                                                                         $0.00
                                       5
                                                                          Total
                                                                          $24.5
                                                                          $20.2
                                                                          $8.50
                                                                         $0.945
                                                                         $0.945
                                                                         $0.945
                                                                          $56.0

The proportion of manifests received in the paper variant substantially drive EPA's manifest processing costs. Costs in Year 1 (approximately 53 percent of manifests submitted as the paper variant) for manifest processing total approximately $23 million; by Year 4, where 95 percent of manifests are submitted electronically and 1.25 percent are submitted as paper, paper processing costs total under $1 million.

In accordance with Section 5.2.8, this RIA also applies the 33.22 percent indirect cost factor for OLEM to the manifest processing costs displayed in Exhibit 5-6. The application of this factor directly increases the manifest processing costs by 33.22 percent (Exhibit 5-7).

Despite the higher labor rates used in this analysis, the inclusion of the indirect cost factor, and the greater volume of manifests processed by EPA relative to baseline state paper manifest processing detailed in Section 4.5, cumulative EPA processing costs dip below the less comprehensive cumulative baseline state manifest processing costs in Year 5, the second year that the adoption scenario estimates e-Manifest system adoption plateauing at 95 percent. This analysis indicates that the e-Manifest system will result in substantial long-term savings in total manifest processing costs, even after accounting for the larger volume of manifests that will be collected in the post-rule scenario.

Exhibit 5-7
Summary of Manifest Processing Costs to EPA by Manifest Variant, including Indirect Costs[a]
(2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                              (Years 1 through 6)
                                       1
Paper Manifest Process
Paper submission
                                                                          $27.6
                                                                          $19.6
                                                                          $5.89
                                                                         $0.655
                                                                         $0.655
                                                                         $0.655
                                                                          $55.1
                                       2

Scanned image submission
                                                                          $1.39
                                                                          $5.49
                                                                          $3.29
                                                                         $0.366
                                                                         $0.366
                                                                         $0.366
                                                                          $11.3
                                       3

XML schema submission
                                                                          $3.57
                                                                          $1.78
                                                                          $2.14
                                                                         $0.238
                                                                         $0.238
                                                                         $0.238
                                                                          $8.21
                                       4
e-Manifest System Process (electronic manifest)
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                       5
                                                                          Total
                                                                          $32.6
                                                                          $26.9
                                                                          $11.3
                                                                           $1.3
                                                                          $1.26
                                                                          $1.26
                                                                          $74.6
                                       6
                                                               Cumulative Total
                                                                          $32.6
                                                                          $59.5
                                                                          $70.8
                                                                          $72.1
                                                                          $73.4
                                                                          $74.6
                                      N/A
                                       7
           Cumulative Total of Baseline State Processing Costs (Exhibit 4-8)[b]
                                                                          $16.2
                                                                          $32.4
                                                                          $48.6
                                                                          $64.7
                                                                          $80.9
                                                                          $97.1
                                      N/A
Totals may not sum due to rounding.
[a] Calculated as 33.22 percent of all costs incurred, based on the most recent indirect cost rate for EPA OLEM published by EPA OFM.
[b] Estimated cost of $16.2 million annually per Exhibit 4-8 in Chapter 4.

5.4 Cost and Cost Savings to Industry  -  Manifest Completion and Submittal

The final rule will have several impacts on the hazardous waste industry related to manifest completion and submittal. Broadly, this RIA estimates that industry time and material burden associated with manifest completion tasks will decrease under the e-Manifest system. However, these cost savings will be offset in part by the manifest fees, and by CROMERR requirements applicable to subsets of the industry.

5.4.1 Reduced Manifest Completion and Submittal Burden

This RIA estimates that submission of fully-electronic manifests through the e-Manifest system will provide substantial cost savings to generators, transporters, and receivers of hazardous waste, who will no longer need to rely on a manual, paper system with multiple physical copies distributed to waste management and regulatory entities throughout the process. The RIA bases this estimate on expected changes to the various manifest-related activities. Specifically, this RIA groups activities described in Chapter 4 and the HWMS ICR into two categories:

 Activities with major burden reductions achieved through electronic manifests  -  this category pertains to activities which are greatly expedited or obviated through the use of electronic manifests. Examples of these types of activities include manifest completion (by generators who do not currently use any proprietary electronic systems to generate and complete manifests), manifest storage and recordkeeping and manifest transmittal to other industry or regulatory entities. This RIA assumes that these activities experience an 80 percent burden reduction when associated with electronic manifests.

 Activities with minimal burden reductions achieved through electronic manifests  -  this category pertains to activities which are only marginally expedited through the use of electronic manifests. Many manifest-related activities fall into this category, including most activities associated with rejected wastes, undeliverable shipments, exception reports, or other potential issues encountered in the process of hazardous waste transportation. Additionally, activities that are likely to be completed by TSDFs (which may already have proprietary electronic systems to generate and complete manifests) are grouped into this category, as the use of electronic manifests would not significantly change baseline practices. This RIA assumes that these activities experience a five percent burden reduction when associated with electronic manifests.

Additionally, a minority of manifest-related activities, namely those related to notifications of hazardous waste discharges, are not assumed by this RIA to have any burden reduction associated with electronic manifests, as they do not directly pertain to paperwork requirements for the manifest.

Exhibits 5-8 and 5-9 present the cost savings to industry based on the application of these reductions. These reductions apply only to the proportion of manifests submitted as electronic manifests, based on the adoption rate presented in Section 5.1.3, in a given year. Exhibit 5-8 displays baseline costs and corresponding reductions on an entity basis, while Exhibit 5-9 presents these items on an activity basis. Note that while the corresponding Exhibits 4-1 and 4-3 disaggregated the savings across federal and state manifests for illustrative purposes, Exhibits 5-8 and 5-9 aggregate the baseline costs into one row to allow for easier comparisons between the baseline and post-rule scenarios.

     Exhibit 5-8
Costs to Industry for Manifest Activities, Entity Basis
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                                  Entity Type
                     Baseline (0% electronic manifests)[a]
                       Year 1 (5% electronic manifests)
                       Year 2 (25% electronic manifests)
                       Year 3 (55% electronic manifests)
                       Year 4 (95% electronic manifests)
                       Year 5 (95% electronic manifests)
                       Year 6 (95% electronic manifests)
                                       1
Generators who Ship Waste
                                                                          $55.2
                                                                          $53.2
                                                                          $45.2
                                                                          $33.3
                                                                          $17.3
                                                                          $17.3
                                                                          $17.3
                                       2
Transporters
                                                                          $38.7
                                                                          $37.2
                                                                          $31.0
                                                                          $21.8
                                                                          $9.42
                                                                          $9.42
                                                                          $9.42
                                       3
Receivers
                                                                           $103
                                                                           $101
                                                                          $91.4
                                                                          $77.0
                                                                          $57.9
                                                                          $57.9
                                                                          $57.9
                                       4
                                                                          Total
                                                                           $197
                                                                           $191
                                                                           $168
                                                                           $132
                                                                          $84.6
                                                                          $84.6
                                                                          $84.6
[a] Calculated as the sum of the total rows (Row 6 in both exhibits) in Exhibits 4-1 and 4-3.

On an entity basis, transporters of hazardous waste enjoy the greatest burden reduction, followed by shippers. TSDF receivers of hazardous waste enjoy the smallest relative burden reduction from the adoption and use of electronic manifests, because many of the activities with major burden reductions do not apply to these entities, and because in many cases they are already using proprietary electronic systems in the baseline. In contrast, transporter and shipper activities emphasize manifest completion, storage, and transmittal activities, all of which have major burden reductions.

    Exhibit 5-9
Costs to Industry for Manifest Activities, Activity Basis
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                                 Activity Type
                     Baseline (0% electronic manifests)[b]
                       Year 1 (5% electronic manifests)
                       Year 2 (25% electronic manifests)
                       Year 3 (55% electronic manifests)
                       Year 4 (95% electronic manifests)
                       Year 5 (95% electronic manifests)
                       Year 6 (95% electronic manifests)
                                       1
Manifest Completion[a]
                                                                           $186
                                                                           $180
                                                                           $157
                                                                           $121
                                                                          $74.0
                                                                          $74.0
                                                                          $74.0
                                       2
Discrepancy / Exception Reports
                                                                          $7.88
                                                                          $7.86
                                                                          $7.78
                                                                          $7.66
                                                                          $7.50
                                                                          $7.50
                                                                          $7.50
                                       3
Undeliverable Shipments
                                                                          $0.03
                                                                          $0.03
                                                                          $0.03
                                                                          $0.03
                                                                          $0.03
                                                                          $0.03
                                                                          $0.03
                                       4
Rejected Shipments / Wastes
                                                                          $3.14
                                                                          $3.13
                                                                          $3.10
                                                                          $3.05
                                                                          $2.99
                                                                          $2.99
                                                                          $2.99
                                       5
Notifications of Discharge
                                                                          $0.11
                                                                          $0.11
                                                                          $0.11
                                                                          $0.11
                                                                          $0.11
                                                                          $0.11
                                                                          $0.11
                                       6
                                                                          Total
                                                                           $197
                                                                           $191
                                                                           $168
                                                                           $132
                                                                          $84.6
                                                                          $84.6
                                                                          $84.6
[a] Includes all activities pertaining to manifest completion, transmittal, and recordkeeping.
[b] Calculated as the sum of the total rows (Row 6 in both exhibits) in Exhibits 4-1 and 4-3.

On an activity basis, the largest burden reductions accrue to manifest completion activities, which also include all transmittal and recordkeeping requirements. This intuitively follows from the nature of electronic manifests and the e-Manifest system, as activities in this category represent routine tasks most easily expedited through automation or near-automation, and fall into the major burden reduction category. The remaining activities are exclusively those in the minimal reduction category, and achieve cost savings of under five percent even as electronic manifest use plateaus at 95 percent in Years 4, 5, and 6. The majority of industry cost savings accrue to manifest completion, transmittal, and recordkeeping activities: in Years 4 through 6, overall (undiscounted) cost savings relative to the baseline for manifest activities are approximately $112 million each year; over 99 percent of this total accrues to manifest completion, transmittal, and recordkeeping activities.

Based on Exhibits 5-8 and 5-9, Exhibit 5-10 summarizes cost savings to industry in Years 1 through 6. On a non-discounted basis, relative to baseline costs for manifest-related activities estimated in Chapter 4, this RIA estimates approximately $440 million in savings to industry over the first six years following e-Manifest system launch. Annually, undiscounted cost savings over this period range from approximately $6 million to approximately $110 million. The approximately $110 million in cost savings occurs annually in perpetuity after the adoption rate plateaus. On a discounted basis, with discounting at a seven percent discount rate applied to 2017 and assuming that the e-Manifest system launches in 2018, cost savings total approximately $330 million instead.

Exhibit 5-10
Cost Savings to Industry Associated with Use of Electronic Manifests
                            (2017$, millions of $)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                                     Cost
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                              (Years 1 through 6)
                                       1
% of electronic manifests
                                      5%
                                      25%
                                      55%
                                      95%
                                      95%
                                      95%
                                      N/A
                                       2
Baseline Cost[a]
                                                                           $197
                                                                           $197
                                                                           $197
                                                                           $197
                                                                           $197
                                                                           $197
                                                                         $1,184
                                       3
Post-Rule Cost
                                                                           $191
                                                                           $168
                                                                           $132
                                                                          $84.6
                                                                          $84.6
                                                                          $84.6
                                                                           $745
                                       4
Cost Savings (undiscounted)
                                                                          $5.93
                                                                          $29.6
                                                                          $65.2
                                                                           $113
                                                                           $113
                                                                           $113
                                                                           $439
                                       5
Cost Savings
(3% discount rate)[b]
                                                                          $5.76
                                                                          $27.9
                                                                          $59.7
                                                                           $100
                                                                          $97.2
                                                                          $94.3
                                                                           $385
                                       6
Cost Savings
(7% discount rate)[b]
                                                                          $5.54
                                                                          $25.9
                                                                          $53.2
                                                                          $85.9
                                                                          $80.3
                                                                          $75.1
                                                                           $326
Totals may not sum due to rounding. Discounting applied under the assumption that 2017 is the base year and Year 1, the first year of e-Manifest system operation, occurs in 2018. Correspondingly, the six years in this table are discounted by one through six years, respectively.
[a] Values in this column represent the sum of Rows 1 and 3 from Exhibit 4-8 in Chapter 4.
[b] Cost savings in out years are less heavily discounted under a lower discount rate.

5.4.2 CROMERR Costs to Industry

As described in Section 5.2.5, the e-Manifest system will require e-Manifest system users to comply with CROMERR standards when submitting information to EPA. To submit information, employees of entities using the e-Manifest system must be registered in the CROMERR system; use of the e-Manifest system will therefore result in additional industry costs associated with CROMERR registration.

EPA's 2004 cost-benefit analysis of CROMERR identified five registration activities required to use the e-Manifest system:

 Registering with CROMERR, including preparing, submitting, mailing to EPA, and filing a wet-ink signature agreement as part of the registration process;

 Placing a phone call to the CROMERR help desk for assistance with the registration process;

 Additional registration with EPA's Central Data Exchange (CDX);

 Obtaining digital signature certifications for users that may potentially submit enforcement-sensitive information; and

 Identification and resolution of problems pertaining to CROMERR registration.

This RIA assumes that CROMERR will apply to all receiver TSDFs and transporters, but not to generators. Consistent with the estimates of EPA CROMERR-related costs, this RIA assumes that each of the 420 federal receiver TSDFs and 1,117 state waste-only TSDFs will seek CROMERR registrations for five employees, while each of the 9,947 trucks engaged in shipping hazardous waste is operated by two drivers, each of whom will require a CROMERR registration to complete manifest activities through the e-Manifest system, for a total of approximately 28,000 users (see Chapter 2). For simplicity, this RIA assumes that each facility operates its own hazardous waste shipping truck; to the extent that this is a high-cost assumption because multiple trucks are aggregated at a single establishment or facility, the costs of CROMERR registration to industry would be lower.

This RIA assesses the costs under alternative assumptions governing CROMERR, such as scenarios where CROMERR is required for generators in addition to TSDF receivers and transporters, in Chapter 6.

The methodology for estimating CROMERR costs to industry is broadly similar to the methodology used to estimate CROMERR-related e-Manifest system costs to EPA in Section 5.2.5. Therefore, this section briefly explains the cost associated with each of the five industry CROMERR registration activities noted above, making reference to the specific calculations as described in more detail in Section 5.2.5 where relevant.

<IP_ADDRESS> CROMERR User Registration  -  Industry Costs

Consistent with Section <IP_ADDRESS>, industry costs for CROMERR registration include: 15 minutes (0.25 hours) for a single employee to register with CROMERR, including preparation, submitting, and filing of the necessary wet-ink signature agreements, and a $2.50 (2003$) charge for postage, which equals $3.37 in 2017$. Users must register not only at those facilities that adopt use of the e-Manifest system registrations but also for a proportion of new users at facilities that had already adopted the e-Manifest system (i.e., as a result of user turnover) and for a proportion of new facilities that did not previously operate in the market (i.e., as a result of facility turnover). Additionally, users who remain registered for three years must renew their CROMERR registration in the third year. These re-registration costs apply only to users at existing facilities, two years after those facilities are estimated to have adopted the e-Manifest system.

Costs of user registration to industry are similar to the costs of processing user registrations to EPA because they reflect the other side of the same interaction (Section <IP_ADDRESS>), though the cost of $13.90 per user registration is based on the industry technical labor rate of $42.06 from the HWMS ICR and $3.37 in postage fees and 0.25 hours, rather than 0.17 hours, for the registration process.

This RIA estimates annual costs to industry for user registrations of approximately $19,000 in the first year after e-Manifest system launch (five percent e-Manifest system adoption) and approximately $320,000 in the sixth year after e-Manifest system launch (95 percent e-Manifest system adoption), and approximately $270,000 annually in perpetuity. These costs vary based on cumulative and incremental e-Manifest system adoption in a given year. It is possible that some hazardous waste truckers and many employees at receiver TSDFs are already registered with CROMERR; to the extent that this is the case, these costs may be an overestimate.

<IP_ADDRESS> CROMERR Help Desk  -  Industry Costs

Consistent with EPA's costs, the CROMERR Cost Benefit Analysis estimated approximately eight minutes (0.13 hours) for industry to place and complete a help desk call, on average. It also assumed that such calls would specifically be related to registration, and that, on average, each registering user would make one such call to the CROMERR help desk in the course of registration. Because of facility and user turnover, this cost applies to more than just the set of users at facilities newly-adopting the e-Manifest system in a given year. The calculations for this cost item are similar to that for user registrations, but use 0.13 hours of industry technical labor rather than 0.25 hours per instance.

Correspondingly, CROMERR costs to industry associated with the help desk range from approximately $8,000 in the first year to approximately $57,000 in the sixth year after system implementation (95 percent adoption) and annually thereafter, with higher costs in some interim years to account for large numbers of first-time user registrations in those years.

<IP_ADDRESS> CDX Registration

Each registering employee must register with the CDX system once as part of CROMERR registration; the CROMERR Cost Benefit Analysis estimates that this registration takes three minutes (0.05 hours) to complete. Due to facility and user turnover, this cost applies to more than just the set of users at facilities newly-adopting the e-Manifest system in a given year. The calculations for this cost item are similar to that for help desk calls, but use 0.05 hours of industry technical labor rather than 0.13 hours per instance.

Costs to industry associated with CDX registration range from approximately $3,000 in the first year to approximately $22,000 in the sixth year after e-Manifest system implementation and annually thereafter, with highest costs in some interim years to account for large numbers of first-time user registrations in those years.

<IP_ADDRESS> Digital Signature Certification

The CROMERR Cost Benefit Analysis also assumes that 20 percent of employee registrations would be required to submit enforcement-sensitive information to EPA. In order to preserve the integrity of these data, the analysis assumes that these registrants obtain and install a digital electronic signature certificate on their browser, which requires 30 minutes of industry technical labor. Similar to the broader CROMERR registration, this must be renewed every two years after the first year. The calculations for this item are similar to those for CROMERR registration (Section <IP_ADDRESS>) but use 0.5 hours of industry technical labor instead for 20 percent of employee registrations instead.

Costs to industry associated with this activity range from approximately $6,000 in the first year to approximately $97,000 in the sixth year after e-Manifest system implementation, with an annual cost in perpetuity of approximately $60,000.

<IP_ADDRESS> CROMERR Facility Registration Issues

The CROMERR Cost Benefit Analysis estimates approximately one hour for industry staff to investigate registration issues or respond to EPA queries, and indicates that such activities apply to three percent of facilities each year. This RIA estimates costs for this activity in a given year as total facilities/trucks x the adoption rate in that year x $42.06 (the cost for one hour of industry technical labor per the HWMS ICR). Costs range from approximately $700 to approximately $14,000 as the adoption rate increases over time, and at $23,000 annually thereafter.

The costs associated with this activity are especially sensitive to the assumption that each truck is its own facility; however, as costs associated with this activity are low even under this conservative assumption, altering it is unlikely to result in substantial cost impacts.

<IP_ADDRESS> Summary of CROMERR-Related Costs to Industry

Exhibit 5-11 summarizes the CROMERR-related costs to industry estimated by this RIA. The cumulative e-Manifest system adoption rate drives these costs, but the fourth year of system operation results in the highest costs in this period due to a large increase in e-Manifest adoption between this year and the previous year. Overall, CROMERR registration costs for industry range from approximately $36,000 to approximately $530,000, depending on the cumulative and incremental adoption rates of e-Manifest in a given year. Following Year 6, these costs are approximately $430,000 in perpetuity.

       Exhibit 5-11
CROMERR Registration and Related Costs to Industry
                     (2014$, thousands of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                           CROMERR-Related Activity
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                    Total
                              (Years 1 through 6)
                                       1
% of electronic manifests
                                      5%
                                      25%
                                      55%
                                      95%
                                      95%
                                      95%
                                      N/A
                                       2
CROMERR Registration
                                                                          $19.1
                                                                          $85.2
                                                                           $168
                                                                           $295
                                                                           $246
                                                                           $320
                                                                         $1,133
                                       3
Help Desk
                                                                          $7.54
                                                                          $33.2
                                                                          $60.3
                                                                          $93.5
                                                                          $57.3
                                                                          $57.3
                                                                           $309
                                       4
CDX Registration
                                                                          $2.90
                                                                          $12.8
                                                                          $23.2
                                                                          $36.0
                                                                          $22.0
                                                                          $22.0
                                                                           $119
                                       5
Digital Signature Certification
                                                                          $5.80
                                                                          $25.8
                                                                          $50.7
                                                                          $89.3
                                                                          $74.5
                                                                          $96.9
                                                                           $343
                                       6
Facility Registration Issues
                                                                          $0.72
                                                                          $3.62
                                                                          $7.97
                                                                          $13.8
                                                                          $13.8
                                                                          $13.8
                                                                          $53.6
                                       7
                                                                          Total
                                                                          $36.1
                                                                           $161
                                                                           $310
                                                                           $527
                                                                           $414
                                                                           $510
                                                                         $1,957
Totals may not sum due to rounding.

5.4.3 System Investment by Industry

This RIA considers only the cost savings associated with the use of electronic manifests and the costs associated with CROMERR for TSDF receivers and transporters as non-manifest fee cost impacts to industry from the e-Manifest system.

Under certain specifications of the e-Manifest system, industry entities may need to invest in internal system upgrades or hardware in order to use the e-Manifest system. These types of upgrades may range from programming to align existing proprietary systems with the e-Manifest system to a requirement to purchase smartphones or tablets in order to use the e-Manifest system at the point of waste transfer, or while the waste is in transit.

This RIA assumes that the e-Manifest system implemented under the final rule will not require any such investment in either hardware or software by firms or facilities in the hazardous waste industry. To the extent that this is not the case, costs to industry associated with the rule may be understated. This RIA further assumes that the e-Manifest system will be web-based, and that costs incurred voluntarily by industry to connect internal or proprietary systems to the e-Manifest system will reflect opportunities for cost savings or functionality beyond the scope of this RIA. This RIA therefore considers such activities to bear a net cost of zero  -  if net costs were high, industry actors would not undertake these activities.

Reflecting this assumption, the adoption rates in Exhibits 5-1 and 5-2 used throughout this chapter indicate near-universal adoption of electronic manifests over a period of four years. In other words, this RIA assumes that the majority of industry entities eventually adopt the use of electronic manifests in part because the one-time costs associated with adoption, if any, are offset by cost savings. Due to a lack of information on what implementation costs may be if they are not minimal, this RIA instead assesses the possibility that industry entities would have to incur significant adoption costs using a sensitivity analysis in Chapter 6 that focuses on adoption rates for the electronic manifests. The sensitivity analysis considers a scenario where ultimate adoption of electronic manifests is considerably lower than the primary analysis in this chapter.

5.5 Manifest Fees to Industry

Under the final rule, e-Manifest fees effectively function as a transfer between EPA and industry, as EPA transfers the system development and operations costs it incurs, in full, to industry. All costs described in Section 5.2 and 5.3 will be recouped through these manifest fees. Over a six-year period of analysis, the total amount to be recouped by these fees is consistent with the total costs incurred by EPA for system development and maintenance in this period; in other words, the fees recoup the sum of the totals in Exhibits 5-4, 5-5, and 5-7.

<IP_ADDRESS> Principles Guiding Manifest Fee Options

In considering fee structures to recoup e-Manifest system costs under the final rule, EPA conducted a review of relevant literature sources and federal guidance documents, especially Office of Management and Budget (OMB) Circular A-25 and numerous reports from the Government Accountability Office (GAO). Based on these source and other fee design considerations, EPA has distilled six principles of fee design that bound and guide the development of EPA's manifest fee options included in this RIA:

 Ensure that administrative (e.g., fee collection) costs are not a significant portion of total EPA system costs. OMB Circular A-25 emphasizes the need to ensure that the cost of collecting the fee does not represent a significant proportion of the fee itself.

 Align fee burden with users receiving the most extensive services and/or cost savings. A key principle in economic theory, and one emphasized in GAO's Federal User Fees: A Design Guide, is that prices for government services should be set such that each individual user offsets the costs incurred for providing a service to the user. Users who impose the greatest costs on the e-Manifest systems should pay higher fees and the fees should reflect the costs imposed.

 Consider whether the market is segmented in a way that requires a tiered fee structure. If the market structures of the relevant industries reveal significant differentiated use of services, costs and benefits to users are likely segmented as well. Alignment of fees with these costs and benefits should take market segmentation into account.

 Agencies should consider system users that are less able to pay when designing a fee structure. While fees that accurately reflect the costs incurred by the system through each individual user are generally both efficient and equitable, economics and GAO also consider distributional impacts across users, and explicitly note that the burden of the fee should be borne by the users better able to pay.

 The fee structure should address variability in fee receipts relative to costs. Variability in fee receipts relative to program costs can be a major challenge in designing fees. For example, over time, the relative numbers of electronic and non-electronic manifest may change, as well as their costs. If programs fail to address this variability, fees can either fail to recover costs or recover too much and lead to an excessive burden on users of the service.

 Fee design should encourage adoption of the system with the greatest net benefits. In accordance with overall economic efficiency, fee designs should align private user incentives to promote actions that present the least cost and greatest benefits to the system as a whole. The design considerations here build on assumptions that show that use of the e-Manifest system represents the lowest per-manifest (and total) cost option for EPA (Exhibit 5-6) and a lower per-manifest cost for regulated entities as well (Exhibits 5-8 and 5-9). The impact of fixed costs on adoption rates for electronic manifests should continue to be a focus in assessing the costs of regulatory options.

Based on the above principles, EPA developed four fee options, presented in the following section.

5.5.2 Fee Options for the Final Rule

This section presents EPA's four fee options for the final rule. Three of these options represent distinct methods of assessing fees across manifest submission options, while the fourth, EPA's final preferred option, is a hybrid of two options that does not require a separate modeling and estimation effort. This RIA does not estimate that the different fee options will result in different total costs collected and recouped via the manifest fees, as the full cost recovery principle remains in effect for each option discussed below. Rather, these options change only the distribution of how the cost recovery burden falls on different manifest variants.

NOTE: The fee estimates presented in this RIA are not EPA's final schedule of fees to be paid for use of the e-Manifest system. Rather, they are derived from the best estimates available at the time of this RIA's publication of costs related to setting up and running the e-Manifest system and program, as well as the best estimates of the adoption of electronic manifests, and finally the best estimates of cost savings that will be realized by switching from paper to electronic manifests. These estimated fees are necessary for properly comparing the costs and cost savings attributable to electronic manifests and for this reason they are presented here.
EPA will publish an actual schedule of fees as a notice in the Federal Register.
NOTE: The fee estimates presented in this RIA are not EPA's final schedule of fees to be paid for use of the e-Manifest system. Rather, they are derived from the best estimates available at the time of this RIA's publication of costs related to setting up and running the e-Manifest system and program, as well as the best estimates of the adoption of electronic manifests, and finally the best estimates of cost savings that will be realized by switching from paper to electronic manifests. These estimated fees are necessary for properly comparing the costs and cost savings attributable to electronic manifests and for this reason they are presented here.
EPA will publish an actual schedule of fees as a notice in the Federal Register.

<IP_ADDRESS> Shared Assumptions across Fee Options

The fee options presented in this RIA incorporate the following set of underlying assumptions:

 All fee options are designed to fully recover EPA's costs to design, build, and run the e-Manifest system and program, consistent with the Electronic Manifest Establishment Act requirement. Each fee option therefore is designed to recover the same cost, and relies on some of the same underlying parameters and other information to estimate fees, though each option uses different calculations to arrive at final fee amounts.

 All fee options assign fees on a per-manifest basis. EPA considered assigning fees in other ways, such as annual subscriptions, but determined that per-manifest fees are best to ensure that users bear the costs of supporting the e-Manifest system in proportion to their use of it. The heaviest users of the system will submit the most manifests, realize the most benefits, and also bear the largest share of the burden of supporting the system. Less frequent users will also realize benefits and bear costs in proportion to their use.

 All fee options assume that TSDFs pay the fees.

 All fee options assume that manifests may be submitted to the system in accordance with one of the four manifest variants discussed in Section 5.1.2 (paper, image, XML, or electronic). Each fee option assigns fees to these manifest variants in a different manner; this assignment protocol is the distinguishing feature of each option.

 All fee options assume that setup costs are distributed across a predetermined payback period, and will cease being recovered after that period ends. Correspondingly, fees will be lower after this period has ended, as setup costs will cease being recovered at this point. This RIA assumes this payback period to be five years; costs under alternate payback scenarios are considered in Chapter 6.

<IP_ADDRESS> Option 1  -  Uniform Cost Fee

Under this fee option, this RIA assigns a single, uniform fee to all manifest variants. This RIA first estimates a weighted average marginal cost by considering the relative prevalence of each manifest variant in a given year (per the assumed adoption rate in Section 5.1.3) as well as the marginal cost to process that manifest variant per Section 5.3. This weighted average marginal cost ranges from $9.86 in the first year after e-Manifest system launch to $0.38 in the fourth year after system launch. Under the statute, EPA must alter the fee to reflect different levels of adoption, but the fee at any given point in time would not vary across manifest variants (i.e., paper, image, XML, etc.).

Under this option, this RIA then evenly divides all remaining costs to EPA (Section 5.2) across all manifests. Setup costs are divided by a factor of five (due to a payback period length of five years) and each fifth of the overall setup costs is applied to the total sum that must be recovered in a given year (for the first five years, only). Exhibit 5-12 illustrates the calculation of the fee, breaking it down into the components that it recovers. Exhibit 5-13 then illustrates the total amount estimated to be collected through this fee option.

  Exhibit 5-12
Option 1  -  Uniform Cost Fee Estimation, Manifest Fee Basis
                             (2017$, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G

                                   Category
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                       1
Marginal Processing Cost
                                                                          $9.86
                                                                          $8.14
                                                                          $3.43
                                                                          $0.38
                                                                          $0.38
                                                                          $0.38
                                       2
Setup Cost (per manifest)
                                                                          $1.10
                                                                          $1.10
                                                                          $1.10
                                                                          $1.10
                                                                          $1.10
                                                                          $0.00
                                       3
O&M Cost (per manifest)
                                                                          $2.54
                                                                          $2.62
                                                                          $2.87
                                                                          $3.22
                                                                          $3.18
                                                                          $3.20
                                       4
                                                    Total Fee for All Manifests
                                                                          $13.5
                                                                          $11.9
                                                                          $7.39
                                                                          $4.70
                                                                          $4.66
                                                                          $3.58

         Exhibit 5-13
Option 1  -  Uniform Cost Fee, Total Fee Levied
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                                     Cost
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                                       1
Marginal Processing Cost
                                                                          $32.6
                                                                          $26.9
                                                                          $11.3
                                                                          $1.26
                                                                          $1.26
                                                                          $1.26
                                                                          $74.6
                                       2
Setup Cost (per manifest)
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $0.00
                                                                          $18.2
                                       3
O&M Cost (per manifest)
                                                                          $8.39
                                                                          $8.65
                                                                          $9.48
                                                                          $10.6
                                                                          $10.5
                                                                          $10.6
                                                                          $58.3
                                       4
                                                               Total Fee Levied
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                                                           $151

Over the six-year period presented, the total amount recovered is approximately $151 million, consistent with the sum of the total costs incurred by EPA across Exhibits 5-4, 5-5, and 5-7. The columns in Exhibit 5-13 specifically pertain to these exhibits: the total in row 1 of approximately $74.6 million matches the corresponding total from Exhibit 5-7; the totals in rows 2 and 3 similarly pertain to the totals of Exhibits 5-4 and 5-5, respectively.

This option is the most simple of those presented in this RIA. Industry feedback has indicated that industry would prefer such a fee in the early years of the system due to its simplicity; however, this option is the most likely to over- or under-collect fees, because it requires EPA to accurately estimate the adoption rate in order to accurately estimate the weighted average marginal cost to process a manifest. Therefore, this option is least likely to fulfill EPA's statutory requirement to fully recover costs each year, though it does so in this RIA, where the adoption rate is assumed to be known and rigid.

This option also subsidizes users who submit manifests that are relatively costly for EPA to process at the expense of users submitting other manifest variants. It is less efficient than the other options because the users do not internalize the costs they actually impose. Thus, it will not given an efficient incentive to users to discontinue submitting paper variant manifests and switch to the e-Manifest system.

<IP_ADDRESS> Option 2  -  Marginal Cost Fee

For this option, this RIA assigns differential fees to each manifest variant, based on the different marginal costs to EPA associated with processing each manifest variant. This RIA then distributes the remaining costs (setup costs, operations costs) equally across each manifest type, similar to Option 1. The resulting fee for each manifest variant under this option is equal to the marginal cost of processing that manifest variant (per Section 5.3), plus a uniform portion of the setup and operations costs. Exhibits 5-14 and 5-15 display the per-manifest fee and the total amount recovered, respectively, for each manifest variant. Again, note that the total amount recovered is approximately $151 million, and the amount recovered for each cost type incurred by EPA, while not shown in these exhibits, is similarly to that shown in Exhibit 5-13. The fees collected in each year similarly track with the figures in Exhibit 5-13, which is a necessary condition of the fee design to fully recover operations costs, processing (marginal) costs and a portion of setup costs in each year, regardless of the fee structure.

Exhibit 5-14
Option 2  -  Marginal Cost Fee, Manifest Basis by Manifest Variant
                             (2017$, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                       1
Paper Manifest Variants
Paper Variant
                                                                         $19.48
                                                                         $19.56
                                                                         $19.81
                                                                         $20.16
                                                                         $20.13
                                                                         $19.05
                                       2

Image Variant
                                                                         $12.49
                                                                         $12.57
                                                                         $12.81
                                                                         $13.17
                                                                         $13.13
                                                                         $12.05
                                       3

XML Variant
                                                                          $6.51
                                                                          $6.59
                                                                          $6.84
                                                                          $7.19
                                                                          $7.16
                                                                          $6.08
                                       4
e-Manifest
Electronic Variant
                                                                          $3.64
                                                                          $3.72
                                                                          $3.97
                                                                          $4.32
                                                                          $4.28
                                                                          $3.20
Note: Fees increase between Year 1 and Year 4 as EPA system O&M costs, including call center costs and CROMERR costs increase with greater e-Manifest adoption, but cease increasing after Year 4 as e-Manifest adoption plateaus and the payback period ends following Year 5.

Exhibit 5-15
Option 2  -  Marginal Cost Fee, Total Fee Levied by Manifest Variant
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                                       1
Paper Manifest Variants
Paper Variant
                                                                          $34.0
                                                                          $24.3
                                                                          $7.37
                                                                         $0.833
                                                                         $0.832
                                                                         $0.787
                                                                          $68.1
                                       2

Image Variant
                                                                          $1.96
                                                                          $7.79
                                                                          $4.77
                                                                         $0.544
                                                                         $0.543
                                                                         $0.498
                                                                          $16.1
                                       3

XML Variant
                                                                          $8.08
                                                                          $4.09
                                                                          $5.09
                                                                         $0.595
                                                                         $0.592
                                                                         $0.503
                                                                          $18.9
                                       4
e-Manifest
Electronic Variant
                                                                         $0.602
                                                                          $3.07
                                                                          $7.21
                                                                          $13.6
                                                                          $13.5
                                                                          $10.1
                                                                          $48.0
                                       5
                                                               Total Fee Levied
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                                                           $151
Note: Fees increase between Year 1 and Year 4 as EPA system O&M costs, including call center costs and CROMERR costs increase with greater e-Manifest adoption, but cease increasing after Year 4 as e-Manifest adoption plateaus and the payback period ends following Year 5.

Option 2 is more likely than Option 1 to fully recover EPA's costs because it does not rely on correct predictions of the e-Manifest adoption rate to accurately assess marginal costs that are considered part of the fee for each manifest variant in this fee option. By virtue of higher fees accruing to manifests which require a higher burden to process, it also provides market signaling information that will encourage users to switch towards electronic manifests.

<IP_ADDRESS> Option 3  -  Marginal Cost Differentiated Fee

The Marginal Cost Differentiated Fee option is similar to Option 2, except that paper manifest processing operations costs (Section 5.2.3) are distributed only across paper manifest variants (paper, image, and XML manifest submissions), and do not accrue to electronic manifests. In other words, whereas in Option 2, non-labor costs for EPA's paper processing center were distributed across all manifest variants, under Option 3, these costs are distributed across paper manifest variants only. Because the annual cost of these non-labor paper manifest processing operations is fairly low (approximately $1 million annually), this does not substantially change the cost calculus of this option relative to Option 2. However, it does slightly apportion costs away from electronic manifests and towards the other manifest variants. Similar to Option 2, this fee option is more likely than Option 1 to fully recover EPA's costs, as it does not rely on long-term predictions regarding the adoption rate to levy marginal processing costs for different manifest variants. It encourages switching towards electronic manifests slightly more than Option 2, by apportioning more of the costs of paper processing specifically to paper manifest variants, causing their prices to be higher relative to electronic manifests.. Exhibits 5-16 and 5-17 display the per-manifest fee and the total amount recovered, respectively, for each manifest variant under this option. Again, because adoption rates are held constant across fee options, note that the total amount recovered is approximately $151 million.

Exhibit 5-16
Option 3  -  Marginal Cost Differentiated Fee, Manifest Basis by Manifest Variant
                             (2017$, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                       1
Paper Manifest Variants
Paper Variant
                                                                         $19.50
                                                                         $19.70
                                                                         $20.32
                                                                         $28.12
                                                                         $28.09
                                                                         $27.01
                                       2

Image Variant
                                                                         $12.51
                                                                         $12.71
                                                                         $13.33
                                                                         $21.13
                                                                         $21.09
                                                                         $20.01
                                       3

XML Variant
                                                                          $6.54
                                                                          $6.73
                                                                          $7.35
                                                                         $15.15
                                                                         $15.12
                                                                         $14.04
                                       4
e-Manifest
Electronic Variant
                                                                          $3.22
                                                                          $3.30
                                                                          $3.55
                                                                          $3.90
                                                                          $3.86
                                                                          $2.78
Note: Fees increase between Year 1 and Year 4 as EPA system O&M costs, including call center costs and CROMERR costs increase with greater e-Manifest adoption, but cease increasing after Year 4 as e-Manifest adoption plateaus and the payback period ends following Year 5.

Exhibit 5-17
Option 3  -  Marginal Cost Differentiated Fee, Total Fee Levied by Manifest Variant
                     (2017$, millions of $, undiscounted)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                               Manifest Variant
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                                       1
Paper Manifest Variants
Paper Variant
                                                                          $34.0
                                                                          $24.4
                                                                          $7.56
                                                                          $1.16
                                                                          $1.16
                                                                          $1.12
                                                                          $69.5
                                       2

Image Variant
                                                                          $1.97
                                                                          $7.88
                                                                          $4.96
                                                                         $0.873
                                                                         $0.872
                                                                         $0.827
                                                                          $17.4
                                       3

XML Variant
                                                                          $8.11
                                                                          $4.18
                                                                          $5.47
                                                                          $1.25
                                                                          $1.25
                                                                          $1.16
                                                                          $21.4
                                       4
e-Manifest
Electronic Variant
                                                                         $0.532
                                                                          $2.73
                                                                          $6.45
                                                                          $12.2
                                                                          $12.1
                                                                          $8.75
                                                                          $42.8
                                       5
                                                                          Total
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                                                           $151
Note: Fees increase between Year 1 and Year 4 as EPA system O&M costs, including call center costs and CROMERR costs increase with greater e-Manifest adoption, but cease increasing after Year 4 as e-Manifest adoption plateaus and the payback period ends following Year 5.

This option redistributes about $5 million in fees over six years away from electronic manifests and toward paper manifests, relative to Option 2. Overall, on an annual basis, fees range from approximately $45 million to approximately $12 million, and are approximately $12 million in perpetuity as the payback period ends and fees are required only to recoup ongoing e-Manifest system operations and processing costs.

<IP_ADDRESS> Option 4  -  Preferred Option

For the remainder of this RIA, the final Preferred Option is a hybrid of Option 2 and Option 3. Specifically, the Preferred Option consists of initially assessing fees under Option 2. Then, if adoption of electronic manifests does not surpass a predetermined threshold (75 percent) after a specified amount of time (five years), fees would begin to be levied under Option 3 instead. Option 3 slightly incentivizes adoption of electronic manifests relative to Option 2. Thus the Preferred Option should increase e-Manifest system use more than Option 2 in case initial electronic manifest adoption is slower than expected, creating inefficiencies in EPA operations and raising overall costs.

This RIA considers a threshold electronic manifest adoption rate of 75 percent after five years of e-Manifest system operation. The assumed adoption rate per Section 5.1.3 meets this threshold in which case Option 3 fee pricing would not be triggered. As a result, this RIA assesses fees under Option 2. However, Chapter 6 analyzes scenarios where the adoption rate differs, and the switch to Option 3 fees takes effect.

Regardless of the fee option, the annual fees collected, shown in Exhibits 5-13, 5-15, and 5-17, apply in Years 1 through 6 of e-Manifest system operations, offsetting EPA's e-Manifest system development and operation costs, as well as cost savings to industry described in Exhibit 5-10. Exhibit 5-18 summarizes the aggregate costs and cost savings to industry as described so far in this chapter.

Over the six-year period, undiscounted cost savings to industry, accounting for burden reductions in manifest activities as well as cost increases due to manifest fees and CROMERR requirements total approximately $290 million. On an annual basis, undiscounted, incremental costs range from approximately $39 million to approximately $100 million in cost savings; approximately $100 million in annual savings to industry occurs in perpetuity as the payback period ends and fees recoup only ongoing operations costs incurred by EPA.

On a discounted basis under a seven percent discount rate, where out-year costs are discounted back to 2017 and the first year of e-Manifest system operation is assumed to be 2018, cost savings are approximately $270 million instead. This represents an annualized cost savings associated with these three items of approximately $56 million.

                                 Exhibit 5-18
             Summary of Select Costs and Cost Savings to Industry
                            (2014$, millions of $)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H
                                       I

                                 Cost Category
                                   Baseline
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                     Total
                                 (Years 1 - 6)
                                       1
Industry Manifest activities (Exhibit 5-10)
                                                                           $197
                                                                           $191
                                                                           $168
                                                                           $132
                                                                          $84.6
                                                                          $84.6
                                                                          $84.6
                                                                           $745
                                       2
CROMERR Costs to Industry (Exhibit 5-11)
                                                                          $0.00
                                                                        $0.0361
                                                                         $0.161
                                                                         $0.310
                                                                         $0.527
                                                                         $0.414
                                                                         $0.510
                                                                          $1.96
                                       3
Manifest fees (Exhibit 5-15) (calculated to recoup system setup and operations costs to EPA)
                                                                          $0.00
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                                                           $151
                                       4
                                                                    Total Costs
                                                                           $197
                                                                           $236
                                                                           $207
                                                                           $157
                                                                           $101
                                                                           $100
                                                                            $97
                                                                           $898
Costs (Cost Savings) Relative to Baseline
                                       5
Industry Manifest activities
                                                                        ($5.93)
                                                                        ($29.6)
                                                                          $65.2
                                                                         ($113)
                                                                         ($113)
                                                                         ($113)
                                                                         ($439)
                                       6
CROMERR Costs to Industry
                                                                        $0.0361
                                                                         $0.161
                                                                         $0.310
                                                                         $0.527
                                                                         $0.414
                                                                         $0.510
                                                                          $1.96
                                       7
Manifest fees (calculated to recoup system setup and operations costs to EPA)
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                                                           $151
                                       8
                                      Total Costs (Cost Savings) (undiscounted)
                                                                         $38.7
                                                                         $9.73
                                                                        ($40.5)
                                                                        ($96.6)
                                                                        ($96.8)
                                                                         ($100)
                                                                         ($286)
                                       9
                                  Total Costs (Cost Savings) (3% discount rate)
                                                                         $37.6
                                                                         $9.17
                                                                        ($37.0)
                                                                        ($85.8)
                                                                        ($83.5)
                                                                        ($84.0)
                                                                         ($244)
                                      10
                                  Total Costs (Cost Savings) (7% discount rate)
                                                                         $36.2
                                                                         $8.50
                                                                        ($33.0)
                                                                        ($73.7)
                                                                        ($69.0)
                                                                        ($66.8)
                                                                         ($198)

However, in addition to the cost components detailed in Exhibit 5-18, this RIA also assesses a number of other costs and cost savings resulting from the final rule and the implementation of the e-Manifest system.

5.6 Cost Savings to States

In Chapter 4, this RIA detailed and estimated the baseline costs associated with a number of activities carried out by states to collect and process federal and state manifests. This RIA estimated these costs at approximately $16 million annually (Exhibit 4-8). Following the implementation of the final rule, states will no longer need to collect and process manifests, as this will be handled by the e-Manifest system for both electronic and paper manifests. The states will be able to access data stored in the e-Manifest system at no charge. This RIA assumes that to the extent that states will wish to continue to collect and process manifests to meet state-specific regulatory, enforcement, or data needs, they will be able to do so through the e-Manifest system. Correspondingly, this RIA assumes that states incur no costs to collect and process manifests in the post-rule scenario, and therefore that they enjoy approximately a $16 million cost savings annually as a result of the rule.

5.7 Hazardous Waste Reporting Costs

Chapter 4 assessed baseline costs of hazardous waste reporting to both industry and states (Sections 4.6 and 4.7, respectively). This RIA assumes that the e-Manifest system will reduce the burden associated with hazardous waste reporting by reducing the number of individual reporting activity instances that take place in a given (biennial) reporting cycle.

5.7.1 Hazardous Waste Reporting Costs to Industry

This RIA estimates the following impacts to hazardous waste reporting activities and costs due to implementation of the e-Manifest system:

 As federal TSDFs will be submitting the final manifest with all attendant data to EPA, other entities will no longer be directly required to specially prepare specific reporting forms, such as the site ID form or read the reporting instructions. Similarly, only receiver TSDFs will be required to submit any reports, rather than receivers and generators.

 Under the final rule, this RIA assumes that TSDFs will not need to revise their data systems to include new reporting items, as this will be handled by the e-Manifest system architecture.

 Generators will not need to specially fill out and file a GM (Generation and Management) Form, as this information will be automatically collected and populated by the e-Manifest system based on submitted manifests.

 The burden associated with creating and submitting WR (Waste Received) Forms will accrue only to federal receiver TSDFs, rather than all receivers of hazardous waste, as assumed in the BR ICR. This reduces the burden associated with WR Forms by removing the costs associated with non-TSDF receivers creating and submitting these forms.

The overall impact of these changes to industry reporting in the post-rule scenario is summarized in Exhibit 5-19. Overall, this RIA estimates approximately $6 million in annual cost savings to industry associated with reduced burden for hazardous waste reporting activities.

                                 Exhibit 5-19
Baseline and Post-Rule Costs Accruing to Industry for Hazardous Waste Reporting Activities
                     (2017$, millions of $, annual costs)
                                     Item
                                   Activity
                          Estimated Cost to Industry
                   Estimated Incremental Cost (Cost Savings)

                                   Baseline
                                   Post-Rule

                                       1
Read Hazardous Waste Report instructions
                                                                         $1.67
                                                                       $0.0341
                                                                        ($1.63)
                                       2
Revise data systems to include new data items not part of facility's general business operations
                                                                        $0.141
                                                                         $0.00
                                                                       ($0.141)
                                       3
Prepare Site ID Form
                                                                        $0.134
                                                                      $0.00274
                                                                       ($0.131)
                                       4
Prepare Form GM
                                                                         $2.35
                                                                         $0.00
                                                                        ($2.35)
                                       5
Prepare Form WR
                                                                         $4.87
                                                                         $4.45
                                                                       ($0.424)
                                       6
Prepare Form OI[a]
                                                                            N/A
                                                                            N/A
                                                                            N/A
                                       7
Submit report to the state or EPA Regional Office
                                                                        $0.902
                                                                       $0.0184
                                                                       ($0.883)
                                       8
Maintain a copy of each form for three years
                                                                        $0.686
                                                                        $0.514
                                                                       ($0.172)
                                       9
                                                                          Total
                                                                         $10.8
                                                                         $5.02
                                                                        ($5.73)
Totals may not sum due to rounding.
Baseline sources: Unit costs and activity counts: Supporting Statement for Information Collection Request (ICR) Number 0976.17 2015 Hazardous Waste Report, Notification of Regulated Waste Activity, and Part A Hazardous Waste Permit Application and Modification. January 22, 2015. Labor rates: Supporting Statement for Information Collection Request (ICR) Number 801.20 Requirements for Generators, Transporters, and Waste Management Facilities under the RCRA Hazardous Waste Manifest System. April 30, 2015, adjusted for inflation to 2017$ using the CPI-U
Post-rule values based on EPA assumptions regarding burden changes associated with implementation and functioning of the e-Manifest system.
a Per the BR ICR, Form OI is a state-optional form that is not expected to be submitted by any entities.

5.7.2 Hazardous Waste Reporting Costs to States

Similarly, this RIA also estimates a set of reduction in burden accruing to states, again stemming from a reduced number of activities. Specifically, as only TSDFs will submit information to the e-Manifest system, this RIA estimates that states will conduct relevant activities in support of receiver TSDFs only, rather than TSDFs and generators. Additionally, this RIA assumes that states will enjoy a reduced burden associated with quality assurance checks on received submissions, as only TSDF receivers of hazardous waste will submit WR Forms in the post-rule scenario, as compared to all receivers of hazardous waste assumed to do so per the BR ICR.

The overall impact of these changes to industry reporting in the post-rule scenario is summarized in Exhibit 5-20. Overall, this RIA estimates approximately $3 million in annual cost savings to states associated with reduced burden for hazardous waste reporting activities.

                                 Exhibit 5-20
Baseline and Post-Rule Costs Accruing to States for Hazardous Waste Reporting Activities
                     (2017$, millions of $, annual costs)
                                     Item
                                   Activity
                           Estimated Cost to States
                   Estimated Incremental Cost (Cost Savings)

                                   Baseline
                                   Post-Rule

                                       1
Distribute Hazardous Waste Report forms and instructions
                                                                         $0.251
                                                                       $0.00509
                                                                       ($0.245)
                                       2
Assist respondents
                                                                         $0.236
                                                                       $0.00480
                                                                       ($0.231)
                                       3
Key entry of report submissions
                                                                        $0.0966
                                                                       $0.00178
                                                                      ($0.0947)
                                       4
Perform quality assurance
                                                                          $8.52
                                                                          $6.29
                                                                        ($2.22)
                                       5
                                                                          Total
                                                                          $9.10
                                                                          $6.30
                                                                        ($2.79)
Totals may not sum due to rounding.
Baseline Sources: Unit costs and activity counts: Supporting Statement for Information Collection Request (ICR) Number 0976.17 2015 Hazardous Waste Report, Notification of Regulated Waste Activity, and Part A Hazardous Waste Permit Application and Modification. January 22, 2015. Labor rates: Supporting Statement for Information Collection Request (ICR) Number 801.20 Requirements for Generators, Transporters, and Waste Management Facilities under the RCRA Hazardous Waste Manifest System. April 30, 2015, adjusted for inflation to 2017$ using the CPI-U.
Post-rule values based on EPA assumptions regarding burden changes associated with implementation and functioning of the e-Manifest system.
a Per the BR ICR, Form OI is a state-optional form that is not expected to be submitted by any entities.

In aggregate, cost savings associated with reduced burden for hazardous waste reporting are estimated at approximately $9 million annually across both states and industry.

5.8 State Hazardous Waste Receiver Registration Costs

As described in Chapter 2, this RIA assesses the costs to state hazardous waste receivers to register and receive an EPA ID. It also assesses the costs to state agencies to register these facilities.

Chapter 2 estimates a total of 1,117 state hazardous waste receivers. These receivers will need to submit a registration form requesting an EPA ID. The cost to do so is encapsulated in the activity, "Gather information and prepare Site ID Form" as captured in EPA's latest Supporting Statement for Information Collection Request Number 0976.18 "2017 Hazardous Waste Report, Notification of Regulated Waste Activity, and Part A Hazardous Waste Permit Application and Modification," dated December 2016. Per this source, the cost to industry to prepare and submit the site identification form is 0.08 hours of managerial labor, 0.6 hours of technical labor, and 0.16 hours of clerical labor, or approximately $53 per form. Given that 1,117 state hazardous waste receivers must submit this form, the cost of this activity is approximately $59,000. Note that this is a one-time cost that is modeled as occurring in Year 1 of system operation as a conservative assumption.

The cost for state agencies to assist hazardous waste receivers with obtaining EPA IDs is assumed to be captured by the burden to distribute Hazardous Waste Report forms and instructions, assist respondents, key entry of report submissions, and perform quality assurance, as also captured in the Supporting Statement for Information collection Request Number 0976.18. These four activities, in total, require 0.08 hours of managerial labor, 0.87 hours of technical labor, and 1.28 hours of clerical labor per receiver application for an EPA ID, or approximately $65 per form received. Given that 1,117 state hazardous waste receivers are estimated to request an EPA ID, the cost of this activity is approximately $73,000. Note that this is a one-time cost that is modeled as occurring in Year 1 of system operation as a conservative assumption.

The marginal magnitude of these costs renders the estimates in this RIA insensitive to deviations in either the count of state hazardous waste receivers or the cost for them and/or state agencies to provide them with EPA IDs. The total cost of this activity across both states and industry is under $150,000, and is a one-time cost. A fivefold increase in either the count of state hazardous waste receivers or the labor burdens associated with EPA ID requests would increase six-year, annualized cost savings estimated by this RIA by approximately seven percent, though the majority of this cost savings decrease results due to additional EPA costs associated with billing and invoicing a considerably expanded number of entities, rather than the one-time costs associated with requesting an EPA ID. Therefore, the effects of this requirement, and the uncertainty associated with the number of state hazardous waste received in existence and affected by the final rule on industry and state costs are severely limited.

5.9 Summary of Costs and Cost Savings

This section summarizes the costs and cost savings to EPA, industry, and states as described throughout this chapter. As presented below, costs to EPA detailed in this chapter are assumed by this RIA to be directly offset by manifest fees to industry. These fees, in turn, initially exceed but eventually only partially offset the cost savings accruing to industry associated with less burdensome manifest activities stemming from the use of electronic manifests.

All costs included in the exhibits below are based on the adoption rate depicted in Section 5.1.3.

In a few cases, this RIA does not anticipate that certain baseline costs will be affected by the final rule. These costs include EPA-specific agency burden for receipt and review of paperwork associated with federal manifest (see Exhibit 4-4, approximately $1 million annually) and industry costs associated with recordkeeping activities for hazardous waste shipments made under reclamation agreements (see Exhibit 4-2, approximately $3 million annually). Additionally, while the capital costs of obtaining physical storage (e.g., file cabinets) may be lessened in the post-rule scenario as manifests are handled electronically and require less physical storage, these costs are assumed to stay constant in the post-rule scenario, an assumption which may slightly understate the cost savings of the rule.

Exhibit 5-21 presents an overall summary of the baseline, post-rule, and incremental (post-rule less baseline) costs (and cost savings) of the final rule. Compared to baseline costs of approximately $238 million, post-rule costs range from $252 million in the first year of system launch to $113 million in the sixth year of system launch. Exhibit 5-22 displays the incremental discounted costs of the rule (using three percent and seven percent discount rates), including the annualized incremental costs of the final rule. This RIA estimates approximately $66 million in annualized cost savings under a seven percent discount rate and approximately $70 million in annualized cost savings over this period under a three percent discount rate, though the rule results in overall costs in the first year and cost savings in the following five years.[,]

Note that extending the period of analysis forward in time under the adoption rate assumptions presented in this chapter would increase the cost savings estimate, because the highest cost savings accrue after the system implementation costs have been fully accounted for (in the six-year period and afterward). Additional years would continue to reveal substantial cost savings rather than net costs. Therefore, the estimate of a $66 million annualized cost savings can be thought of as a low-end estimate for the long-term savings associated with a functioning e-Manifest system. For example, extending the period of analysis to ten years from system launch, and assuming that net cost savings in Years 7 through 10 are similar to those experienced in Year 6 leads to an annualized cost savings estimate of approximately $85 million instead.
                                 Exhibit 5-21
  Summary of Costs and Cost Savings of the Final Rule and e-Manifest System
                            (2017$, millions of $)
                                     Item
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                       G
                                       H

                                 Cost Category
                                   Baseline
                    Post-Rule (e-Manifest System Launched)

                                    Annual
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                         Baseline and Post-Rule Costs
Costs to EPA
                                       1
Receipt/review of federal manifests[a]
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                       2
e-Manifest system  -  annual payment for setup costs ($18.2M total)[b]
                                                                          $0.00
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $3.64
                                                                          $0.00
                                       3
e-Manifest system  -  operations costs[c]
                                                                          $0.00
                                                                          $8.39
                                                                          $8.65
                                                                          $9.48
                                                                          $10.6
                                                                          $10.5
                                                                          $10.6
                                       4
e-Manifest system  -  manifest processing costs[c]
                                                                          $0.00
                                                                          $32.6
                                                                          $26.9
                                                                          $11.3
                                                                          $1.26
                                                                          $1.26
                                                                          $1.26
                                       5
                                                                       Subtotal
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
                                                                          $1.04
Costs to Industry
                                       6
Manifest activities[d]
                                                                           $201
                                                                           $195
                                                                           $171
                                                                           $136
                                                                          $88.3
                                                                          $88.3
                                                                          $88.3
                                       7
CROMERR
                                                                          $0.00
                                                                        $0.0361
                                                                         $0.161
                                                                         $0.310
                                                                         $0.527
                                                                         $0.414
                                                                         $0.510
                                       8
Manifest fees[e]
                                                                          $0.00
                                                                          $44.6
                                                                          $39.2
                                                                          $24.4
                                                                          $15.5
                                                                          $15.4
                                                                          $11.9
                                       9
Hazardous waste reporting activities
                                                                          $10.8
                                                                          $5.02
                                                                          $5.02
                                                                          $5.02
                                                                          $5.02
                                                                          $5.02
                                                                          $5.02
                                      10
State TSDFs - Registration
                                                                          $0.00
                                                                        $0.0593
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                                                          $0.00
                                      11
                                                                       Subtotal
                                                                           $212
                                                                           $245
                                                                           $216
                                                                           $165
                                                                           $109