MEMORANDUM

TO:		Public Record for the NPDES Electronic Reporting Rule
		EPA Docket Number EPA-HQ-OECA-2009-0274 (www.regulations.gov)	

FROM:		Carey A. Johnston, P.E.
            USEPA/OECA/OC
            ph: (202) 566 1014
            johnston.carey@epa.gov

DATE:		14 May 2014

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SUBJECT:	Supporting Information on the NPDES Electronic Reporting Rule Implementation [DCN 0106]
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Overview 

      The Initial Recipient term and the State Readiness Criteria are important and related concepts in the implementation of the proposed rule. However, these two concepts are distinct. The 90% participation rate in the State Readiness Criteria would not affect EPA's determination of the Initial Recipient as detailed in Part 127.27. The State Readiness Criteria would be the parameter EPA would use to determine when it should require electronic reporting through use of an Information Collection Request when the authorized state, tribe, or territory is not ready to implement electronic reporting. 
      
      EPA's determination of the Initial Recipient is independent of any other EPA decisions applying the State Readiness Criteria. EPA's decision to designate an authorized state, tribe, or territory as the initial recipient for DMRs is limited to the authorized program's description of "how its data system will be compliant with 40 CFR part 3 and 40 CFR part 127, and the date or dates when the state, tribe, or territory will be ready to accept NPDES information from NPDES-regulated facilities in a manner compliant with 40 CFR part 3 and 40 CFR part 127," [see 127.27(a)]. For example, a state can be listed as the Initial Recipient for collecting DMRs even if the DMR participation rate in that state is less than 90%. Below are some implementation examples.
      
      Finally, EPA solicits comment on the concept of using the ICR associated with this rule to require NPDES-regulated entities to electronically submit their NPDES program data to their authorized state, tribe, or territory as a "fill in the gaps" measure where the authorized NPDES program has a CROMERR-approved electronic tool. The proposed rule had NPDES-regulated entities reporting these data to EPA. EPA would retain the ability assess and pursue enforcement actions on NPDES-regulated entities that fail to comply with the requirements of the ICR.

Implementation Examples


Example #1: EPA lists State X as being the Initial Recipient for DMRs and there are 1,000 facilities in this state that are required to submit DMRs. One year after the effective date of the final rule 900 facilities in this state are correctly electronically submitting DMRs to the state (i.e., these DMRs contain all Appendix A data and are submitted in compliance with CROMERR). What actions will EPA take with respect to the 100 facilities that submitted their DMRs on paper to the state?

Answer: Under the proposed rule, EPA would take no actions to require electronic submissions of DMRs from these facilities because 90 percent of the facilities in this state that are required to submit DMRs are electronically submitting these DMRs in compliance with Part 127 (Appendix A data included) and Part 3 (CROMERR  -  authentication and encryption standards). The electronic DMR submission to the state is the copy of record for the 900 facilities and the paper DMR submission to the state is the copy of record for the 100 facilities.



Example #2: Assume the same scenario as in Example #1 but now only 750 facilities in this state are correctly submitting DMRs to the state one year after the effective date of the final rule. What actions will EPA take with respect to the 750 facilities in this state that are correctly electronically submitting DMRs to the state and the 250 facilities that submitted their DMRs on paper to the state?

Answer: Under the proposed rule, EPA would take no actions to electronically collect DMRs from the 750 facilities that are electronically submitting these DMRs in compliance with Part 127 (Appendix A data included) and Part 3 (CROMERR  -  authentication and encryption standards) to the state as the Initial Recipient for DMRs. However, since the DMR electronic submission participation rate is less than 90 percent, EPA would use its CWA authority to require electronic submission of DMR data from the 250 facilities who submitted their DMRs using paper reports. This means that these 250 facilities will be potentially filing their DMR twice: once on paper to the state (if required by their permit) and another time to EPA electronically. Once a facility is electronically submitting its DMRs to the state, the facility no longer is required to electronically report its DMRs directly to EPA. Additionally, the electronic DMR submission to the state is the copy of record for the 750 facilities and the paper DMR submission to the state is the copy of record for the 250 facilities. EPA also notes that authorized NPDES programs can help increase electronic reporting (and lower the instance of double reporting) by modifying or reissuing NPDES permits to include electronic reporting. EPA has proposed to allow authorized NPDES programs to do this through the minor modification process (see 40 CFR 122.63).



Example #3: Assume the same scenario as in Example #2 but, after some efforts by the state and EPA, the DMR electronic submission participation to the state is now at or above 90 percent. What actions will EPA take with respect to the 100 or fewer facilities that submitted their DMRs on paper to the state?

Answer: This is the same answer for Example #1.



Example #4: State X initially requests that EPA be the Initial Recipient for DMRs and there are 1,000 facilities in this state that are required to submit DMRs. One year after the effective date of the final rule 900 facilities in this state are correctly electronically submitting DMRs to EPA. What actions will EPA take with respect to the 100 facilities that submitted their DMRs on paper to the state?

Answer: This is the same answer for Example #1.



Example #5: Assume the same scenario as in Example #4 but now only 750 facilities in this state are correctly submitting DMRs to EPA one year after the effective date of the final rule. What actions will EPA take with respect to the 750 facilities in this state that are correctly electronically submitting DMRs to EPA and the 250 facilities that submitted their DMRs on paper to the state?

Answer: EPA will take no actions on 750 facilities that are electronically submitting these DMRs in compliance with Part 127 (Appendix A data included) and Part 3 (CROMERR  -  authentication and encryption standards) to EPA as the initial recipient. However, since the DMR electronic submission participation rate is less than 90%, EPA will use its authority under CWA Section 308 to directly collect DMR data from the 250 facilities. This means that these 250 facilities will be filing their DMRs twice: once on paper to the state (as required by their permit) and another time to EPA electronically (as required by EPA's Information Collection Request issued under authority of CWA Section 308). Once a facility is correctly electronically submitting its DMRs to EPA the facility is no longer required to submit a paper DMR to the state (as State X has requested that EPA be the Initial Recipient for DMRs).




Example #6: State X initially requests that EPA be the Initial Recipient for DMRs but at a later date would like to change this designation. Does the DMR electronic submission participation factor into EPA's decision to list State X as the initial recipient for DMRs?

Answer: No. EPA's decision to designate State X as the initial recipient for DMRs is limited to State X's description of "how its data system will be compliant with 40 CFR part 3 and 40 CFR part 127, and the date or dates when the state, tribe, or territory will be ready to accept NPDES information from NPDES-regulated facilities in a manner compliant with 40 CFR part 3 and 40 CFR part 127." If State X becomes the initial recipient for DMRs with a DMR electronic submission participation rate equal to or greater than 90%, then EPA will not use its authority under Section 308 of the Clean Water Act to directly collect these DMR data from permittees in that state. Conversely, EPA will use its authority under Section 308 of the Clean Water Act to directly collect these DMR data from permittees that file their DMRs on paper if the DMR electronic submission participation rate is less than 90%.



Example #7: In the first few years after the final rule State X elects EPA to be the initial recipient for MS4 Program Reports. This means that MS4 permittees electronically submit their data to EPA and these data are also simultaneously submitted to State X (if State X has its own separate database for NPDES program data). State X then changes its mind and applies to be the Initial Recipient for these data. Does the 90% participation rate from the State Readiness Criteria affect EPA's decision on whether State X can be the Initial Recipient for MS4 Program Reports?

Answer: No. The 90% participation rate in the State Readiness Criteria does not affect the determination of the Initial Recipient. EPA uses the 90% participation rate in the State Readiness Criteria to clearly communicate when it plans to use its CWA Section 308 authority to electronically collect data directly from NPDES regulated entities. The State Readiness Criteria influences the application of this authority, which is executed through the Information Collection Request and not through the eRule.





Example #8: State X has been designated as `Initial Recipient' for Pretreatment Program Annual Reports [see 40 CFR 403.12(i) and `NPDES Data Group No. 7' in Table 1 of Appendix A to Part 127]. There are 400 approved pretreatment programs in this state that are required to submit these reports. Two years after the effective date of the final rule 360 of the 400 approved pretreatment programs in this state are electronically submitting these reports using the state's CROMERR approved electronic reporting tool. However, the state is not sharing some of the Pretreatment Program Annual Reports data elements, which are listed in Appendix A to 40 CFR 127, with EPA. What actions will EPA take with respect to the 40 paper reporting approved pretreatment programs? What action will EPA take with respect to the incomplete data on the 360 electronically reporting approved pretreatment programs?

Answer: In this example State X is complying with EPA's CROMERR standards (Part 3) but not with EPA's eRule (Part 127). This might be the result of the state's electronic reporting tool not collecting all the necessary data elements or the state not sharing all the necessary data elements with EPA in a timely manner. Section 127.27(d) describes a process for EPA to work with State X to get their electronic reporting tools and data sharing systems compliant with CROMERR and the eRule. As proposed, there are no automatic triggers or thresholds for when EPA would initiate this process. EPA did not include automatic triggers or thresholds in order to give EPA and the states flexibility on how to resolve these issues. In this example, if State X is unable or unwilling to successfully remediate its electronic reporting tools and data sharing systems, then EPA will change the `Initial Recipient' for Pretreatment Program Annual Reports from State X to EPA. It is noteworthy that making an `Initial Recipient' switch away from the state to EPA would involve NPDES regulated entities as they would likely need to get a digital signature to use EPA electronic reporting tools. Consequently, it is very likely that EPA would invoke the 127.27(d) process only for the most serious case where a state does not comply with Parts 3 and/or 127. Finally, EPA will take no action regarding the 40 paper reporting approved pretreatment programs since at least 90% of the 400 approved pretreatment programs in this state are electronically reporting their annual reports. See Answer #2 for how EPA would handle the situation if 41 or more of these approved pretreatment programs reported their annual reports on paper to the state.




Example #9: State X has been designated as the `Initial Recipient' for General Permit Reports [see 40 CFR 122.28, 124.5, and `NPDES Data Group No. 2' in Table 1 of Appendix A to Part 127]. State X has an electronic reporting tool for a construction stormwater NPDES general permit that provides permit coverage to 2,800 construction operators. This state electronic reporting tool is not CROMERR approved but does collect the minimum set of federal NPDES data (Appendix A to 40 CFR 127) for General Permit Reports. Two years after the effective date of the final rule all 2,800 construction operators are using the state electronic reporting tool and the state is sharing all of the necessary data with EPA. What action will EPA take with respect to the 2,800 construction operators or the state?

Answer: EPA will take no action regarding the 2,800 construction operators as they are electronically reporting their General Permit Reports. However, the state electronic reporting tool is not CROMERR compliant so EPA will need to work with State X. Section 127.27(d) describes how EPA with work with State X in order to get their electronic reporting tools and data sharing systems compliant with CROMERR and the eRule. See Answer #8 for a more detailed description of how EPA will work with State X.


Electronic Reporting Tools

      Under certain scenarios, as described in the examples above, EPA may electronically collect NPDES program data directly from NPDES regulated entities. EPA plans on using NetDMR to directly collect DMR data and the NPDES Electronic Reporting Tool (NeT) to collect other NPDES program data from NPDES regulated entities. This is important as during the initial implementation some NPDES regulated entities may be required to make two submissions of the same data. The NPDES regulated entity would send a signed paper version, which is the copy of record, in accordance with its permit conditions or control mechanism and it would make another submission of these same data using EPA's electronic reporting tools (NetDMR, NeT) in accordance with EPA's Information Collection Request, which EPA issued under authority of CWA Section 308. 
      
      EPA will be able to share the data it collects with the states through the Exchange Network. EPA will be the data steward for the data it collects under authority of CWA Section 308. Additionally, EPA will be responsible for resolving any data discrepancies between the data it collects under authority of CWA Section 308 and any state data in ICIS-NPDES that is derived from an NPDES regulated entity's paper submission with a "wet-ink" signature.
      
      NPDES regulated entities that wish to electronically submit their NPDES program data must first get a digital signature. 

         o       EPA Tools: NPDES regulated entities will first use EPA's Centralized Data Exchange (CDX) registration process before they can use NeT to electronically submit their data. Likewise, NPDES regulated entities using NetDMR will first need to complete a similar but different registration and CROMERR process (NetDMR was developed before the more streamlined virtual CDX registration processes, which use automated challenge questions to authenticate the use with data from LexisNexis).

         o       State Tools: NPDES regulated entities will first need obtain an electronic signature using the State CROMERR process. Once EPA completes its virtual/external CDX CROMERR services state and third-party system developers will have the option to use these services, which should lower the cost of administering electronic signatures.

      If the `Initial Recipient' status for a particular state for a particular data group switches from the state to EPA then the NPDES regulated entities in that data group may be required to get an electronic signature from EPA. This is the case when these NPDES regulated entities are also switching from using a state electronic reporting tool to an EPA tool. For example, if a facility is using a state electronic reporting tool and needs to switch to an EPA tool to send data to EPA (as EPA is the new `Initial Recipient' for that data group) then the facility will need to get an electronic signature from EPA. 
      
      As noted above  -  it is EPA's goal to help all states be the initial recipient for any data group (e.g., DMRs) and there is a process in Part 127.27(d) for helping states maintain or regain their status as the initial recipient. If a state regains its `Initial Recipient' status for a particular data group, then NPDES regulated entities in that data group will use an electronic signature from the state. 

Minor Modifications of NPDES Permits

      EPA is also proposing changes to 40 CFR 122.63 ("Minor modifications of permits") that would allow states to use the minor modification procedure with the consent of the permittee to change reporting of NPDES program data from a paper process to an electronic process. This proposed change to the minor modification process would ease the burden on states to update existing NPDES permits to include the electronic reporting requirements for regulated entities. The eRule also solicits comment on an alternative approach to minor modifications of the permit; in this alternative approach, the consent of the permittee would not be required to convert the permit to require electronic reporting.
      
      The eRule also notes that some states, tribes, and territories may be able to make minor permit modifications to multiple permits through one action. EPA may also conduct such minor modifications for the NPDES permits it issues. Incorporating electronic reporting requirements through use of the minor modification process would also help reduce the instances where NPDES regulated entities make two submissions of the same data (submission of the copy of record on paper to the state and an electronic submission of the same data to EPA).

