EPA-815-Z-01-001
Monday,

January 22, 2001
Part
Environmental

Protection Agency

40 CFR Parts 9, 141, and 142
National Primary Drinking Water
Regulations; Arsenic and Clarifications to
Compliance and New Source
Contaminants Monitoring; Final Rule

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6976
Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Parts 9,141 and 142
[WH-FRL-6934-9]
RIN 2040-AB75

National Primary Drinking Water
Regulations; Arsenic and Clarifications
to Compliance and New Source
Contaminants Monitoring
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Final rule.

SUMMARY: Today EPA is establishing a
health-based, non-enforceable
Maximum Contaminant Level Goal
(MCLG) for arsenic of zero and an
enforceable Maximum Contaminant
Level (MCL) for arsenic of 0.01 mg/L (10
ug/L). This regulation will apply to non-
transient non-community water
systems, which are not presently subject
to standards on arsenic in drinking
water, and to community water systems.
  In addition, EPA is publishing
clarifications for monitoring and
demonstration of compliance for new
systems or sources of drinking water.
The Agency is also clarifying
compliance for State-determined
monitoring after exceedances for
inorganic, volatile organic, and
synthetic organic contaminants. Finally,
EPA is recognizing the State-specified
time period and sampling frequency for
new public water systems and systems
using a new source of water to
demonstrate compliance with drinking
water regulations. The requirement for
new systems and new source
                         monitoring will be effective for
                         inorganic, volatile organic, and
                         synthetic organic contaminants.
                         DATES: This rule is effective March 23,
                         2001, except for the amendments to
                         141.24(f)(l5), 1
                         141.24(h)(20), 142.l6(e), 142.16(j), and
                         142.16(k) which are effective January
                         22,2004.
                           The compliance date for requirements
                         related to the clarification for
                         monitoring and compliance under
                               .,    .,
                         141.24(Q(15), 141.24(f)(22),
                         141.24(h)(ll), 141.24(h)(20), 142.16(e),
                         142.16(j), and 142.16(k) is January 22,
                         2004. The compliance date for
                         requirements related to the revised
                         arsenic standard 'under §§ 141.23(i)(4),
                         141.23(k)(3), 141.23(k)(3)(ii), 141.51(b),
                         141.62(b), 141.62(b)(16), 141.62(c),
                         141.62(d), and 142.62(b) is January 23,
                         2006. For purposes of judicial review,
                         this rule is promulgated as of January
                         22, 2001.
                         ADDRESSES: Copies of the public
                         comments received, EPA responses, and
                         all other supporting documents are
                         available for review at the U.S. EPA
                         Water Docket (4101), East Tower B-57,
                         401 M Street, SW, Washington DC
                         20460. For an appointment to review
                         the docket, call 202-260-3027 between
                         9 a.m. and 3:30 p.m. and refer to Docket
                         W-99-16.
                         FOR FURTHER INFORMATION CONTACT: The
                         Safe Drinking Water Hotline, phone:
                         (800) 426-4791, or (703) 285-1093, e-
                         mail: hotline.sdwa@epa.gov for general
                         information about, and copies of,  this
                         document and the proposed rule.  For
technical inquiries, contact: Jeff Kempic,
(202) 260-9567, e-mail:
kempic.jeffrey@epa.gov for treatment
and costs, and Dr. John B. Bennett, (202)
260-0446, e-mail:
bennett.johnb@epa.gov for benefits.

SUPPLEMENTARY INFORMATION:

Regulated Entities

  A public water system (PWS), as
defined in 40 CFR 141.2, provides water
to the public for human consumption
through pipes or "other constructed
conveyances, if such system has at least
fifteen service connections or regularly
serves an average of at least twenty-five
individuals daily at least 60 days out of
the year." A public water system is
either a community water system (CWS)
or a non-community water system
(NCWS). A community water system, as
defined in § 141.2, is "a public water
system which serves at least fifteen
service connections used by year-round
residents or regularly serves at least
twenty-five year-round residents." The
definition in § 141.2 for a non-transient
non-community water system
(NTNCWS) is "a public water system
that is not a [CWS] and that regularly
serves at least 25 of the same persons
over 6 months per year." EPA has an
inventory totaling over 54,000
community water systems and
approximately 20,000 non-transient
non-community water systems
nationwide. Entities potentially
regulated by this action are community
water systems and non-transient non-
community water systems. The
following table provides examples  of the
regulated entities under this rule.

Category
Industry 	
State, Tribal, and Local Govern-
ment.
Federal Government

TABLE OF REGULATED ENTITIES
Examples of regulated entities
Privately owned/operated community water supply systems using ground water, surface water, or
ground water and surface water.
State, Tribal, or local government-owned/operated water supply systems using ground water, s
water, or mixed ground and surface water.
Federally owned/operated community water supply systems using ground water surface water or
ground water and surface water.


mixed
urface
mixed

  The table is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
regulated by this action. This table lists
the types of entities that EPA is now
aware could potentially be regulated by
this action. Other types of entities not
listed in this table could also be
regulated. To determine whether your
facility is regulated by this action, you
should carefully examine the
applicability criteria in §§ 141.11 and
141,62 of the rule, If you have any
                         questions regarding the applicability of
                         this action to a particular entity, consult
                         the general information contact listed in
                         the section listing contacts for further
                         information.
                         Abbreviations used in this rule
                         <—less than
                         <—less than or equal to
                         >—greater than
                         S—greater than or equal to
                         ±—plus or minus
                         § —section
a—o, Greek letter, in statistics
  represents standard deviation
ug—Microgram, one-millionth of a gram
  (3.5 x 10~8 of an ounce)
fig/L—micrograms per liter
AA—Activated alumina
AIC—Akaike Information Criterion
ACWA—Association of California Water
  Agencies
AMWA—Association of Metropolitan
  Water Agencies
APHA—American Public Health
  Association

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               Federal Register/Vol.  66,  No. 14/Monday, January  22,  2001/Rules and  Regulations       6977
  ARARs—Applicable or relevant and
    appropriate requirements
  As (HI)—Trivalent arsenic. Common
    inorganic form in water is arsenite
  As (V)—Pentavalent arsenic. Common
    inorganic form in water is arsenate
  ASDWA— Association of State Drinking
    Water Administrators
  AsHs—Arsine
  ASTM—American Society for Testing
    and Materials
  ATSDR—Agency for Toxic Substances
    and Disease Registry, U.S. Department
    of Health & Human Services
  AWWA—American Water Works
    Association
  AWWARF—American Water Works
    Association Research Foundation
  BAT—Best available technology
  BV—Bed volume
  CCR—Consumer Confidence Report
  CERCLA—Comprehensive
    Environmental Response,
    Compensation, and Liability Act
    administered by EPA for hazardous
    substances
  C/F—Modified coagulation/filtration
  CFR—Code of Federal Regulations
  CSFII—Continuing Survey of Food
   Intakes by Individuals
  CWA—Clean Water Act administered by
   EPA for surface waters of the U.S.
  CWS—Community water system
  CWSS—Community Water System
   Survey
 DMA—Dimethyl arsinic acid, cacodylic
   acid, (CH3)2HAs02
 DNA—Deoxyribonucleic acid
 DWSRF—Drinking Water State
   Revolving Fund
 EA—Economic analysis
 EDR—Electrodialysis reversal
 EEAC—Environmental Economics
   Advisory Committee
 e.g.—exempli gratia, Latin for "for
   example"
 EPA—U.S. Environmental Protection
   Agency
 et al.—et alia, Latin for "and others"
 FACA—Federal Advisory Committee
   Act
 FR—Federal Register
 FRFA—Final Regulatory Flexibility
   Analysis
 FSIS—Federalism Summary Impact
   Statement
 GDP—Gross Domestic Product
 GFAA—Graphite furnace atomic
  absorption
 GHAA—Gaseous hydride atomic
  absorption
 GI—Gastrointestinal
 GW—Ground water
 GWR—Ground Water Rule
HRRCA—Health Risk Reduction and
  Cost Analysis
ICP—AES—Inductively coupled plasma-
  atomic emission spectroscopy
ICP-MS—Inductively coupled plasma
  mass spectroscopy
  ICR—Information collection request
  i.e.—id est, Latin for "that is"
  lOCs—Inorganic contaminants
  ISCV—Intra-system coefficient of
    variation
  IX—Ion exchange
  L—Liter, also referred to as lower case
    "1" in older citations
  LD50—The dose of a chemical taken by
    mouth or absorbed by the skin which
    is expected to cause death in 50% of
    the test animals
  LS—Modified lime softening
  LTl/FBR—Long Term 1 Enhanced
    Surface Water Treatment and Filter
    Backwash Recycling Rule
  MCL—Maximum contaminant level
  MCLG—Maximum contaminant level
    goal
  MDL—Method detection limit
  mg—Milligrams, one-thousandth of a
    gram, 1 milligram=l,000 micrograms
  mg/kg—Milligrams arsenic per kilogram
    body weight or soil weight
  mg/L—Milligrams per liter
  MHI—Mean household income
  MMA—Monomethyl arsenic, arsonic
    acid, CH3H2ASO3
  NAOS—National Arsenic Occurrence
    Survey
  NAS—National Academy of Sciences
  NAWQA—National Ambient Water
   Quality Assessment, USGS
  NCI—National Cancer Institute
  NCWS—Non-community water system
 NDWAC—National Drinking Water
   Advisory Council for EPA
 NTRS—National Inorganic and
   Radionuclide Survey done by EPA
 NODA—Notice of Data Availability
 NOMS—National Organic Monitoring
   Survey done by EPA
 NPDES—National Pollutant Discharge
   Elimination System for CWA
 NPDWR—National primary drinking
   water regulation
 NR—Not reported
 NRC—National Research Council, the
   operating  arm of NAS
 NTNCWS—Non-transient non-
   community water system
 NTTAA—National Technology  Transfer
   and Advancement Act
 NWIS—National Water Information
   System of USGS
 OGWDW—Office  of Ground Water and
  Drinking Water in EPA
 OMB—Office of Management and
  Budget
 PE—Performance evaluation, studies to
  certify laboratories for EPA drinking
  water testing
 pH—Negative log of hydrogen ion
  concentration
PNR—Public Notification Rule
FOE—Point-of-entry treatment devices
POTWs—Publicly owned treatment
  works, treat wastewater
POU—Point-of-use treatment devices
  ppb—Parts per billion
  ppm—Parts per million
  PQL—Practical quantitation level
  PRA—Paperwork Reduction Act
  psi—Pounds per square inch
  PT—Performance testing
  PUG—Public utilities commission
  PWS—Public water systems
  QALYs—Quality adjusted life years
  RCRA—Resource Conservation and
    Recovery Act
  REF—Relative exposure factors
  RFA—Regulatory Flexibility Act
  RIA—Regulatory Impact Analysis
  RO—Reverse osmosis
  RUS—Rural Utilities Service
  RWS—Rural Water Survey
  SAB—Science Advisory Board
  SBAR—Small Business Advocacy
    Review
  SBREFA—Small Business Regulatory
    Enforcement Fairness Act
  SD—Standard deviation
  SDWA—Safe Drinking Water Act
  SDWIS—Safe Drinking Water
    Information System
  SEER—Surveillance, Epidemiology, and
    End Results
  SM—Standard Method for Examination
    of Water and Wastewater
  SMF—Standardized monitoring
   framework
  SMRs—Standardized mortality ratios
  SO4—Sulfate
  SOCs—Synthetic organic contaminants
  STP-GFAA—Stabilized temperature
   platform graphite furnace atomic
   absorption
 SW—Surface water
 TBLLs—Technically based local limits
 TC—Toxicity Characteristic, RCRA
   hazardous waste
 TCLP—Toxicity Characteristic Leaching
   Procedure, tests for hazardous waste
 TDS—Total dissolved solids
 TMF—Technical, managerial, financial
   capacity
 TOC—Total organic carbon
 UMRA—Unfunded Mandates Reform
   Act
 URTH—Unreasonable risk to health
 U.S.—United States
 USDA—US Department of Agriculture
 USGS—US Geological Survey
 UV—Ultraviolet
 VOCs—Volatile organic contaminants
 VSL—Value of statistical life
 VSLY—Value of statistical life year
 WHO—World Health Organization
 WS—Water supply
 WTP—Willingness-to-pay
 Table of Contents

 I. Background and Sumrnary of the Final
Rule
A. What Did EPA Propose?
B. Overview of the Notice of Data
    Availability (NODA)
C. Does This Regulation Apply to My Water '
    System?

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6978
Federal Register/Vol.  66, No. 14/Monday, January  22, 2001/Rules and Regulations
D. What are the Final Drinking Water
    Regulatory Standards for Arsenic
    (Maximum Contaminant Level Goals and
    Maximum Contaminant Levels)?
E. Will There be a Health Advisory?
F. What are the Best Available Technologies
    For Removing Arsenic From Drinking
    Water?
  1. BAT technologies
  2. Preoxidation
  3. Factors affecting listing technologies
  4. Other technologies evaluated, but not
    designated as BAT
  5. Waste disposal
G. Treatment Trains Considered For Small
    Systems
  1. Can my water system use point-of-use
    (POU), point-of-entry (FOE), or bottled
    water to comply with this regulation?
  2. What are the affordable treatment
    technologies for small systems?
  3. Can my water system get a small system
    variance from an MCL under  today's
    rule?
H. Can My System Get a General Variance or
    Exemption from the MCL Under Today's
    Rule?
I. What Analytical Methods are Approved for
    Compliance Monitoring of Arsenic and
    What are the Performance Testing
    Criteria for Laboratory Certification?
   1. Approved analytical methods
   2. Performance testing criteria for
    laboratory certification
J. How Will I Know if My System Meets the
    Arsenic Standard?
   1. Sampling points and grandfathering of
    monitoring data
   2. Compositing of samples
   3. Calculation of violations
   4. Monitoring and compliance schedule
 K. What do I Need To Tell My Customers?
   1. Consumer Confidence Reports
   a. General requirements
   b. Special informational statement
   2. Public Notification
 L. What Financial Assistance Is Available for
    Complying With This Rule?
 M. What is the Effective Date and
     Compliance Date for the Rule?
 N. How Were Stakeholders Involved in the
     Development of This Rule?
 II. Statutory Authority
 III. Rationales for Regulatory Decisions
 A. WhatistheMCLG?
 B. What is the Feasible Level?
   1. Analytical measurement feasibility
   2. Treatment
 C. How Did EPA Revise Its National
     Occurrence Estimates?
   1. Summary of occurrence data and
     methodology
    2. Corrections and additions to the data
    3. Changes to the methodology
    4. Revised occurrence results
 D. How Did EPA Revise'Its Risk Analysis?
    1. Health risk analysis
    a. Toxic forms of arsenic
    b. Effects of acute toxicity
    c. Non-cancer effects associated with
     arsenic.
    d. Cancers associated with arsenic
    o. How does arsenic cause cancer?
    f. What is the quantitative relationship
     between exposure and cancer effects that
                                may be projected for exposures in the
                                U.S.?
                              g. Is it appropriate to assume linearity for
                                the dose-response assessment for arsenic
                                at low doses given that arsenic is not
                                directly reactive with DNA?
                              2. Risk factors/bases for upper- and lower-
                                bound analyses
                              a. Water consumption
                              b. Relative Exposure Factors
                              c. Arsenic occurrence
                              d. Risk distributions
                              e. Estimated risk reductions
                              f. Lower-bound analyses
                              g. Cases avoided
                              3. Sensitive subpopulations
                              4. Risk window
                            E. What are the Costs and Benefits at 3,5,10,
                                and20ug/L?
                              1. Summary of cost analysis
                              a. Total national costs
                              b. Household costs
                              2. Summary of benefits analysis
                              a. Primary analysis
                              b. Sensitivity analysis on benefits valuation
                              c. SAB recommendations
                              d. Analytical approach
                              e. Results
                              3. Comparison of costs and benefits
                              a. Total national costs and benefits
                              b. National net benefits and benefit-cost
                                ratios ,-",.-
                              c. Incremental costs and benefits
                              d. Cost-per-case avoided
                              4. Affordability
                             F. What MCL Is EPA Promulgating and What
                                Is the Rationale for This Level?
                              1. Final MCL and overview of principal
                                considerations
                              2. Consideration of health risks
                              3. Comparison of benefits and costs
                              4. Rationale for the final MCL
                              a. General considerations
                              b. Relationship of MCL to the feasible level
                                 (3 ug/L)
                               c. Reanalysis of proposed MCL and
                                 comparison to final MCL
                               d. Consideration of higher MCL options
                               e. Conclusion
                             IV. Rule Implementation
                             A. What are the Requirements for Primacy?
                             B. What are the Special Primacy
                                 Requirements?
                             C. What are the State Recordkeeping
                                 Requirements?
                             D. What are the State Reporting
                                 Requirements?
                             E. When does a State Have to Apply for
                                 Primacy?
                             F. What are Tribes Required To Do Under
                                 This Regulation?
                             V. Responses to Major Comments Received
                             A. General Comments
                               1. Sufficiency of information and adequacy
                                 of procedural requirements to support a
                                 final rule
                               2. Suggestions for development of an
                                 interim standard
                               3. Public involvement and opportunity for
                                 comment
                               4. Relation of MCL to the feasible level
                               5. Relationship of MCL to other regulatory
                                 programs
                               6. Relation of MCL to WHO standard
                               7. Regulation of non-transient non-
                                 community water systems (NTNCWSs)
  8. Extension of effective date for large
    systems
B. Health Effects of Arsenic
  1. Epidemiology data
  2. Dose-response relationship
  3. Suggestions that EPA await further
    health effects research
  4. Sensitive subpopulations
  5. EPA's risk analysis
  6. Setting the MCLG and the MCL
C. Occurrence
  1. Occurrence data
  2. Occurrence methodology
  3. Co-occurrence
D. Analytical Methods
  1. Analytical interferences      ,
  2. Demonstration of PQL (includes
    acceptance limits)
  3. Acidification of samples
E. Monitoring and Reporting Requirements
  1. Compliance determinations
  2. Monitoring of POU devices
  3. Monitoring and reporting for NTNCWSs
  4. CCR health language and reporting date
  5. Implementation guidance
  6. Rounding analytical results
F. Treatment Technologies
  1. Demonstration of technology
    performance
  2. Barriers to technology application
  3. Small system technology application
  4. Waste generation and disposal
  a. Anion exchange
  b. Activated alumina
  c. Reverse osmosis
  5. Emerging technologies
 G. Costs
  1. Disparity of costs
  a. What is EPA's response to major
    comments on the decision tree for the
    proposed rule?
  b. What is EPA's response to comments on
    system level costs?
   c. What is EPA's response to comments
    that state the report "Cost Implications of
    a Lower Arsenic MCL" (Frey et al.,
    2000), be used as a basis for reflecting
    more realistic national costs than EPA's
    estimates?
   2. Affordability
   3. Combined cost of new regulations
   4. Projected effects of the new standard on
     other regulatory programs.
 H. Benefits of Arsenic Reduction
   1. Timing of benefits accrual (latency)
   2. Use of the Value of Statistical Life (VSL)
   3. Use of alternative methodologies for
     benefits estimation
   4. Comments on EPA's consideration of
     nonquantifiable benefits
   5. Comments on EPA's assumption of
     benefits accrual prior to rule
     implementation
 I. Risk Management Decision
   1. Role of uncertainty in decision making
   2. Agency's interpretation of benefits
     justify costs provision
   3. Alternative regulatory approaches
   4. Standard for total arsenic vs. species-
     specific standards
 J. Health Risk Reduction and Cost Analysis
     (HRRCA)
   1. Notice and comment requirement
   2. Conformance with SDWA requirements

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              Federal Register/Vol.  66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                         6979
VI. Administrative and Other Requirements
A. Executive Order 12866: Regulatory
    Planning and Review
B. Regulatory Flexibility Act (RFA), as
    Amended by the Small Business
    Regulatory Enforcement Fairness Act of
    1996 (SBREFA), 5 U.S.C. 601 et seq.
C. Unfunded Mandates Reform Act (UMRA)
    of 1995
  a. Authorizing legislation
  b. Cost-benefit analysis
  c. Financial assistance
  d. Estimates of future compliance costs and
    disproportionate budgetary effects
  e. Macroeconomic effects
  f. Summary of EPA's consultation
    with State, Tribal, and local
    governments
  g. Nature of State, Tribal, and local
    government concerns and how EPA
    addressed these concerns"
  h. Regulatory alternatives considered
  i. Selection of the regulatory
    alternative
D. Paperwork Reduction Act (PRA)
E. National Technology Transfer and
    Advancement Act (NTTAA)
F. Executive Order 12898:
    Environmental Justice
G. Executive Order 13045: Protection of
    Children from Environmental
    Health Risks and Safety Risks
H. Executive Order 13132: Federalism
I. Executive Orders 13.084 and 13175:
    Consultation and Coordination with
    Indian Tribal Governments
J. Plain Language
K. Congressional Review Act
L. Consultations with the Science
    Advisory Board, National Drinking
    Water Advisory Council, and the
    Secretary of Health and Human
    Services
M. Likely Effect of Compliance With the
    Arsenic Rule on the Technical,
    Financial, and Managerial Capacity
    of Public Water Systems

VI. References  .

List of Tables
Table I.F-1.—Best Available Technologies
   and Removal Rates
Table I.G-1.—Treatment Technology Trains
Table I.G-2.—Baseline Values for Small
   Systems Categories
Table I.G—3.—Available Expenditure Margin
   for Affordable Technology
   Determinations
Table I.G—4.—Design and Average Daily
   Flows Used for Affordable Technology
   Determinations
Table I.G—5.—Affordable Compliance
   Technology Trains for Small Systems
   with population 25-500
Table I.G—6.—Affordable Compliance
   Technology Trains for Small Systems
   with populations 501-3,300 and 3,301 to
   10,000
Table I.I-l.—Approved Analytical Methods
   (40 CFR 141.23) for Arsenic at the MCL
   of 0.01 mg/L
Table III.C-1.—Summary of Occurrence
    Databases for the Proposed and Final
    Rules
Table III.C-2.—Alaska PWS Inventories:
    Baseline Handbook and Corrected
Table III.C-3.—National Occurrence
    Exceedance Probability Estimates
Table III.C-4.—Parameters of Lognormal
    Distributions Fitted to National
    Occurrence Distributions
Table III.C-5.—Regional Occurrence
    Exceedance Probability Estimates
Table III.C-6.—Statistical Estimates of
    Numbers of Systems with Average
    Finished Arsenic Concentrations in '
    Various Ranges
Table III.C-7.—Estimated Intra-System
    Coefficients of Variation
Table ffl.C-8.—Comparison of National
    Arsenic Occurrence Estimates
Table III.D-1.—Life-Long Relative Exposure
    Factors
Table III.D-2(a).—Cancer Risks for U.S.
    Populations Exposed At or Above MCL
    Options, after Treatment1'2 (Without
    Adjustment for Arsenic in Food and
    Cooking Water)
Table III.D-2 (b).—Cancer Risks for U:S.
    Populations Exposed At or Above MCL
    Options, after Treatment1-2 (With
    Adjustment for Arsenic Exposure in
    Food and Cooking Water)    !
Table ffl.D-2(c).—Cancer Risks for'U.S.
    Populations Exposed At or Above MCL
    Options, after Treatment1 (Lower Bound
    With Food and Cooking Water
    Adjustment, Upper Bound Without Food
    and Cooking Water Adjustment)
Table III.D-3,—Annual Total(Bladder and
    Lung) Cancer Cases Avoided from
    Reducing Arsenic in CWSs and
    NTNCWS
Table III.E-1.—Total Annual National
    System and State Compliance Costs
Table IH.E-2.—Mean Annual Costs per
    Household
Table III.E-3.—Estimated Benefits from
    Reducing Arsenic in Drinking Water
Table III.E-4.—Sensitivity of the Primary
    VSL Estimate to Changes in Latency
    Period Assumptions, Income Growth,
    and Other Adjustments
Table III.E-5.—Sensitivity of Combined
    Annual Bladder and Lung Cancer
    Mortality Benefits Estimates to Changes
    in VSL Adjustment Factor Assumptions
Table III.E-6.—Sensitivity of Combined
    Annual Bladder and Lung Cancer
    Mortality Benefits Estimates to Changes
    in VSL Adjustment Factor Assumptions
Table III.E-7.—Estimated Annual Costs and
    Benefits from Reducing Arsenic in
    Drinking Water
Table III.E—8 Summary of National Annual
    Net Benefits and Benefit-Cost Ratios,
    Combined Bladder and Lung Cancer
    Cases
Table III.E-9 Estimates of the Annual
    Incremental Risk Reduction, Costs, and
    Benefits of Reducing Arsenic hi Drinking
    Water               : ..      •;
Table m.E-10. Annual Cost Per Cancer Case
    Avoided for the Final Arsenic Rule—-
    Combined Bladder and Lung Cancer
    Cases
 TABLE V.F-4.1 Treatment Trains in Final
    Versus Proposed Arsenic Rule Decision
    Tree
 Table V.F-4.2 New or Revised Treatment
    Trains
 Table VI.B-1. Profile of the Universe of Small
    Water Systems Regulated Under the
    Arsenic Rule

 I. Background and Summary of the
 Final Rule

 A. What Did EPA Propose?
  On June 22, 2000, the Federal
 Register published EPA's proposed
 arsenic regulation for community water
 systems and non-transient non-
 community water systems (65 FR 38888;
 EPA, 2000i). EPA proposed a health-
 based, non-enforceable goal, or
 Maximum Contaminant Level Goal
 (MCLG), of zero micrograms  per liter
 (ug/L) and a Maximum Contaminant
 Level (MCL) of 5 ug/L. The Agency also
 requested comment on alternate MCL
 levels of 3 ug/L, 10 ug/L, and 20 ug/L.
 (In the proposed rule EPA expressed
 arsenic concentration in milligrams per
 liter (mg/L) or parts per million, which
 matches the units of the former  and
 current standard for arsenic.  Except as
 noted, the Agency will refer to arsenic
 concentration in micrograms per liter
 (ug/L) in this preamble.)
  EPA based the June 2000 proposal on
 extensive analysis including a careful
 consideration of the following issues: a
 nonzero MCLG; occurrence of arsenic in
 public water systems; our approach for
 estimating national occurrence and co-
 occurrence; acceptance limits used to
 establish the practical quantitation level
 (PQL); rounding of measured values for
 compliance purposes; extending
 compliance by two years for systems
 serving under 10,000 people  in order to
 add capital improvements; dates for
 reporting changes in the consumer
 confidence reports and public
 notification; appropriateness of the
 national affordability criteria; affordable
 technologies for small systems;
 implementation issues for point-of-use
 (POU) and point-of-entry (POE)
 treatments; appropriateness of non-
hazardous residual costing; our overall
 analysis of costs; adjusting benefits
 estimates'(e.g., for factors such as
 latency); our approach for considering
uncertainties that affected risk; use of
the authority to set an MCL at a level
 other than the feasible MCL; expression
 of the MCL as total arsenic; approaches
to regulation of NTNCWSs; State
program revisions; selenium levels as an
attenuation factor in arsenic toxicity;
impacts on small entities; use of
consensus analytical methods; methods
to address environmental justice
concerns; and comments on use of plain

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Federal  Register/Vol. 66, No.  14/Monday, January 22,  2001/Rules and Regulations
language. We asked commenters to
submit data and comments on these
issues, as well as any other issues raised
in the proposal.
  The proposal reflected several types
of technical evaluations, including
analytical methods performance and
laboratory capacity; the likelihood of
different size water systems choosing
treatment technologies based on source
water characteristics; and the national
occurrence of arsenic in drinking water
supplies. Furthermore, the Agency
assessed the quantifiable and
nonquantifiable costs and health risk
reduction benefits likely to occur at the
treatment levels considered, and the
effects of arsenic on sensitive
subpopulations.
  The proposed MCL was consistent
with the Agency's use of the new
benefit/cost provisions of the Safe
Drinking Water Act (SDWA), as
amended in 1996 (see section n. of this
preamble for additional information
about this provision). EPA proposed 3
ug/L as the feasible MCL, after
considering treatment costs and
efficiency under field conditions as well
as considering the appropriate
analytical methods. Because EPA
determined that the benefits of
regulating arsenic at the feasible level
would not justify the costs, the Agency
proposed an MCL of 5 Ug/L, while
requesting comment on MCL options of
3 ng/L (the feasible level), 10 ug/L, and
20 ug/L.
  We based our estimates of large
system compliance costs primarily on
costs for coagulation/filtration and lime
softening, although we consider several
other technologies to be appropriate as
best available technology (BAT)
technologies. (See Table I.F-1.)  For
small-system (systems serving 10,000
people and less) compliance costs, we
considered the costs for ion exchange,
activated alumina, reverse osmosis, and
nanofiltration. EPA proposed extending
the effective date-to five years after the
final rule issuaiice for small community
water systems.and maintaining the
effective date at three years after
promulgation for all other community
water systems. EPA proposed that States
applying to adopt the revised arsenic
MCL may use their most recently
approved monitoring and waiver plans
or note in their primacy application any
revisions to those plans. EPA proposed
that NTNCWSs monitor for arsenic and
report exceedances of the MCL.
  The Agency also clarified the
procedure used for determining
compliance after exceedances for
inorganic, volatile organic, and
synthetic organic contaminants  in
§§ 141.23(i)(2), 141.24(f)(l5)(ii), and
                         141.24(h)(ll)(ii), respectively. Finally,
                         EPA proposed that new systems and
                         systems using a new source of water be
                         required to demonstrate compliance
                         with the MCLs using State-specified
                         time frames. The clarified new source
                         and new system compliance regulations
                         require that States establish initial
                         sampling frequencies and compliance
                         periods for inorganic, volatile organic,
                         and synthetic organic contaminants in
                         §§ 141.23(c)(9), 141.24(0(22), and
                         141.24(h)(20), respectively.

                         B. Overview of the Notice of Data
                         Availability (NODA)
                           In the proposed rule, EPA quantified
                         the risk reduction and benefits of
                         avoiding bladder cancer and noted that
                         a peer-reviewed quantification of lung,
                         cancer risk from arsenic exposure would
                         probably be available in time to
                         consider for the final rule (65 FR 38888
                         at 38899; EPA, 2000i). Relying upon a
                         discussion in the National Research
                         Council (NRG) report (NRG, 1999, pg. 8)
                         about the qualitative risks of lung cancer
                         (65 FR 38888 at 38944; 2000i), EPA
                         provided a "What-If' estimate of lung
                         cancer benefits (65 FR 38888  at 38946,
                         2000i) in the proposed rule. On October
                         20, 2000, the Federal Register published
                         EPA's Notice of Data Availability
                         (NODA) containing a revised risk
                         analysis for bladder cancer and new risk
                         information concerning lung cancer (65
                         FR 63027; EPA, 2000m), and identified
                         a correction to Table 4 on October 27,
                         2000 (65 FR 64479; EPA, 2000n). The
                         NODA also provided information
                         concerning the availability of cost
                         curves used to develop the costs
                         published in the proposal.
                           EPA used new risk information for
                         lung and bladder cancer from a peer-
                         reviewed article written by Morales et
                         al. (2000).  In the NODA, EPA explained
                         that the authors used several alternative
                         statistical models to estimate  cancer
                         risk. EPA explained its reasons for
                         selecting "Model 1" with no
                         comparison population for further
                         analysis. We used daily water
                         consumption (EPA, 2000c) reported by
                         gender, region, age, economic status,
                         race, and separately for pregnant
                         women, lactating women, and women
                         in childbearing years combined with
                         weight data to derive exposure factors
                         for the U.S. We used these exposure
                         factors, our occurrence estimate (EPA
                         2000g) of populations exposed to
                         arsenic at different concentrations, and
                         the risk distributions from the Morales
                         et al. (2000) paper in Monte Carlo
                         simulations to estimate the upper bound
                         of risks faced by the U.S. population.
                         The NODA compared the bladder
                         cancer risks derived for the proposal
against the bladder cancer risks derived
from the Morales et al. (2000) study.
EPA also derived lung cancer risks
using the same approach and the risk
model contained in the Morales et al.
(2000) study.
  EPA also used the newly calculated
risks to estimate a lower bound risk in
the U.S. This calculation took into
account the amount of additional
arsenic people in Taiwan were likely to
have ingested from water used in food
preparation. EPA showed the effects on
risks for the U.S."population at both the
mean and 90th percentile levels for
various arsenic levels in drinking water.
Based on the revised risk assessment,
we updated our assessment of the
relative risk of lung cancer as compared
to bladder cancer. The NODA indicated
that instead of being 2 to 5 times as
many fatal lung cancer cases as bladder
cancer cases (as was cited in NRC's
Executive Summary, NRC,  1999, pg. 8 as
a qualitative estimate), the combined
risk of excess lung and bladder cancer
were thought to be only about twice that
of bladder cancer risk. EPA noted that,
while the new risks were higher than
the bladder cancer risk in the proposal,
the monetized benefits of lung cancer
would fall within the lung cancer
benefits range estimated using the
"What-If analysis (e.g., $19.6 million—
$224 million yearly for an MCL of 10
Ug/L) in the proposal (65 FR 38888 at
38959; EPA, 2000m).
  In the NODA, EPA also explained that
the docket for the proposed rule had the
November 1999 version (EPA, 1999o) of
"Technologies and Costs for the
Removal of Arsenic from Drinking
Water" rather than the April 1999
version of the document that was the
primary source for the treatment
technology cost equations used to
generate the national cost estimate. The
national cost estimate was presented in
the "Proposed Arsenic in Drinking
Water Rule Regulatory Impact Analysis"
(EPA, 2000h). The NODA therefore
announced the availability of the
"Technologies and Costs for the
Removal of Arsenic from Drinking
Water," dated April 1999 (EPA,1999b).
The NODA also noted that commenters
interested in reproducing the waste
disposal curves should consult the
"Small Water System Byproducts
Treatment and Disposal Cost
Document" (EPA, 1993a) and "Water
System Byproducts Treatment and
Disposal Document (EPA, 1993b)." In
addition to placing these documents in
the docket, the NODA also specified
that an electronic copy of the treatment
technology and waste disposal
equations used in the development of
the RIA could be found in the docket.

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             Federal Register/Vol.  66, No. 14/Monday, January  22,  2001/Rules  and Regulations
                                                                      6981
EPA made the April 1999 version of the
document, "Technologies and Costs for
the Removal of Arsenic from Drinking
Water" (EPA,1999b) available on its
arsenic webpage.
  The, cost methodology and cost
estimates were clearly stated and
explained injhe proposal for public
review and consideration. Through a
technical oversight, we incorrectly
attributed the source for the cost curves
to the November version of the
document placed in the docket (EPA,   ,
1999o). As a result, people could not
replicate the precise analysis we did,
should a commenter desire to do so.
More specifically, although the inputs,
assumptions, and model methodology
were clearly explained, we incorrectly
cited the sources of an intermediate step
of deriving specific cost curves from
those assumptions. Based upon the
proposal's detailed discussion of inputs,
assumptions and associated
methodology, EPA believes the public
was fully able to review, understand,
and comment on the Agency's estimate
of potential impacts. EPA discusses the
cost  curves further in section III.E.l of
this preamble.
C. Does This Regulation Apply to My
Water System?
  The final regulation on arsenic in
drinking water promulgated today
applies to all CWSs and NTNCWSs. The
regulation not only establishes an MCLG
and MCL for arsenic, but also lists
feasible technologies and affordable
technologies for small systems that can
be used to comply with the MCL.
However, systems are not required to
use the listed technologies in order to
meet the MCL.
D. What are the Final Drinking Water
Regulatory Standards for Arsenic
(Maximum Contaminant Level Goals
and Maximum Contaminant Levels)?
  In today's rule, the MCL&is 0 ng/L,
and the  enforceable MCL is 0.01 mg/L,
which is the same as 10 micrograms per
liter  (u.g/L) or 10 parts  per billion (ppb).
EPA based the MCL on total arsenic,
because drinking water contains almost
entirely inorganic forms, and the
analytical methods for total arsenic are
readily available and capable of being
performed by certified laboratories at an
affordable cost.
E. Will There be a Health Advisory?
  A health advisory for arsenic is not
part of today's rulemaking. EPA will be
considering whether or not to issue a
health advisory after evaluating the
recommendations of the Science
Advisory Board (SAB) (EPA, 2000q).
The purpose of an advisory would be to
provide useful information to water
providers between issuance and
implementation of this rule.

F. What are the Best Available
Technologies For Removing Arsenic
From Drinking Water?

  Section 1412(b)(4)(E) of the Safe
Drinking Water Act states that each
National  Primary Drinking Water
Regulation (NPDWR) which establishes
an MCL shall list .the technology,
treatment techniques, and other means
that the Administrator finds to be
feasible for purposes of meeting the
MCL. Technologies are judged to-be a
best available technology (BAT) when
the following criteria are satisfactorily
met:
  (1) The capability of a high removal
efficiency;
  (2) A history of full-scale operation;
  (3) General geographic applicability;
  (4) Reasonable cost based on large and
metropolitan water systems;
  (5) Reasonable service life;
  (6) Compatibility with other water
treatment processes; and
  (7) The ability  to bring all of the water
in a system into compliance.
  EPA identified BATs in this section
using the listed criteria. Their removal
efficiencies and a brief discussion of the
major issues surrounding the usage of
each technology  are also given in this
section. More details about the
treatment technologies and costs can be
found in  "Technologies and Costs for
the Removal of Arsenic From Drinking
Water" (EPA, 2000t).

1. BAT technologies

  EPA reviewed  several technologies as
BAT candidates for arsenic removal,
e.g., ion exchange, activated alumina,
reverse osmosis,  nanofiltration,
electrodialysis reversal, coagulation
assisted microfiltration, modified
coagulation/filtration, modified lime
softening, greensand filtration,
conventional iron and manganese
removal,  and several emerging
technologies. The Agency determined
that, of the technologies capable of
removing arsenic from source water,
only the technologies in Table I.F-1
fulfill the requirements of SDWA for
BAT determinations for arsenic. The
maximum percent of arsenic removal
that can be reasonably obtained from
these technologies is also shown in the
table. These removal efficiencies are for
arsenic (V) removal.
   TABLE l.F-1.— BEST AVAILABLE
 TECHNOLOGIES AND REMOVAL RATES
Treatment Technology
Ion Exchange (sulfate £ 50 mg/
L) ...
Activated Alumina 	
Reverse Osmosis 	
Modified Coagulation/Filtration
Modified Lime Softening (pH >
10.5) 	 	
Electrodialysis Reversal
Oxidation/Filtration (20:1
iron:arsenic) 	
Maximum
Percent Re-
moval 1
95
95
>95
95
90
85
80
  1The percent removal figures are for  ar-
senic  (V)  removal.  Pre-oxidation  may  be
required.
2. Preoxidation
  In water, the most common valence
states of arsenic are As (V), or arsenate,
and As (III), or arsenite. As (V) is more
prevalent in aerobic surface waters and
As (III) is more likely to occur in
anaerobic ground waters. In the pH
range of 4 to 10, As (V) species
(H2AsO4 minus; an(J H2AsO42 minus;)
are negatively charged, and the
predominant As (III) compound
(HsAsOs) is neutral in charge. Removal
efficiencies for As (V) are much better
than removal of As (III) by any of the
technologies evaluated because the
arsenate species carry a negative charge
and arsenite is neutral under these pH
conditions, ^o increase the removal
efficiency when As (HI) is present, pre-
oxidation to the As (V) species is
necessary.
  As (III) may be converted through pre-
oxidation to As (V) using one of several
oxidants. Data on oxidants indicate that
chlorine, potassium permanganate, and
ozone are effective in oxidizing As (III)
to As (V). Pre-oxidation with chlorine
may create Undesirable concentrations
of disinfection byproducts and
membrane fouling of subsequent
treatments such as reverse osmosis. EPA
has completed research on the chemical
oxidants for As (III) conversion, and is
presently investigating ultraviolet light
disinfection technology (UV) and solid
oxidizing media. For POU and POE
devices, central chlorination  may be
required for oxidation of As (III).

3. Factors affecting listing technologies
  Ion Exchange (IX) can effectively
remove arsenic using anion exchange
resins. It is recommended as a BAT
primarily for sites with low sulfate
because sulfate is preferred over  arsenic.
Sulfate will compete for binding sites
resulting in shorter run lengths. Due to
much shorter run lengths than activated
alumina, anion exchange must be

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules  and Regulations
regenerated because it is not cost
effective to dispose of the resin after one
use. Column bed regeneration frequency
is a key factor in the cost of the process
and affects the volume of waste
produced by the process. The proposed
rule preamble noted that anion
exchange may be practical up to
approximately 120 mg/L of sulfate
(Clifford, 1994). The upper-bound
sulfate concentration for the final rule is
50 mg/L. The selection of this upper
bound is based on several factors,
including cost and the ability to dispose
of the brine stream.
  The proposed rule listed three
mechanisms to dispose of the brine
stream used for regeneration. The
options were: sanitary sewer,
evaporation pond, and chemical
precipitation. Many comments on the
proposed rule were based on the
assumption that the waste  streams
generated would be considered
hazardous waste. Waste streams
containing less than 0.5% solids are
evaluated against the toxicity
characteristic directly to determine if
the waste is hazardous. Arsenic in the
regeneration brine will likely exceed 5
mg/L for most systems with arsenic
above 10 Ug/L and sulfate below 50 mg/
L. Since the brine stream would likely
be considered hazardous, EPA
eliminated the evaporation pond and
the chemical precipitation options from
the decision tree as options for disposal
of anion exchange wastes. The Agency
retained discharge to a sanitary sewer
because domestic sewage and any
mixture of domestic sewage and other
wastes that pass through a  sewer system
to a publicly owned treatment works
(POTW) for treatment is excluded from
consideration as solid waste (40 CFR
261.4). Domestic sewage means
untreated sanitary wastes that pass
through a sewage system. Discharges
meeting the previously stated criteria
are excluded from regulation as
hazardous waste. However, these
assumptions were reviewed to
substantially reduce projections of brine
wastes going to POTWs from those that
were used in support of the proposed
rule.
  Discharge to a sanitary sewer can be
limited by technically based local limits
(TBLLs) for arsenic or total dissolved
solids. Since anion exchange is
regenerated more frequently than
activated alumina, the total dissolved
solids increase can be significant. Many
comments indicated that significant
increases in total dissolved solids would
be unacceptable, especially in the
Southwest where water resources are
scarce. Salt is used for regeneration of
anion exchange resins. The upper
                         bound of 50 mg/L sulfate for anion
                         exchange is based on projected
                         increases of total dissolved solids using
                         the quantity of salt needed for
                         regeneration and the frequency of
                         regeneration (based on sulfate). The
                         sulfate upper bound for the final rule is
                         significantly lower than the upper
                         bound from the proposed rule. Due to
                         the potential for an increase in total
                         dissolved solids, anion exchange would
                         be favored in areas other than lite
                         Southwest where the volume of brine is
                         very small relative to the total volume
                         of wastewater being treated at the
                         POTW. Systems that need to treat only
                         a few entry points or can blend a
                         significant portion of the water to meet'
                         the MCL may produce a smaller brine
                         stream to allow the brine to be
                         discharged to a POTW. Water systems
                         should check with the POTW to ensure
                         that the brine stream will be accepted
                         before selecting this option.
                           Activated Alumina (AA) is an
                         effective arsenic removal technology;
                         however, the capacity of activated
                         alumina to remove arsenic is very pH
                         sensitive. High removals can be
                         achieved over a broad range of pH, but
                         shorter run lengths will be observed at
                         higher pH. Activated alumina can be
                         operated in one of two ways. The
                         activated alumina can either be
                         disposed of or regenerated after the ,
                         media is exhausted. Under the
                         regeneration option, strong acids and
                         bases are used to remove arsenic from
                         the media so that it can be Used again
                         to remove arsenic. Because arsenic is
                         strongly adsorbed to the media, only
                         about 50--70% of the adsorbed arsenic is
                         removed. The brine stream produced by
                         the regeneration process then requires
                         disposal. The proposed rule listed
                         discharge to a sanitary sewer as the
                         disposal mechanism for the brines.
                         Many comments on the proposed rule
                         noted that TBLLs for arsenic or total
                         dissolved solids might restrict discharge
                         of brine streams to the sanitary  sewerr
                         Since activated alumina run lengths
                         (i.e., number of bed volumes (BV) per
                         run) are much longer than anion
                         exchange, the arsenic concentrations in
                         the brine stream would likely be much
                         higher. Regeneration of activated
                         alumina media is not recommended for
                         larger systems because: (1) Disposal of
                         the brine may be difficult, (2) the
                         regeneration process is incomplete
                         which reduces subsequent run lengths,
                         and (3) for most systems it will be
                         cheaper to replace the media rather than
                         regenerate it. The option of replacing
                         the spent media with new media is
                         called disposable activated alumina.
                           The disposable activated alumina
                         option can be operated both at the
optimal pH of 6 and at higher natural
water pH values. It is expected that
larger systems would adjust pH to take
advantage of the longer run lengths.
EPA developed several disposable
activated alumina options for the final
rule. Two options were based on
operating the process at the natural pH
of the water (no pH adjustment). These
options are intended primarily for
smaller systems, although larger systems
may also be able to operate at the
natural pH if it is low enough to get
sufficiently long run lengths. Two
options where the pH was adjusted to
pH 6 were also examined. The longer
run length is based on using sulfuric
acid to lower the pH. However, sulfate
can compete for adsorption sites with
arsenic. It was recommended that
hydrochloric acid be used to obtain a
longer run length (Clifford et al., 1998).
When pH is adjusted to pH 6, post-
treatment corrosion control will be
necessary.
  In our analysis, we assumed that
spent media could be safely disposed of
in a non-hazardous landfill. The
preamble to the proposed rule described
results from testing of activated alumina
media used to remove arsenic in
drinking water systems with arsenic
above 50 ug/L. The results from the
Toxicity Characteristic Leaching
Procedure (TCLP) on these samples was
typically less that 50 Ug/L. The current
toxicity characteristic (TC) regulatory
level for designating arsenic as a
hazardous waste under the Resource
Conservation and Recovery Act (RCRA)
is 5 mg/L (5000 ug/L) and is listed in 40
CFR 261.24(a). The TC regulatory level
is one hundred times higher than the
results from the activated alumina
samp'les.
  Reverse Osmosis (RO) can provide
removal efficiencies of greater than 95%
when operating pressure is ideal. Water
rejection (on the order of 20-25%) may
be an issue in water-scarce regions and
may prompt systems employing RO to
seek greater levels of water recovery.
Water recovery is the volume of
drinking water produced by the process
divided by the influent stream (product
water/influent stream). Increased water
recovery is often more expensive, since
it can involve recycling of water through
treatment units to allow more efficient
separation of solids from water. This
can also produce more concentrated
solid wastes. However, the waste stream
will generally not be as  concentrated as
anion exchange brines, so it should be
easier to dispose of. Based on the cost
of the process, it is unlikely that reverse
osmosis would be installed solely for
arsenic removal. Blending a treated
portion with an untreated portion and

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             Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                       6983
still meeting the MCL would make
reverse osmosis more cost effective. If
blending is not an option, post-
treatment corrosion control would be
necessary. Since a large portion of the
water is wasted, water quantity could be
an issue, especially in the Western U.S.
It should be noted that while reverse
osmosis is listed as a BAT, it was not
used to develop national costs because
other options are more cost effective and
have much smaller waste streams.
  Modified Coagulation/Filtration (C/F)
is an effective treatment process for
removal of As (V) according.to
laboratory, pilot-plant, and full-scale
tests. The type of coagulant and dosage
used affects the efficiency of the
process. Below a pH  of approximately 7,
removals with alum or ferric sulfate/
chloride are similar. Above a pH of 7,
removals with alum decrease
dramatically (at a pH of 7.8, alum
removal efficiency is about 40%). Other
coagulants are also less effective than
ferric sulfate/chloride. Systems may
need to lower pH or add more coagulant
to achieve higher removals.
  Modified'Lime Softening (LS),   .
operated within the optimum pH range
of greater than 10.5 is likely to provide
a high percentage of As removal.
Systems operating lime softening at
lower pH will need to increase the pH
to achieve higher removals of arsenic.
  Coagulation/Filtration and Lime
Softening are unlikely to be installed
solely for arsenic removal. Systems
considering installation of one of these
technologies should  design the process
to operate in the optimal pH range if
high removal efficiencies are needed for
compliance.
   Electrpdialysis Reversal (EDR) can
produce effluent water quality
comparable to reverse osmosis. EDR
systems are fully automated, require
little operator attention, and do not
require chemical addition. EDR systems,
however, are typically more  expensive
than nanofiltration and reverse osmosis
systems. These systems are often used
in treating brackish water to make it
suitable for drinking. This technology
has also been applied in the  industry for
wastewater recovery and typically
operates at a recovery of 70 to 80%.
Since a large portion of the water is
wasted, water quantity could be an
issue, especially in the Western U.S. It
should be noted that while
electrodialysis reversal is listed as a
BAT, it was not used to develop
national costs because other options are
more cost effective and have much
smaller waste streams.
   Oxidation/Filtration (including
greensand filtration) has an advantage in
that there is not as much competition
with other ions. Arsenic is co-
precipitated with the iron during iron
removal. Sufficient iron needs to be
present to achieve high arsenic
removals. One study recommended a
20:1 iron to arsenic ratio (Subramanian
et al., 1997). Removals of approximately
80% were achieved when iron to
arsenic ratio was 20:1. When the iron to
arsenic ratio was lower (7:1), removals
decreased below 50%. The presence of
iron in the source water is critical for
arsenic removal. If the source water
does not contain iron, oxidizing and
filtering the water will not remove
arsenic. When the arsenic is present as
As(III), sufficient contact time needs to
be provided to convert the As(III) to
As(V) for removal by the oxidation/
filtration process. An additional pre-
oxidation step is not required for this
process as long as there is sufficient
contact time.  In developing national
cost estimates, EPA assumed that
systems would opt for this type of
technology only if more than 300 jig/L
of iron was present. The Agency
assumed a removal percentage of 50%
when estimating national costs because
the 20:1 ratio could not be verified due
to limitations in the co-occurrence
database. However, EPA assumed a
removal percentage of 80% as part of a
sensitivity analysis. At proposal EPA
indicated that oxidation filtration was
not being listed as BAT because it has
a low removal efficiency, which might
not be appropriate for an MCL of 5.
However, the Agency also noted that
this technology may be appropriate for
systems that do not require high arsenic
removal and had high iron in their
source water. Because this is an
inexpensive technology that is
particularly effective for high-iron, low-
arsenic waters, EPA is listing oxidation/
filtration as a BAT with a footnote that
the iron-to-arsenic ratio must be at least
20:1. Systems with greater than 300 |ig/
L of iron will also see benefits in the
aesthetic quality of the water as the iron
can be reduced below the secondary
standard. EPA's inclusion of oxidation/
filtration as a BAT in today's final rule
is based upon further evaluation of all
available information and studies as
well as on public comments.
4. Other technologies evaluated, but not
designated as BAT
   Coagulation Assisted Microfiltration.
The coagulation process described
previously can be linked with
microfiltration to remove arsenic. The
microfiltration step essentially takes the
place of a conventional gravity filter.
The. University of Houston recently
completed pilot studies at Albuquerque,
New Mexico on iron coagulation
followed by a direct microfiltration
system. The results of this study
indicated that iron coagulation followed
by microfiltration is capable of
removing arsenic (V) from water to yield
concentrations that are consistently
below 2 ng/L. Critical operating
parameters are iron dose, mixing energy,
detention time, and pH (Clifford, 1997).
Coagulation and microfiltration as
separate processes have both been
installed full scale, but the combined
coagulation/microfiltration process does
not have a full-scale operation history.
Since a full-scale operation history is
one of the requirements to list a
technology as a BAT, it is not presently
being listed as one. It could be
designated as such in the future if the
technology meets that requirement. EPA
used this option in developing the
national cost estimate because we
believe coagulation/microfiltration is an
appropriate technology that will be used
by certain water systems to comply with
this rule, even though it is not currently
listed as BAT for the reasons mentioned.
  Granular ferric hydroxide is a
technology that may combine very long
run length without the need to adjust
pH. The technology has been
demonstrated for arsenic removal  full
scale in England (Simms et al., 2000). A
pilot-scale study for activated alumina
was also conducted on that water and
showed run lengths much longer than
observed in pilot-scale studies in the
United States. Due to the lack of
published data showing performance for
a range of water qualities, granular ferric
hydroxide was not designated a BAT. In
addition, there is little published
information on the cost of the media, so
it is difficult to evaluate cost. Granular
ferric hydroxide is being investigated in
several ongoing studies and may be an
effective technology for removing
arsenic. Systems may wish to
investigate it and other adsorption
technologies such as modified activated
alumina and other iron-based media.
Many of these other new adsorptive
media are also being investigated in
several ongoing studies.
5. Waste disposal
  Waste disposal will be an important
issue for both large and small drinking
water plants. Costs for waste disposal
have been added to the costs of the
treatment technologies (in addition to
any pre-oxidation and corrosion control
costs), and form part of the treatment
trains that are listed in Tables I.G— 1,
I.G-5,  and I.G-6.
  The preamble to the proposed rule
summarized toxicity characteristic
leaching procedure (TCLP) data on
residuals from different arsenic removal

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Federal  Register/Vol. 66, No.  14/Monday, January  22,  2001/Rules and Regulations
technologies. The arsenic
concentrations in TCLP extracts from
alum coagulation, activated alumina,
lime softening, iron/manganese
removal, arid coagulation-microfiltration
residuals were below 0.05 mg/L, which
is two orders of magnitude lower than
the current TC regulatory level. The
TCLP data for iron coagulation were
mixed—the residuals from an arsenic
removal plant were below 0.05 mg/L,
but the residuals from another iron
coagulation plant were above 1 mg/L.
However, this is still below the TC
regulatory level of 5 mg/L. Based on
these data, EPA does not believe that
drinking water treatment plant residuals
would be classified as hazardous waste.
The TCLP data also indicate'that most
residuals could meet a much lower TC
regulatory level. Options where the
brine stream could be hazardous were
eliminated from the final decision tree.
For the purposes of the national cost
estimate, it was assumed that solid
residuals would be disposed of at
nonhazardous landfills.
G. Treatment Trains Considered For
Small Systems
1. Can my water system use point-of-use
(POU), point-of-entry (POE), or bottled
water to comply with this regulation?
  Section 1412(b)(4)(E)(ii) of SDWA, as
amended in 1996, requires EPA to issue
a list of technologies that achieve
compliance with MCLs established
under the Act that are affordable and
applicable to typical small drinking
water systems. These small public water
systems categories are: (1) population of
more than 25 but less than or equal to
500; (2) population of more than 500,
but less than or equal to 3,300; and (3)
population of more than 3,300, but less
than or equal to 10,000. Owners and
operators may choose any technology or
technique that best suits their
conditions, as long as the MCL is met.  •
  The technologies examined for BAT
determinations were also evaluated as
small system compliance technologies.
Several other alternatives that are solely
small system options were also
evaluated as compliance technologies.
Central treatment is not the only option
available to small systems. One of the
provisions included in the SDWA
Amendments of 1996 allows the use of
POU and POE devices as compliance
technologies for small systems. SDWA
stipulates that POU/POE treatment
systems:
shall ba owned, controlled and maintained
by the public water system or by a person
under contract with the public water system
to ensure proper operation and maintenance
and compliance with the MCL or treatment
                         technique and equipped with mechanical
                         warnings to ensure that customers are
                         automatically notified of operational
                         problems (§ 1412(b)(4)(E)).
                           Whole-house, or POE treatment, is
                         necessary when exposure to the
                         contaminant by modes other than
                         consumption is a concern; this is not the
                         case with arsenic.  Single faucet, or POU
                         treatment, is preferred when treated
                         water is needed only for drinking and
                         cooking purposes. POU devices are
                         especially applicable for  systems that
                         have a large flow and only a minor part
                         of that flow directed for potable use
                         such as at many.NTNCWSs. POE/POU
                         options include reverse osmosis,
                         activated alumina, and ion exchange
                         processes. POU systems are easily
                         installed and can be  easily operated  and
                         maintained. In addition, these systems
                         generally offer lower capital costs and
                         may reduce engineering,  legal, and other
                         fees associated with  centralized
                         treatment options. However, there will
                         be higher administrative costs
                         associated with POU and POE options.
                         For POU options, the trade-off is lower
                         treatment cost since  only 1% of the
                         water is treated, but higher
                         administrative and monitoring costs
                         occur. Centrally managed POU options,
                         even with the higher monitoring and
                         administrative costs, are less expensive
                         than central treatment for populations
                         up to 150 to 250 people depending upon
                         the technology and number of '
                         households.
                           Using POU/POE devices introduces
                         some new issues. Adopting a POU/POE
                         treatment system in a small community
                         requires more record-keeping to monitor
                         individual devices than does central
                         treatment. POU/POE systems may
                         require special regulations regarding
                         customer responsibilities as well as
                         water utility responsibilities. The water
                         system or person under contract to the
                         system is responsible for maintaining
                         the devices in customers' homes. This
                         responsibility cannot be delegated to the
                         customer. Use of POU/POE systems
                         does not reduce the need for a well-
                         maintained water distribution system.
                         Increased monitoring may be necessary
                         to ensure that the treatment units are
                         operating properly. Monitoring POU/
                         POE systems is also more complex
                         because compliance samples need to be
                         taken after each POU or POE unit rather
                         than at the entry point to the
                         distribution system to be  reflective of
                         treatment.
                           EPA examined three technologies as
                         POU and POE devices for the proposed
                         rule. EPA assumed that systems would
                         more likely choose to use POU activated
                         alumina (AA) or reverse osmosis (RO),
                         and POE AA in the proposed rule. POU
and POE ion exchange (IX) and POE RO
were considered, but not included as
compliance technologies in the
proposed rule. Activated alumina and
ion exchange units face a breakthrough
issue. If the activated alumina is not
replaced on time, there is a potential for
significantly reduced arsenic removal.
However, if the anion exchange resin is
not replaced or regenerated on time, the
previously removed arsenic can be
driven off the resin by sulfate. Tap water
arsenic concentrations can be higher
than the source water.  This is called
chromatographic peaking. Due to the
potential for chromatographic peaking
and run lengths that would typically be
less than six months, anion exchange
was not listed as a compliance
technology in the proposed rule. POE
ion exchange also may present problems
with total dissolved solids  since the
resin would need to be regenerated.
Since all sites within the system would
need treatment, the total dissolved
solids increase from a centrally
managed POE ion exchange system
would be similar to that from a central
treatment ion exchange system. EPA did
not list POE RO units as compliance
technologies because it could create
corrosion control problems. In addition,
water recovery would be no higher than
central treatment, so water quantity
issues associated with  central treatment
reverse osmosis would be applicable to
POE RO.
  The proposed rule included POE AA
as a small system compliance
technology. Arsenic removal by AA is
very sensitive to the pH. The finished
water pH will typically be higher than
the optimal pH of 6 to meet the
corrosion control requirements of the
lead and copper rule. A finished water
pH for many systems would be in the
range of pH 7 to pH 8, Using data on
activated alumina run length and pH, it
was determined that viable run lengths
were likely only when  the finished
water pH was at or below pH  7.5
(Kempic, 2000). Even in this pH range,
the media may need to be replaced more
frequently than once a  year, which
would make the option very expensive
especially compared to the POU AA
option. The run length data used for this
analysis were from a site with very little
competing ions (Simms and Azizian,
1997). Studies at other sites with higher
levels of competing ions have much
lower run lengths (Clifford  et  al., 1-998).
Based on the limited finished water pH
range where POE AA might be effective
and the fact that the POU media needs
replacing much less frequently due to
lower water demand, POE AA has not
been listed  as a compliance technology

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              Federal Register/Vol.  66,  No. 14/Monday, January 22, 2001/Rules  and Regulations
                                                                                                6985
in the final rule. POE devices utilizing
media that are less sensitive to pH
adjustment may be listed as compliance
technologies in the future once data on
their performance are generated.
  The effect of pH was also examined
on POU AA. Under the POU AA option,
the volume of water requiring treatment
is much smaller. The unit will be
installed at the kitchen tap and only the
water being used for cooking and
consumption is being treated for arsenic
removal. Since the ratio of the daily
volume of water being treated to the size
of the unit is much smaller, POU units
can be operated for longer periods of
time before the media needs to be
replaced. The replacement frequency
assumed for the costs is every six
months. Viable run lengths for the POU
option were greater than one year up to
pH 8 (Kempic, 2000). This analysis
assumed a large daily usage volume of
24 liters per day. The average
consumption per person per day is just
over 1 liter. Even if competing ions
reduced the run length significantly,
systems with tap water at or below pH
8 should meet the MCL of 10 ug/L using
a six-month replacement frequency for
                        the media. POU AA is a compliance
                        technology when the tap water pH is at
                        or below pH 8.
                          POU RO was listed as a compliance
                        technology in the proposed rule and it
                        is being listed as a compliance
                        technology in the final rule as well.
                        Several comments indicated that water
                        rejection would be an issue with POU
                        devices. Since only about 1% of the
                        total water used in the household is
                        being treated, POU RO is unlikely to
                        create water quantity problems. If the
                        water rejection rate was 10:1, thisjwould
                        only increase the total household water
                        demand by about 10 percent. Where
                        availability of additional water is
                        limited, systems may want to consider
                        other alternatives to meet the MCL.
                          In order to be consistent with 1996
                        SDWA Amendments, EPA issued a
                        Federal Register notice on June 11,1998
                        (EPA, 1998f) that deleted the
                        prohibition on the use of POU devices
                        as compliance technologies. This
                        prohibition was in 40 CFR 141.101. This
                        section now states that public water
                        systems shall not use bottled water to
                        achieve compliance with an MCL.
                        Bottled water may be used on -a
                        temporary basis to  avoid unreasonable
risk to health. Therefore, bottled water
cannot be used as a compliance
technology for the arsenic rule.
  Likely treatment trains are shown in
Table I.G—1. These trains represent a
wide variety of solutions, including
BATs, that small systems may consider
when complying with the proposed
arsenic MCL. Not all solutions may be
viable for a given system. For example,
only those systems with coagulation/
filtration in place will be able to modify
their existing treatment system. The
treatment trains include BATs, waste
disposal, and when necessary, pre-
oxidation and corrosion control. While
systems could install lime softening at
pH> 10.5 or optimized coagulation/
filtration solely for arsenic removal,
EPA does not view this as a likely
option. Reverse osmosis and
electrodialysis reversal are also  not
included in this table because other
options are more cost effective for
arsenic removal and  do not reject a large
volume of water like these two
technologies. RO and EDR may be cost-
effective options if removal of other
contaminants is needed and water
quantity is not a concern.
 TABLE I.G-1.— TREATMENT TECHNOLOGY TRAINS FOR CONSIDERATION BY .SMALL SYSTEMS IN COMPLYING WITH FINAL
                                                RULE INCLUDING BATs
    Train #
                        Treatment Technology Trains for Consideration by Small Systems
9...

10 ,

11 ,

12 ,
13 ,
Add pre-oxidation [if not in-place] and modify in-place Lime Softening (pH > 10.5) and modify corrosion control.
Add pre-oxidation [if not in-place] and modify in-place Coagulation/Filtration and modify corrosion control.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal. Sulfate level < 20 mg/L.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal.  Sulfate level: 20 mg/L < sulfate £
  50 mg/L.
Add pre-oxidation [if not in-place] and add  Coagulation Assisted Microfiltration with corrosion control and add mechanical
  dewatering/non-hazardous landfill waste disposal.
Add pre-oxidation [if not in-place] and add Coagulation Assisted Microfiltration with corrosion control and add non-mechanical
  dewatering/non-hazardous landfill waste disposal.
Add Oxidation/Filtration (Greensand) (20:1 iron: arsenic) and add POTW for backwash stream.
Add pre-oxidation [if not in-place] and add Activated Alumina and add non-hazardous landfill (for spent media) waste dis-
  posal. pH 7 £ pH < pH 8.
Add pre-oxidation [if not in-place] and add Activated Alumina and add non-hazardous landfill (for spent media) waste dis-
  posal. pH 8 <. pH :£ pH 8.3.
Add pre-oxidation [if not in-place] and add Activated Alumina with pH adjustment (to  pH 6) and corrosion control and add
  non-hazardous landfill (for spent media) waste disposal. Run length = 23,100 BV.                       ,
Add pre-oxidation [if not in-place] and add Activated Alumina with pH adjustment (to  pH 6) and corrosion control and add
  non-hazardous landfill (for spent media) waste disposal. Run length = 15,400 BV.
Add pre-oxidation [if not in-place] and add POU Reverse Osmosis.
Add pre-oxidation [if not in-place] and add POU Activated Alumina. (Finished water pH < pH  8.0)
  Pre-oxidation costs are given as a
separate component because they will
be incurred only by some systems. In
estimating national costs, it was
assumed that only systems without pre-
oxidation in place would need to add
the necessary equipment. It is expected
that no surface water systems will need
to install pre-oxidation for arsenic
removal and that fewer than 50% of the
ground water systems may need to
                        install pre-oxidation for arsenic
                        removal. Ground water systems without
                        pre-oxidation should ascertain if pre-
                        oxidation is necessary by determining if
                        the arsenic is present as As (III) or As
                        (V). Ground water systems with
                        predominantly As (V) will probably not
                        need pre-oxidation to meet the MCL.
2. What are the affordable treatment
technologies for small systems?

  The 13 treatment trains listed in Table
I.G-1 were compared against the
national-level affordability criteria to
determine the affordable treatment
trains. The Agency's national-level
affordability criteria were published in
the August 6,1998 Federal Register
(EPA, 1998h). In this notice, EPA
discussed the procedure for affordable

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules  and Regulations
 treatment technology determinations for
 the contaminants regulated before 1996.
   The preamble to the proposed arsenic
 rule described the derivation of the
 national-level affordability criteria (65
 FR 38888 at 38926; EPA, 2000i). A very
 brief summary follows: First an
 "affordability threshold" (i.e., the total
 annual household water bill that would
 be considered affordable) was
 calculated. The total annual water bill
 includes costs associated with water
 treatment, water distribution, and
 operation of the water system. In
 developing the threshold of 2.5%
 median household income, EPA
 considered the percentage of median
 household income spent by an average
 household on comparable goods and
                         services and on cost comparisons with
                         other risk reduction activities for
                         drinking water such as households
                         purchasing bottled water or a home
                         treatment device. The complete
                         rationale for EPA's selection of 2.5% as
                         the affordability threshold is described
                         in "Variance Technology Findings for
                         Contaminants Regulated Before 1996"
                         (EPA, 19981).
                           The Variance Technology Findings
                         document also describes tile derivation
                         of the baselines for median household
                         income, annual water bills, and annual
                         household consumption. Data from the ,
                         Community Water System Survey
                         (CWSS) were used to derive the annual
                         water bills and annual water
                         consumption values for each of the
 three small system size categories. The
 Community Water System Survey data
 on zip codes were used with the 1990
 Census data on median household
 income to develop the median
 household income values for each of the
 three small-system size categories. The
 median household-income values used
 for the affordable technology
 determinations are not based on the
 national median income. The value for
 each size category is a national median
 income for communities served by small
 water systems within that range. Table
 I.G—2 presents the baseline values for
, each of the three small-system size
 categories. Annual water bills and
 median household income are based on
 1995 estimates.
                         TABLE I.G-2.—BASELINE VALUES FOR SMALL SYSTEMS CATEGORIES
System size category
(population served)
25-500 	
501-3,300 	
3,300-10,000 ....





Annual household con-
sumption
(1000gallons/yr)
72
74
77
Annual water bills
($/yr)
. $211
184
181
Median household in-
come
($)
$30,785
27,058
27,641
  For each size category, the threshold
value was determined by multiplying
the median household income by 2.5%.
The annual household water bills were
subtracted from this value to obtain the
available expenditure margin. Projected
treatment costs will be compared
against the available expenditure margin
to determine if there are affordable
compliance technologies for each size
category. The available expenditure
margin for the three size categories is
presented in Table I.G—3.
                         TABLE   l.G-3—AVAILABLE  EXPENDI-
                           TURE   MARGIN  FOR  AFFORDABLE
                           TECHNOLOGY DETERMINATIONS
System size cat-
egory
(population
served)
25-500 	
501-3,300 	
3,301-10,000 ....
Available expenditure
margin
($/household/year)
559
492
510
                          The size categories specified in
                        SDWA for affordable technology
                        determinations are different than the
size categories typically used by EPA in
the Economic Analysis. A weighted
average procedure was used to derive
design and average flows for the 25-500
category using design and average flows
from the 25-100 and 101-500
categories. A similar approach was used
to derive design and average flows from
the 501-1000 and 1001-3300 categories
for the 501-3300 category. The Variance
Technology Findings document (EPA,
19981) describes this procedure in more
detail. Table I.G-4 lists the design and
average flows for the three size
categories.
      TABLE I.G-4— DESIGN AND AVERAGE DAILY FLOWS USED FOR AFFORDABLE TECHNOLOGY DETERMINATIONS

25-500 	
501-3,300 	
3,301-10,000 	

" System size category
(population served)




Design flow
(mgd)
0058
050
1 8

Average flow
(mgd)
0 015
0 17
0 70

  Capital and operating and
maintenance costs were derived for each
treatment train using the flows listed
previously and the cost equations in the
Technology and Cost Document. Several
conservative assumptions were made to
derive the costs. The influent arsenic
concentration was assumed to be 50 ug/
L, which was the MCL for arsenic prior
to this rule. The treatment target was 8
Ug/L, which is 80% of the MCL. Thus,
little blending could be performed to
                        reduce costs. Capital costs were
                        amortized using the 7% interest rate
                        preferred by OMB for benefit-cost
                        analyses of government programs and
                        regulations rather than a 3% interest
                        rate.
                          The annual system treatment cost in
                        dollars per year was converted into a
                        rate increase using the average daily
                        flow. The annual water consumption
                        values listed in Table I.G—2 were
                        multiplied by 1.15 to account for water
lost due'to leaks. Since the water lost to
leaks is not billed, the water bills for the
actual water used were adjusted to cover
this lost water by increasing the
household consumption. The rate
increase in dollars per thousand gallons
used was multiplied by the adjusted
annual consumption to determine the
annual cost increase for the household
for each treatment train. Several
comments on affordability presented
household cost increases that were

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              Federal Register/Vol. 66, No. 14/Monday,  January 22, 2001/Rules  and Regulations         6987
derived by dividing the annual system
cost by the number of households. That
is an inappropriate method because
residential customers would not only be
paying for the water that they use, but
also all the water used by non-
residential customers of the system..
  Of the 13 treatment trains in Table
I.G—1, the ones identified in Table I.G—
5 are deemed to be affordable for
                         systems serving 25—500 people as the
                         annual household cost was below the
                         available expenditure margin. The two
                         trains using coagulation-assisted
                         microfiltration are not affordable for this
                         size category. All 13 treatment trains are
                         deemed to be affordable for systems
                         serving 501-3,300 and 3,301-10,000
                         people and are presented in Table I.G-
6. Centralized compliance treatment
technologies include ion exchange,
activated alumina, modified
coagulation/filtration, modified lime
softening, and oxidation/filtration (e.g.
greensand filtration) for source waters
high in iron. In addition, POU and POE
devices are also compliance technology
options for the smaller systems.
    TABLE l.G-5.— AFFORDABLE COMPLIANCE TECHNOLOGY TRAINS FOR SMALL SYSTEMS WITH POPULATION 25-500
   Train No.
                                        Treatment Technology Trains
9 ...

10,

11 ,

12 ,
13 ,
Add pre-oxidation [if not in-place] and modify in-plaoe Lime Softening (pH > 10.5) and modify corrosion control.
Add pre-oxidation [if not in-place] and modify in-place Coagulation/Filtration and modify corrosion control.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal. Sulfate level £ 20 mg/L.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal.  Sulfate level: 20 mg/L < sulfate <
  50 mg/l.
Add Oxidation/Filtration (Greensand) (20:1 iron: arsenic) and add POTW for backwash stream.
Add pre-oxidation [if not in-place] and add Activated Alumina and add non-hazardous landfill (for spent media) waste dis-
  posal. pH 7  10.5) and modify corrosion control.
Add pre-oxidation [if not in-place] and modify in-place Coagulation/Filtration and modify corrosion control.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal. Sulfate level < 20 mg/L.
Add pre-oxidation [if not in-place] and add Anion Exchange and add POTW waste disposal.  Sulfate level: 20 mg/L < sulfate <
  50 mg/l.
Add pre-oxidation [if not in-place] and add Coagulation Assisted Microfiltration  with corrosion  control and add mechanical
  dewatering/non-hazardous landfill waste disposal.
Add pre-oxidation [if not in-place] and add Coagulation Assisted Microfiltration with corrosion control and add non-mechanical
  dewatering/non-hazardous landfill waste disposal.
Add Oxidation/Filtration (Greensand) (20:1 iron: arsenic) and add POTW for backwash stream.
Add pre-oxidation [if not in-place]  and  add Activated Alumina and add non-hazardous landfill (for spent media) waste dis-
  posal. pH 7 
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Federal  Register/Vol. 66, No.  14/Monday, January  22,  2001/Rules and Regulations
Erevisions of SDWA are narrowly
 jcused on addressing those rare
circumstances where some unusual
characteristic of the source water
available to a system will result in less
effective performance of the BAT.
Exemptions may be granted in
accordance with section 1416(a) of
SDWA and EPA's regulations.
Exemptions are designed to provide a
system facing compelling
circumstances, such as economic
hardship, additional time to come into
compliance.
  Under section 1415(a)(l)(A) of the
SDWA, a State that has primary
enforcement responsibility (primacy), or
EPA as the primacy agency, may grant
variances from MCLs to those public
water systems of any size that cannot
comply with the MCLs because of
characteristics of the water sources. The
primacy agency may grant general
variances to a system on condition that
the system install the best available
technology, treatment techniques, or
other means, and provided that
alternative sources of water are not
reasonably available to the  system. At
the time this type of variance is granted,
the State must prescribe a schedule for
compliance with its terms and may
require the system to implement
additional control measures.
Furthermore, before EPA or the State
may grant a general variance, it must
find  that the variance will not result in
an unreasonable risk to health (URTH)
to the public served by the  public water
system.
  Under section 1413(a)(4), States that
choose to issue general variances must
do so under conditions, and in a
manner, that are no less stringent than
section 1415. Of course, a State may
adopt standards that are more stringent
than the EPA's standards. EPA specifies
BATs for general variance purposes.
EPA may identify as BAT different
treatments under section 1415 for
variances other than the BAT under
section 1412 for MCLs. The BAT
findings for section 1415 may vary
depending on a number of factors,
including the number of persons served
by the public water system, physical
conditions related to engineering
feasibility, and the costs of compliance
with MCLs. In this final rule, EPA is not
specifying different BAT for variances
under section 1415(a).
  Under section 1416(a), EPA or a State
may  exempt a public water system from
any requirements related to an MCL or
treatment technique of an NPDWR if it
finds that: (1) Due to compelling factors
(which may include a variety of
"compelling" factors, including
economic factors such as qualification
                         of the PWS as serving a disadvantaged
                         community), the PWS is unable to
                         comply with the requirement or
                         implement measure to develop an
                         alternative source of water supply; (2)
                         the exemption will not result in an
                         URTH; (3) the PWS was in operation on
                         the effective date of the NPWDR, or for
                         a system that was not in operation by
                         that date, only if no reasonable
                         alternative source of drinking water is
                         available to the new system; and (4)
                         management or restructuring changes
                         (or both) cannot reasonably result in
                         compliance with the Act or improve the
                         quality of drinking water.
                           If EPA or the State grants an
                         exemption to a public water system, it
                         must at the same time prescribe a
                         schedule for compliance (including
                         increments of progress or measures to
                         develop an alternative source of water
                         supply) and implementation of
                         appropriate control measures that the
                         State requires the system to meet while
                         the exemption is in effect. Under section
                         1416(b)(2)(A), the schedule prescribed
                         shall require compliance as
                         expeditiously as practicable (to be
                         determined by the State), but no later
                         than 3 years after the compliance date
                         for the regulations established pursuant
                         to section 1412(b)(10). For public water
                         systems serving 3,300 people or less and
                         needing financial assistance for the
                         necessary improvements, EPA or the
                         State may renew an exemption for one
                         or more additional two-year periods, but
                         not to exceed a total of six years, if the
                         system establishes that it is taking all
                         practicable steps to meet certain
                         requirements specified in the statute.
                         Thus, the maximum possible duration
                         of a small systems exemption is nine
                         years beyond the 5-year compliance
                         schedule specified in today's rule.
                           A public water system shall not be
                         granted an exemption unless it can
                         establish that either: (1) The system
                         cannot meet the standard without
                         capital improvements that cannot be
                         completed prior to the date established
                         pursuant to section 1412(b)(10); (2) in
                         the case of a system that needs financial
                         assistance  for the necessary
                         implementation, the system has entered
                         into an agreement to obtain financial
                         assistance pursuant to section 1452 or
                         any other Federal or State program; or
                         (3) the system has entered into an
                         enforceable agreement to become part of
                         a regional public water system.
                           EPA believes that exemptions will be
                         an important tool to help States address
                         the number of systems needing financial
                         assistance to achieve compliance with
                         the arsenic rule (and other rules) with
                         the available supply of financial
                         assistance. About 2,300 CWSs and about
1,100 NTNCWSs will need to install
treatment to achieve compliance with
today's final rule. CWSs and not-for-
profit NTNCWSs are eligible for
assistance from the Drinking Water State
Revolving Fund (DWSRF). Between its
inception in Federal Fiscal Year 1997
and June 2000, the DWSRF program has
provided assistance to about 1,100
systems. Given the many competing
demands being placed oh financial
assistance programs, the ability to
extend the period of time  available for
a system to receive financial assistance
will provide important flexibility for
States and systems. Exemptions provide
an opportunity to extend the period of
time during which a system can achieve
compliance, thus providing needy
systems with additional time to qualify
for financial assistance. Under today's
action, all systems have 5  years to
achieve compliance. Exemptions for an
additional 3 years can be made available
to qualified systems. For those qualified
systems serving 3,300 persons or less,
up to 3 additional 2-year extensions to
the exemption are possible, for a total
exemption duration of 9 years. When
added to the 5 years provided for
compliance by the rule, this allows up
to 14 years for small systems serving up
to 3,300 people to achieve compliance.
  EPA will issue guidance in the near
future on considerations involved in
granting exemptions under the arsenic
rule, including making findings of no
URTH where exemptions are offered.
I. What Analytical Methods are
Approved for Compliance Monitoring of
Arsenic and What are the  Performance
Testing Criteria for Laboratory
Certification ?

1. Approved Analytical Methods
  Today's rule lists four analytical
technologies that are approved for
compliance determinations of arsenic at
the MCL of 0.01 mg/L (see Table I.I-l).
As noted in the June 22, 2000 proposed
rule (65 FR 38888, EPA, 20001), the
methods listed in Table I.I-l are the
same analytical technologies that were
approved for arsenic when the MCL was
0.05 mg/L, with the exception of the
methods that use Inductively Coupled
Plasma Atomic Emission Spectroscopy
(ICP-AES) measurement technology.
EPA is withdrawing two ICP-AES
methods (EPA Method 200.7 and SM
3120B) because their detection limits
(0.008 mg/L and 0.050 mg/L
respectively) are too high to reliably
determine compliance with an MCL of
0.01 mg/L. In the June 2000 proposed
rule, EPA noted that the ICP-AES
methods were rarely used  to obtain
laboratory certification when analyzing

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              Federal Register /Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                      6989
 low level challenge samples for arsenic.
 Therefore, we believe withdrawal of the
 availability of the ICP-AES methods for
 drinking water will not affect laboratory  methods, and today's final rule amends
 capacity. EPA did not receive any        the CFR to effect this withdrawal.
 adverse comment on the proposal to
 compliance determinations of arsenic in  withdraw approval of these two

       TABLE 1.1-1.—APPROVED ANALYTICAL METHODS (40 CFR 141.23) FOR ARSENIC AT THE MCL OF 0.01 MG/L
Methodology
Inductively Coupled Plasma Mass Spectroscopy (ICP-MS) 	
Stabilized Temperature Platform Graphite Furnace Atomic Absorption (STP-GFAA) 	
Graphite Furnace Atomic Absorption (GFAA) 	
Gaseous Hydride Atomic Absorption (GHAA) 	 '.. 	

Reference method
200 8 (EPA)
200 9 (EPA)
311 3B (SM) D-2972
93C (ASTM)
3114B (SM) D 2972
93B (ASTM)
 2. Performance Testing Criteria for
 Laboratory Certification
   For purposes of drinking water
 laboratory certification, the Agency
 specifies pass/fail (acceptance) limits for
 a successful analysis of the required
 annual challenge sample, i.e., a
 performance evaluation (PE) or
 performance testing (FT) sample. These
 acceptance limits have been historically
 derived using one of two different
 approaches:
   (a) Variable acceptance limits uniquely
 derived for each PE study from a regression
 analysis of the performance of all laboratories
 that participate in that PE-study, or
   (b) Fixed acceptance limits derived from a
 regression analysis of the laboratory PE
 sample analysis results in several PE studies.
   Variable acceptance limits are
 analogous to "grading on a curve"
 which means that the pass/fail limit can
 vary from PE study to study depending
 on the quality and experience of the
 laboratories participating in the study.
 These limits are specified in the CFR as
 plus or minus two sigma (2 ) where
 sigma is the standard deviation of the
 analytical results reported in the PE
 study. EPA specifies variable acceptance
 limits when a method or measurement
 technology is new enough that an
 insufficient number of experienced
 laboratories have participated in the PE
 studies or when only a few PE studies
 have been conducted.
   EPA prefers the fixed acceptance
 limits approach because it is the better
 indicator of laboratory performance
 averaged over time and several different
 concentrations of the target analyte.
 Fixed limits also provide the same pass/
 fail benchmark in each PE study. As
 discussed in the proposed rule, EPA has
 a large base of PE-study data from which
 to derive a practical quantitation limit
 (PQL) and a fixed PE-study acceptance
 limit for arsenic. Thus, as proposed in
the June 2000 rule, today's final rule
 amends § 141.23(k)(3)(ii) to specify an
 acceptance limit of ±30% in PE (now
known as FT) samples spiked with
 arsenic at the PQL of 0.003 mg/L or
 greater. For a brief discussion of the
 derivation of the PQL for arsenic, see
 section ni.B.l, What is the feasible
 level?

 /. How Will I Know if My System Meets
 the Arsenic Standard?

  This section summarizes changes to
 the arsenic monitoring and compliance
 determination requirements. The
 Agency is also changing the methods •
 used by a system to determine if it is in
 violation of an MCL for all of the
 regulated inorganic contaminants
 (IOCs), synthetic organic contaminants
 (SOCs), and volatile organic
 contaminants (VOCs). See section I.J.3.
 for more information regarding violation
 determinations.
 1. Sampling Points and Grandfathering
 of Monitoring Data
  In today's rule, the Agency is moving
 the requirements associated with
 arsenic into § 141.23(c) making it
 consistent with the requirements for
 IOCs regulated under the standardized
 monitoring framework. All CWS and
 NTNCWSs must monitor for arsenic at
 each entry point to the distribution
 system. In some cases, § 142.11(1)
 allows States to establish regulations
 that "vary from comparable regulations
 set forth in part 141 of this chapter, and
 demonstrate that any different State
 regulation is at least as stringent as the
 comparable regulation contained in part
 141." Using this authority, States may
 allow systems to collect samples at an
 alternative location  (e.g., the first point,
 of drinking water consumption in the
 distribution system) if the State justifies
 in its primacy program that the
 alternative location is equally or more
 protective. States could implement the
 change in sampling  location once the
 primacy package is approved.
  The MCL compliance elements of the
rule become effective in 2006. Some*
ground water systems will collect
 samples to comply with the sampling
 requirements for all regulated IOCs
 (including arsenic) in 2005 in
 accordance with the State monitoring
 plan. This sampling event will satisfy
 the monitoring requirements for the
 2005-2007 compliance period, but the
 revised arsenic MCL will not become
 effective until 2006. Ground water
 systems may use grandfathered data
 collected after January 1, 2005 to satisfy
 the sampling requirements for the 2005-
 2007 compliance period. The
 grandfathered data must report results
 from analytical methods approved for
 use by this final rule (e.g., the method
 detection limit must be substantially
 less than the revised MCL of 10 u,g/L).
 Data collected using unacceptably high
 detection levels (e.g. using ICP-AES
 technology)  will not be eligible for
 grandfathering. If the grandfathered data
 are used to comply with the 2005-2007
 compliance period and the analytical
 result is greater than 10 u,g/L, that
 system will be in violation of the
 revised MCL on the effective date of the
 rule. If systems do not use grandfathered
 data, then surface water systems must
 collect a sample by December 31, 2006
 and ground water systems must collect
 a sample by December 31, 2007 to
 demonstrate compliance with the
 revised MCL.
  2. Compositing of Samples
  Compositing of samples is allowed
 under the standardized monitoring
 framework. The States that allow
 compositing of samples use the
 methodology in the Phase II/V
 regulations as specified in
 § 141.23(a)(4). In today's rule, CWSs and
 NTNCWSs will still be allowed to
 composite samples; however, if arsenic
 is detected above one-fifth of the revised
MCL (2 (ig/L), then a follow-up sample
 must be taken within 14 days at each
 sampling point included in the
 composite as described in § 141.23(a)(4).
Compliance  determinations must be
based on the follow up sample result.
Water systems may composite samples
 (temporally and spatially) until a

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Federal Register/Vol. 66, No.  14/Monday, January  22,  2001/Rules and Regulations
contaminant (arsenic or any other
contaminant regulated in the Phase n/V
regulations) is detected. Once a
contaminant has been detected in a
composited sample at concentrations
greater than one-fifth of the MCL, the
systemfs) must discontinue the practice
of compositing samples for all future
monitoring.
3. Calculation of Violations
  In today's rule, the Agency is
clarifying the compliance determination
section for the lOCs  (including arsenic),
the SOCs, and the VOCs in §§ I4l.23(i),
141.24(f)(15), and 141.24(h)(ll),
respectively.
  Systems will determine compliance
based on the analytical result(s)
obtained at each sampling point. If any
sampling point is in violation of an
MCL, the system is in violation. For
systems monitoring more than once per
year, compliance with the MCL is
determined by a running annual average
at each sampling point. Systems
monitoring annually or less frequently
whose sample result exceeds the MCL
for any inorganic contaminant in
§ 141.23(c), or whose sample results
exceeds the trigger level for any organic
contaminant listed in § 141.24(f) or
§ 141.24(h), must revert to quarterly
sampling for that contaminant the next
quarter. Systems are only required to
conduct quarterly monitoring at the
entry point to the distribution system at
which the sample was collected and for
the specific contaminant that triggered
the system into the increased
monitoring frequency. Systems triggered
into increased monitoring will not be
considered in violation of the MCL until
they have completed one year of
quarterly sampling. If any sample result
will cause the running annual average to
exceed the MCL at any sampling point
(i.e., the analytical result is greater than
four times the MCL), the system is put
of compliance with the MCL
immediately. Systems may not monitor
more frequently than specified by the
State to determine compliance unless
they have applied to and obtained
approval from the State. If a system does
not collect all required samples when
compliance is based on a running
annual average of quarterly samples,
compliance will be based on the
running annual average of the samples
collected. If a sample result is less than
the method detection limit, zero will be
used to calculate the annual average.
States have the discretion to delete
results of obvious sampling or analytic
errors.
  States still have the flexibility to
require confirmation samples for
positive or negative results. States may
                         require more than one confirmation
                         sample to determine the average
                         exposure over a 3-month period.
                         Confirmation samples must be averaged
                         with the original analytical result to
                         calculate an average over the 3-month
                         period. The 3-month average must be
                         used as one of the quarterly
                         concentrations for determining the
                         running annual average. The running
                         annual average must be used for
                         compliance determinations.
                           The rule requires that monitoring be
                         conducted at all entry points to the
                         distribution system. However, the State
                         has discretion to require monitoring and
                         determine compliance based on a case-
                         by-case analysis of individual drinking
                         water systems. The Agency cannot
                         address all of the possible outcomes that
                         may occur at a particular water system;
                         therefore, EPA encourages drinking
                         water systems to inform State regulators
                         of their individual circumstances. Some
                         systems have implemented elaborate
                         plans including targeted, increased
                         monitoring that is more representative
                         of the average annual contaminant
                         concentration to which individuals are
                         being exposed (some States use a time-
                         weighted or flow-weighted averaging
                         approach to determine compliance).
                           Some States require that systems
                         collect samples from wells that only
                         operate for one month out of the year
                         regardless of whether they are operating
                         during scheduled sampling times. The
                         State may determine compliance based
                         on several factors including, but not
                         limited to, the quantity of water
                         supplied by a source, the duration of
                         service of the source, and contaminant
                         concentration.

                         4. Monitoring and Compliance Schedule
                           Systems must begin complying with
                         the clarified monitoring and compliance
                         determination provisions of today's rule
                         effective January 22, 2004 for inorganic,
                         volatile organic, and synthetic organic
                         contaminants. These requirements
                         clarify that for §§ 141.23(i)(2),
                         141.24(f)(15)(ii), and 141.24(h)(ll)(ii)
                         compliance will be determined based on
                         the running annual average of the initial
                         MCL exceedance and any subsequent
                         State-required confirmation samples. In
                         addition, the clarifications address
                         calculation of compliance when a
                         system fails to collect the required
                         number of samples. Compliance
                         (determined by the average
                         concentration) will be based on the total
                         number of samples collected. Some
                         systems, have purposely not collected
                         the required number of quarterly
                         samples and only incurred monitoring
                         and reporting violations for the
                         uncollected samples. Any systems that
avoid required sampling will calculate
MCL violations by dividing the summed
samples by the actual number of
samples taken. This clarification did not
change §§ 141.23(i)(l) and
141.24(h)(ll)(i) which allow systems to
use zero for all non-detects when
calculating MCL violations. In addition,
if any one sample would cause the
annual average to be exceeded, the
system is out of compliance
immediately.
  Also in today's rule, the Agency is •
moving the arsenic monitoring and
compliance requirements from
§§ 141.23(1) to (q) to the standardized
monitoring framework in § 141.23 for
other lOCs. States may grant systems
nine-year monitoring waivers using the
conditions in § 141.23(c) for arsenic.
The criteria for developing a State
waiver program were published in the
Phase II/V rules, and as  noted in section
IV.B. of this rule, the Agency is not
modifying the waiver criteria in today's
rulemaking. However, the revised
arsenic rule is not effective until January
23, 2006 (see section I.M. for a more
detailed discussion regarding the
effective date of the rule.). States and
utilities supported moving arsenic into
the standardized monitoring framework.'
  To use compliance data after the
effective date of the 10 ug/L MCL,
systems must use an approved method
with a method detection limit
substantially less than the revised
arsenic MCL of 10 ug/L. This means that
after December 31,  2006 and December
31, 2007 all surface water systems and
groundwater systems, respectively, may
not use analytical methods using the
ICP-AES technology, because the
detection limits for these methods are 8
Hg/L or higher. This restriction means
that two ICP-AES methods that were
approved when the MCL was 50 |ig/L
may not be used for compliance
determinations at the revised MCL of 10
Ug/L. The two methods are EPA Method
200.7 and SM 3120B. Prior to 2005,
systems may have compliance  samples
analyzed with these less sensitive
methods. However, EPA advises
systems to have compliance  samples
analyzed and reported at the laboratory
minimum detection limit.
  If sampling demonstrates that arsenic
exceeds the MCL, a CWS will be
triggered into quarterly monitoring for
that sampling point "in  the next quarter
after the violation occurred." The State
may allow the system to return to'the
routine monitoring frequency when the
State determines that the system is
reliably and consistently below the
MCL. However, the State cannot make  a
determination that the system is reliably
and consistently below the MCL until a

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              Federal  Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                      6991
 minimum of two consecutive ground
 water, or four consecutive surface water
 samples, have been collected
 (§141.23(c)(8)).
   The Agency is not promulgating a
 reduced monitoring approach similar to
 the revised radionuclides final rule
 published on December 7, 2000 (65 FR
 76708; EPA, 2000p). As noted above, all
 systems have to collect IOC samples
 once a year or once every three years,
 depending on the source water, unless
 they have a waiver. The Agency believes
 that very few States issue waivers for •
 lOCs because the analysis is relatively
 inexpensive'and most lOCs are naturally
 occurring elements that may be found in
 concentrations above the method
 detection limit. Therefore, the majority
 of systems must collect routine samples
 for the regulated lOCs; and most of the
 methods used for analysis of these
 contaminants will measure arsenic as
 well as antimony, beryllium, cadmium,
 chromium, copper, and nickel.

 1C. What do I Need to tell My Customers?
 1. Consumer Confidence Reports
   a. General requirements. In 1998, EPA
 promulgated the Consumer Confidence
 Report Rule (CCR) (codified at 40 CFR
 part 141, subpart O), a final rule
 requiring community water systems to
 issue annual water quality reports to
 their customers (63 FR 44512; EPA,
 19981). The reports are due each year by
 July 1, and provide a snapshot of water
 quality over the preceding calendar
 year. The reports include information
 on levels of detected contaminants and
 if the system has violated an MCL or a
 treatment technique, must also include
 information on the potential health
 effects of contaminants from appendix
 A to subpart O. When they have such
 violations, systems must also include in
 their report an explanation of the
 violation and remedial measures taken
 to address it. The arsenic health effects
 language is currently required when
 arsenic levels exceed 25  ug/L, one-half
 the existing MCL of 50 ug/L, required
 under § 141.154(b).
  EPA is today retaining the health
 effects language for arsenic issued with
 the final CCR Rule and updating
 appendix A to subpart O to include the
 MCL and MCLG as revised in this rule,
 together with special arsenic-specific
 reporting requirements.
  In addition to the standard reporting
 of arsenic detects and arsenic MCL
violations, EPA is today finalizing a
requirement (proposed at § 141.154(b);
 finalized at § 141.154(0)  that CWSs that
 detect arsenic between the revised and
existing MCL (i.e., above 10 ug/L and up
to and including 50 ug/L) prior to the
 effective date for compliance with the
 revised MCL, include the CCR Rule
 health effects language in their reports.
 This action is required even though,
 technically, the systems are not in
 violation of the regulations. This
 requirement will be effective for the five
 years after promulgation, when systems
 are not yet required to comply with the
 revised MCL. Then, beginning January
 23, 2006, systems out of compliance
 must report violations of the revised
 arsenic MCL under § 141.153(d)(6) to
 the public.
   Based on stakeholder and commenter
 input, the Agency decided in the final
 CCR Rule that it would use authority
 granted in SDWA section
 1414(c)(4)(B)(vi) to require inclusion of
 health effects language for arsenic
 exceedances before the compliance date.
 That section allows the Administrator to
 require inclusion of health effects
 language for "not more than three
 regulated contaminants" other than
 those found to violate an MCL. The
 Agency used this authority  for total  '
 trihalomethanes in the Stage 1
 Disinfectants and Disinfection
 Byproducts Rule (63 FR 69390). The
 Agency is now using this same authority
 for arsenic, because it believes that it is
 important to provide customers with the
 most current understanding of the risk
 presented by this contaminant as soon
 as possible after establishing a new
 standard. This provision provides
 systems the flexibility to put this health
 effects information into context  and to
 explain to customers that the system is
 complying with existing standards.  .
  EPA modified the language it
 proposed on June 22, 2000 to reflect the
 MCL promulgated today and to clarify
 what language a system must include in
 its report. Systems subject to
 § 141.154(f) must begin including the
 arsenic health effects language in the
 report due by July 1, 2002.
  b.  Special informational statement. In
 addition, in the CCR Rule, the Agency
 decided to require that CCRs include
 additional information about certain
 contaminants, one of which was arsenic.
 As explained in the preamble to the
 CCR Rule (63 FR 44512 at 44514; EPA,
 1998i), because of commenters'
 concerns about the adequacy of the
 current MCL, EPA decided that systems
 that detect arsenic between 25 ug/L and
the current MCL must include some
 information regarding the arsenic
 standard (§ 141.154(b)). This    •,- . •
 informational statement is different
from the health effects language
required for an MCL violation. EPA
noted in the CCR rule and in the arsenic
proposal that the informational
 statement requirement would be deleted
 upon promulgation of a revised MCL.
   In view of the fact that EPA is today
 finalizing an MCL somewhat higher
 than the technologically feasible MCL,
 and that some commenters expressed
 concern about the risk that a higher-
 than-feasible MCL might present to
 certain consumers, EPA is today
 retaining and revising an existing
 § 141.154(b) requirement that systems
 which find arsenic below the MCL must
 provide additional information to their
 customers. EPA believes that consumers
 should be aware of the uncertainties
 surrounding the risks presented even by
 very low levels of arsenic.  While EPA
 addressed many of the sources of
 uncertainty in its risk analysis of arsenic
 in support of the final rule, several
 sources of uncertainty remain. Chief
 among these is the mode of action (i.e.,
 the shape of the dose-response curve).
 EPA continues to research the effects of
 arsenic (according to an arsenic research
 plan required by the 1996 SDWA
 Amendments and submitted to
 Congress) and should have a better
 understanding of these effects as the
 relevant research is completed. EPA
 believes that this uncertainty adequately
 justifies retaining the existing
 requirement to provide consumers with
 information about low levels of arsenic.
  The existing § 141.154(b) requirement
 is today updated in two ways. First, the
 arsenic level that triggers the additional
 information is reset from 25 ug/L (half
 the existing MCL) to 5 ug/L (half the
 revised MCL). In the preamble to the
 CCR Rule, we explained that "[many]
 commenters agreed that half the MCL
 would be an appropriate threshold for
 requiring additional risk-related
 information." EPA continues to believe
 that half the MCL is an appropriate
 trigger for special information about
 certain contaminants. Beginning with.
 the report due by July 1, 2002, CWSs
 that find arsenic above 5 ug/L and up to
 and including 10 ug/L must include
 § 141.154(b) special health information
 about arsenic in their consumer
 confidence reports.
  Second, the suggested text of the
 special information is updated. Rather
than stating that "EPA is reviewing the
 drinking water standard for arsenic
 . .  .," the statement announces clearly
that the consumer's water meets EPA's
new standard while also noting the cost-
benefit trade-off involved in setting that
standard. The suggested text further
notes that there are uncertainties
 (described in section III.F of this notice)
surrounding the risks of low levels of
arsenic. Systems retain the  flexibility, as
defined in the existing requirement, to

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Federal Register /Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
adjust this language in consultation
with the Primacy Agency.
2. Public Notification
  On May 4, 2000, EPA issued the final
Public Notification Rule (PNR) to revise
the minimum requirements that public
water systems must meet for public
notification of violations of EPA's
drinking water standards (65 FR 25982;
EPA, 2000e). Water systems must begin
to comply with the revised PNR
regulations on October 31, 2000 (if they
are in jurisdictions where the program
is directly implemented by EPA) or on
the date a primacy State adopts the new
requirements (not to exceed May 6,
2002). EPA's drinking water regulation
on arsenic affects public notification
requirements and amends the PNR as
part of its rulemaking.
  Today's final rule will require CWSs
and NTNCWSs to provide a Tier 2
public notice for arsenic MCL violations
and to provide a Tier 3 public notice for
violations of the monitoring and testing
procedure requirements. The new
arsenic MCL will become effective
January 23,2006.  CWSs and NTNCWSs
must provide public notification to
consumers for any violations after the
effective date of the revised arsenic
MCL. The PNR requires owners and
operators of public water systems to
give notice to persons they serve for all
violations when they are operating
under a variance or exemption (or
violate conditions of the variance or
exemption).
L. What Financial Assistance is
Available for Complying With This
Rule?
  There are two major sources of
Federal financial assistance available for
water systems: the Drinking Water State
Revolving Fund (DWSRF) and the Water
and Waste Disposal Loan and Grant
Program of the Rural Utilities Service
(RUS) of the U. S. Department of
Agriculture.
  The 1996 SDWA Amendments
authorized (i.e., approved spending)
$9.6 billion for the DWSRF program. To
date, Congress has appropriated (i.e.,
provided) $4.2 billion, which includes
$825 million for the program in Fiscal
Year 2001. By the end of September
2000, States had been awarded $3.2
billion in capitalization grants and, from
that, had provided more than $2.8
billion in assistance to eligible drinking
water systems. The Federal
capitalization grant, together with State
matching funds, is currently making
available about $1 billion per year.
States have considerable discretion in
designing their DWSRF program, and
have the option of offering special
                         assistance to systems that the State
                         considers to be disadvantaged. Special
                         assistance may include principal
                         forgiveness, a negative interest rate, an
                         interest rate lower than that charged to
                         non-disadvantaged systems, and
                         extended repayment periods of up to 30
                         years. Federal law allows DWSRF
                         assistance to be provided to water
                         systems of both public ownership and
                         private ownership, although some States
                         are unable or choose not to provide
                         assistance to privately owned systems.
                           EPA recognizes that public water
                         systems and States face a significant
                         challenge in implementing new
                         requirements that are needed to ensure
                         the continued provision of safe drinking
                         water. While the DWSRF program is
                         proving to be a significant source of
                         funding, it cannot be viewed as the  only
                         source of funding. It will take a
                         concerted effort on the part of Federal,
                         State and local governments, private
                         business, and utilities to address the
                         significant infrastructure needs
                         identified by public water systems.  In
                         order to ensure that the DWSRF
                         program is used to focus attention on
                         the highest priority needs, all States
                         must give priority to those drinking
                         water infrastructure improvement
                         projects that will have the greatest
                         public health benefit or ensure
                         compliance with SDWA. State DWSRF
                         programs are currently making loans
                         available to the highest ranked projects
                         on their lists and are also using a
                         portion of the grants to support other
                         important drinking water program
                         activities.
                           The RUS program is focused on
                         providing a safe, reliable water supply
                         arid wastewater treatment to residents of
                         rural America. The program offers a
                         combination of low interest loans and
                         grants to systems serving rural areas and
                         cities and towns of up to 10,000 persons
                         and which are publicly owned
                         (including Native American systems) or
                         operated as not-for-profit corporations.
                         In recent years the RUS program has
                         typically offered assistance totaling
                         about $1.3 billion per year, about 60%
                         of which is directed to drinking water
                         projects. Thus, about $780 million per
                         year is available for rural drinking water
                         systems from this program. Together
                         with the approximately $1 billion per
                         year being made available through the
                         DWSRF, this results in a total of about
                         $1.78 billion per year of Federal
                         financial assistance available for
                         drinking water.
                            Other Federal financial assistance
                         programs exist that may help systems
                         with SDWA compliance related
                         expenditures. However, these other
                         programs are not generally as large  or
focused on drinking water as are the
DWSRF and RUS programs. EPA's
Environmental Financial Advisory
Board has developed a "Guidebook of
Financial Tools" (EPA, 1999c), which
offers a comprehensive summary of
public and private programs and
mechanisms for paying for drinking
water and other environmental systems.
The handbook is available through
EPA's web site at: http://www.epa.gov/
efinpage/guidbk98/index.h tm.
  The Federal financial assistance
programs described previously clearly
face numerous, competing demands on
their resources. EPA's 1995 Drinking
Water Infrastructure Needs Survey
(EPA, 1997a) identified a total 20-year
need for all systems of $138.4 billion.
The single largest category of need
(accounting for over half of the total
need) is installation and rehabilitation
of transmission and distribution
systems. Treatment needs constitute the
second largest category of need,
accounting for over V* of total needs.
Storage and source rehabilitation and
development constitute the remaining
major categories of needs. Thus, systems
seeking financial assistance for
installation of arsenic treatment are
competing for resources with systems
seeking assistance for compliance with
other rules and with systems seeking
resources for basic  infrastructure repair
and replacement. In seeking to meet
these numerous and competing needs,
the Agency recognizes the importance of
priority setting for financial assistance
programs. Systems having the financial
capability to secure funding through the
capital markets should do so, leaving
the Federal financial assistance
programs to assist the truly needy
systems. Since the  demand for
assistance will likely outstrip the supply
of assistance, States may wish to
consider exemptions, which will
provide additional time for systems to
secure financial assistance.

M. What is the Effective Date and
Compliance Date for the Rule?
  In the proposed rule, EPA made a
finding that all small systems (i.e.,
systems serving 10,000 people or less)
would be granted a 2-year capital
improvement extension which extends
the MCL effective date for purposes of
compliance with the new MCL to
January 23, 2006. EPA proposed the 2-
year capital improvement extension for
small systems because of the time
required for systems to plan, finance,
design and construct new treatment
systems.
  Large systems were not provided this
additional time because of the greater
resources  these systems have to perform

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                                                                      6993
 capital improvements in a timely
 manner. However, upon consideration
 of information submitted by
 commenters, EPA has determined that
 large systems will also require an
 additional 2 years to complete the
 capital improvements necessary to
 comply with the arsenic MCL. While
 large systems (i.e.,  systems serving more
 than 10,000 people) do have greater
 resources to implement capital
 improvements, (e.g., engineering and
 construction management  staff to
 manage the projects), these systems
 generally also have more entry points to
 the distribution system that will require
 treatment.
  A number of treatment technologies
 are listed  as BAT for the proposed rule:
 ion exchange, activated alumina, reverse
 osmosis, modified  coagulation/
 filtration, modified lime softening and
 electrodialysis reversal. There are also
 several emerging technologies for
 arsenic removal, such as nanofiltration
 and granular ferric hydroxide. To ensure
 cost effective compliance with the
 arsenic MCL, systems will need to
 evaluate their treatment technology
 options as a first step. This planning
 step may include pilot studies with
 potential treatment systems, or it may be
 limited to an evaluation of the raw
 water characteristics. Systems choosing
 to conduct pilot testing may take a year
 or more to contract with vendors and to
 perform pilot testing.
  Once the planning step is completed
 systems must design and construct the
 treatment systems.  Design  and
 permitting of the treatment systems can
 take an additional year, and
 construction of the treatment system can
 take another year. Because systems will
 also need  time to: obtain funding, obtain
 local government approval of the
 project, or acquire the land necessary to
 construct these technologies, it is likely
 that most large systems will need
 additional time beyond the three-year
 effective date for compliance with the
 new MCL that EPA proposed.
  Based upon these considerations, EPA
 determined, in accordance with section
 1412(b)(10) of SDWA, that the
 compliance date for the new arsenic
 MCL, regardless of system  size, will be
 5 years from the date of promulgation of
 the standard. See section I.H. for more
 information regarding variance and
 exemptions.
 N. How Were Stakeholders Involved in
 the Development of This Rule?
  EPA met extensively with a  broad
range of groups during the  development
 of the arsenic proposal, both at EPA-
 sponsored meetings and at other
 organizations' meetings. The Federal
 Register published notices about EPA's
 arsenic meetings, and we made
 conference call lines available for those
 who chose not to attend in person. In
 addition, EPA notified people about
 regulatory actions via the three Federal
 Register notices (proposal, notice of
 data availability, and correction notice),
 by mail and e-mail. Over 600 people
 asked to be on the mailing list during
 the regulatory development period.
   EPA held arsenic stakeholders
 meetings September  11-12,1997 in
 Washington, DC; February 25,1998 in
 San Antonio, Texas; May 5,1998 in
 Monterey, California; June 2-3,1999 in
 Washington, DC; and August 9, 2000 in
 Reno, Nevada. For each of these
 meetings we invited representatives of
 States, tribal groups,  associations,
 utilities and environmental groups. The
 docket for the proposed rule (W-99-16)
 contains the meeting discussion papers,
 agendas, participants lists, presentation
 materials, and executive meeting
 summaries. All the meeting materials,
 except the presentations and attendance
 list, are also available on EPA's arsenic
 in drinking water web page,
 www.epa.gov/safewater/arsenic.html.
  EPA also presented sessions on
 drinking water regulations (including
 arsenic) at the National Indian Health
 Board Annual Conference in Anchorage,
 Alaska in September 1998. The Inter-
 tribal Council of Arizona hosted a
 consultation for EPA with Tribes
 February 24-25,1999 in Las Vegas, NV
 at which an overview of the proposed
 arsenic regulation was presented. EPA
 also conducted a series of workshops at
 the Annual Conference of the National
 Tribal Environmental Council May 18—
 20,1999 in Eureka, California. The
 Council distributed materials and
 gathered comments on EPA's drinking
 water regulations from all recognized
 Tribal governments.
  In addition to the general stakeholder
 meetings, EPA also had targeted
 meetings with States' representatives. In
 May 1999, State regulatory
 representatives from California, Nevada,
Michigan, Illinois, Texas, Indiana, New
 Mexico, and Louisiana joined  EPA in a
 discussion on the development of the
 cost of compliance decision tree. In
August 1999, State regulatory
representatives from Illinois, Indiana,
New Mexico, and Texas joined EPA
workgroup members in a discussion of
the NRC study use, review of the
 occurrence work, treatment technology
update, and regulatory changes. The
interaction from these meetings with
State colleagues improved the
regulatory language and the preamble.
  In May 2000, EPA presented a
summary of the rule to the National
 Governors' Association. In May 2000,
 EPA held a dialogue in Washington, DC
 with State officials and the associations
 that represent elected officials.
 Presentations on arsenic and other
 drinking water rules under development
 were given to representatives of the
 National Association of Towns and
 Townships, National Governors'
 Association, National Association of
 Counties, National League of Cities,
 Association of State Drinking Water
 Administrators, Environmental Council
 of the States, Florida Department of
 Environmental Protection, Drinking
 Water Section, Association of State and
 Territorial Health Officials, and the
 International City/County Management.
 The purpose of the dialogue was to
 consult on the expected compliance  and
 implementation costs  of these rules for
 State, county, and local governments
 and gain a better understanding of the
 views of representatives of State,
 county, and local governments and their
 elected officials. The meeting materials
 are in the docket for the proposed rule.
  In addition to the various special
 meetings and discussions mentioned
 previously, EPA representatives
 delivered arsenic regulatory
 development presentations at a variety
 of meetings held by other organizations.
 These included the American Water
 Works Association (AWWA)  Inorganic
 Contaminants Meetings in February,
 1998 in San Antonio, TX and in
 February, 2000 in Albuquerque, NM;
 meetings of the Association of State
 Drinking Water Administrators
 (ASDWA) in February and October
 1998, March and October 1999, and in
 October 2000; meetings of the
 Association  of Metropolitan Water
 Agencies (AMWA) in January and
 March 1998; and a meeting of the
 Association of California Water
 Agencies in March 1998. EPA also gave
 several technical presentations and
 regulatory updates at the AWWA annual
 meetings as well as at the AWWA Water
 Quality and Technology Conferences in
 1998,1999, and 2000.  EPA participated
 in the Society of Toxicology arsenic
 workshop in Philadelphia, PA in March
 2000. Finally, EPA co-sponsored and
 participated in the four International
 Conferences on Arsenic Exposure and
 Health Effects in July 1993, June 1995,
July 1998, and June 2000.
  After the proposal was published in
the Federal Register, EPA notified all
persons on its electronic mailing list  for
the arsenic rule of its availability and
 sent information. The Regulatory Impact
Analysis went on the arsenic  web page
a week after the proposal publication.
Similarly, EPA also notified the
individuals and organizations on this

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mailing list about the NODA and the
correction notice.
II. Statutory Authority
  Section 1401 of SDWA requires a
"primary drinking water regulation" to
specify a MCL if it is economically and
technically feasible to measure the
contaminant and to include testing
procedures to insure compliance with
the MCL and proper operation and
maintenance. An NPDWR that
establishes an MCL also lists the
technologies that are feasible to meet the
MCL, but systems are not required to
use the listed technologies (section
1412(b)(3)(E)(i)). As a result of the 1996
amendments to SDWA, when issuing a
NPDWR, EPA must also list affordable
technologies that achieve compliance
with the MCL or treatment technique for
three categories of small systems: those
serving 10,000 to 3301 persons, 3300 to
501 persons, and 500 to 25 persons. EPA
can list modular (packaged) and POE
and POU treatment units for the three
small system sizes, as long as the units
are maintained by the public water
system or its contractors. Home units
must contain mechanical warnings to
notify customers of problems (section
                         the risk from other contaminants or the
                         technology would interfere with the
                         treatment of other contaminants (section
                         1412(b)(5)). Second, if benefits at the
                         feasible level would not justify the
                         costs, EPA may propose and promulgate
                         an MCL "that maximizes health risk
                         reduction benefits at a cost that is •
                         justified by the benefits" (section
  In section 141 2 (b) (12) (A) of SDWA, as
amended August 6, 1996, Congress
directed EPA to propose a national
primary drinking water regulation for
arsenic by January 1, 2000 and issue the
final regulation by January 1, 2001. At
the same time, Congress directed EPA to
develop a research plan by February 2,
1997 to reduce the uncertainty in
assessing health risks from low levels of
arsenic and conduct the research in
consultation with the NAS, other
Federal agencies, and interested public
and private entities. The amendments
allowed EPA to enter into cooperative
agreements for research. On October 27,
2000, Public Law 106-377, the bill
which included Fiscal Year 2001
appropriations for EPA, amended the
statutory deadline to direct EPA to
promulgate a final arsenic standard by
no later than June 22, 2001.
  Section 1412(a)(3) requires EPA to
propose an MCLG simultaneously with
the NPDWR. The MCLG is defined in
section 1412(b)(4)(A) as "the level at
which no known or anticipated adverse
effects on the health of persons occur
and which allows an adequate margin of
safety." Section 1412(b)(4)(B) specifies
that each NPDWR will specify an MCL
as close to the MCLG as is feasible, with
two exceptions added in the 1996
amendments. First, the Administrator
may establish an MCL at a level other
than the feasible level if the treatment
to meet the feasible MCL would increase
                           When proposing an MCL, EPA must
                         publish, and seek public comment on,
                         the health risk reduction and cost
                         analyses (HRRCA) of each alternative
                         maximum contaminant level considered
                         (section 1412(b)(3)(C)(i)).  This includes
                         the quantifiable and nonquantifiable
                         benefits from reductions in health risk,
                         including those from removing co-
                         occurring contaminants (not counting
                         benefits resulting from compliance with <
                         other proposed or final regulations),
                         costs of compliance (not counting costs
                         resulting from other regulations), any
                         increased health risks (including those
                         from co-occurring contaminants) that
                         may result from compliance,
                         incremental costs and benefits of each
                         alternative MCL considered, and the
                         effects on sensitive subpopulations  (e.g.,
                         infants, children, pregnant women,
                         elderly, seriously ill, or other groups at
                         greater risk). EPA must analyze the
                         quality and extent of the information,
                         the uncertainties in the analysis, and the
                         degree and nature of the risk. As
                         required by the statute, EPA issued  a
                         HRRCA for arsenic (EPA,  20001) as
                         section XIII of the June 22, 2000 arsenic
                         proposal (65 FR 38888 at  38957).
                           The 1996 amendments  also require
                         EPA to base its action on the best
                         available, peer-reviewed science and
                         supporting studies and to present health
                         effects information to the  public in an
                         understandable fashion. To meet this
                         obligation, EPA niust specify, among
                         other things,
                         peer-reviewed studies known to the
                         Administrator that support, are directly
                         relevant to, or fail to support any estimate of
                         public health effects and the methodology
                         used to reconcile inconsistencies in the
                         scientific data (section!412(b)(3)(B)(v)).
                           Section 1413(a)(l) allows EPA to grant
                         States primary enforcement
                         responsibility (primacy) for NPDWRs
                         when EPA has determined that the State
                         has adopted regulations that are no less
                         stringent than EPA's. States must adopt
                         comparable regulations within two
                         years of EPA's promulgation of the final
                         rule, unless a two-year extension is
                         granted. State primacy also requires,
                         among other things, adequate
                         enforcement (including monitoring  and
                         inspections) and reporting. EPA must
                         approve or deny State applications
within 90 days of submission (section
1413(b)(2)). In some cases, a State
submitting revisions to adopt an
NPDWR has primacy enforcement
authority for the new regulation while
EPA action on the revision is pending
(section 1413(c)). Section 1451(a) allows
EPA to grant primacy enforcement
responsibility to Federally recognized
Indian Tribes, providing grant and
contract assistance, using the
procedures applied to States.  .     .  ' >

IIL Rationales for Regulatory Decisions

A. What Is the MCLG? '
  The proposed rule suggested that an
MCLG of zero be established for arsenic
in view of the fact that we are currently
unable to specify a safe threshold level
due to uncertainty about the mode of
action for arsenic. Today's rule
establishes a final MCLG for arsenic of
zero. After full consideration of public
comments, EPA continues to believe
that the most scientifically valid
approach, given the lack of critical data,
is to use the linear approach to assessing
the mode of action. This approach '
results in an MCLG of'zero.-In the'    •
proposal and the NODA, EPA rioted that
the available data point to several
potential carcinogenic modes of action
for arsenic (EPA also requested
additional data on the mode of action).  '
However,  which mode(s) of action is
operative is unknown. For this reason,
while the Agency recognizes that the
dose-response relationship may be
sublinear, the data do not provide any
basis upon which EPA could reasonably
construct this relationship.1 Thus, EPA
has no basis upon which to depart from
its assumption of linearity. The NRG
report noted that available data that
could help determine the shape of the
dose-response curve are inconclusive
and do not meet EPA's stated criteria for
departure  from the default assumption
of linearity (NRG, 1999). See section
III.D.l for a thorough discussion of the
dose-response assessment.
  Because the postulated mode of action
for arsenic cannot specifically be  ,
described and the key events are
unknown, the Agency lacks sufficient
available, peer-reviewed information to
estimate quantitatively a non-linear
mode of action. The Agency has thus
decided not to depart from the
assumption of linearity in selecting an
MCLG of zero.

B. What Is the Feasible Level?

1. Analytical Measurement Feasibility; .
  In .the development of a drinking
water regulation, fiPA derives a
practical quantitation limit (PQL) to
estimate or evaluate the minimum,

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              Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and  Regulations
                                                                      6995
reliable quantitation level
(concentration) that most laboratories
can be expected to meet during day-to-
day operations. The PQL accounts for
the limits of current measurement
technologies and the laboratories that
use the methods written around these
analytical technologies. The PQL was
defined in a November 13,1985 rule (50
FR 46906, EPA, 1985b) as "the lowest
concentration of an analyte that can be
reliably measured within specified
limits of precision  and accuracy during
routine laboratory operating
conditions." A PQL is determined either
through use of interlaboratory studies
or, in absence of sufficient studies,
through the use of a multiplier of 5 to
10 times the method detection; limit
(MDL). Interlaboratory data are obtained-
from water supply  (WS)  studies that are
conducted by EPA to certify drinking
water laboratories.  The WS studies
require a candidate laboratory to
measure the concentration of the target
analyte within specified limits (e.g.,
±30%) of the amount spiked into a PE
(now called PT) challenge sample.
Using graphical or  linear regression
analysis of the WS  data, the Agency sets
a PQL at a concentration where at least
75% of experienced laboratories
(generally EPA and State laboratories)
could perform within this acceptable
limit for accuracy, e.g., ±30%.
  As discussed in the June 22, 2000
proposed rule for arsenic, the Agency
determined that the PQL (i.e., the
feasible level of measurement) for
arsenic in drinking water is 0.003 mg/
L •with an acceptance limit of ±30%. The
derivation of the PQL for arsenic is
consistent with the process used to
determine PQLs for other metal
contaminants regulated under SDWA
and takes into consideration the
recommendations from EPA's SAB
(EPA, 1995). Using acceptance limits of
±30% and linear regression analysis of
six recent WS studies, EPA derived a
PQL of 0.00258 mg/L for arsenic, which
was rounded to 0.003 mg/L at the ±30%.
While the PQL represents a relatively
stringent target for laboratory
performance, based on the WS data used
to derive the PQL for arsenic, the
Agency believes most laboratories
(using appropriate quality assurance
and quality control procedures) can
achieve this level on a routine basis.

2. Treatment Feasibility
  EPA  has .determined that 3 jig/L is
technologically feasible for large
systems based on peer-reviewed
treatment information. EPA has listed
seven BATs for arsenic in the final rule.
They are: ion exchange when sulfate
<:50 mg/L, activated alumina, reverse
osmosis, modified coagulation/
filtration, modified lime softening at pH
>10.5, electrodialysis reversal, and
oxidation/filtration when the iron to
arsenic ratio is at least 20:1. Bench, pilot
and full-scale data were examined to
determine the capabilities of the
treatment processes. The treatment
performance data are summarized in
"Technologies and Costs for the
Removal of Arsenic from Drinking
Water" (EPA, 20001).

C. How Did EPA Revise its National
Occurrence Estimates?

1. Summary of Occurrence Data and
Methodology
  Our data and methodology for
estimating arsenic occurrence are
substantially the same as in the
proposed rule (65 FR 38888 at 38903;
EPA, 20001). The data and methodology
are described in detail in (EPA, 2000r).
Following is a summary of our method.
All of the elements of this summary are
the same as in the proposed rule, except
where noted.
  Our occurrence database consists of
arsenic compliance monitoring samples
of finished drinking water, submitted
voluntarily by drinking water agencies
in 25 States. The 25  States are
distributed throughout the U.S., with at
least one located in each of the seven
geographic regions that we used in our
analysis (65 FR 38888 at 38906; EPA,
2000i; EPA, 2000r). In some States we
used data only from a subset of years in
which detection limits were lowest. For
each PWS in our database, we estimated
the mean arsenic concentration over
time in finished water, by first "filling
in" non-detected concentrations, using
one of two statistical methods (EPA,
2000r), then averaging the detected and
filled-in observations from that system.
Next, we collected the system mean
estimates into State distributions, then
merged the State distributions into
regional and then national distributions.
In combining the regional distributions
into a national distribution, we
weighted each region by the total
number of systems in the region, not
just the number of systems in the States
in our database. This procedure has the
same effect as assigning the regional
distributions to  the 25 States for which
we have no observations in our
database.
  In addition to the distributions of
system means, we estimated nationwide
intra-system coefficients of variation
(ISCV). For a given water system, the
ISCV quantifies the variation of mean
arsenic levels at the system's entry
points to the distribution system (i.e.,
sampling points of individual wells and
treatment points) around the overall
system mean. We estimated a separate
ISCV for each ground water (gw) CWS,
surface water (sw) CWS, and, unlike in
the proposed rule, ground water
NTNCWS. Each of these ISCVs is
assumed to be constant throughout the
U.S.

2. Corrections and Additions to the Data
   Some public commenters asked
whether our data might have errors in
the classification of water samples as
treated or untreated. If that were the
case, then including untreated samples
in our  database could cause us to
overestimate occurrence in finished
water.  In order to determine whether
and to  what extent these problems exist,
we solicited additional data sets from
drinking water agencies in six States
(Alabama; California, Illinois, New
Mexico, North Carolina, and Texas)
from whom we already had data in our
draft data set. All six States responded
to our request by submitting additional
data, including additional identifiers of
untreated observations, as well as some
new observations not contained in our
draft data base. In California, once the
newly  identified untreated observations
were removed from the data set, the
number of surface water observations
decreased from 2,488 in the draft data
set to 1,280 in the final data set. For
ground water, on the other hand, the
number of samples in California
increased from 5,622 to 9,494. The
increase resulted in part from the
additional data, and in part because we
changed our methodology, as we
describe below, to include samples from
both treated and untreated ground water
in our ground water estimates. Changes
in the other five States were of smaller
size.
  We also updated our data set from
Utah. The latest data from Utah include
more observations and covers the years
1980 to 1999. The total number of
observations from Utah in our data set •
increased from 2,447 to 4,684.
  Table III.C—1 compares the number of
observations, systems, and States in our
database, by system type and source
water type, in the proposed and final
rules. Note that our complete database
is larger than shown in Table III.C—1,
but in some States we excluded data
from some years in which analytical
detection limits were highest. Table
III.C—1  counts only the data from the
years that we used to estimate
occurrence.

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
            TABLE lll.c-1.—SUMMARY OF OCCURRENCE DATABASES FOR THE PROPO'SED AND FINAL RULES
System type
cws 	
cws 	
NTNCWS 	
NTNCWS 	
All 	

Source water
GW 	
sw 	
GW 	
SW 	
All 	

Proposed rule
#of
observations
44,502
15,892
* 6,420
*420
67,234
#of
systems
15,640
2,360
* 4,662
*150
22,812
#0f
States
25
25
*18
*14
25
Final rule
#of
observations
53,307
16,212
7,045
*409
76,973
#.of
systems
15,931
2,228
4,382
"118
22,659
#ot
States
25
25
17
*15
25
  * Data not used In estimating occurrence.
  We also updated our baseline
inventory of the public water systems in
the U.S. and the populations they serve,
by type of system, type of source water,
and State. We use this inventory to
estimate the numbers of systems and
people affected by different MCL
options, by multiplying the number of
people or systems in a given category by
the estimated fraction of systems in that
category with mean arsenic greater than
the levels of interest. In the proposed
rule, the occurrence and regulatory
impact analyses used different sets of
baseline estimates: occurrence took
baseline estimates from EPA's 4th
quarter 1997 Safe Drinking Water
                         Information System (SDWIS) database,
                         while the proposal's regulatory impact
                         analysis (RIA) used 4th quarter 1998
                         SDWIS. The result, as some public
                         conunenters pointed out, was that the
                         proposed rule contained two
                         inconsistent sets of estimates of the
                         numbers of people and systems affected
                         by different MCL options (65 PR 38888;
                         EPA, 2000i, Table V-3; EPA, 2000h,
                         Exhibit 4—11). The two estimates of total
                         numbers of systems affected at various
                         MCLs differed by up to 2 7 %. We
                         corrected this inconsistency by
                         adopting, with one modification, the
                         baseline inventory in EPA's Drinking
                         Water Baseline Handbook (EPA, 2000b)
throughout this preamble and all
supporting documents for the final rule.
The inventory in the Baseline Handbook
is taken from EPA's 4th quarter 1998
SDWIS database, or the same that was
used in the proposed RIA. The only
modification we made to the inventory
was in Alaska where the Baseline
Handbook lists zero NTNCWS and zero
population served by NTNCWS.
Following public comment from the
Alaska Department of Environmental
Conservation, we corrected the
inventory of NTNCWS in Alaska. The
Baseline Handbook and corrected
Alaska inventories are shown in Table
III.C-2.
                 TABLE lll.C-2.—ALASKA PWS INVENTORIES: BASELINE HANDBOOK AND CORRECTED
System type
CWS 	
CWS 	
NTNCWS 	
NTNCWS 	
All 	

Source water
GW
SW 	
GW 	
SW 	
All 	

Baseline handbook
No. of systems
508
160
0
0
668
Population
served
227,874
317,155
0
0
545,029
Corrected
No. of systems
344
121
161
35
661
Population
served
175,367
260,792
51,909
56,013
544,081
  The revised estimates of numbers of
systems affected at different arsenic
concentrations are shown in Table III.C—
6. Since the proposed and final
Economic Analysis use the same set of
baseline estimates (except for the small
correction in Alaska), changes in Table
III.C-6 compared to the proposed RIA
(EPA, 2000h, Exhibit 4-11) are due to
changes in the occurrence estimates in
Table III.C-3, which follows. Changes in
Table III.C-6 compared to the proposed
occurrence analysis (65 FR 38888; EPA,
2000i, Table V-3) are due to changes in
occurrence estimates and also correction
of the baseline.

3. Changes to the Methodology

  In September 1999, EPA sponsored a
peer review of our occurrence data and
methodology by three independent
experts in geochemistry and statistics.
In response to that review and public
                         comments, we have made minor
                         revisions to our methodology for
                         estimating occurrence in two ways since
                         the proposed rule.
                           First, we now estimate the occurrence
                         distribution for ground water NTNCWSs
                         separately from CWSs. In the proposed
                         rule, we used the CWSs distribution as
                         a surrogate for NTNCWSs, for both
                         ground and surface water systems. We
                         now estimate occurrence in ground
                         water NTNCWSs separately, using the
                         same method as for CWSs, as described
                         previously. For ground water NTNCWSs
                         we have data from 17 States, compared
                         to 25 States for CWSs, so there are on
                         average fewer States with data in each
                         region. Moreover we have no data about
                         NTNCWSs from any States in the
                         Southeast region (Alabama, Florida,
                         Georgia, Mississippi, and Tennessee).
                         We therefore  used the occurrence
                         distribution for ground water CWSs as
a surrogate for ground water NTNCWSs
in the Southeast. The revised
occurrence estimates for ground water
NTNCWSs are shown in Table III.C-3.
  We still do not estimate a separate
occurrence distribution for surface
water NTNCWSs. For surface water
NTNCWSs, we did not believe that the
118 systems for which  data were
provided for NTNCWSs formed as
strong a basis  for estimating occurrence
as the much larger CWS surface water
data base, especially in the
concentration range of  interest. In
addition, there is less reason to believe
that surface water NTNCWSs will differ
from surface water CWSs. We thus
believe the surface water  CWS estimates
provide the soundest basis for
estimating impacts given  the types of
data available.
  Second, we have improved our
method for estimating intra-system

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                                                                      6997
 variability. In the proposed rule, we
 estimated the ISCV by measuring the
 total amount of variability of arsenic
 concentrations around the system mean
 within each system. The problem with
 that approach is that it fails to
 distinguish between-source variability
 (variability of sampling-point means
 around the system mean) from within-	
 source variability (variability of
 observations at each sampling point
 around the sampling-point mean).
 Within-source variability includes
 variations in concentrations through
 time at a source, and analytical
 variability caused by imprecision of the
• analytical methods used to measure
 arsenic in water samples. The ISCV is
 intended to describe only between-
 source variability within a system.
 Following the recommendations of the
 peer review, we corrected our model of
 intra-systern variation to include
 separate terms for between-source and
 within-source variability. As a result,
 our estimates of the ISCVs decreased,
since we separate out the within-source
variability. The revised ISCV estimates
are shown in Table III.C-7.
  A third change to our methodology is
that, for ground water systems, we now
include observations on both treated
and untreated ground water in our
analysis. With the exception of iron
removal technologies, most treatment in
ground water systems has little effect on
arsenic, so one might expect arsenic
concentrations to be similar in treated
and untreated samples. This turns out to
be the case in our data: estimates that
included untreated samples were either
slightly higher or lower than-estimates
with only treated samples. We therefore
decided to include both treated and
untreated samples in our ground water
occurrence estimates. For surface water
estimates, we still use only samples
from treated water.
4. Revised Occurrence Results
  Table III.C-3 shows our revised .
estimates of the national distribution of
arsenic occurrence, by system type and
source water type. The distributions are
stated in terms of "exceedance
probabilities," that is, the fraction of
systems with mean arsenic equal to or
greater than the given concentration, in
finished water. The "weighted point
estimate" is the combination of State
distributions into a national
distribution, as described previously.
We consider the weighted point
estimate to be our best estimate. The
"lognormal fit" is the result of fitting a
lognormal distribution to the weighted
point estimates. The lognormal fit is an
approximation to the weighted point
estimate, which we use in our cost and
benefit analyses (sections III.E and III.F).
The lognormal approximation simplifies
the simulation studies that we use to
derive costs and benefits, by allowing
each distribution to be summarized in
terms of only two parameters. Table
III.C-4 lists the parameters of the fitted
lognormal distributions.
                    TABLE III.C-3.—NATIONAL OCCURRENCE EXCEEDANCE PROBABILITY ESTIMATES

Percent of systems with mean finished arsenic exceeding concentrations (u.g/L) of:
3
5
10
20
50
                                                  Ground Water CWS
Weighted point estimate 	 	 	
95% confidence interval1 	
Loanormal fit 	
19.9
[19.3,21.9]
19.7
12.1
[11.7,13.0]
12.0
5.3
[5.2,5.9]
5.3
2.0
[1.9,2.3]
2.0
0.43
[0.38,0.52]
0.43
                                                  Surface Water CWS




5.6
[4.8,20.61
5^.6

3.0
[1.8,9.7]
3.0

0.80
[0.52,1.6]
1.1

0.32
[0.13,0.82]
0.37

0.10
[0.02,0.59]
0.067

                                                Ground Water NTNCWS

95% confidence interval1 	
Lognormal fit 	 	 	 	 	
24.2

23.4
15.6

14.2
5.3

6,1
2.1

2.2
0.47

0.42
   1 Brackets indicate confidence intervals which were computed for the proposed rule and have not been updated. No confidence intervals were
 computed for NTNCWS.

     TABLE lll.C-4.—PARAMETERS OF LOGNORMAL DISTRIBUTIONS FITTED TO NATIONAL OCCURRENCE DISTRIBUTIONS
System type
CWS 	
CWS 	
NTNCWS 	
Source water
GW 	
sw 	
GW 	
Log-mean 1
-0.25
-1.68
0.03
Log-SD2
1.58
1.74
1.47
   1 Log-mean = mean of natural logarithm of arsenic concentrations (ng/L).
   2 Log-SD = standard deviation of natural logarithm of arsenic.concentrations (ng/L).
   Table III.C-3 lists separate
 distribution estimates for ground and
 surface water CWS and for ground water
 NTNCWSs. As we said previously, we
 believe surface water CWSs provide a
 more sound basis for estimation.
  For CWSs, the estimates in Table
III.C-3 have changed only slightly since
the proposed rule. For ground water
CWSs, the largest change is an increase
at 10 u,g/L from 5.3% exceedance to
5.4%. For surface water CWSs, the
largest change is a decrease at 3 u,g/L
from 6.0% in the proposed rule to 5.6%
in Table III.C-3. This decrease is as
expected, since, as we explained
previously, our revised database
excludes some observations on
untreated water that were included in
the draft database. Our surface water

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occurrence estimates did increase
slightly at 5 ug/L, however, as Table
III.C-8 shows.
  For ground water NTNCWSs, our
estimated exceedance probabilities
increased from 19.9% to 24.2% at 3 ug/
L, and from 12.1% to 15.6% at 5 ug/L.
The estimates at higher concentrations
changed by at most 0.1% point. The
estimates changed because we now
estimate a separate distribution for
ground water NTNCWSs, as we
described previously.
  The confidence intervals listed in
Table m.C-3 were computed for the
proposed rule, using a computationally
intensive resampling procedure, as
described in (EPA, 20GOr). Since our
data set and point estimates have
changed only minimally for the final
                          rule, we did not recompute the
                          confidence intervals.
                            Table III.C-5 shows occurrence
                          distributions in seven geographic
                          regions presented in the proposal and
                          developed by Frey and Edwards (1997).
                          (The States and names of these
                          geographic regions in Table III.C-5 are
                          based directly on the authors'
                          designations.) As in the proposed rule,
                          we find concentrations to be generally
                          highest in the West, and generally
                          lowest in the Southeast and Mid-
                          Atlantic. In regions where analytical
                          reporting limits in our database were
                          mostly higher than 3 ug/L or 5 ug/L, we
                          did not attempt to estimate occurrence
                          at the lowest concentrations. These
                          cases are indicated by dashes in Table
 III.C-5. In some regions, we were able
 to estimate occurrence in fewer States at
 the lowest concentrations, and this
 sometimes led to inconsistencies in our
 estimates. For example, for New
 England surface water CWSs, we
 estimated occurrence at 3 ug/L using
 only Maine, and at 5 ug/L using Maine,
 New Hampshire, and New Jersey. The
 introduction of more States at higher
 concentrations led to inconsistent
 estimates of 6.2% and 11.7% of New
 England surface water CWSs with
 arsenic exceeding 3 ug/L and 5 Ug/L,
 respectively. We did not try to resolve
 these inconsistencies at the regional
 level, but note that the national
 occurrence distributions, listed in Table
 III.C—3, are consistent.
                    TABLE lll.C-5.—REGIONAL OCCURRENCE EXCEEDANCE PROBABILITY ESTIMATES
                                                                Percent of systems with mean finished arsenic exceeding con-
                                                                                centrations (ug/L) of:
                                                                                               10
                                                                                                            20
                                                  Ground Water CWS
Mid-Atlantic	            (2)
Midwest	           21.2
New England 	           21.7
North Central 	           21.3
South Central	           18.6
Southeast	           0.9
West	           31.5

                                                 Surface Water CWS

Mid-Atlantic 	            (2)
Midwest	           3.0
New England 	           16.2
North Central	           9.1
South Central	           3.8
Southeast	           0.2
West	           12.7

                                                Ground Water NTNCWS

Mid-Atlantic	            (2)
Midwest	           26.2
New England 	            (2)
North Central 	           29.8
South Central	           24.0
Southeast	           0.9
West	I	34.3
  1 Estimate is inconsistent with estimate at the next higher concentration. See text for explanation.
  a Means not enough data to form an estimate. See text for explanation.
                                                                       *0.4
                                                                       13.8
                                                                       20.8
                                                                       13.1
                                                                       9.7
                                                                       0.4
                                                                       25.2
                     0.7
                     6.2
                     7.0
                     6.0
                     3.6
                     0.1
                    12.5
0.0
2.4
2.9
2.4
1.1
0.0
5.0
                                                                       0.1
                                                                       1.6
                                                                      11.7
                                                                       3.2
                                                                       0.9
                                                                       6.1
                                                                       8.2
                     0.0
                     0.7
                     1.0
                     0.6
                     0.2
                     0.0
                     3.4
0.0
0.3
0.4
0.1
0.1
0.0
1.4
                                                                      17.1
                                                                        (2)
                                                                      22.8
                                                                      14.4
                                                                       0.4
                                                                      21.9
                     1.4
                     8.2
                     2.1
                    15.0
                     5.9
                     0.1
                    10.5
0.5
3.3
0.6
9.3
1.9
0.0
4.2
  Table ni.G-6 shows our estimates of
the numbers of systems with mean
finished arsenic concentrations in
various ranges, by system type and size.
As in the proposed rule, we find no
evidence of any consistent difference in
mean arsenic among systems of different
sizes. We conclude that the occurrence
                         distributions shown in Table in.C-3
                         apply to all categories of system size. In
                         Table III.C-6, therefore, the estimated
                         numbers of systems are computed by
                         multiplying the baseline inventory of all
                         systems of the given size and type, by
                         the corresponding probability of falling
                         within the given range, computed from
Table m.C-3 and shown in the "% of
systems" rows. The estimates for surface
water NTNCWSs were computed by
applying the occurrence distribution for
surface water CWSs to the baseline
inventory of surface water NTNCWSs.

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                                                                           6999
TABLE 111. C-6— STATISTICAL ESTIMATES OF NUMBERS OF SYSTEMS WITH AVERAGE FINISHED ARSENIC CONCENTRATIONS
                                                IN VARIOUS RANGES
                 System size (population served)
                                                              Number of systems with mean arsenic concentration (ng/L) in the
                                                                                    range of:
                                                                 >3to5
                                                                              >5 to 10
                                                                                           >10 to 20
                                                                                                           >20
                                                 Ground Water CWS
25 to 500	         2,272
501 to 3,300	           811
3,301 to 10,000	           192
10,001 to 50,000	....:	•.	            95
>so,ooo	.......::;	            15
All	         3,384
% of systems	          7.8%

                                                 Surface Water CWS

25 to 500	:	            76
501 to 3,300	...:	            92
3,301 to 10,000	            47
10,001 to 50,000	.'.	            41
>50,000 	            15
All 	.......	'..-	           270
% of systems 	'.;...	          2.5%

                                               Ground Water NTNCWS

25 to 500	         1,440
501 to 3,300 	:..	           230
3,301 to 10,000	             5
10,001 to 50,000	             1
>50,000	             0
All 	         1,677
% of systems	          8.6%

                                               Surface Water NTNCWS

25 to 500	            14
501 to 3,300	             5
3,301 to 10,000	             1
10,001 to 50,000	             0
>50,000	             0
All 	:	            20
% of systems 	|	2.5%

  Numbers do not add up to totals in some cases due to rounding.
                                                 1,980
                                                   706
                                                   167
                                                    83
                                                    13
                                                 2,949
                                                 6.8%
                    961
                    343
                     81
                     40
                      6
                   1,432
                   3.3%
                 584
                 208
                  49
                  24
                   4
                 870
                2.0%
                                                    68
                                                    81
                                                    41
                                                    36
                                                    13
                                                   239
                                                  2.2%
                     14
                     17
                      9
                      8
                      3
                     51
                   0.5%
                  10
                  12
                   6
                   5
                   2
                  34
                0.3%
                                                 1,713
                                                   274
                                                     6
                                                   .  1
                                                     0
                                                 1,995
                                                 10.3%
                    545
                     87
                      2
                      0
                      0
                    635
                   3.3%
                 348
                  56
                   1
                   0
                   0
                 405
                2.1%
                                                    13
                                                     4
                                                     1
                                                     0
                                                     0
                                                    17
                                                  2.2%
                      3
                      1
                      0
                      0
                      0
                      4
                   0.5%
                   2
                   1
                   0
                   0
                   0
                   2
                0.3%
  Our proposed and final estimates of
intra-system coefficients of variation are
shown in Table m.C-7. The revised
estimates are lower, since, as we
     described previously, we now better
     separate out within-source (time and
     analytical) variability from the
     variability of source means within a
system. The ISCV estimate for ground
water NTNCWSs also has changed
because we now estimate it separately
from that of ground water CWSs.
                    TABLE lll.C-7— ESTIMATED INTRA-SYSTEM COEFFICIENTS OF VARIATION (ISCV)
           System type
                                            Source water
                                                                     Proposed rule
                                                                    ISCV (percent)
                                                             Final rule
                                                   ISCV (percent)
                       95% confidence
                           interval
 CWS 	
 CWS 	
 NTNCWS
GW.
SW .
GW.
62.9
68.4
62.9
37.1
52.6
25.2
[33.1,40.8]
[31.4,69.6]
 [9.6,34.7]
  Table III.C-8 compares our proposed
 and final national occurrence estimates
 to estimates from three other studies:
 the National Arsenic Occurrence Survey
 (NAOS) (Frey and Edwards, 1997),
 National Inorganics and Radionuclides
 Survey (NIRS) (Wade Miller Associates,
      1992), and U.S. Geological Survey
      (USGS) (USGS, 2000). All of the studies
      in Table III.C-8 evaluated drinking
      water except for USGS, which evaluated
      ambient ground water, some of which
      came from non-drinking water sources.
      Wade Miller used surface water
estimates from the 1978 Community
Water System Survey, which we
consider now to be out of date, so those
estimates are not shown. Note' that Frey
and Edwards (1997) found significantly
different occurrence distributions for
small and large systems, so the NAOS

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estimates are reported separately for
small and large systems. The NAOS
included samples from all 50 States, but
it was a much smaller study (468
                         samples, compared to about 77,000 in
                         our database), and it analyzed
                         unfinished water samples. Frey and
                         Edwards (1997) applied estimated
efficiencies for the treatments known to
be in place at the sampling locations, to
predict the concentrations in finished
water.
                    TABLE lll.C-8.—COMPARISON OF NATIONAL ARSENIC OCCURRENCE ESTIMATES
Study
Type of water
System types
Population served
% of systems with mean arsenic ex-
ceeding concentrations (u.g/L) of:
2
3
5
10
20
                                                Ground Water Systems
EPA-proposed 	 	
EPA-flnal 	
NAOS-small 	
NAOS-large
NIRS 	
USQS
raw + finished 	
raw + finished 	
finished 1 	
finished 1 	
finished 	
raw 	
cws 	
CWS 	
PWS 	
PWS 	
CWS 	
PWS 	
all 	
all 	
510,000 	
> 10 000
all ..
all 	
Surface Water Systems
EPA-proposed 	
EPA-final 	
NAOS-small 	
NAOS-larae 	
finished 	
finished 	
finished1 	
finished1 	
cws 	
CWS 	
PWS 	
PWS 	
all ....
all 	
S10.000 	
> 10,000 	
27.2
27.3
23.5
28.8
17.4
25.0
9.9
9.8
6.2
7.5
19.9
19.9
NR
NR
11.9
NR
6.0
5.6
NR
NR
12.1
12.1
12.7
15.4
6.9
13.6
2.9
3.0
1.8
1.3
5.4
5.3
5.1
6.7
2.9
7.6
0.8
0.8
0.0
0.6
2.1
2.0
NR
NR
1.1
3.1
0.3
0.3
NR
NR
  NR s not reported.
  1 Predicted from raw water, using estimated efficiency of treatment in place.
  Table III.C-8 shows that our proposed
and final occurrence estimates are only
slightly different, with the possible
exception of surface water occurrence
estimates at 3 ug/L, where our estimate
decreased from 6.0% to 5.6%
exceedance for the final rule. The
difference is explained by the
identification and exclusion of samples
of untreated water from our database for
the final rule, as we described
previously. For ground water, our
estimates fall within the range reported
in the other three studies. For surface
water, our estimates are somewhat
higher than those of the NAOS.
D. How Did EPA Revise its Risk
Analysis?
1. Health Risk Analysis

  o. Toxic forms of arsenic. Humans are
exposed to many forms of arsenic that
have different toxicities. For example,
the metallic form of arsenic (0 valence)
is not absorbed from the stomach and
intestines and does not exert adverse
effects. On the other hand, a volatile
compound such as arsine (AsHa) is
toxic, but is not present in water or
food. Moreover, the primary organic
forms (arsenobetaine and  arsenocholine)
found in fish and shellfish seem to have
little or no toxicity (Sabbioni et at.,
1991). Arsenobetaine quickly passes out
of the body in urine without being
metabolized to other compounds
(Vahter, 1994). Little is known about the
various arsenic species in vegetables,
grains, and oils (NRC, 1999). Arsenite
(+3) and arsenate (+5) are the most
                         prevalent toxic forms of inorganic
                         arsenic found in drinking water. In
                         general, the inorganic forms of arsenic
                         have been considered to be more toxic
                         than the organic forms. In toxicity tests,
                         the inorganic forms were reported to be
                         more toxic than the organic forms (NAlS,
                         1977) and the trivalent form was more
                         toxic than the pentavalent one (Szinicz
                         and Forth,  1988).
                           In animals and humans, inorganic
                         pentavalent arsenic is converted to
                         trivalent arsenic that is methylated (i.e.,
                         chemically bonded to a methyl group,
                         which is a  carbon atom linked to three
                         hydrogen atoms) to monomethyl arsenic
                         (MMA) and dimethyl arsinic acid
                         (DMA), which are organic arsenicals.
                         The primary route of excretion for these
                         four forms  of arsenic is in the urine. The
                         organic arsenicals MMA and DMA were
                         once thought to be much less toxic than
                         inorganic arsenicals. Many studies
                         reported organic arsenicals to be less
                         reactive in tissues, to kill less cells, and
                         to be more easily excreted in urine
                         (NRC,  1999). However, recent work has
                         shown that the assumption that organic
                         forms that arise during the metabolism
                         of inorganic arsenic are less toxic than
                         inorganic forms may not be correct
                         (Aposhian  et al., 2000;  Petrick et al.,
                         2000).  One reason for this was that
                         earlier toxicity tests were conducted
                         using pentavalent MMA and DMA
                         because it was believed that trivalent
                         MMA(III) and DMA(III) were too
                         transient to be found in urine. Recently,
                         MMA(III) was isolated in human urine
                         (Aposhian  et al., 2000). Tests have
                         demonstrated that MMA(III) is more
toxic to hepatocytes (i.e., liver cells) that
inorganic trivalent arsenic (Petrick et
al., 2000; Styblo et al., 2000). These
reports indicate that the metabolism of
inorganic arsenic is not necessarily a
detoxification process. As yet, it is not
known which form of arsenic
participates in the key events within
cells that disrupt cell growth control
and initiate or influence tumor
formation. The SAB noted that "[i]t is
not possible to consider contributions of
different forms of arsenic to the overall
response based on the data that are
available today" (EPA, 2000q).
  b. Effects of acute toxicity. Inorganic
arsenic can exert toxic effects after acute
(short-term) or chronic (long-term)
exposure. From human acute poisoning
incidents, the LDso of arsenic has been
estimated to range from 1 to 4 mg
arsenic per kilogram (kg) of body weight
(Vallee et al., 1960, Winship, 1984).
This dose would correspond to a lethal
dose range of 70 to 280 mg for 50% of
adults weighing 70 kg. At nonlethal, but
high acute doses, inorganic arsenic can
cause gastroenterological effects, shock,
neuritis (continuous pain) and vascular
effects in humans- (Buchanan,  1962).
Such incidents usually occur after
accidental exposures. However,
sometimes high dose acute exposures
may be self-administered. For example,
inorganic arsenic is a component of
some herbal medicines and adverse
effects have been reported after use. In
one report of  74 cases (Tay and Seah,
1975), the primary signs were  skin
lesions (92%), neurological (i.e., nerve)
involvement (51%),  and

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                                                                       7001
gastroenterological, hematological (i.e.,
blood) and renal (i.e., kidney) effects [19
to 23%). Although acute or short-term
exposures to high doses of inorganic
arsenic can cause adverse effects, such
exposures do not occur from U.S. public
water supplies in compliance with the
current MCL of 50 ug/L. EPA's drinking
water regulation addresses the long-
term, chronic effects of exposure to low
concentrations of inorganic arsenic in
drinking water.
   c. Non-cancer effects associated with
arsenic. A large number of adverse
.noncarcinogenic effects has been
reported in humans after exposure to
drinking water highly contaminated
with inorganic arsenic. The earliest and
most prominent changes are in the skin,
e.g., hyperpigmentation and keratoses
(calus-like  growths).  Other effects that
have been reported include alterations
in gastrointestinal, cardiovascular,
hematological (e.g., anemia),
pulmonary, neurological,
immunological and reproductive/
developmental function (ATSDR, 1998).
  The most common symptoms of
inorganic arsenic exposure appear on
the skin and occur after 5-15 years of
exposure equivalent to 700 fig/day for a
70 kg adult, or within 6 months to 3
years at exposures equivalent to 2,800
Ug/day for  a 70 kg adult (NRG, 1999, pg.
131). They include alterations in
pigmentation and the development of
keratoses that are localized primarily on
the palms of the hands, the soles of the
feet, and the torso. The presence of
hyperpigmentation and keratoses on
parts of the body not exposed to the sun
is characteristic of arsenic exposure
(Yeh, 1973; Tseng, 1977). The same
alterations have been reported in
patients treated with Fowler's solution
(1% potassium arsenite; Cuzick etal.,
1982), used for asthma, psoriasis,
rheumatic  fever, leukemia, fever, pain,
and as a tonic (WHO, 1981; NRG, 1999).
   Chronic  exposure to inorganic arsenic
is often associated with alterations in
gastrointestinal(GI) function. For
example, noncirrhotic hypertension is a
relatively specific, but not commonly
found  manifestation in inorganic
arsenic-exposed individuals and may
not become a clinical observation until
the patient demonstrates GI bleeding  •
(Morris et al, 1974; Nevens et al, 1990).
Physical examination may reveal spleen
and liver enlargement, and
histopathological examination of tissue
specimens may demonstrate periportal
fibrosis (Morris et al., 1974; Nevens et
al., 1990; Guha Mazumder et al., 1997).
There have been a few reports of
cirrhosis after inorganic arsenic
exposure, but the authors of these
studies did not determine the subjects'
alcohol consumption (NRG, 1999).
  Development of peripheral vascular
disease (hardening of the arteries to the
arms and legs, that can cause pain,
numbness, tingling, infection, gangrene,
and clots) after inorganic arsenic
exposure has also been reported. In
Taiwan, blackfoot disease (BFD), a
severe peripheral vascular insufficiency
which may result in gangrene of the feet
and other extremities) has been the most
severe manifestation of this effect. Tseng
(1977) reported over 1,000 cases of BFD
in the arsenic study areas of Taiwan.
Less severe cases of peripheral vascular
disease have been described in Chile
(Zaldivar et al., 1974) and Mexico
(Cebrian, 1987). In a Utah study,
increased standardized mortality ratios
(SMRs) for hypertensive heart disease
were noted in both males and females
after exposure to inorganic arsenic-
contaminated drinking water (Lews et
al., 1999). These reports link exposure
to inorganic arsenic effects on the
cardiovascular system. Although deaths
due to hypertensive heart disease were
roughly twice as high as expected in
both sexes, increases in death did not
relate to increases in dose, calculated as
the years of exposure times the median
arsenic concentration. The Utah data
indicate that heart disease should be
considered in the evaluation of potential
benefits of U.S. regulation. Vascular
effects have also been reported as an
effect of arsenic exposure in another
study in the U.S. (Engel et al., 1994), in
Taiwan (Wu et al., 1989) and in Chile
(Borgono et al., 1977). The overall
evidence indicating an association of
various vascular diseases with arsenic
exposure supports consideration of this
endpoint in evaluation of potential
noncancer health benefits of arsenic
exposure reduction.
  Studies in Taiwan (Lai et al., 1994)
and Bangladesh (Rahman et al., 1998)
found an increased risk of diabetes
among people consuming arsenic-
contaminated water. Two Swedish
studies found an increased risk of
mortality from diabetes among those
occupationally exposed to arsenic
(Rahman and Axelson, 1995; Rahman et
al., 1998).
  Although peripheral neuropathy
(numbness, muscle weakness, tremors;
ATSDR, 1998) may be present after
exposure to short-term, high doses of
inorganic arsenic (Buchanan, 1962; Tay
and Seah, 1975), there are no studies
that definitely document this effect after
exposure to levels of less than <50 jig/
L of inorganic arsenic in drinking water.
Hindmarsh et al. (1977) and Southwick
et al. (1983) have reported limited
evidence of peripheral neuropathy in
Canada and the U.S., respectively, but it
was not reported in studies from
Taiwan, Argentina or Chile (Hotta, 1989,
as cited by NRG 1999).
  There have been a few, scattered
reports in the literature that inorganic
arsenic can affect reproduction and
development in humans (Borzysonyi et
al., 1992; Desi et al., 1992; Tabacova et
al., 1994; Hopenhayn-Rich et al., 2000).
After reviewing the available literature
on arsenic and reproductive effects, the
NRG (1999) wrote that "nothing
conclusive can be stated from these
studies." Regarding the Hopenhayn-
Rich study, the majority of the SAB
panel (EPA, 2000q) concluded that
while;
it is generally reasonable to consider that
children are generally at greater risk for a
toxic response to any agent in water because
of their greater drinking water consumption
(on a unit-body weight basis), [the SAB does
not] believe that this study demonstrates
such a heightened sensitivity or
susceptibility to arsenic.
The EPA agrees with this conclusion.
  d. Cancers associated with arsenic.
Inorganic arsenic is a multi-site human
carcinogen by the drinking water route.
Asian, Mexican and South American
populations with exposures to arsenic
in drinking water generally at or above
hundreds of micrograms per liter are
reported to have increased risks of skin,
bladder, and lung cancer. The current
evidence also suggests that the risks of
liver and kidney cancer may be
increased following exposures to
inorganic forms of arsenic. The weight
of evidence for ingested arsenic as a
causal factor of carcinogenicity is much
greater now than a decade ago, and the
types of cancer occurring as a result of
ingesting inorganic arsenic have even
greater health implications for U.S. and
other populations than the occurrence
of skin cancer alone. (Until the late
1980s skin cancer had been the cancer
classically associated with arsenic in
drinking water.) Epidemiologic studies
(human studies) provide direct data on
arsenic risks from drinking water at
exposure levels much closer to those of
regulatory concern than environmental
risk assessments based on animal
toxicity studies.
  Sjcin Cancer. Early reports linking
inorganic arsenic contamination of
drinking water to skin cancer came from
Argentina (Neubauer, 1947, reviewing
studies published as early as 1925) and
Poland (Tseng et al., 1968). However,
the first studies that observed dose-
dependent effects of arsenic associated
with skin cancer came from Taiwan
(Tseng et al., 1968; Tseng, 1977). These
studies focused EPA's attention on the
health effects of ingested arsenic.

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Physicians administered physical
examinations to the study group of over
40,000 residents from 37 villages, as
well as to a reference group of 7500
residents reported to be exposed to a
median level of 0 to 0.017 mg/L arsenic
(reference group). The study population
was divided into three groups based on
exposure to inorganic arsenic (0 to 0.29,
0.30 to 0.59 and £0.60 mg of inorganic
arsenic per liter (mg/L) measured at the
village level. A dose- and age-related
increase of arsenic-induced skin cancer
among the villagers was noted. No skin
cancers were observed in the low
arsenic reference  areas. In both the EPA
1988 report on skin cancer and the  1999
NRG report, it was noted that grouping
individuals into broad exposure groups
(rather than grouping  into village
exposures) limited the usefulness of
these studies for quantitative dose-
response estimation. However, these
Tseng reports and other corroborating
studies such as those by Albores et al.
(1979) and Cebrian et al. (1983) on
drinking water exposure and exposures
to inorganic arsenic in medicines
(Cuzick et al., 1982) and in pesticides
(Roth, 1956) led the EPA, using skin
cancer as the endpoint, to classify
inorganic arsenic as a human carcinogen
(Group A) by the oral route (EPA, 1984).
  Internal cancers. Exposure to
inorganic arsenic in drinking water has
also been associated with the
development of internal cancers. Chen
et al. (1985) used  SMRs to evaluate the
association between ingested arsenic
and cancer risk in Taiwan. (SMRs, ratios
of observed to expected deaths from
specific causes, are standardized to
adjust for differences in the age
distributions of the exposed and
reference populations). The authors
found statistically significant increased
risks of mortality for bladder, kidney,
lung, liver and colon cancers. A
subsequent mortality study in the same
area of Taiwan found significant dose-
response relationships for deaths from
bladder, kidney, skin, and lung cancers
in both sexes and from liver and
prostrate cancer for males. They also
found increases in peripheral and
cardiovascular diseases but not in
cerebrovascular accidents (Wu et al.,
1989). There are several corroborating
reports of the increased risk of cancers
of internal organs from ingested arsenic
including two from South American
countries. In Argentina, significantly
increased risks of death from bladder,
lung and kidney cancer were reported
(Hopenhayn-Rich et al., 1996; 1998). In
a population of approximately 400,000
in northern Chile^Smith et al. (1998)
                         found significantly increased risks of
                         bladder and lung cancer mortality.
                           There have only been a few studies of
                         inorganic arsenic exposure via drinking
                         water in the U.S., and most have not
                         considered cancer  as an endpoint. The
                         best U.S. study currently available is
                         that of Lewis et al. (1999) who
                         conducted a mortality study of a '
                         population in Utah whose drinking
                         water contained relatively low
                         concentrations of arsenic. EPA scientists
                         conducted an epidemiological study of
                         4,058 Mormons exposed to arsenic in
                         drinking water in seven communities in
                         Millard County, Utah (Lewis et al.,
                         1999). The 151 samples from their
                         public and private  drinking water
                         sources had arsenic concentrations
                         ranging from 4 to 620 ug/L with seven
                         median (mid-point in range) community
                         exposure concentrations of 14 to 166
                         ug/L. Observed causes of death in the
                         study group (numbering 2,203) were
                         compared to those  expected from the
                         same causes based upon death rates for
                         the general white male and female
                         population of Utah. While the study
                         population males had a significantly
                         higher risk of prostate cancer mortality,
                         females had no significant excess risk of
                         cancer mortality at any site. Millard
                         County subjects had higher mortality
                         from kidney cancer, but this was not
                         statistically significant. Both males and
                         females in the study group had less risk
                         of bladder, digestive system and lung
                         cancer mortality than the general Utah
                         population. The Mormon females had
                         lower death rates from breast and female
                         genital cancers than the State rate.
                         These decreased death rates were not
                         statistically significant.
                           Tsai et al. (1999) estimated SMRs for
                         23 cancer and non-cancer causes of
                         death in women and 27 causes of death
                         in men in an area of Taiwan with
                         elevated arsenic exposures. The SMRs
                         in this study are an expression of the
                         ratio between deaths that were observed
                         in an area with elevated arsenic levels
                         and those that were expected to occur,
                         compared to both the mortality of
                         populations in nearby areas without
                         elevated arsenic levels and to the
                         national population. Drinking water
                         (250-1,140 ug/L) and soil (5.3-11.2
                         mg/kg) in the Tsai et al. (1999)
                         population study had high arsenic
                         content. However, the study gives an
                         indication of the types of health effects
                         that may be associated with arsenic
                         exposure via drinking water. The study
                         reports a high mortality rate (SMR> 3)'
                         for both sexes from bladder, kidney,
                         skin, lung, and nasal cavity cancers and
                         for vascular disease. Females also had
                         high mortalities for laryngeal cancer.
   The SMRs calculated by Tsai et al. -, •
 (1999) used the single cause of death  .
 noted on the death certificates. Many
 chronic diseases, including some
 cancers, are not generally fatal.
 Consequently, the impact indicated by
 the SMR in this study may
 underestimate the total impact of these
 diseases. The causes of death reported
 in this study are consistent with what is
 known about the adverse effects of
 arsenic. Tsai et al. (1999) identified
 "bronchitis, liver cirrhosis,
 nephropathy, intestinal cancer, rectal
 cancer, laryngeal cancer, and
 cerebrovascular disease" as possibly.
 "related to chronic arsenic exposure via
 drinking water," which had not been
 reported before. In addition, people in
 the study area were observed to have
 nasal cavity and larynx cancers not
 caused by occupational exposure to
 inhaled arsenic.                  ,
   A small cohort study in Japan of
 persons exposed to arsenic in drinking
 water provides evidence of the
 association of cancer and arsenic among
 persons exposed for 5 years to 1000
 ug/L or more and followed for 33 years
 after cessation of exposure. The
 strongest association was for lung and
 bladder cancer, similar to results in
 studies in Taiwan and South America
 (Tsuda et al., 1995).
   Kurttio et al. (1999) conducted a case-
 cohort design study of 61 bladder and
 49 kidney cancer cases and 275 controls
 to evaluate the risk of these diseases
 with respect to arsenic drinking water
 concentrations. In this study the median
 exposure was 0.1 ug/L, the maximum
 reported was 64 ug/L, and 1% of the
 exposure was greater than 10 ug/L. The
 authors reported that very low
 concentrations of arsenic in drinking
 water were significantly associated with
 bladder cancer when exposure occurred
 two to nine years prior to diagnosis.
 Arsenic exposure occurring greater than
 10 years prior to  diagnosis was not
 associated with bladder cancer risk.
 This raises a question about the
 significance of the finding about
 exposures two to nine years since one
 would expect earlier exposure to have
 had an effect given the Tsuda et al.
 (1995) study summarized previously.
  The two internal cancers consistently
 seen and best characterized in
 epidemiologic studies are those of lung
 and bladder. EPA considers the studies
 summarized before as confirmation of
 its long-standing view that arsenic is a
known human carcinogen. This rule
relies on assessment of lung and bladder
cancers for its quantitative risk
estimates in support of the MCL. EPA
recognizes that other internal cancers as
well as skin cancer are important.

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                                                                       7003
Nonetheless, some issues with other
cancer endpoints led to their being
considered qualitatively rather than
quantitatively. EPA has considered skin
and liver cancer qualitatively for the
following reasons: (1) The skin cancer
endpoint is difficult to analyze because,
in the U.S., it is considered curable; and
(2) the liver cancer endpoint is likely to
have been influenced in Taiwan by the
prevalence there of viral hepatitis which
is a factor in liver cancer.
  How does arsenic cause cancer? EPA
sponsored an "Expert Panel on Arsenic
Carcinogenicity: Review and
Workshop" in May 1997 (EPA, 1997e).
The panel evaluated existing data to
comment on arsenic's carcinogenic
mode of action and the effect on dose-
response extrapolations. The panel
noted that arsenic compounds have not
formed deoxyribonucleic acid (DNA)
adducts (i.e., bound to DNA) nor caused
point mutations. Thus, indications are
that the mode of action does not involve
direct reaction with DNA. Trivalent
inorganic forms inhibit enzymes, but
arsenite and arsenate do not affect DNA
replication. The panel discussed several
modes of action, concluding that arsenic
indirectly affects DNA, inducing
chromosomal changes. The panel
thought that arsenic-induced
chromosomal abnormalities could
possibly come from errors in DNA
repair and replication that affect gene
expression; that arsenic may increase
DNA hypermethylation and oxidative
stress;  that arsenic may affect cell
proliferation (cell death appears to be
nonlinear); and that arsenic may act as
a co-carcinogen. Arsenite causes cell
transformation but not mutation of cells
in culture. It also induces gene
amplification (multiple copies of DNA
sequences) in a way that suggests
interference with DNA repair or cell
control instead of direct DNA damage.
  In terms of implications for the risk
assessment, the panel noted that risk per
unit dose estimates from human studies
can be biased either way (i.e., reduced
animal fats in the diet would
underestimate risk). For the Taiwanese
study,  the "* * * biases associated with
the use of average doses and with the
attribution of all increased risk to
arsenic would both lead to an
overestimation of risk (EPA, 1997e, page
31)." While health effects are most
likely observed in people getting high
doses,  the effects are assigned to the
average dose of the exposure group.
Thus, risk per unit dose estimated from
the average doses would lead to an
overestimation of risk (EPA, 1997e, page
31). On the other hand, basing risk
estimates on one or two tumor sites may
underestimate risk as compared to
summing risks for all related health
endpoints.
  There is much research underway
about the mode of action for arsenic. In
order to understand the shape of the
dose-response relationship in the range
of exposure typical of the U.S., that is
significantly below the range of
observation of epidemiologic studies,
one needs to identify which one or more
of the possible modes of action is
operative. If this can.be elucidated, it
will become possible to study and
quantify the key events within cells that
influence cell growth control and how
they may quantitatively relate to
eventual tumor incidence. Until then
the shape of the dose-response
relationship and whether there is any
threshold cannot be known.
  /. What is the quantitative
relationship between exposure and
cancer effects that may be projected for
exposures in the U.S.? The Agency
chose to make its quantitative estimates
of risk based on the Chen et al.  (1988;
1992) and Wu et al.  (1989) Taiwan
studies. This choice was endorsed by
the NRG and EPA's SAB (EPA, 2000q;
NRC, 1999). The database from Taiwan
has the following advantages: mortality
data were drawn from a cancer registry;
arsenic well water concentrations were
measured for each of the 42 villages;
there was a large, relatively stable study
population that had life-time exposures
to arsenic; there are  limited measured
data for the food intake of arsenic in this
population; age- and dose-dependent
responses with respect to arsenic in the
drinking water were demonstrated; the
collection of pathology data was
unusually thorough; and the
populations were quite homogeneous in
terms of lifestyle.
  EPA recognizes that there are
problems with the Taiwan study that
introduce uncertainties to the risk
analysis such as: the use of median
exposure data at the village  level; the
low income and relatively poor diet of
the Taiwanese study population (high
levels of carbohydrates, low levels of
protein, selenium and other essential
nutrients); and high exposure to arsenic
via food and cooking water. These are
discussed more thoroughly in the
following paragraphs. The available
studies from Taiwan are ecological
studies and have exposure uncertainties
that are recognized. Ecological studies
are problematic as bases for quantitative
risk assessment. Errors in assigning
persons to exposures are difficult to
avoid. Moreover, all confounding factors
that may have contributed to risk may
not be adequately accounted for. These
uncertainties have to be remembered
since they lead to uncertainty in the
quantitative dose-response relationship
estimated in the observed range of data
and in any extrapolation to estimate the
potential risk at exposures significantly
below the observed range. There is not
a way to take all confounding factors
into account quantitatively, (see section
III.F.)
  Notwithstanding these concerns, the
Taiwan epidemiological studies provide
the basis for assessing potential risk
from lower concentrations of inorganic
arsenic in drinking water, without
having to adjust for cross-species
toxicity interpretation. Ordinarily, the
characteristics of human carcinogens
can be explored and experimentally
defined in test animals. Dose-response
can be measured, and animal studies
may identify internal transport,
metabolism, elimination, and
subcellular events that explain the
carcinogenic process. Arsenic presents
unique problems for quantitative risk
assessment because there is no test
animal species in which to study its
carcinogenicity. While such studies
have been undertaken, it appears that
test animals do not respond to inorganic
arsenic exposure in a way that makes
them  useful as a model for human
cancer assessment. Their metabolism of
inorganic arsenic is also quantitatively
different than humans.
  There are issues with the
extrapolation of the dose-response from
the observed range of exposure in
Taiwan to estimate Taiwan cancer risk
below the observed data range and
application of the same risk estimate to
U.S. populations. The following issues
have been addressed:
  • The Taiwan population ingested
more  arsenic in food and via cooking
with contaminated water than is typical
for the U.S. population. This is because
the staples of the Taiwan diet were rice
and sweet potatoes. Rice and sweet
potatoes are high in arsenic and both
staples absorb water upon cooking. EPA
did a  sensitivity analysis of the effect of
exposure to arsenic through water used
in preparing food in Taiwan. EPA also
analyzed the effect of exposure to
arsenic through food.
  • The Taiwan data on exposure were
uncertain because the association of
individuals with contaminated wells
was made by grouping persons in a
village and assuming they had a lifetime
of exposure to the median of the
concentration of arsenic measured in
the wells serving that village. Wells
within each village had varying arsenic
levels so that people using certain wells
had much higher exposures than others
in the same village. Not all wells serving
all villages were measured. However; all
villagers were assigned a single median

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Federal Register/Vql. 66, No. 14/Monday,  January 22, 2001/Rules and Regulations
concentration for exposure. In addition,
moves made from village to village were
not accounted for. When villages with
only one arsenic measurement were
removed from the data set (on the theory
that the exposure data were too
uncertain), or when village means
instead of medians were used for the
exposure estimates, there was no
statistically significant change in the
estimated point of departure, using
Model 1 of Morales et al. (2000).
  • The Taiwan population was a rural
 Sopulation that was not well nourished,
 aving deficits of selenium, possibly
methionine or choline (methyl donors),
zinc and other essential nutrients. This
malnourishment is not typical of the
U.S. population, although some U.S.
populations may have one or another of
the same deficits. The Taiwanese
population may also have some genetic
differences from the general U.S.
population. These issues cannot be
quantitatively accounted for. However,
deficits in selenium in the diet, in
particular, are a known risk factor for
cancer and indicate possible
overestimation of risk when the Taiwan
data are applied. EPA has qualitatively
taken this into account. (See section
III.F.)
  • The Utah study (Lewis et al., 1999)
did not find any excess  bladder or lung
cancer risk after exposure to arsenic at
concentrations of 14 to  166 ug/L. An
important feature of the study is that it
estimated excess risk by comparing
cancer rates among the  study
population, in Millard County, Utah to
background rates in all  of Utah. But the
cancer rates observed among the study
population, even those  who consumed
the highest levels of arsenic, were lower,'
in many cases significantly lower, than
in all of Utah. This is evidence that
there are important differences between
the study and comparison populations
besides their consumption of arsenic.
One such difference is that Millard
County is mostly rural,  while Utah as a
whole contains some large urban
populations. Another difference is that
the subjects of the Utah study were all
members of the Church of Jesus Christ
of Latter Day Saints, who for religious
reasons have relatively  low rates of
tobacco and alcohol use. For these
reasons, the Agency believes that the
comparison of the study population to
all of Utah is not appropriate for
estimating excess risks.  An alternative
method of analysis is to compare cancer
rates only among people within the,
study population who had high and low
exposures. The Agency  performed such
an analysis on the Utah data, using the
statistical technique of Cox proportional
hazard regression (US EPA, 2000x; Cox
                         and Oakes, 1984). The results showed
                         no detectable increased risk of lung or
                         bladder cancers due to arsenic, even
                         among subjects exposed to more than
                         100 (ig/L on average. On the other hand,
                         the excess risk could also not be
                         distinguished statistically from the
                         levels predicted by model 1 of Morales
                         et al. (2000). What these results show is
                         that the Utah study is not powerful
                         enough to estimate excess risks with
                         enough precision to be useful for the
                         Agency's arsenic risk analysis.
                         Furthermore, the SAB noted that
                         "(a)lthough the data provided in
                         published results of the Lewis, et al.,
                         1999 study imply that there was no
                         excess bladder or lung cancer in this
                         population, the data are  not in a form
                         that allows dose-response to be assessed
                         dependably" (EPA, 2000q). The
                         indications of Lewis et al. study have
                         been taken into account  in the
                         judgments of the impact of scientific
                         uncertainties on the final MCL.
                           g. Is it appropriate to assume linearity
                         for the dose-response assessment for
                         arsenic at low doses given that arsenic
                         is not directly reactive with DMA?
                         Independent scientific panels (EPA,
                         2000q; NRC, 1999; EPA, 1997e; EPA,
                         1988) who have considered the Taiwan
                         study have raised the caution that using
                         the Taiwan study to estimate U.S. risk
                         at lower levels may result in an overly
                         conservative estimation of U.S. risk. The
                         independent panels have each said that
                         below the observed range of the high
                         level of contamination in Taiwan the
                         shape of the dose-response relationship
                         may prove to be sublinear when there is
                         adequate data to characterize the  mode
                         of action. If so, an assumption that the
                         effects seen per dose increment remain
                         the same from high to low levels of dose
                         may overstate the U.S. risk. In
                         evaluating the benefits of alternative
                         MCLs, EPA weighed both the qualitative
                         and quantitative uncertainties about risk
                         magnitude (see section III.F.)
                           The use of a linear procedure to
                         extrapolate from a higher, observed data
                         range to a lower range beyond
                         observation is a science policy approach
                         that has been in use by Federal agencies
                         for four decades. Its basis is both science
                         and policy. The policy objectives are to
                         avoid underestimating risk in order to
                         protect public health and be consistent
                         and clear across risk assessments. The
                         science components include its
                         applicability to generally available data
                         sets (animal tests and human studies)
                         and its basis in the fact that cancer is a
                         consequence of genetic changes coupled
                         with the assumption that direct reaction
                         with DNA is a basic mode of action for
                         chemicals causing important genetic
                         changes (Cogliano et al.,  eds., 1999).
  The linear approach is intended to
identify a level of risk that is an upper
limit on what the risk might be. There
are two biological situations in which
the linear approach can be a particularly
uncertain estimate of risk. One is when
the metabolism and toxicokinetics of the
agent being assessed cause a nonlinear
relationship between the dose of the
active form and the dose of the applied
form of the agent. If this is not
quantitatively dealt with in the dose
part of the dose-response estimation, the
linear extrapolation will have added
uncertainties. In the case of arsenic, it
is known that metabolism and
toxicokinetics are complex, but the
active form(s) is not known. The
resulting complexities of estimating
dose cannot, therefore, be accounted for
in dose-response modeling.
  The other situation is when the mode
of action of the agent is indirect; that is,
when there is not a one-to-one reaction
between the active form of the agent and
DNA, but, instead, the active form
affects other cell components or
processes that, in turn, causes genetic
change. In such cases, the rates of these
secondary processes are limiting, not
the dose of the active form. With few
exceptions, the rates of these secondary
processes are thought not to be a linear
function of applied dose. In the case of
arsenic, it is known that arsenic does
cause genetic changes in short-term
tests, but these are indirect genetic
changes (not one-to-one reactions
between arsenic and DNA).
  If there are both complex
toxicokinetics and secondary effects, the
upper-limit risk estimate from the linear
approach provides may be overly
conservative. However, there simply are
not sufficient data to quantify the effect
of these two features of arsenic on risk.
While some commenters assert that the
Agency can simply use models that
have sublinear structures to address the
issue of secondary  nature of effects, the
Agency does not agree. There are no
data on the effects of arsenic that may
be precursors to cancer. Without such
biological data, the exercise of blindly
applying models has no anchor, in
EPA's judgment. Such modeled
extrapolations could take numerous
shapes and there is no way to decide
how shallow or steep the curve would
be or where on the dose gradient the
zero risk level might be, given the
hundreds of possibilities. There are also
certain modes of action that do not
involve DNA reactivity, but are thought
to be linear in dose response, such as
effects on growth-control signals within
cells. Since we do not know what the
mode of action of arsenic is, we cannot
in fact rule out linearity. Therefore, in

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              Federal  Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and  Regulations
                                                                       7005
 accordance with the 1986 cancer
 guidelines, and subsequent guidance
 discussed later, the Agency cannot
 reasonably use anything other than a
 linear mode of action to estimate the
 upper bound of risk associated with
 arsenic exposure. Nevertheless, the
 uncertainties about both of these facets
 (the toxicokinetics and secondary
 effects) of risk estimation have been
 taken into account qualitatively in the
 Agency's final decision as a perspective
 on the linear dose-response estimation
 (see section III.F.).
   The Agency considered mode-of-
 action information as a basis for
 departing from the assumption of
 linearity and in the process, developed
 a framework for judging the adequacy of
 mode of action data (EPA, 1996a). This
 framework has been reviewed and
 supported by the SAB (EPA, 1997f; EPA,
 1999g). The framework was applied to
 the assessment of chloroform (EPA,
 2000d).
   In order to decide whether a
 particular'mode of action is operative
 for an agent, the database on mode of
 action must be rich and able to both
 describe the sequence of key events in
 the putative mode of action and
 demonstrate it experimentally. The
 elements of the framework analysis
 include:
   • Summary description of postulated
 mode of action (the postulated sequence
 of cellular/physiological events leading
 to cancer must be described.)
   • Identification of key events (the
 specific events that are key to
 carcinogenesis must described in order
 to be experimentally examined.)
   • Strength, consistency, specificity of
 association (the experimental
 observation of the key events and their
 relationship to tumor development must
 be described.)
  • Dose-response relationship (the
 dose-response relationship between the
 key events and tumor incidence must be
 described and evaluated.)
  • Temporal relationship (the key
 events must be shown to precede  tumor
 development.)
  • Biological plausibility and
 coherence (the postulated mode of
 action and the data must be in accord
 with general, accepted scientific
 evidence about the causes of cancer.)
  • Other modes of action (alternative
 modes of action that are suggested must
be examined and their contribution, if
any, described.)
  • Conclusion (an overall conclusion
is made as to whether the postulated
mode of action is accurate given the
results of evaluation of the evidence
under the previous elements.)
   • Human relevance, including
 subpopulations (if the evidence of mode
 of action of carcinogenicity is from.
 animal studies, its human relevance is
 examined.)
   In the case of chloroform, there was
 sufficient information to describe key
 events and undertake mode of action
 analysis. In the case of arsenic, the
 postulated mode of action cannot be
 specifically described, the key events
 are unknown, and no analysis of the
 remaining elements of the mode of
 action framework can be made.  Several
 possible influences of arsenic on the
 carcinogenic process have been
 postulated, but there are insufficient
 experimental data either to show that
 any one of the possible modes is the
 influence actually at work or to test the
 dimensions of its influence as the
 framework requires.
   For chloroform there are extensive
 data on metabolism that identify the
 likely active metabolite. The key
 events—cell toxicity followed by
 sustained cell proliferation and
 eventually tumor effects—have been
 extensively studied in many
 experiments. The key events have been
 empirically demonstrated to precede
 and consistently be associated with
 tumor effects. In sum, a very large
 number of studies have satisfied the
 requirements of the framework analysis.
 By contrast, the arsenic database fails to
 even be able to satisfy the first element
 of the framework; the key events are
 unknown. While there are a number of
 possible modes of action implied by
 existing data, none of them has been
 sufficiently studied to be analyzed
 under the Agency's framework. For this
 reason the comparison of the "best
 available, peer reviewed data" for
 arsenic and chloroform shows quite
 different results. There are not sufficient
 data on arsenic to describe a mode of
 action as there were for chloroform.
 This was also the conclusion of the SAB
 review of arsenic (EPA, 2000q).
   Overall, the NRG and SAB reports
 agreed that the best available science
 provides no alternative to use of a linear
 dose-response process for arsenic
 because a specific mode (or modes) of
 action has not been identified. Unlike
 chloroform, the Agency lacks sufficient ,
 available, peer-reviewed information on
 arsenic to estimate quantitatively a non-
 linear mode of action. The Agency thus
 has decided not to depart from the
 assumption of linearity in selecting an
 MCLGofzero.
 2. Risk factors/bases for upper- and
 lower-bound analyses
  EPA calculated upper- and lower-
bound risk  estimates for the U.S.
 population exposed to arsenic
 concentrations. The approach for this
 analysis included five components.
 First, we developed relative exposure
 factor distributions, which incorporate
 data from the recent EPA water
 consumption study with age, sex, and
 weight data.  Second, the Agency
 calculated the arsenic occurrence
 distributions for the population exposed
 to arsenic levels above 3 |ig/L. Third, we
 chose risk distributions for bladder and
 lung cancer for the analysis from
 Morales et al. (2000). Fourth, EPA
 developed estimates of the projected
 bladder and lung cancer risks faced by
 exposed populations using Monte-Carlo
 simulations,  bringing  together the
 relative exposure factor, occurrence, and
 risk distributions. These simulations
 resulted in upper bound estimates of the
 risks faced by U,S. populations exposed
 to arsenic concentrations at or above 3
 Hg/L in their  drinking water. Finally,
 EPA made adjustments to the lower-
 bound risk estimates to reflect exposure
 to arsenic in cooking water and in food
 in Taiwan. A more detailed description
 of the risk methodology is  provided in
 Appendix B of the Economic Analysis
 (EPA, 2000o).
   a. Water consumption. EPA recently
 updated its estimates of per capita daily
 average water consumption (EPA,
 2000c). The estimates  used data from
 the combined 1994,1995, and 1996
 Continuing Survey of Food Intakes  by
 Individuals (CSFII), conducted by the
 U.S. Department of Agriculture (USDA).
 The CSFII is a complex, multi-stage area
 probability sample of the entire U.S. and
 is conducted  to survey the food and
 beverage intake of the  U.S. Per capita
 water consumption estimates are
 reported by source. Sources include
 community tap water,  bottled water,
 and water from other sources, including
 water from household wells and rain
 cisterns, and household and public
 springs. For each source, the mean and
 percentiles of the distribution of average
 daily per capita consumption are
 reported. The estimates are based on an
 average of 2 days of reported
 consumption  by survey respondents.
 The estimated mean daily average per
 capita consumption of "community tap
 water" by individuals  in the U.S.
 population is 1 liter/person/day. For
 "total water", which includes bottled
 water, the estimated mean daily average
 per capita consumption is 1.2 liters  per/
 person/day. These estimates of water
 consumption  are based on a sample of
 15,303 individuals in the 50 States and
the District of Columbia. The sample
was selected to represent the entire

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population of the U.S. based on 1990
census data.
  The estimated 90th percentile of the
empirical distribution of daily average
per capita consumption of community
tap water for the U.S. population is 2.1
liters/person/day; the corresponding
number for the 90th percentile of daily
average per capita consumption of total
water is 2.3 liters/person/day. In other
words, current consumption data
indicate that 90% of the U.S: population
consumes approximately 2 liters/
person/day, or less.
  Water consumption estimates for
selected subpopulations in the U.S. are
described in the CSFII, including per '.
capita water consumption by source for
gender, region, age categories, economic
                         status, race, and residential status and
                         separately for pregnant women,
                         lactating women, and women in
                         childbearing years. The water
                         consumption estimates by age and sex
                         were used in the computation of the
                         relative exposure factors discussed later.
                           b. Relative Exposure Factors. Lifetime
                         male and female relative exposure
                         factors (REFs) for each of the broad age
                         categories used in the water
                         consumption study were calculated,
                         where the life-long REFs indicate the
                         ' sensitivity of exposure to an individual
                         relative to the sensitivity.of exposure of
                         an "average" person weighing 70
                         kilograms and consuming 2 liters of
                         water per'day, a "high end" water
consumption estimate according to the
EPA water consumption study referred
to previously (EPA, 2000c). In these
calculations, EPA combined the water
consumption data with data on
population weight from the 1994
Statistical Abstract of the U.S.
Distributions for both community tap
water and total water consumption were
used because the community tap water
estimates may underestimate actual tap
water consumption. The weight data
included a mean and a distribution of
weight for male and females on a year-
to-year basis. The means and standard
deviations of the life-long REFs derived
from this analysis are shown in Table
III.D-1.
                             TABLE III.D-1.—LIFE-LONG RELATIVE EXPOSURE FACTORS

Male




Community water consumption data

sd = 061 	 , 	

sd 06

Total water consumption data
Mean - 0.73
s.d. - 0.62
Mean - 0.79
s d - 0 61

  c. Arsenic occurrence. EPA recently
updated its estimates of arsenic
occurrence, and calculated separate
occurrence distributions for arsenic
found in ground water and surface
water systems. These occurrence
distributions were calculated for
systems with arsenic concentrations of 3
ug/L or above. Arsenic occurrence
estimates are described in more detail in
section DI.C.
  d. Risk distributions. In its 1999
report, "Arsenic in Drinking Water," the
NRG analyzed bladder cancer risks
using data from Taiwan. In addition,
NRG examined evidence from human
epidemiological studies in Chile and
Argentina, and concluded that risks of
bladder and lung cancer had
comparable risks to those  "in Taiwan at
comparable levels of exposure" (NRC,
1999). The NRC also examined the
implications of applying different
statistical analyses to the newly
available Taiwanese data for the
purpose of characterizing bladder
cancer risk. While the NRC's work did
not constitute a formal risk analysis,
they did examine many statistical issues
(e.g., measurement errors, age-specific
probabilities, body weight, water
consumption rate, comparison
populations, mortality rates, choice of
model) and provided a starting point for
additional EPA analyses. The report
noted that "poor nutrition, low
selenium concentrations in Taiwan,
genetic and cultural characteristics, and
arsenic intake from food"  were not
                         accounted for in their analysis (NRC,
                         1999, pg. 295). In the June 22, 2000
                         proposed rule, EPA calculated bladder
                         cancer risks and benefits using the
                         bladder cancer risk analysis from the
                         NRC report (NRC, 1999). We also
                         estimated lung cancer benefits in a
                         "What If analysis based on the
                         statement in the 1999 NRC report that
                         "some studies have shown that excess
                         lung cancer deaths attributed to arsenic
                         are 2-5 fold greater than the excess
                         bladder cancer deaths" (NRC, 1999).
                           In July, 2000, a peer reviewed article
                         by Morales et al. (2000) was published,
                         which presented additional  analyses of
                         bladder cancer risks as well  as estimates
                         of lung and liver cancer risks for the
                         same Taiwanese population analyzed in
                         the NRC report. EPA summarized and
                         analyzed the new information from the
                         Morales et al. (2000) article in a NODA
                         published on October 20, 2000 (65  FR
                         63027; EPA, 2000m). Although the data
                         used were the same as used by the  NRC
                         to analyze bladder cancer risk in their
                         1999 publication, Morales et al. (2000)
                         considered more dose-response models
                         and evaluated how well they fit the
                         Taiwanese data for both bladder cancer
                         risk and lung cancer risk. Ten risk
                         models were presented in Morales  et al.
                         (2000) used with and without one of
                         two comparison populations. After
                         consultation with the primary authors
                         (Morales and Ryan), EPA chose Model
                         1 with no comparison population for
                         further analysis.
  EPA believes that the models in
 Morales "et al. (2000) Without a
 comparison population are more
 reliable than those with a comparison
 population. Models with no comparison
 population estimate the arsenic dose-
 response curve only from the study
 population. Models with a comparison
 population include mortality data from
 a similar population (in this case either
 all of Taiwan or part of southwestern
 Taiwan) with low arsenic exposure.  ,
 Most of the models with comparison
 populations resulted in dose-response
 curves that were supralinear (higher
 than a linear dose response) at low
 doses. The curves were "forced down"
 near zero dose because the comparison
 population consists of a large number of
 people with low risk and low exposure.
 EPA believes, based on discussions with
 the authors of Morales et al. (2000), that
 models with a comparison population
 are less reliable, for two reasons. First,
 there is no basis in data on arsenic's
 carcinogenic mode of action to support
 a supralinear curve as being biologically
 plausible. To the contrary, the
 conclusion of the NRC panel (NRC,
 1999) was that the mode of action data
 led one to expect dose responses that
 would be either linear or less than linear
 at low dose. However, the NRC
.indicated that available data are
 inconclusive and " *  * * do not meet
 EPA's 1996 stated criteria for departure
 from the default assumption of
 linearity." (NRC, 1999)

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   Second, models that include
 comparison populations assume that the
 study and comparison populations are
 the same in all important respects
 except for arsenic exposure. Yet Morales
 et al, (2000) agree that "[t]here is reason
 to believe that the urban Taiwanese
 population is not a comparable
 population for the poor rural population
 used in this study." Moreover, because
 of the large amount of data in the
 comparison populations, the model
 results are sensitive to assumptions
 about this group. Evidence that supports
 these arguments are that the risks in the
 comparison groups are substantially
 lower than in similarly exposed
 members of the study group and the
 shape of the estimated dose-response
 changes sharply as a result. For these
 reasons, EPA believes that the models
 without comparison populations are
 more reliable than those with them. Of
 the models that did not include a
 comparison population, EPA believes
 that Model 1 best fits the data, based on
 the Akaike Information Criterion (AIC),
 a standard criterion of model fit, applied
 to Poisson models.  In Model 1, the
 relative risk of mortality at any time is
 assumed to increase exponentially with
 a linear function of dose and a quadratic
 function of age.
   Morales et al. (2000) reported that two
 other models without comparison
 populations also fit the Taiwan data
 well: Model 2, another Poisson model
 with a nonparametric instead of
 quadratic age effect, and a multi-stage
 Weibull (MSW) model. Under Model 2,
 the points of departure for male and
 female bladder and lung cancer are from
 1% to 11% lower than under Model 1,
 but within the 95% confidence bounds
 from Model 1. Model 2 therefore implies
 essentially the same bladder and lung
 cancer risks as Model 1. Under the
 MSW model, compared to Model 1,
 points of departure are 45% to 60%
 higher for bladder cancer and for female
 lung cancer, and 38% lower for male
 lung cancer. EPA did not consider the
 MSW model for further analysis,
 because this model is more sensitive to
 the omission of individual villages
 (Morales et al., 2000) and to the
 grouping of responses by village (NRC,
. 1999), as occurs in the Taiwanese data.
 However, if the MSW model were
 correct, it would imply a 14% lower
 combined risk of lung and bladder
 cancers than Model 1, among males and
 females combined.
   Considering all of these results, the
 Agency decided that the more
 exhaustive statistical analysis of the
 data provided by Morales et al. (2000),
 as analyzed by EPA, would be the basis
 for the new risk calculations for the
 final rule (with further consideration of
 additional risk analyses) and other
 pertinent information. The Agency
 views the results of the alternative
 models described above as an additional
 uncertainty which was considered in
 the decision concerning the selection of
 the final MCL (see section III.F. of
 today's preamble).
   e. Estimated risk reductions.
 Estimated risk reductions for bladder
 and lung cancer at various MCL levels
 were developed using Monte-Carlo
 simulations. Monte-Carlo analysis is a
 technique for analyzing problems where
 there are a large number of
 combinations  of input values which
 makes it impossible to calculate every
 possible result. A random number
 generator is used to select input values
 from pre-defined distributions. For each
 set of random  numbers, a single
 scenario's result is calculated. As the
 simulation runs, the model is
 recalculated for each new scenario that
 continues until a stopping criteria is
 reached. These simulations combined
 the distributions of relative exposure
 factors (REFs), occurrence at or above 3
 Hg/L, and risks of bladder and lung
 cancer taken from the Morales et al.
 (2000) article.  The simulations resulted
 in upper-bound estimates of the actual
 risks faced by  populations exposed to
 arsenic concentrations at or above 3 (Xg/
 L in their drinking water.
  /. Lower-bound analyses. Two
 adjustments were  made to the risk
 distributions resulting from the
 simulations described previously,
 reflecting uncertainty about the actual
 arsenic exposure in the Taiwan study
 area. First, the Agency made an
 adjustment to the lower bound risk
 estimates to take into consideration the
 effect of exposure  to arsenic through
 water used in preparing food in Taiwan.
 The Taiwanese staple foods were dried
 sweet potatoes and rice (Wu et al.,
 1989). Both the 1988 EPA "Special
 Report on Ingested Inorganic Arsenic"
 report (EPA.1988) and the 1999 NRC
 report assumed that an average
 Taiwanese male weighed 55-kg and
 drank 3.5 liters of water daily, and that
 an average Taiwanese female weighed
 50 kg and drank 2  liters of water daily.
 Using these assumptions, along with an
 assumption that Taiwanese men and
 women ate one cup of dry rice and two
 pounds of sweet potatoes a day, the
Agency re-estimated risks for bladder
 and lung cancer, using one additional
liter water consumption for food
preparation (I.e., the water absorbed by
hydration during cooking). This
adjustment was discussed and used in
the October 20, 2000 NODA (65 FR
63027; EPA, 2000m).
   Second, an adjustment was made to
 the lower-bound risk estimates to take
 into consideration the relatively high
 arsenic concentration in the food
 consumed in Taiwan as compared to the
 U.S. The food consumed daily in
 Taiwan contains about 50 ug of arsenic,
 versus about 10 ug in the U.S. (NRC,
 1999, pp. 50-51). Thus the total
 consumption of inorganic arsenic (from
 food preparation and drinking water) is
 considered, per kilogram of body
 weight, in the process of these
 adjustments. To carry them out, the
 relative contribution of arsenic in the
 drinking water that was consumed as
 drinking water, on a ug arsenic per
 kilogram body weight per day (|ig/kg/
 day) basis/was compared to the total
 amount of arsenic consumed in drinking
 water, drinking water used for cooking,
 and in food, on a ug/kg/day basis.
   Other factors contributing to lower
 bound uncertainty include the
 possibility of a sub-linear dose-response
 curve below the point of departure. The
 NRC noted "Of the several modes of
 action that are considered most
 plausible, a sub-linear dose response
, curve in the low-dose range is
 predicted, although linearity cannot be
 ruled out." (NRC, 1999).  The recent
 Utah study (Lewis et al.,  1999),
 described in section V.G.l(b), provides
 some evidence that the shape of the
 dose-response curve may well be sub-
 linear at low doses. Because sufficient
 mode of action data were not available,
 an adjustment was not made to the risk
 estimates to reflect the possibility of a
 sub-linear dose-response curve.
 Additional factors contributing to
 uncertainty include the use of village
 well data rather than individual
 exposure data, deficiencies in the
 Taiwanese diet relative to the U.S. diet
 (selenium, choline, etc.),  and the
 baseline health status in the Taiwanese
 study area relative to U.S. populations.
 The Agency did not make adjustments
 to the risk estimates to reflect these
 uncertainties because applicable peer-
 reviewed, quantitative studies on which
 to base such adjustments were not
 available.
   Estimated risk levels for bladder and
 lung cancer combined at various MCL
 levels are shown in Tables III.D-2(a-c).
 The risk estimates without adjustments
 for exposure uncertainty through
 cooking water and food are shown Table
,111.0-2 (a). These estimates incorporate
 occurrence data, water consumption
 data, and male and female risk
 estimates. Lower bounds  show estimates
 using community water consumption
 data; upper bounds show estimates
 using total water consumption data.
 Table IILD-2 (b) shows estimated risk

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Federal Register/Vol.  66,  No. 14/Monday, January 22, 2001/Rules and Regulations
levels for bladder and lung cancer
combined at various MCL levels with
adjustments for exposure uncertainty
through cooking water and food. These
estimates incorporate occurrence data,
water consumption data, and male risk
estimates, with lower bounds reflecting
community water consumption data and
upper bounds reflecting total water
consumption data. There are no
adjustments for other factors which
contribute to uncertainty, such as the
use of village well data as opposed to
individual exposure data. Tablet in.D-2
(c) is a combination of Table m.D-2(a)
and Table III.D-2 (b). with the lower
bounds taken from Table III.D-3 [b), and
the upper bounds taken from Table
                          m.D-2 (a). Thus Table III.D-2 (c) reflects
                          the range of estimates before and after
                          the exposure uncertainty adjustments
                          for cooking water and for food, along
                          with the incorporation of water
                          consumption data, occurrence data, and
                          cancer risk estimates. These estimates
                          were used to estimate the range of
                          potential cases avoided at the various
                          MCL levels.
                            The lower-bound risk estimates in
                          Tables m.D-2 (a-c) reflect the following:
                          —The community (tap) water
                            consumption from the EPA water
                            consumption study (EPA, 2000c)
                          —The occurrence distributions  of
                            arsenic in U.S. ground and surface
                            water systems
—Male risk estimates from Morales et
  al. (2000)
—Arsenic exposure from cooking water
  in Taiwan
—Arsenic exposure from food in
  Taiwan
  The upper-bound risk estimates in
Tables IH.D-2(a-c) reflect the following:
—The total water consumption
  estimates from the EPA water
  consumption study (EPA, 2000c)
—The occurrence distributions of
  arsenic in U.S. ground and surface
  water systems
—Male and female risk estimates from
  Morales et al. (2000)
       TABLE lll.D-2(a).—CANCER RISKS FOR U.S. POPULATIONS EXPOSED AT OR ABOVE MCL OPTIONS, AFTER
                                                   TREATMENT '-2
                                   [without adjustment for arsenic in food and cooking water]

3 	
5 	
10 	
20 	
MCL
(ra/L)




Mean exposed
population risk
0.93-1.25x10-"
1.63 -2.02x10-"
2.41-2.99x10-"
3.07-3.85x10-"
90th percentile exposed
population risk
1.95-2.42x10-"
3.47-3.9x10-"
5.23-6.09x10-"
6.58-8.37 x 10-"
  1 Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume that the probability of illness
Irom arsenic exposure in the U.S. is equal to the probability of death from arsenic exposure among the arsenic study group.
  2The estimated risks are male and female risks combined.

       TABLE III.D-2(B).—CANCER RISKS FOR U.S. POPULATIONS EXPOSED AT OR ABOVE MCL OPTIONS, AFTER
                                                  TREATMENT 1,2
                                   [without adjustment for arsenic in food and cooking water]

3
5
10 	
20 	
MCL
(H9/L)




Mean exposed
population risk
0.11-0.13x10-"
0.27-0.32x10-"
0.63-0.76x10-"
1.1-1.35x10-"
90th percentile exposed
population risk
0.22-0.26x10-"
0.55-0.62x10-"
1.32-1.54x10-"
2.47-2.89x10-"
  'Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume that the probability of illness
from arsenic exposure in the U.S. is equal to the probability of death from arsenic exposure among the arsenic study group.
  2The estimated risks are for males.

TABLE III.D-2(c).—CANCER  RISKS FOR U.S. POPULATIONS EXPOSED AT OR ABOVE MCL OPTIONS, AFTER TREATMENT1-2
             [lower bound with food and cooking water adjustment, upper bound withough food and cooking water adjustment]

3 	
5
10
20 	
MCL
(ng/L)




Mean exposed
population risk
0.11-1.25x10-"
0.27-2.02x10-"
0.63-2.99 x 10-"
1.1-3.85x10-"
90th percentile exposed
population risk
0.22-2.42 x 10-"
0.55-3.9x10-"
1.32-6.09x10-"
2.47-8.37x10-"
  1 Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume that the probability of illness
from arsenic exposure in the U.S. is equal to the probability of death from arsenic exposure among the arsenic study group.
  g. Cases avoided. The lower and
upper bound risk estimates from Table
III.D-2(c) were applied to the exposed
population to generate cases avoided for
CWSs serving less than a million
customers. Because the actual arsenic
occurrence was known for the very large
                          systems (those serving over a million
                          customers), their system-specific arsenic
                          occurrence distributions could be
                          directly computed. The system-specific
                          arsenic distributions allowed direct
                          calculation of avoided cancer cases. The
                          process, described in detail in the
Economic Analysis (EPA, 2000o),
utilizes the same risk estimates from
Morales et al. (2000) that were used in
deriving the number of cases avoided in
smaller CWSs. Cases avoided for
NTNCWSs were also computed
separately, utilizing factors developed to

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                                                                      7009
account for the intermittent nature of
the exposure. These factors are
described in the Economic Analysis.
  An upper-bound adjustment was
made to the number of bladder cancer
cases avoided to reflect a possible lower
mortality rate in Taiwan than was
assumed in the risk assessment process
described earlier. We also made this
adjustment in the June 22, 2000
proposal. In the Taiwan study area,
information on arsenic-related bladder
and lung cancer,deaths was reported. In
order to use these data to determine the
probability of contracting bladder and
lung cancer as a result of exposure to
arsenic, a probability of mortality, given
the onset of arsenic-induced bladder
and lung cancer among the Taiwanese
study population, must be assumed. The
study area in Taiwan is a section where
arsenic concentrations in the water are
very high by comparison to those in the
U.S., and an area of low incomes and
poor diets, where the availability and
quality of medical care is not of high
quality, by U.S. standards. In its
estimate of bladder cancer risk, the
Agency assumed that within the
Taiwanese study area, the probability of
contracting bladder cancer was
relatively close to the probability of
dying from bladder cancer (i.e., that the
bladder cancer incidence rate was equal
to the bladder cancer mortality rate).
  We do not have data on the rates of
survival for bladder cancer in the
Taiwanese villages in the study at the
time of data collection. We do know that
the relative survival rates for bladder
cancer in developing countries overall
ranged from 23.5% to 66.1% in 1982-
1992 (WHO, 1998). We also have some
information on annual bladder cancer
mortality and incidence for the general
population of Taiwan in 1996. The age-
adjusted annual incidence rates of
bladder cancer for males and females,
respectively, were 7.36 and 3.09 per
100,000, with corresponding annual
mortality rates of 3.21 and 1.44 per
100,000 (correspondence from Chen to
Herman Gibb, January 3, 2000).
Assuming that the proportion of males
and females in the population is equal,
these numbers imply that the mortality
rate for bladder cancer in the general
population of Taiwan, at present, is
45%. Since survival rates have most
likely improved over the years since the
original Taiwanese study, this "number
represents a lower bound on the
survival rate for the original area under
study (i.e., one would not expect a
higher rate of survival in that area at
that time). This has implications for the
bladder cancer risk estimates from the
Taiwan data. If there were any persons
with bladder cancer who recovered and
died from some other cause, then our
estimate underestimated risk; that is,
there were more cancer cases than
cancer deaths. Based on the previous
discussion, we think bladdep- cancer
incidence could be no more than two-
fold bladder cancer mortality; and that
an 80% mortality rate would be
plausible. Thus, we have adjusted the
upper bound of cases avoided, which is
 used in the benefits analysis, to reflect
 a possible mortality rate for bladder
 cancer of 80 percent. Because lung
 cancer mortality rates are quite high,
 about 88% in the U.S. (EPA, 1998n), the
 assumption was made that all lung
 cancers in the Taiwan study area
 resulted in fatalities.
  The total number of bladder and lung
 cases avoided at each MCL is shown in
 Table III.D-3. These cases avoided
 include CWSs and NTNCWSs cases.
 The number of bladder and lung cancer
 cases avoided ranges from 57.2 to  138.3
 at an MCL of 3 Hg/L, 51.1 to 100.2  at an
 MCL of 5 ng/L, 37.4 to 55.7 at an MCL
 of 10 u,g/L, and 19.0 to 19.8 at an MCL
 of 20 |ig/L. The cases avoided were
 divided into premature fatality and
 morbidity (i.e., illness) cases based on
 U.S. mortality rates. In the U.S.
 approximately one out of four
 individuals who is diagnosed with
 bladder cancer actually dies from
 bladder cancer. The mortality rate  for
 the U.S. is taken from a cost of illness
 study recently completed by EPA (EPA,
 1999J). For those diagnosed with
 bladder cancer at the average age of
 diagnosis (70 years), the probability for
 dying of that disease during each year
 post-diagnosis was summed over a
 20-year period to  obtain the value  of 26
 percent. Mortality rates for U.S. bladder
 cancer patients have decreased overall
 by 24% from 1973 to 1996. For lung
 cancer, mortality rates are much higher.
 The comparable mortality rate for lung
 cancer in the U.S. is 88% (EPA, 1998n).
  TABLE lll.D-3.—ANNUAL TOTAL (BLADDER AND LUNG) CANCER CASES AVOIDED FROM REDUCING ARSENIC IN CWSs
                                                  AND NTNCWS
Arsenic level (ug/L)
3 	
5 	
10 	 : 	
20 	 	 	
Reduced
mortality
cases1
32.6-74.1
29 1-53.7
21 .3-29.8
10.2-11.3
Reduced
morbidity
cases1
24.6-64 2
220-465
16.1-25.9
8.5-8.8
Total cancer
cases
avoided
572-1383
51 1-1002
37 4-55 7
19.0-19.8
  1 Based on U.S. mortality rates given in the text.
3. Sensitive Subpopulations

  The 1996 SDWA amendments include
specific provisions in section
1412(b)(3)(C)(i)(V) that require EPA to
assess the effects of a contaminant not
just on the general population but on
groups within the general population
such as infants, children, pregnant
women, the elderly, individuals with a
history of serious illness, or other
subpopulations are identified as likely
to be at greater risk of adverse health
effects due to exposure to contaminants
in drinking water than the general
population. The NRC subcommittee
noted that there is a marked variation in
susceptibility to arsenic-induced toxic
effects that may be influenced by factors
such as genetic polymorphisms
(especially in metabolism), life stage at
which exposures occur, sex, nutritional
status, and concurrent exposures to
other agents or environmental factors.
The NRC report concluded that there is
insufficient scientific information to
permit separate cancer risk estimates for,
potential subpopulations such as
pregnant women, lactating women, and
children and that factors that influence
sensitivity to or expression of arsenic-
associated cancer and noncancer effects
need to be better characterized. EPA
agrees with the NRC that there is not
enough information to make risk
conclusions on any specific
subpopulations.

4. Risk Window

  EPA has historically considered 10~4
to 10~6 as a target risk range protective
of public health in its drinking water
program. However, the risk-range

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represents a policy goal for EPA, and is
not a statutory factor in setting an MCL.
Note that the procedure EPA uses to
estimate such risks provides an upper-
bound estimate. In the case of arsenic,
EPA performed a benefit-cost analysis as
required by the statute. This analysis is
discussed in more detail in section III.F.
E. What Are the Costs and Benefits at 3,
5,10, and 20 \ig/L?
  In accordance with section 1412
(b)(3)(C) of SDWA, EPA must analyze
the costs and benefits of a proposed
NPDWR. To comply with this provision,
EPA included the complete analysis in
the proposed rule. Also, in accordance
with Executive Order 12866, Regulatory
Planning and Review, EPA must
estimate the costs and benefits of the
arsenic rule in an Economic Analysis in
conjunction with publishing the final
rule. EPA has prepared an Economic
Analysis to comply with the
requirements of this Order. This  section
provides a summary of the information
from the Arsenic Economic Analysis
(EPA, 2000o).
1. Summary of Cost Analysis
  National cost estimates of compliance
with the arsenic rule were derived from
                          estimates of utility treatment costs,
                          monitoring and reporting costs, and
                          start-up costs for both CWS and
                          NTNCWSs. Utility treatment costs were
                          derived using occurrence data,
                          treatment train unit costs, and decision
                          trees. The occurrence data provide a
                          measure of the number of systems that
                          would need to install treatment in each
                          size category. The treatment train unit
                          cost estimates provide a measure of how
                          much a technology will cost to install.
                          Decision trees vary by system size and
                          are used as a prediction of the treatment
                          technology trains facilities would likely
                          install to comply with options
                          considered for the revised arsenic
                          standard. Detailed descriptions of the
                          methodologies used in  determining the
                          costs of this rule are found in the
                          "Technologies and Cost for Removal of
                          Arsenic in Drinking Water" document
                          (EPA, 2000t) and also the "Arsenic
                          Economic Analysis"  (EPA, 2000o), both
                          of which are in the docket for this final
                          rulemaking.
                            a. Total national costs. Under the
                          MCL of 10 ng/L, the Agency estimates
                          that total national costs to CWSs are
                          $172.3 million (1999 dollars) annually  ''
                          at a 3% discount rate. This total
national cost includes annual treatment
costs ($169.6 million), annual
monitoring and administrative costs
($1.8 million), and annual State costs
($0.9 million). Assuming a 7% discount
rate, total national costs to CWSs are
estimated at $196.6 million annually.
  Total national costs to NTNCWSs are
estimated at $8.1 million annually at a
3% discount rate. This includes annual
treatment costs ($7.0 million), annual
monitoring and administrative costs
($0.9 million), and annual State costs
($0.1 million). Total national costs to
NTNCWSs, assuming a 7% discount
rate, are estimated at $9.1 million^
annually.
  Table III.E-1 shows the total national
cost breakdown for the arsenic MCL and
also for three other arsenic levels
considered in the proposed rule.
Expected system costs include treatment
costs, monitoring costs, and
administrative costs of compliance.
State costs include monitoring and
administrative costs of implementation.
As expected, aggregate  arsenic
compliance costs increase with
decreasing arsenic MCL levels as more
systems are affected.
                  TABLE lll.E-1.—TOTAL ANNUAL NATIONAL SYSTEM AND STATE COMPLIANCE COSTS
                                                   [$ millions, 1999]
                 Discount rate
                                                        CWS
                                                3 percent    7 percent
                                                                              NTNCWS
                                                          3 percent    7 percent
                                                                                         Total
                 3 percent    7 percent
                                                     MCL = 3
System Costs	      $668.1      $759.5
Treatment	       665.9       756.5
Monitoring/Administrative	         2.2         3.0
State Costs 	*	         1.4         1.6

    Total1	       669.4       761.0

                                                    MCL =

System Costs	       396.4       451.1
Treatment	       394.4       448.3
Monitoring/Administrative	         2.0         2.8
State Costs	         1.1         1.3

    Total1	       397.5       452.5

                                                  Final MCL = 10 |ig/L

System Costs	       171.4       195.5
Treatment	.'.	       169.6       193.0
Monitoring/Administrative	         1.8         2.5
State Costs 	         0.9         1.0

    Total1 	       172.3       196.6

                                                    MCL = 20 ng/L

System Costs	         62.4        71.4
Treatment	         60.7        69.0
Monitoring/Administrative	         1.7         2.4
                                                               $28.2
                                                               27.2
                                                                 1.0
                                                                 0.1
                                                               28.3
         $31.0
          29.6
           1.4
           0.2
                                                                           31.1
$696.3
 693.1
   3.2
   1.5
                                                                                      697.8
$790.4
 786.0
   4.4
   1.7
                                                                                                  792.1
                                                               17.3
                                                               16.3
                                                                1.0
                                                                0.1
          18.9
          17.6
           1.3
           0.2
 413.5
 410.6
   2.9
   1.2
 470.2
 466.1
   4.1
   1.4
                                                               17.3
                                                                           19.1
                                                                                      414.8
                                                                                                  471.7
                                                                7.9
                                                                7.0
                                                                0.9
                                                                0.1
           8.9
           7.6
           1.3
           0.2
 179.4
 176.7
   2.7
   1.0
 204.4
 200.6
   3.8
   1.2
                                                                8.1
                                                                            9.1
                                                                                      180.4
                                                                                                  205.6
                                                                3.5
                                                                2.6
                                                                0.9
           4.1
           2.8
           1.3
  65.9
  63.3
   2.6
  75.5
  71.8
   3.7

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              Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and  Regulations
                                                                       7011
            TABLE lll.E-1—TOTAL ANNUAL NATIONAL SYSTEM AND STATE COMPLIANCE COSTS—Continued
                                                   [$ millions, 1999]
Discount rate
State Costs 	
Total1 	

CWS
3 percent
0.7
63.2
7 percent
0.8
72.3
NTNCWS
3 percent
0.1
3.6
7 percent
0.2
4.2
Total
3 percent
0.9
66.8
7 percent
1.0
76.5
  1 Total may not match detail due to rounding.


  b. Household costs. Table III.E-2
shows mean annual costs per household
for those households that are served by
systems that may need to treat under
today's rule. As discussed in Table
IH.C-6 of today's preamble and Table 8-
2 of the Economic Analysis, of the
approximately 74,000 systems that are
covered by today's rule, EPA estimates
that only about 3,433 of these systems
will require treatment. Table III.E-2
refers only to the households served by
systems expected to need treatment. The
average household cost increase
resulting from today's rule is $31.85.
However, due to economies of scale,
costs per household are higher in the
smaller size categories, and lower in the

                               TABLE I
 larger size categories. For today's rule
 (10 ng/L), costs are expected to be
 $326.82 per household for systems
 serving <100 people, and $162.50 per
 household for systems serving 101-500
 people. Costs per households in systems
 larger than those are substantially lower:
 From $70.72 to $0.86 per household. As
 shown in Table UI.E—2, the costs per
 household do not vary dramatically
 across MCL options although Table
 III.E-1 shows that total national costs
 are significantly different. This
 divergence is attributable to the total
 number of households affected by each
 MCL level and not the cost of treatment.
 For example, approximately eleven
 million households would be affected
by an MCL of 3 Hg/L compared to
approximately three million affected by
the today's final rule MCL of 10 |ig/L.
In addition, the household costs change-
relatively little among MCL options
because while each progressively lower
MCL option brings in a larger number of
systems subject to the rule, the majority
of those systems generally need only
minimal removal of arsenic. This fact
offsets, to an extent, the increased costs
as a result of more systems covered at
lower MCL options. A more detailed
discussion of household costs can be
found in Chapter 6 of the "Arsenic
Economic Analysis" document (EPA,
2000o).
il.E-2.—MEAN ANNUAL COSTS PER HOUSEHOLD
            [in 1999 dollars]1
System size
<100 	
101-500 	 	 	
501-1,000 	
1,001-3.300 	
3.301-10,000 	
10,001-50,000 	
50,001-100,000 	
100,001-1,000,000 	 : 	
>1, 000,000 	
All categories ..."3 	
3ug/L
$317 00
16691
7481
6376
4284
3840
31 63
25 29
7.41
,41.34
5ng/L
$31826
16402
73 11
61 94
40 18
3607
2945
2334
279
36.95
10ng/L
$326 82
16250
7072
5824
3771
3237
2481
2052
086
31.85
20 (ig/L.
$351 15
166 72
6824
5436
3463
29 05
22 63
19 26
0 15
23.95
  10nly households served by those systems expected to install treatment.
  2. Summary of Benefits Analysis
  Arsenic ingestion has been linked to
a multitude of health effects, both
cancerous and non-cancerous. These
health effects include cancer of die
bladder, lungs, skin, kidney, nasal
passages, liver, and prostate. Arsenic
ingestion has also been attributed to
cardiovascular, pulmonary,
immunological, and neurological,
endocrine effects. A complete list of the
arsenic-related health effects reported in
humans is discussed  in section III. D of
this preamble. Current research on
arsenic exposure has  only been able to
provide enough information to conduct
a quantitative assessment of bladder and
lung cancers. The other health effects
and possible non-health benefits remain
unquantified in this analysis but are
 discussed qualitatively. It is important
 to note that if the Agency were able to
 quantify additional arsenic-related
 health effects and non-health effects, the
 quantified benefits estimates may be
 significantly higher than the estimates
 presented in this analysis. In addition,
 the SDWA amendments of 1996 require
 that EPA fully consider both
 quantifiable and non-quantifiable
 benefits that result from drinking water
 regulations and has done this for today's
 arsenic rule.
  a. Primary analysis. Quantifiable
 benefits. Although arsenic in drinking
 water has been associated with
 numerous health effects (see section
 III.D), the quantified benefits that result
 from todayfs rule are associated only
 with reductions in arsenic-related
bladder and lung cancers. A complete
discussion of risk assessment
methodology and assumptions can be
found in Chapter 5 of the "Arsenic
Economic Analysis" document (EPA,
2000o).
  The quantified benefits for today's
rule for both CWSs and NTNCWSs
range from $140 million to $198 million
and consider both lower- and upper-
bound risk levels. Specifically, the
benefits to the CWSs are approximately
$138.2 million to $193.2 million and
$1.4 million to $4.5 million for
NTNCWSs; Table III.E-3 shows the
complete range of quantified benefits for
the other MGL levels considered by the
Agency. Section III.D.2. of this preamble
explains the derivation of the upper-
and lower-bound estimates

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7012
Federal Register/Vol. 66, No. 14/Monday,  January 22, 2001/Rules and  Regulations
  In order to monetize the benefit from
the bladder and lung cancers cases
avoided, the Agency used two different
values. First, a value of statistical life
(VSL) estimate was applied to those
cancer cases that result in a mortality.
EPA assumed a 26% mortality rate for
bladder cancer and an 88% mortality
rate for lung cancer (EPA, 1999J; EPA,
1998n).  The current VSL value used by
the Agency is $6.1 million, in 1999
dollars.  This value of $6.1 million does
not reflect any adjustments to account
for national real income growth that
occurred subsequent to the completion
of the wage-risk studies on which EPA's
VSL estimate is derived. Were the
Agency to adjust the VSL to account for
this growth in real income, the VSL
would be approximately $6.77 million
(assuming a 1.0 income elasticity).
  Second, a willingness-to-pay value
(WTP) is used to monetize the cancer
cases that do not result in a mortality.
The WTP value for avoiding a non-fatal
cancer is not currently available;
therefore, the Agency used a WTP
estimate to reduce a case of chronic
bronchitis as a proxy. The use of this
value may understate the true benefit if
the WTP to avoid a nonfatal cancer is
greater than the WTP to avoid a case of
chronic bronchitis. The mean value of
this WTP estimate is $607,000 (in 1999
dollars). A complete discussion of the
VSL and WTP values and how they are
calculated can be found in Chapter 5 for
                         the "Arsenic Economic Analysis"
                         document (EPA, 2000o).
                         —Non-quantifiable benefits. There are a
                           number of important non-quantified
                           benefits that EPA considered in its
                           analysis. Chief among these are
                           certain health impacts-known to be
                           caused by arsenic, though, while they
                           may be substantial, the extent to
                           which these impacts occur at levels
                           below 50 ug/L is unknown. These
                           additional health effects include
                           cancers, other than bladder and lung
                           cancers, as well as non-cancer health
                           effects. In addition, EPA has
                           identified non-health benefits that
                           may result from today's rule, which
                           are discussed next.
                           EPA was not able to quantify many of
                         the health effects potentially associated
                         with arsenic due to data limitations.
                         These health effects include other
                         cancers such as skin and prostate cancer
                         and non-cancer endpoints such as
                         cardiovascular, pulmonary, and
                         neurological impacts. These health
                         effects and the relevant studies linking
                         these health effects to arsenic in
                         drinking water are  discussed in section
                         in.D.  of today's rule. For example, a
                         number of epidemiologic studies
                         conducted in several countries (e.g.,
                         Taiwan, Japan, England, Hungary,
                         Mexico, Chile, and Argentina) report an
                         association between arsenic in drinking
                         water and skin cancer in exposed
populations. Studies conducted in the
U.S. have not demonstrated an
association between inorganic arsenic in
drinking water and skin cancer.
However, these studies may not have
included enough people in their design
to detect these types of effects.
  Other potential benefits not quantified
or monetized in today's rule include
reduced uncertainty about becoming ill
from consumption of arsenic in drinking
water and the ability for some treatment
technologies to  eliminate multiple
contaminants. The reduced uncertainty
concept depends on several factors
including consumer's degree of risk  ,
aversion, their perceptions about the
drinking water quality (degree to which
they will be affected by the regulatory
action), and the expected probability
and severity of human heath effects
associated with arsenic contamination
of drinking water. Another non-
quantified benefit is the effect on those
systems that install treatment
technologies that can address multiple
contaminants. For example, membrane
systems, such as reverse osmosis, can be
used for arsenic removal but can also
remove many other contaminants that
EPA is in the process of regulating or
considering regulating. Therefore, by
installing a reverse osmosis system, a
system may not have to make any
additional changes to comply with these
future regulations.
                 TABLE III.E-3— ESTIMATED BENEFITS FROM REDUCING ARSENIC IN DRINKING WATER
                                                   [S millions 1999]
Arsenic level
(ng/L)
3 	
5 	
10 	
20 	

Total quantified
health benefits 1
$213.8-$490.9
$191.1-$355.6
$139.6-$197.7
$66.2-$75.3

Potential non-quantified health benefits includes reductions in:
Skin Cancer.
Kidney Cancer.
Cancer of the Nasal Passages.
Liver Cancer.
Prostate Cancer.
Cardiovascular Effects.
Pulmonary Effects.
Immunological Effects.
Neurological Effects.
Endocrine Effects.
  1 Benefits from reduction in bladder and lung cancer. The range represents both a lower and upper bound risk as discussed in section I
this preamble.
                                                                                               . D. of
  b. Sensitivity analysis on benefits
valuation. For the final rulemaking
analysis, some commenters have argued
that the Agency should consider an
assumed time lag or latency period in its
benefits calculations. The term
"latency" can be used in different ways,
depending on the context. For example,
health scientists tend to define latency
as the period beginning with the initial
exposure to the carcinogen and ending
when the cancer is initially manifested
                         (or diagnosed), while others consider
                         latency as the period between
                         manifestation of the cancer and death.
                         Latency, in this case, refers to the
                         difference between the time of initial
                         exposure to environmental carcinogens
                         and the actual mortality. Use of such an
                         approach might reduce significantly the
                         present value of health risk reduction
                         benefits estimates.
                           In the proposed arsenic rule, the
                         Agency included qualitative language
on the latency issue, including
descriptions of other adjustments which
may influence the estimate of economic
benefits associated with avoided cancer
fatalities. The Agency also agreed to ask
the SAB to conduct a review of the
benefits' transfer issues and possible
adjustment factors associated with
economic valuation of mortality risks. A
summary of the SAB's
recommendations is shown in the
following section.

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             Federal Register/Vol.  66, No. 14/Monday, January  22,  2001/Rules and Regulations
                                                                      7013
  c. SAB recommendations. EPA
brought this issue before the
Environmental Economics Advisory
Committee (EEAC) of EPA's SAB in a
meeting held on February 25, 2000 in
Washington, DC. The SAB submitted a
final report on its findings and
recommendations to EPA on July 27,
2000. The Panel's report made a number
of recommendations on the adjustment
factors and benefit-cost analysis in
general. A copy of the final SAB report
(EPA, 2000J) is in the record for this
ruleniaking.
  The SAB Panel noted that benefit-cost
analysis, as described in the Agency's
Guidelines for Preparing Economic
Analysis (EPA, 2000k), is not the only
analytical tool nor is efficiency the only
appropriate criterion for social decision
making. The SAB Panel also stated that
it is important to carry out such
analyses in an unbiased manner with as
much precision as possible. In its report,
the SAB recommended that the Agency
continue to use a wage-risk-based VSL
as its primary estimate; any appropriate
adjustments that are made for timing
(e.g., latency) and income growth
should be part of the Agency's main
analysis while any other proposed
adjustments should be accounted for in
sensitivity analyses to show how results
would change if the VSL were adjusted
for some of the major differences in the
characteristics of the risk and of the
affected populations. The SAB
recommended including only
adjustments for latency and income
growth in the main analysis because it
did not believe any of the other
proposed adjustments were adequately
supported in the literature at the present
time. Specifically, the SAB report
recommended that (1) Health benefits
brought about by current policy
initiatives (i.e., after a latency period)
should be discounted to present value
using the same rate that  is used to
discount other future benefits and costs
in the primary analysis;  and any other
proposed adjustments should be
accounted for in a sensitivity analysis  •
including adjustments to the VSL for a
"cancer premium," voluntariness and
controllability, altruism, risk aversion,
and ages of the affected population. No
adjustment should be made to the VSL
to reflect health status of persons whose
cancer risks are reduced. (2) Estimates
of VSLs accruing in future years should
be adjusted in the primary analysis to
reflect anticipated income growth, using
a range of income elasticities.
  After considering the SAB's
recommendations, EPA has developed a
sensitivity analysis of the latency
structure and associated benefits for the
arsenic rule, as described in the next
section and in the Economic Analysis
for the final rule. This analysis consists
of health risk reduction benefits that
reflect adjustments for discounting,
incorporation of a range of latency
period assumptions, adjustments for
growth in income, and incorporation of
other factors such as voluntariness and
controllability. Although the SAB
recommended accounting for latency in
a primary benefits analysis, the Agency
believes that, in the absence of any
sound scientific evidence on the
duration of particular latency periods
for arsenic related cancers, discounted
benefits estimates for arsenic are more
appropriately accounted for in a
sensitivity analysis. Sensitivity analyses
are generally reserved for examining the
effects of accounting for highly
uncertain factors, such as the estimation
of latency periods, on health risk
reduction benefits estimates.
  Defining a latency period is highly
uncertain because the length of the
latency period is often poorly
understood by health scientists. In some
cases, information on the progression of
a cancer is based on animal studies, and
extrapolation to humans is complex and
uncertain. Even when human  studies
are available, the dose considered may
differ significantly from the dose
generally associated with drinking water
contaminants (e.g., involve a high level
of exposure over a short time period,
rather than a long term, low level of
exposure). The magnitude of the dose,
may in turn, affect the resulting latency
period. Information on latency may be
unavailable in many cases or,  if
available, may be highly uncertain and
vary significantly across individuals.
The Agency recognizes, however, that
despite significant uncertainty in the
latency period associated with arsenic
exposure through drinking water, it is
unlikely that all cancer reduction
benefits would be realized immediately
upon exposure reduction. To the extent
that there are delays due to latency in
the realization of these benefits,
monetized cancer reduction benefits
would be discounted; although, as
discussed above, this may be offset by
other adjustments.
   d. Analytical approach. For the
latency sensitivity analysis, the health ,
benefits have been broken into separate
treatments of morbidity and mortality.
The mortality component of the total
benefits is examined in this analysis
because a cancer latency period (i.e., the
time period between initial exposure to
environmental carcinogens and the
actual fatality) impacts arsenic-related
fatalities to a greater extent than arsenic-
related morbidity. For purposes of this
analysis, the Agency examined the
impacts of various latency period
assumptions, adjustments for income
growth, and incorporation of other
adjustments such as a voluntariness and
controllability, on bladder and lung
cancer fatalities associated with arsenic
in drinking water (EPA, 2000k).
  Because the latency period for arsenic
related bladder and lung cancers is
unknown, EPA has assumed a range of
latency periods from 5 to 20 years.
While both lung and bladder cancer
have relatively long,  average latencies,
the lower end of the latency period is
substantially less. As can be seen by
inspection of the Surveillance,
Epidemiology, and End Results (SEER)
data of the National Cancer Institute,
significant incidence of both cancers
occurs in individuals in the 15-19 year
old age groups (NCI,  2000). This
• strongly indicates a short latency period
for whatever the cause of the cancer
may have been.
  Moreover, the mode of action for
arsenic is suspected to be one that
. operates at a late stage of the cancer
process that may advance the
expression of cancers initiated by other
causes (sometimes referred to as
"promoting out" the cancerous effect).
Therapeutic treatment with the drug
cyclophosphamide, which causes cell
toxicity, has been seen to induce
bladder cancer in as little as 7 months
to 15 years in affected patients. This was
of course a high dose treatment, but the
example serves to illustrate the ability of
an agent to advance the development of
cancer.
  For these reasons, we believe latency
periods of 5,10, and 20 years serve as
reasonable approximations, in the
absence of definitive data on arsenic-
induced cancers, of the latency periods
for the sensitivity analysis.
  Table III.E-4 shows the sensitivity of
the primary analysis VSL estimate ($6.1
million, 1999 dollars) to changes in
latency period assumptions and also
with the incorporation of an adjustment
to reflect changes in WTP based on real
income growth and other adjustment
factors. As is shown  in Table III.E-4, the
adjusted VSL is greater than the primary
VSL ($6.77 million versus $6.1 million)
at an income elasticity of 1.0, with
adjustments for income growth only.
Assuming a 3% discount rate, the
lowest adjusted VSL value ($3.44
million) is yielded over a 20-year
latency period that includes discounting
and income growth only  (income
elasticity = 0.22). Assuming a 7%
discount rate, the highest adjusted VSL
is also $6.77 million (adjusted  for
income growth only  (income elasticity =
1.0)). The lowest adjusted VSL is $1.61
million (discounted over 20 years).

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Federal  Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
 TABLE III.E-4.— SENSITIVITY OF THE PRIMARY VSL ESTIMATE TO CHANGES IN LATENCY PERIOD ASSUMPTIONS, INCOME
                                        GROWTH, AND OTHER ADJUSTMENTS
                                                  [$ millions, 1999]
Adjustment factor
Latency period (Years)
5
10
20
                                                 3% Discount Rate
Primary Analysis (No VSL Adjustment) 	
Adjusted lor Income Growth: 1
elasticity = 0.22 	 	 	
elasticity = 1.0 	 	 	 	
Adjusted (or Income Growth 1 and Discounting:
elasticity - 0.22 	
elasticity - 1 .0 	 	
Adjusted for Income Growth,1 Discounting, and 7% Increase for Voluntariness and Controllability;
elasticity - 0.22 	
elasticity = 1.0 	 	 	
Break-Even for Other Characteristics (as a percentage of the primary VSL estimate);
elasticity = 0.22 	
elasticity = 1.0 	

6 1
6 22
677.
5 37
584
574
625


cent
6 1
622
677
463
504
4 95
539



6 1
6 22
6 77
344
3 75
369
4 01



                                                 7% Discount Rate
Primary Analysis (No VSL Adjustment) 	
Adjusted for Income Growth:1
elasticity = 0.22 	
elasticity -1.0 	
Adjusted for Income Growth1 and Discounting:
elasticity - 0.22 	
elasticity = 1.0 	 	 	
Adjusted for Income Growth, 1 Discounting, and 7% Increase for Voluntariness and Controllability:
elasticity — 0.22 	
elasticity - 1.0 	 	 	

Break-Even for Other Characteristics (as a percentage of the primary VSL estimate):
elasticity - 0.22 	
elasticity = 1.0 	
6 1
622
677
4 44
483
4 75
5 17


1 5 oercent
6 1
622
677
3 16
344
338
368


40 oercent
6 1
622
6 77
1 R1
1 75
1 T>
1 ft7


69 nercent
  1Th!s adjustment reflects the change in WTP based on real income growth from 1990 to 1999.
  The first row of both the 3% and 7%
discount rate panels in Table III.E-4
shows the VSL used in the primary
analysis. Because this value has not
been adjusted for discounting over an
assumed and unknown latency period,
this value does not deviate from the
original $6.1 million used in the
primary benefits analysis. The second
and third rows of both the 3 and 7
percent panels show the adjustments to
the primary VSL to account for changes
in WTP for fatal risk reductions
associated with real income growth
from 1990 to 1999. As real income  •
grows, the WTP to avoid fatal risks is
also expected to increase at a rate
corresponding  to the income elasticity
of demand, as discussed below. This
income growth, from the years 1990 to
1999, accounts for the differences in
incomes of the VSL study population
versus the population affected by the
arsenic rule. This does not include any
income adjustments over a latency
period because of methodological issues
that have not yet been resolved.
However, pending the resolution of
                         these issues, EPA may include an
                         adjustment for income growth over a
                         latency period in future analyses, as
                         recommended by the SAB.
                          The fourth and fifth rows of both the
                         3% and 7% panels illustrates the
                         impacts of adjusting the primary VSL
                         for discounting and WTP changes based
                         on real income growth over a range of
                         assumed latency periods. As is shown
                         in Table III.E-4, this value decreases
                         from $5.84 million assuming a five-year
                         latency period to $3.75 million
                         assuming a 20-year latency period (at a
                         3% discount rate and income elasticity
                         of 1.0). At a 7% discount rate, this value
                         decreases from $4.83 million to $1.75
                         million.
                          The sixth and seventh rows of the 3%
                         and 7% panels illustrate the effects of
                         incorporating a 7% increase for
                         Voluntariness and controllability. The
                         7% adjustment is based on a study by
                         Cropper and Subramanian (1999) that
                         indicates individuals may place a
                         slightly higher Willingness to Pay
                         (WTP) on risks where exposure is
neither voluntary nor controllable by
the individual.
  In adjusting for WTP changes based
on real income growth, EPA used a
range of income elasticities from the
economics literature. Income elasticity
is the % change in demand for a good
(in this case, WTP for fatal risk
reductions) for every 1% change in
income. For example, an income
elasticity of 1.0 implies that a 10 percent
higher income level results in a 10%
higher WTP for fatal risk reductions. In
a recent study (EPA, 20001), EPA
reviewed the literature related to the
income elasticity of demand for the
prevention of fatal health impacts.
Based on data from cross-sectional
studies of wage premiums, a range of
elasticity estimates for serious health
impacts was developed, ranging from a
lower-end estimate of 0.22 to an upper-
end estimate of 1.0.
  There are several other characteristics
that differ between the VSL estimates
used in the primary analysis and an
ideal estimate specific to the case of
cancer risks from arsenic. These might

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             Federal-Register/Vol. 66, No. 14/Monday,  January 22, 2001/Rules and Regulations
                                                                      7015
include a cancer premium, differences
in risk aversion, altruism, age of the
individual affected, and a morbidity
component of the VSL mortality
estimate. Very little, empirical
information is available on the impact
that these characteristics have on VSL
estimates so they are not accounted for
directly in this sensitivity analysis. A
more complete discussion of the other
characteristics identified by economists
as having a potential impact on
willingness to pay to reduce mortality
risks can be found in chapter seven of
the Agency's "Guidelines for Preparing
Economic Analyses" (EPA 2000k),
which is available in the docket for this
final rulemaking.
  However, it is possible to use a
different type of analysis to address the
question: what would the impact on
VSL of these additional characteristics
need to be to produce the $6.1 million
VSL used in the primary benefits
analysis? (See primary benefits  analysis
in section III.E.2.a of today's rule.) The
last two rows of the 3% and 7% panels
of Table III.E—4 attempt to answer this
question in percentage terms. For
example, at a 3% discount rate  over a
10-year latency period, income  elasticity
of 1.0, and a 7% adjustment for
controllability and voluntariness, a
factor of 12% (as shown in the bottom
row of the 3% panel of Table III.E-4)
indicates that if accounting for these
characteristics would increase VSL by
more than 12% then the primary
analysis will tend to understate ihe
value of risk reductions. If accounting
for these characteristics would not
increase VSL by at least 12%, then the
primary analysis may overstate benefits
(a negative % indicates that the primary
analysis understates benefits unless the
combined impact of these additional
characteristics actually reduces VSL
estimates).
  Some researchers believe that the
value of some of these characteristics
will substantially add to the unadjusted
VSL (one study suggests that a cancer
premium alone may be worth an
additional 100% of primary VSL value
(Revesz, 1999)). Some researchers also
believe that some of these
characteristics have a negative effect on
VSL, suggesting that some of these
factors offset one another. Until we
know more about these various factors
we cannot explicitly make adjustments
to existing VSL estimates. The SAB
noted in its report that these
characteristics require more empirical
research prior to incorporation into  the
Agency's primary benefits analysis, but
could be explored as part of a sensitivity
analysis.
  e. Results. Table III.E-5 illustrates the
impacts of changes in VSL adjustment
factor assumptions on the estimated
benefits for the range of fatal bladder
and lung cancer cases avoided in the
final arsenic rule, assuming a 3%
discount rate. The results of this
analysis at a 7% discount rate are given
in Table III.E-6. These results were
calculated by applying the adjusted VSL
from Table III.E-4 to the lower- and
upper-bound estimates of fatal bladder
and lung cancer cases avoided as shown
in Table m.E-3 in section III.D.2 of
today's rule. For purposes of this
sensitivity analysis, EPA presented
combined bladder and lung cancer cases
avoided in Tables III.E-5 and III.E-6.
Health risk reduction benefits
attributable to reduced arsenic levels in
both CWSs and NTNCWSs are
presented in these tables as well.
  It is important to note that the
monetized benefits estimates shown in
this section reflect quantifiable benefits
only. As shown in section III.E.2.a, there
may be a number of nonquantifiable
benefits associated with regulating
arsenic in drinking water. Were EPA
able to quantify some of the currently
nonquantifiable health effects and other
benefits associated with arsenic
regulation, monetized benefits estimates
would be higher than what is shown in
the table. A more complete discussion
of how risks from arsenic in drinking
water and the corresponding health
benefits were calculated is provided in
the "Arsenic Economic Analysis" (EPA,
2000o), which is available in the docket
for this final rulemaking.
  TABLE III.E-5.—SENSITIVITY OF COMBINED ANNUAL BLADDER AND LUNG CANCER MORTALITY BENEFITS ESTIMATES TO
                               CHANGES IN VSL ADJUSTMENT FACTOR ASSUMPTIONS
                                           [$ millions, 1999, 3% discount rate]1
Arsenic Level (u.g/L)
3
5
10
20
                                          5-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment) 	 	 	
Adjusted for Income Growth2
E - 0 22 	 .-. 	
E - 1 0 	
Adjusted for Income Growth2 and Discounting:
E - 0 22 ' 	
E - •] o 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E - o 22 	
E = 1 o 	

199-452
203-461
221-502
175-398
190-433
187-425
204-463

176-328
181-334
197-364
156-288
170-314
167-308
182-336

130-182
133-186
144-202
114-160
124-174
122-171
133-186

62-69
63-70
69-77
55-61
60-66
59-65
64-71

                                          10-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment) 	
Adjusted for Income Growth:2
E = 0 22 	 	 	
E - 1 0 	
Adjusted for Income Growth,2 and Discounting:
E - o 22 	 	 	 .........
E - 1 o 	 	 	 ••• 	 • 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E - o 22 	
E-1.0 	 	 	 .'.
199-452
203-461
221-502
151-343
164-373
161-367
176-399
176-328
181-334
197-364
135-249
147-271
144-266
157-289
130-182
133-186
144-202
99-138
107-150
105-148
115-161
62-69
63-70
69-77
47-52
51-57
50-56
55-61

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7016
Federal  Register/Vol. 66, No.  14/Monday, January  22,  2001/Rules and Regulations
  TABLE III.E-5.—SENSITIVITY OF COMBINED ANNUAL BLADDER AND LUNG CANCER MORTALITY BENEFITS ESTIMATES TO
                         CHANGES IN VSL ADJUSTMENT FACTOR ASSUMPTIONS—Continued
                                          [$ millions, 1999, 3% discount rate]1
                          Arsenic Level (ug/L)
                                                                                  10
                                                                                              20
                                          20-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment)
Adjusted (or Income Growth:2
E = 0.22 	
E = 1.0 	 	 	
Adjusted for Income Growth2 and Discounting:
E = 0 22 . 	 	 	 .. 	
£ 53 1 0 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E = 0 22 	
E = 1.0 	
1 99-452
203-461
221-502
112 255
122-278
120-273
131-297
176 328
181-334
1 97-364
100-185
109 201
1 07-1 98
117-215
130 182
133-186
144-202
73-103
80-112
79-110
85-119
62—69
63-70
69-77
35-39
38—42
38-42
41-45
  1The lower- and upper-bound benefits estimates correspond to the lower- and upper-bound risk estimates and cancer cases avoided as
shown In section III.D.2 of this preamble.
  2ThIs adjustment reflects the change in WTP based on real income growth from 1990 to 1999. E = income elasticity.

  TABLE III.E-6.—SENSITIVITY OF COMBINED ANNUAL BLADDER AND LUNG CANCER MORTALITY BENEFITS ESTIMATES TO
                               CHANGES IN VSL ADJUSTMENT FACTOR ASSUMPTIONS
                                           [$ millions, 1999, 7% discount rate]1
            Arsenic Level (ug/L)
                                                                                                10
                                                                                                           20
                                          5-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment) 	
Adjusted for Income Growth:2
E = 0.22 	
Es 1.0 	
Adjusted for Income Growth,2 and Discounting:
E = 0.22 	
E = 1.0 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E s 0.22 	
E = 1.0 	

1 99-452
203-461
221-502
145-329
157-358
155-352
1 68-383

1 78-328
181-334'
197-364
129-238
141-259
138-255
1 50-278

1 30-1 82
133-186
144-202
95-132
103-144
102-142
110-154

62-69
63-70
69-77
45-50
50-55
49-54
53-58

                                          10-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment) 	
Adjusted for Income Growth:2
E = 0 22 	
E = 1.0 	
Adjusted for Income Growth 2 and Discounting:
E - 0 22 	
E- 1.0 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E- 022
E- 1 o

1 99-452
203-461
221-502
103-234
112 255
110-251
1 20-273

1 78-328
181-334
197-364
92 170
100-185
98-182
107 198

130-182
1 33-1 86
144-202
67-94
73-103
72 101
78-1 1 0

62-69
63-70
69-77
32-36
35-39
35-38
38—42

                                          20-Year Latency Period Assumption
Primary Analysis (No VSL Adjustment) 	 ;.
Adjusted for Income Growth:2
E = 0 22 	
E s 1 o 	
Adjusted for Income Growth2 and Discounting:
E-0.22 	
E = 1.0 	
Adjusted for Income Growth,2 Discounting, and 7% Increase for Voluntariness and
Controllability:
E = 0.22 	 	 	
E-1.0 	
1 99-452
203-461
221-502
53-119
57-130
56-127
61-139
1 78-328
181-334
1 97-364
47-86
51-94
50-92
54-100
130-182
1 33-1 86
144-202
34-48
37-52
37-51
40-56
62-69
63-70
69 77
16-18
18-20
18-20
19-21
  1The lower- and upper-bound benefits estimates correspond to the lower- and upper-bound risk estimates and cancer cases avoided as
shown in section III.D.2 of this preamble.
  aThis adjustment reflects the change in WTP based on real income growth from 1990 to 1999. E = income elasticity.

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              Federal Register/Vol. 66, No. 14/Monday, January  22, 2001/Rules and  Regulations
                                                                                                              7017
  As shown in Tables III.E-5 and III.E-
6, the highest range of adjusted benefits
estimates at the 10 |ig/L MCL ($144-
$202 million) are yielded when benefits
are adjusted for changes in WTP based
on real income growth only with an
income elasticity of 1.0. The lowest
adjusted benefits estimates at the 10 ug/
L MCL ($73-$103 million at 3%, $34-
$48 million at 7%) are yielded under -,
the assumption of a 20-year latency
period that includes adjustments for
'discounting and WTP changes based on
real income growth (income elasticity =
0.22). These results indicate the high
degree of sensitivity of benefits
estimates to different assumptions  of a
                                       latency period, discount rate, and
                                       income elasticity and also the inclusion
                                       of adjustments for income growth and
                                       voluntariness and controllability.
                                       3. Comparison of Costs and Benefits

                                        This section presents a comparison of
                                       quantifiable total national costs and
                                       benefits for each of the arsenic
                                       regulatory options considered. Three
                                       separate analyses are considered,
                                       including a direct comparison of
                                       aggregate national costs and benefits, a
                                       summary of benefit-cost ratios and net
                                       benefits, and the results of a cost-
                                       effectiveness analysis of each regulatory
                                       option.
  a. Total national costs and benefits.
Table III.E-7 shows the annual costs
and benefits associated with the 10 u,g/
L MCL and also with three other arsenic
levels considered in the proposed rule.
Both costs and benefits increase as
arsenic levels decrease. Costs increase
over decreasing arsenic levels because
of the increasing number of systems that
must treat to lower arsenic levels. •
Benefits estimates increase as arsenic
levels decrease due to the greater
number of both fatal and non-fatal
cancer cases avoided at lower arsenic
levels. Additionally, other potential
non-quantifiable health benefits are
summarized in Table III.E-7.
         TABLE III.E-7 ESTIMATED ANNUAL COSTS AND BENEFITS FROM REDUCING ARSENIC IN DRINKING WATER
                                                   [1999, $ millions]
Arsenic
level
(W/L)
3 	
5 	
10 	
20 	
Total national
costs to CWSs
andNTNCSs1
697.8-792.1
414.8-471.7
180.4-205.6
66.8-76.5
Total bladder
cancer health
benefits2
58.2-156.4
52.0-113.3
38.0-63.0
20.1-21.5
Total lung can-
cer health
benefits2
155.6-334.5
139.1-242.3
101.6-134.7
46.1-53.8
Total com-
bined cancer
health bene-
fits2
213.8-490.9
191.1-355.6
139.6-197.7
66.2-75.3
Potential nonquantifiable health benefits
Skin Cancer; Kidney Cancer; Cancer of the Nasal Passages;
Liver Cancer; Prostate Cancer; Cardiovascular Effects; Pul-
monary Effects; Immunological Effects; Neurological Effects;
Endocrine Effects.


  1 Costs include treatment, monitoring, O&M, and administrative costs to CWSs and NTNCWSs and State costs for administration of water'pro-
 grams The lower number shows costs annualized at a consumption rate of interest of 3%, EPA's preferred approach. The higher number shows
 costs annualized at 7%, which represents the standard discount rate preferred by OMB for benefit-cost analyses of government programs and

    The lower- and upper-bound bladder, lung, and combined cancer benefits estimates correspond to the lower- and upper-bound risk estimates
   i cancer cases avoided as shown in section III.D.2 of this preamble; these estimates include both mortality and morbidity.
regulations.

and
   b. National net benefits and benefit-
 cost ratios. Table III.E-8 describes the
 quantifiable net benefits and the benefit-
 cost ratios under various regulatory
 levels for both CWSs and NTNCWSs at
 3% and 7% discount rates. The net
 benefits and benefit-cost ratios do not
 include any of the potential
 nonquantifiable health benefits that are
                                       listed in the previous table. As shown
                                       in Table III.E-8, under both the lower-
                                       and upper-bound estimates of avoided
                                       lung and bladder cancer cases, the net
                                       benefits decrease as the arsenic rule
                                       MCL options become increasingly more
                                       stringent. Similarly, the benefit-cost
                                       ratios decrease with each more stringent
                                       MCL option. Costs outweigh the
quantified benefits for the lower-bound
benefits estimates under all four MCL
options. Benefit-cost ratios are equal to
or greater than 1.0 for the upper-bound
benefits estimates (at both 3% and 7%
discount rates) for arsenic levels of 10
ug/L and 20 ug/L.
   TABLE III.E—8. SUMMARY OF NATIONAL ANNUAL NET BENEFITS AND BENEFIT-COST RATIOS, COMBINED BLADDER AND
                                                LUNG CANCER CASES
                                                  [1999, $ millions]123


Arsenic level (|ig/L)
3
5
10
20
                                                   3% Discount Rate




Net Benefits 	
B/C Ratio 	
Net Benefits 	
B/C Ratio 	
(484.0)
0.3
(206.8)
0.7
(223.7)
0.5
(59.2)
0.9
(40.8)
0.8
17.3
1.1
(0.6)
1.0
8.5
1.1
                                                   7% Discount Rate


Uooer Bound 	
Net Benefits 	

Net Benefits 	
(578.3)
0.3
(301.1)
(280.6)
0.4
(116.1)
(66.0)
0.7
(7.9)
(10.3)
0.9
(1.2)

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  7018        Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules  and Regulations
   TABLE III.E—8. SUMMARY OF NATIONAL ANNUAL NET BENEFITS AND BENEFIT-COST RATIOS, COMBINED BLADDER AND
                                          LUNG CANCER CASES—Continued
                                                  [1999, $ millions]12 a



B/C Ratio 	
Arsenic level (ng/L)
3
0.6
5
0.8
10
1.0
20
1.0
   1 Costs include trealment, monitoring, O&M, and administrative costs to CWSs and NTNCWSs and State costs for administration of water pro-
 grams. The lower number shows costs annualized at a consumption rate of interest of 3%, EPA's preferred approach. The higher number shows
 costs annualized at 7%, which represents the standard discount rate preferred by OMB for benefit-cost analyses of government proarams and
 regulations.                                 '              ,..                -
   5The lower- and upper-bound bladder, lung, and combined cancer benefits estimates correspond to the lower- and upper-bound risk estimates
 and cancer cases avoided as shown in section III.D.2 of this preamble; unqualified benefits are not included.
   3 Numbers in parentheses indicate negative numbers.
   c. Incremental costs and benefits.
 Incremental costs and benefits are those
 that are incurred or realized in reducing
 arsenic exposures from one level to the
 next more stringent level (e.g., from 20
 Hg/L to 10 Ug/L). Estimates of
 incremental costs are useful in
 developing estimates of the cost-
 effectiveness of successively more
 stringent requirements.
   Table III.E-9 shows the incremental
 total national risk reduction, arsenic
                    mitigation costs, :and monetized health
                    benefits for the various arsenic levels
                    valued using discount rates of three and
                    seven percent.
     TABLE III.E-9—ESTIMATES OF THE ANNUAL INCREMENTAL RISK REDUCTION, COSTS, AND BENEFITS OF REDUCING
                                            ARSENIC IN DRINKING WATER
                                                   [$ millions, 1999]          ,
Benefit-cost element
Incremental Risk Reduction:
Fatal Cancers Avoided per Year1 	 	 	 	 	
Incremental Risk Reduction:
Non-Fatal Cancers Avoided per Year1 	
Annual Incremental Monetized Benefits2 	
Annual Incremental Costs (3%)3 	
Annual Incremental Costs (7%)3 	
Arsenic level (ug/L)
20
10:2-11.3
8.5-8.8
$66.2-$75.3
$66.8
$76.5
10
11.1-18.5
7.6-17.1
$73.4-
$122.4
$113.6
$129.1
5
7.8-23.9
5.9-20.6
• $51.5-
$157.9
$234.4
$266.0
3
3.5-20.4
2.6-17.7
$22.7-
$135.4
$283.0
$320.5
   1 Total fatal and non-fatal cancer cases avoided are discussed in section III.D.2 of this preamble.
   2The lower- and upper-bound combined cancer benefits estimates correspond to the lower- and upper-bound risk estimates and cancer cases
 avoided as shown in section III.D.2 of this preamble.
   a Costs Include treatment, monitoring,  O&M, and administrative costs to CWSs and NTNCWSs and State costs for administration of water
 programs.
   d. Cost-per-case avoided. Cost-per-
 case avoided is a commonly used
 measure of th'e economic efficiency with
 which regulatory options are meeting
 the intended regulatory objectives.
 Table III.E—10 shows the results of an
 analysis in which the average national
 cost of achieving each unit of reduction
 in cases of bladder and lung cancer
 avoided, was calculated. The average
 annual cost per case avoided was
 computed at each MCL option for both
 3% and 7% discount rates.
  As shown in Table in.E-10, the cost
 per bladder and lung cancer case
 avoided ranges from $4.8 million down
 to $3.2 million at the 10 ug/L MCL,
 assuming a 3% discount rate. At a 7%
 discount rate, the cost per bladder and
 lung cancer case avoided ranges from
 35.5 million down to $3.7 million at the
 10 ug/L MCL. As expected, the cost per
bladder and lung cancer case avoided
 decreases with increasing arsenic levels.
 This is due to lower compliance costs at
 higher levels for the standard.

 TABLE  III.E-IO.—ANNUAL  COST PER
   CANCER  CASE AVOIDED FOR THE
   FINAL  ARSENIC  RULE—COMBINED
   BLADDER AND LUNG CANCER CASES
            $ millions, 1999]
Arsenic
level (ug/L)
Lower-bound
estimate '
Upper-bound
estimate >
           3 % Discount Rate
3 	
5 	
10 	
20 	

122
8 1
48
35

50
4 •)
32
34

           7 % Discount Rate
3 ..
5 ...
10
13.8
 9.2
 5.5
5.7
4.7
3.7
                   TABLE lll.E-10.—ANNUAL COST  PER
                     CANCER  CASE  AVOIDED  FOR  THE
                     FINAL   ARSENIC   RULE—COMBINED
                     BLADDER   AND    LUNG   CANCER
                     CASES—Continued
                               $ millions, 1999]
Arsenic
level (ug/L)
20 	
Lower-bound
estimate '
r^
4.0
Upper-bound
estimate '
3.9
  1 The lower- and upper-bound cost per can-
cer case avoided corresponds to the range of
combined cancer benefits estimates as shown
in Table III.E-3.

4. Affordability

  As noted previously, section
1412(b)t4XE)(ii) of SDWA, as amended,
requires EPA, when promulgating a
national primary drinking water
regulation which establishes a
maximum contaminant level (MCL), to

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             Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                       7019
list technology (considering source
water quality) that achieves compliance
with the MCL and is affordable for
systems in three specific population size
categories: 25-500, 501-3300, and
3301-10,000. If, for any given size
category/source water quality
combination, an affordable compliance
technology cannot be identified, section
1412(b)(15)(A) requires the Agency to
list a variance technology. Variance
technologies may not achieve full
compliance with the MCL but they must
achieve the maximum contaminant
reduction that is affordable considering
the size of the system and the quality of
the source water. In order for the
technology to be listed, EPA must
determine that this level of contaminant
reduction is protective of public health.
  A determination of national level
affordability is concerned with
identifying, for each of the given size
categories, some central tendency or
typical circumstance relating to their
financial abilities. The metric EPA
selected for this purpose is the median
household income (MHI) for
communities of the specified sizes. The
household is thus the focus of the
national-level affordability analysis.
EPA considers treatment technology
costs affordable to the typical household
if they represent a percentage of MHI
that appears reasonable when compared
to other household expenditures.' This
approach is based on the assumption
that the affordability to the median
household served by the CWS can serve
as an adequate proxy for the
affordability of technologies to the
system itself.  The national-level
affordability criteria have two major
components: current annual water bills
(baseline) and the affordability
threshold (total % of MHI directed to
drinking water). Current annual water
bills were derived directly from the
1995 Community Water System Survey.
Based on 1995 conditions, 0.75-0.78%
of MHI is being directed to water bills
for systems serving fewer than 10,000
persons.
  The fundamental, core question in
establishing national-level affordability
criteria is: what is the threshold beyond
which drinking water would no longer
be affordable for the typical household
in each system size category? Based
upon careful analysis EPA believes this
threshold to be 2.5% of MHI. In
establishing this threshold, the Agency
considered baseline household
expenditures  (as documented in the
1995 Consumer Expenditure Survey,
Bureau of Labor Statistics) for piped
water relative to expenditure
benchmarks for other household goods,
including those perceived as substitutes
for piped water treated to higher
standards, such as bottled water and
point-of-use and point-of-entry devices.
Based on these considerations, EPA
concluded that current household water
expenditures are low enough, relative to
other expenditures, to support the cost
of additional risk reductions. The
detailed rationale for the selection of
2.5% MHI as the affordability threshold
is provided in the guidance document
entitled "Variance Technology Findings
for Contaminants Regulated Before
1996." The difference between the
affordability threshold and current
water bills is the available expenditure
margin. This represents the dollar
amount by which the water bill of the
typical (median) household could
increase before exceeding the
affordability threshold of 2.5% of MHI.
  By definition, the MHI is the income
value exactly in the middle of the
income distribution. The median is a
measure of central tendency; its purpose
is to help characterize the nature of a
distribution of values. In the case of
income, which tends not to be evenly^
distributed, the median is a much better
indicator of central tendency than the
mean, or arithmetic average, that could
be significantly skewed by a few large
values. The Agency recognizes that
there will be half the households in
each size category with incomes above
the median, and half the households
with incomes below the median. The
objective of a national-level affordability
analysis is to look across all the
households in a given size category of
systems and determine what is
affordable to the typical, or "middle of
the road" household.
  The Agency recognizes that baseline
costs change over time as water systems
comply with new regulations and
otherwise update and improve their
systems. To take account of this  upward
movement in the baseline, the Agency
plans to adjust the baseline it employs
in its calculation in two ways. First,
actual changes in the baseline will be
measured approximately every 5 years
by the Community Water System
Survey. These changes will reflect not
only the increased costs resulting from
EPA drinking water rules, but also any
changes resulting from other factors that
could affect capital or operating  and
maintenance costs. Second, to the extent
practical and appropriate during the
period between Community Water
System Surveys, the baseline will be
adjusted to reflect the cost of rules
promulgated during that period.
  MHI also changes from year to year,
generally increasing in constant  dollar
terms. For example, since 1995 MHI has
increased (in 1999$) by 9.6%. Thus, to
determine the available expenditure
margin (the difference between the
affordability threshold and the baseline)
for each successive rule, adjustments
would need to be made in both the
baseline and the MHI.
  Given the narrow and specific
purpose for which the national-level
affordability criteria are used, the
Agency is not adjusting either the
baseline or the MHI for its analysis for
the final arsenic rule. As noted
previously, MHI has increased by 9.6%.
The rules, which have been
promulgated since the baseline was
developed, are the Interim Enhanced
Surface Water Treatment Rule, the Stage
1 Disinfectants and Disinfection
Byproducts Rule, the revised
Radionuclides Rule, the Consumer
Confidence Report Rule and the revised
Public Notification Rule. The Interim
Enhanced Surface Water Treatment Rule
applies only to systems serving greater
than 10,000 persons, so it has
essentially no impact on the baseline
costs for smaller systems. The Stage 1
Disinfectants and Disinfection
Byproducts Rule does apply to small
systems, and it has an impact on only
12% of the nearly 68,200 ground water
systems serving < 10,000 persons; and
on 70% of the nearly 5200 surface water
systems serving < 10,000 persons. The
revised Radionuclides Rule has limited
impact since it, for the most part,
reaffirmed long-standing MCLs. The
Consumer Confidence Rule and revised
Public Notification Rule result in no
capital expenditures and only very
modest administrative costs.
  The Agency believes that, for
purposes of assessing national-level
affordability of the arsenic rule, the
unadjusted baseline and unadjusted
MHI are appropriate. Making
adjustments to these two factors would
not materially alter the outcome of the
analysis.
  The distinction between national-
level affordability criteria and
affordability assessments for individual
systems cannot be over-emphasized.
The national-level affordability criteria
serve only to guide EPA on the listing
of an affordable compliance technology
versus a variance technology for a given
system size/source water combination
for a given contaminant. In the case of
arsenic, EPA has determined that
nationally affordable technologies exist
for all system size categories and has
therefore not identified a variance
technology for any system size/source
water combination. This means that
EPA believes that the typical household
in each system size category can afford
the costs associated with the listed
compliance technologies. EPA

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recognizes that individual water
systems may serve a preponderance of
households with incomes well below
the median or may face unusually high
treatment costs due to some unusual
local circumstance.
  SDWA provides a number of tools
that States can use to address
affordability concerns for these
individual water systems. Two of these
tools are financial assistance under the
Drinking Water State Revolving Fund
(DWSRF) and extended compliance
time-frames under an exemption. SDWA
allows States to provide special
assistance to water systems that the
State determines to be disadvantaged,
using State-developed affordability
criteria. This special assistance may
include forgiveness of principal, a
negative interest rate, an interest rate
lower than that charged to non-
disadvantaged systems, and extended
repayment periods of up to 30 years. To
date, about half of the States have
implemented disadvantaged community
programs as part of their DWSRF.
Almost one quarter of all loans made
under the DWSRF have been made to
systems classified as disadvantaged by
the States.
  In addition to special financial
assistance through the DWSRF, as
discussed previously, systems facing
affordability concerns may also be
eligible for extended time to achieve
compliance under the terms of a State-
issued exemption or may receive
assistance under the Rural Utilities
Service (RUS) program of the United
States Department of Agriculture (see
section I.L). Together with the
approximately $1 billion per year being
made available through the DWSRF, this
results in a total of about $1.78 billion
per year of Federal financial assistance
available for drinking water.
  Decisions that a drinking water
system makes about how to allocate its
costs to users and how to design rates
can also have a significant effect on
affordability for low-income
households. A traditional declining
block rate structure would be regressive
and might result in the households with
the least income  subsidizing excessive
water use by more affluent households.
Numerous alternative rate designs are
possible that are  more progressive. Of
particular interest in addressing
affordability concerns is lifeline rates.
Lifeline rates are a rate structure
applicable to qualified residential
customers that includes a specified
block of water use priced below the
standard charge for the customer class.
Such rates are primarily designed to aid
the poor in obtaining some minimum
level of service at an affordable price.
                           The basic organizational or
                         institutional structure of the drinking
                         water system is another very important
                         factor that influences the affordability of
                         water service. The key issue here is the
                         extent to which a given organizational
                         or institutional structure is capable of
                         achieving economic and operational
                         efficiency. An especially important
                         element of this efficiency relates to the
                         degree to which a system seeks to work
                         together with other systems. Systems
                         that effectively work together, perhaps
                         by combining management, will realize
                         lower overall costs compared to the
                         same systems working independently.

                         F. What MCL Is EPA Promulgating and
                         What Is the Rationale for This Level?

                         1. Final MCL and Overview of Principal
                         Considerations
                           EPA is today promulgating a final
                         arsenic MCL of 10 |ig/L. EPA's selection
                         of this MCL is based on the SDWA
                         statutory requirements for establishing
                         an MCL and reflects the Agency's
                         detailed evaluation and careful
                         consideration of thousands of pages of
                         comments. As part of this process, we
                         have evaluated new data and analysis
                         on occurrence, unit treatment costs,
                         small system impacts, treatment
                         technology availability, waste disposal
                         options, and uncertainties regarding
                         exposure and health effects data. Based
                         on this new information, the Agency has
                         revisited technical analyses,
                         calculations, and  judgments underlying
                         the proposed MCL of 5 (ig/L. As
                         discussed in section III.E. in this
                         preamble, the Agency has conducted a
                         thorough revaluation of costs and has
                         carefully considered substantial new
                         analysis on this subject submitted by
                         commenters. In addition, EPA has
                         completed a detailed reassessment of
                         the risks of arsenic in drinking water,
                         and has made significant adjustments to
                         provide a more quantitative evaluation
                         of major sources of uncertainty
                         discussed at proposal and emphasized
                         by commenters from a number of
                         different perspectives.
                           Today's rule, with a final MCL of 10
                         jig/L, reflects the application of several
                         provisions under  SDWA, the first of
                         which generally requires that EPA set
                         the MCL for each  contaminant as close
                         as feasible to the MCLG, based on
                         available technology and taking costs to
                         large systems into account. The  1996
                         SDWA amendments also require that
                         the Administrator determine whether or
                         not the quantifiable and nonquantifiable
                         benefits of an MCL justify the
                         quantifiable and nonquantifiable costs.
                         This determination is to be based on the
                         Health Risk Reduction and Cost
Analysis (HRRCA) required under
section 1412fb)(3)(C). The HRRCA must
include consideration of seven analyses:
  (1)   The quantifiable and
nonquantifiable benefits from treatment
to the new MCL;
  (2)   The quantifiable and non
quantifiable benefits resulting from
reductions of co-occurring
contaminants;
  (3)   The quantifiable and
nonquantifiable costs resulting directly
from the  MCL;
  (4)   The incremental costs and
benefits at the new MCL and
alternatives considered;
  (5)   The health risks posed by the
contaminant, including risks to
vulnerable populations;
  (6)   Any increased risk resulting from
compliance, including risks associated
with co-occurring contaminants; and
  (7)   Any other relevant factor,
including the uncertainties in the
analyses  and the degree and nature of
risk.
  Finally, the 1996 SDWA amendments
provide new discretionary authority for
the Administrator to set an MCL less
stringent than the feasible level if the
benefits of an MCL set at the feasible
level would not justify the costs (section
1412(b)(6)) based on the HRRCA
analysis.  Today's rule establishing an
MCL of 10 |ig/L for arsenic is the second
time EPA has invoked this new
authority. (The first such time was in
the final rule for uranium,  which was
published on December 7,  2000; EPA,
2000p.)
  In addition to the feasible MCL of 3
|ig/L, the Agency evaluated MCL
options of 5 |ig/L, 10 ug/L,  and 20 |ig/
L and the various comments offered
concerning these levels in response to
the proposed rule. EPA has determined
that a final MCL of 10 (ig/L more
appropriately meets the relevant
statutory criteria referred to above,
particularly after considering the
following: Available information
relating to the various health effects
associated with arsenic; new analysis
regarding the projected risk to the
population of adverse health effects that
would remain after implementation; the
revised costs and benefits of the various
options; the incremental costs and
benefits; and the uncertainties in the
benefit-cost and risk analyses. A
summary of the results of the Agency's
reanalysis of these various  factors
follows.

2. Consideration of Health Risks
  The fifth and seventh HRRCA
analyses focus on the health risks to be
addressed by a new MCL. Estimates of
risk levels to the population remaining

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                                                                       7021
after the regulation is in place provide
a perspective on the level of public
health protection and associated
benefits. SDWA clearly places a
particular focus on public health
protection afforded by MCLs. For
instance, where EPA decides to use its
discretionary authority after a
determination that the benefits of an
MCL would not justify the costs, section
1412(b)(6) requires EPA to set the MCL
at a level that "maximizes health risk
reduction benefits at a cost that is
justified by the benefits." (EPA does not
believe the sixth HRRCA analysis,
consideration of increased risk likely to
result from compliance is a significant
factor in connection •with selection of a
final MCL; rather, we believe that many
of the appropriate technologies for
reducing arsenic will reduce many other
co-occurring inorganic contaminants as
well thereby decreasing, rather than
increasing risk.)
  The Agency based its evaluation of
the risk posed by arsenic at the MCL
options of 3 |ig/L, 5 ug/L, 10 ug/L and
20 Jig/L on a number of considerations,
including the bladder cancer risk
analysis developed by the National
Research Council (NRG) of the National
Academy of Sciences (NRG, 1999); the
NRC's qualitative assessment of other
possible adverse health effects; the lung
cancer risk analysis developed by
Morales et al. (2000); and findings of
other relevant national and international
studies. This information included, but
was not limited to, findings from
epidemiological studies in South
America cited in the NRG report (NRG,
1999) and a study of a population
exposed to high levels of arsenic in
Millard County, Utah conducted by
Lewis, et al. (1999).
  Among the factors EPA considered in
choosing the final MCL was Congress'
intent that EPA "reduce * * *
[scientific] uncertainty" in promulgating
the arsenic regulation reflected in
section 1412(b)(12) arsenic research
plan provisions and the legislative
history on the arsenic provision (S. Rep.
104-169,104th Cong., 1st Sess. at 39-
40). The uncertainties in the analyses of
costs, benefits and risks are also a factor
required to be considered in the
HRRCA.  All assessments  of risk are
characterized by an amount of
uncertainty. Some of this uncertainty
can be reduced by collecting more data
or data of a different sort. For other
types of uncertainty, improved data or
assessment methods can allow one to
define the degree to which an estimate
is likely to be above or below the "true"
risk. For the arsenic risk assessment,
there are several definable sources of
uncertainty that were taken into
account. These include, but are not
limited to, the following:
  • Uncertainty about the exact
exposure of individuals in the study
population to arsenic in drinking water,
water used in cooking, and food;
  • Uncertainties associated with
applying data from a population in rural
Taiwan to the heterogenous population
of the U.S. (including differences in
health status and diet between the
Taiwanese and the U.S. population);
and
  • Uncertainties concerning precisely
how a chemical causes cancer in
humans (the mode of action) that affects
assessments of the extent and severity of
health effects at low doses.
  Section III.D. of the preamble to
today's final rule provides a detailed
explanation of how these uncertainties
associated with the risk analysis were
taken into account in developing a
revised estimate of the risk of arsenic in
drinking water. Based on comments and
available information, the Agency has
focused, in particular, on the first
uncertainty bullet, and made two
adjustments to its risk analysis to reduce
uncertainty and more accurately apply
data from the Taiwan study to the U.S.
population. EPA has revised its
quantified estimate of the risks of
arsenic in drinking water to adjust for
exposure to arsenic in both cooking
water and food in the Taiwanese study
and has also developed a risk range for
the combined effects of bladder  and
lung cancer to reflect the  scope of
uncertainty underlying these estimates.
Thus, one of the previously listed
uncertainties has specifically been taken
into  account quantitatively, while others
continue to be considered in a
qualitative sense.
  In EPA's judgment, use of a risk range
more clearly supports a qualitative
consideration  and recognition of the
uncertainties that are inherent in any
risk analysis that substantially relies
upon epidemiological information. EPA
believes that the health risk analysis
presented in section III.D. of today's rule
comprises a plausible range of likely
risk associated with various
concentrations of arsenic in drinking
water. As just  suggested, we do not
believe it is appropriate to select a
central or "best estimate" of the risk,
due to the uncertainties associated with
the underlying health effects studies
and the various plausible assumptions
used in considering these uncertainties
for our risk analysis. This revised
analysis of risks was used in
recalculating the benefits attributable to
reducing arsenic in drinking water from
its present levels. EPA also recognizes
that the latter two bulleted sources of
uncertainty may operate to reduce the
risk estimates if it were possible to
account for them quantitatively.
3. Comparison of Benefits and Costs
  Under HRRCA analyses one and two,
the Agency must consider both
quantifiable and nonquantifiable health
risk reduction benefits. Benefits
considered in our analysis include those
about which quantitative information is
known and can be monetized as well as
those which are more qualitative in
nature (such as some of the non-cancer
health effects potentially associated
with arsenic) and which cannot
currently be monetized. Important
assumptions inherent in EPA's revised
analysis of the benefits estimates
include the value of a statistical life and
willingness to pay to avoid illness.
These assumptions and various
adjustment factors considered for our
benefits analysis are explained in detail
in section III.E. of this preamble.
  EPA considered the relationship of
the monetized benefits to the monetized
costs for each the regulatory levels it
considered. While strict equality of
monetized benefits and costs is not a
requirement under section
1412(b)(6)(A), this relationship is an
important consideration in the
regulatory development process. The
monetized costs and monetized benefits
of this final rule, and the methodologies
used to calculate them, are discussed in
detail in section III. E. of this preamble
and in the arsenic Economic Analysis.
  EPA believes, however, that reliance
on only an arithmetic analysis of
whether monetized benefits outweigh
monetized costs is inconsistent with the
statute's instruction to consider both
quantifiable and nonquantifiable costs
and benefits. The Agency therefore
examined and considered qualitative
and non-monetized benefits in
establishing the final MCL, as well as
other factors discussed previously.
These benefits are associated with
avoiding certain adverse health impacts
known to be caused by arsenic at higher
concentrations, which may also be
associated with low level
concentrations, and include skin and
prostate cancer as well as
cardiovascular, pulmonary, neurological
and other non-cancer effects. (These
health effects are discussed in Section
III.D. of this preamble.)
  Other potential benefits not
monetized for today's final rule include
customer peace of mind from knowing
drinking water has been treated for
arsenic and reduced treatment costs for
contaminants that may be co-treated
with arsenic. (For example, increased
use of coagulation and micro filtration

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 by surface water systems will offer
 benefits with respect to removal of
 microbial contaminants and disinfection
 byproducts.)                '
   HRRCA analyses three and four
 require EPA to consider the costs of
 compliance with the rule and the
 incremental costs and benefits. EPA has
 also revised the cost of compliance
 estimates associated with the various
 possible regulatory levels considered for
 today's final ralemaking. The central
 estimate of costs has risen modestly
 since the proposed rule based on our
 further analysis of the information and
 data provided by commenters. However,
 in response to comments, we have also
 performed a sensitivity analysis that
 addresses a number of variables in our
 analysis and which indicates that the
 costs of compliance could exceed our
 central estimate by as much as 22%.
   In comparing monetized costs and
 benefits, we conducted several types of
 analyses, including:
   •  Comparison of total national costs
 and benefits (Table in.E-7);
   •  Analysis of incremental costs and
 benefits (comparing one regulatory
 option to another) (Table in.E-9);
   •  Estimates of net benefits (Table
 1II.E-8); and
   •  Examination of benefit-cost ratios
 (Table m.E-8).
 Detailed descriptions of our analyses
 appear in section in.E. of this preamble
 and in the Economic Analysis
 supporting today's rule. Our
 consideration of these analyses in
 support of the rationale for the final
 MCL is discussed below.
 4. Rationale for the Final MCL
   The rationale for the final MCL
 promulgated with today's rule is based
 on the HRRCA analyses outlined
 previously and the statutory criteria for
 setting an alternative (higher than
 feasible) MCL under section 1412(b)(6).
 These analyses include:
   • A revised risk analysis of arsenic in
 drinking water;
   • A revised analysis of total costs;
   • A revised analysis of total benefits;
   • A comparison of costs and benefits
 using various metrics at various MCL
 options (including incremental costs
 and benefits); and
   • Other pertinent factors (including
 uncertainties and the degree and nature
 of risk).
  In the proposed rule, EPA indicated a
preference for a standard at 5 ug/L, but
 solicited comment on MCL options of 3
 ug/L, 10 ug/L, and 20 ug/L,  depending
upon how uncertainties were addressed
in the risk analysis as well in the
calculation of costs and benefits.
However, EPA also noted that, between
                          the time of proposal and promulgation
                          of the final rule, it would work to
                          resolve as much of this uncertainty as
                          possible. As described earlier, the
                          principal revised analyses conducted
                          since the rule was proposed and
                          considered in our selection of the final
                          MCL include: A revised analysis of the
                          uncertainties of the health effects that
                          has generated a revised risk range for
                          the various MCL options considered; a
                          revised range of benefits associated with
                          our current estimates of the risks; and a
                          revised analysis of costs, including
                          uncertainty and sensitivity analyses.
                          These revised analyses allow an
                          updated comparison of the costs and
                          benefits for the various regulatory
                          options considered.
                            a. General considerations. As
                          explained in section ffl.E. of today's
                          preamble, both our benefits and cost
                          estimates involve ranges, rather than
                          point estimates, due to a variety of
                          factors. Thus, our consideration of costs
                          and benefits involved an examination
                        ,  and comparison of these ranges. As can
                          be seen from Table III.E-7, both total
                          costs and benefits increase as one
                          examines progressively lower (i.e., more
                          stringent) regulatory options compared
                          to higher options. However, the benefits
                          and costs do not increase
                          proportionately across the range of
                          regulatory options as shown by a
                          comparison of net benefits (defined as
                          costs minus benefits). Progressively
                          more stringent regulatory options
                         become considerably more expensive,
                          from a cost standpoint, than the
                          corresponding increases in benefits, as
                         reflected in decreasing net benefits, (see
                         Table m.E-8.)
                           b. Relationship of MCL to the feasible
                         level (3 \Lg/L). The MCL must be set as
                         close as feasible to the MCLG, unless  •
                         EPA invokes its discretionary authority
                         under section 14l2(b)(6) of SDWA to set
                         an alternative MCL, which must then be
                         set at a level that maximizes health risk
                         reduction benefits at a cost that is
                         justified by the benefits. As explained
                         earlier in this preamble, the MCLG is
                         zero and the feasible level is 3 ug/L. The
                         Agency believes that there are several
                         important considerations in examining
                         the feasible level. In comparing the
                         benefits and the costs at this level (see
                         Table m.E-7), we note that it has the
                         highest projected total national costs
                         (relative to the other MCL options
                         considered). In addition, while the
                        benefits are highest at this level relative
                        to the other MCL options, both the net
                        benefits and the benefit/cost disparity  at
                        the feasible level are the least favorable
                        of the regulatory options  considered.
                        For these reasons, we believe benefits of
                        the feasible level do not justify the costs.
 Almost all commenters agreed with this
 conclusion in the proposal.
   c. Reanalysis ofproposed MCL and
 comparison to final MCL. Based on
 substantial public comment, EPA has
 reexamined the proposed MCL of 5 ug/
 L. In comparing this level to 10 Ug/L, we
 note that both the net benefits and the
 benefit-cost relationships are less
 favorable for 5 ug/L as compared to 10
 Ug/L. Total national costs at 5 ug/L are
 also approximately twice the costs of an
 MCL of 10 Ug/L. At 10 Ug/L, EPA notes
 that the lung and bladder cancer risks to
 the exposed population after the rule's
 implementation are within the Agency's
 target risk range for drinking water
 contaminants of 1 x 10 ~6 to 1 x 10 ~4
 or below. EPA recognizes that there is
 uncertainty in this quantification of
 cancer risk (as well as other health
 endpoints) and this risk estimate
 includes a number of assumptions, as
 discussed previously. EPA did not
 directly rely on the risk range in
 selecting the final MCL, since it is not
 part of die section 1412(b)(6) criteria;
 however, it is an important
 consideration, because it has a direct
 bearing on our estimates of the benefits
 of the rule.
   d. Consideration of higher MCL
 options. EPA does not believe an MCL
 less stringent 10 ug/L is warranted  from
 the standpoint of benefit-cost
 comparison. While total national costs
 associated with 20 ug/L are the lowest
 of the regulatory options considered,
 benefits are also the lowest of these
 options. Both regulatory options of 10
 Ug/L and 20 ug/L have relatively
 favorable benefit-cost relationships
 relative to lower regulatory options but
 are not significantly different from one
 another based on this comparison
 metric. However, the incremental,
 upper-bound benefits at 10 ug/L are
 more than twice those of 20 ug/L; and
 10 ug/L is clearly the more protective
 level. Thus, we do not believe that an
 MCL of 20 ug/L would  "maximize
 health risk reduction benefits" as
 required for an MCL established
 pursuant to section 1412(b)(6).
  e. Conclusion. Strict parity of
 monetized costs and monetized benefits
 is not required to find that the benefits
 of a particular MCL option are justified
 under the statutory provisions of section
 1412(b)(6) of SDWA. However, EPA
believes that, based on comparisons of
 cost and benefits (using the various
benefit-cost comparison tools
 discussed), the monetized benefits of a
regulatory level of 10 ug/L best justify
the costs. In addition, as discussed in
section III.D. and elsewhere in today's
preamble, our further qualitative
consideration of the various sources of

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                                                                       7023
 uncertainty in our understanding of
 arsenic since the proposal (e.g., such as
 that surrounding the mode of action),
 has led us to conclude that our estimate
 of risk (for the risks we have quantified)
 is most likely an upper bound of risks
 and that the higher MCL of 10 ug/L is
 appropriate. Finally, as discussed in
 section III.E. of this preamble EPA
 believes that there are a number of not
 yet quantified adverse health effects and
 potentially substantial non-monetized
 benefits at 10 Ug/L that increase the
 overall benefits at this level.
   In summary, based on our reanalysis
 of costs, benefits, and health risk
 reduction, and factoring in the
 uncertainties in these analyses and the
 degree and nature of risk, EPA believes
 the final MCL of 10 ug/L represents the
 level that best maximizes health risk
 reduction benefits at a cost that is
 justified by the benefits and that the
 other regulatory options considered in
 the proposed rule do not satisfy the
 statutory requirements of section
 1412(b)(6) of SDWA. We are therefore
 exercising our discretionary authority
 under the statute to establish an MCL at
 a level higher than the feasible level and
 setting that level at 10 ug/L.

 IV. Rule Implementation

 A. What Are the Requirements for
 Primacy?
  States must revise their programs to
 adopt any part of today's rule that is
 more stringent than the approved State
 program. Primacy revisions must be
 completed in accordance with 40 CFR
 142.12, and 142.16. States must submit
 their revised primacy application to the
 Administrator for approval. A State's
 request for final approval must be
 submitted to the Administrator no later
 than 2 years after promulgation of a new
 standard unless the State requests and is
 granted an additional 2-year extension.
  For revisions of State programs,
 § 142.12 requires States to submit,
 among other things, "[a]ny additional
 materials that are listed in § 142.16 of
 this part for a specific EPA regulation,
 as appropriate." Today's rule do^es not
 require States to submit information in
 § 142.16(e) for primacy revisions
 associated with the revised arsenic
 MCL. The final rule notes that
 § 142.16(e) primacy revision
 information will only be required for
 new contaminants, not revisions of
 existing regulated contaminants.
B. What Are the Special Primacy
Requirements?                  •  -   •
  Today's rule adds special primacy
requirements in § 142.16Q) and
§ 142.16(k) to the State special primacy
 requirement section. Section 142.16(j)
 clarifies that for an existing regulated
 contaminant such as arsenic, States may
 indicate in the primacy application that
 they will use the existing monitoring
 plans and waiver criteria approved for
 primacy under the National Primary
 Drinking Water Standards (NPDWRs) for
 organic and inorganic contaminants (the
 Phase II/V rules). Alternatively, the
 State may inform the Agency in its
 application of any changes to the
 monitoring plans and waiver
 procedures.
   Section 142.16(k) requires States to
 establish initial monitoring
 requirements for new systems and new •
 sources. Many States already have
 developed monitoring programs for new
 systems and for systems that are using
 new sources  of water. To meet the
 requirements of § 142.16(k), States that
 have existing requirements may simply
 explain to EPA in their primacy revision
 package their'monitoring schedule and
 how the State can ensure that all new
 systems and new sources will comply
 with the existing MCLs and moriitoring
 requirements. Some States may wish to
 explain that monitoring for new systems
 is established on a case-by-case basis.
 States should explain the factors that are
 considered as case-by-case
 determinations are made.
   When a State develops or modifies  an
 initial monitoring program for new
 systems and new sources, it should
 ensure that the program reflects the
 contaminants) of concern for that State,
 known contaminant use, historical data,
 and vulnerability. Because of varying
 contaminant uses and sources, some
 contaminants occur at higher levels in
 some regions of the country than in
 other regions. Additionally, the
 concentrations of some contaminants
 are known to show clear seasonal peaks,
 while others remain constant
 throughout the year. For example, some
 States may be concerned with atrazine
 and require multiple samples during a
 specified vulnerable period (e.g., May
 1-July 31), while another State may
 only require one sample for the entire
 year. Alternatively, another State may
 be concerned about trichloroethylene
 and require four quarterly samples.
 C. What Are the State Recordkeeping
 Requirements?
  The standard record keeping
 requirements for States under SDWA
 apply to the arsenic rule (§ 142.14).
Today's rule does not modify or require
 additional recordkeeping requirements.
 States with primacy must keep all
records of current monitoring
requirements  and the most recent
monitoring frequency decision
 pertaining to each contaminant,
 including the monitoring'results and
 other data supporting the decision, and
 the State's findings based on the
 supporting data and any additional
 bases for such decision. These records
 must be kept in perpetuity or until a
 more recent monitoring frequency
 decision has been issued.
 D.. What are the State Reporting
 Requirements?
   Currently, States with primary
" enforcement responsibility must report
 to EPA information under § 142.15
 regarding violations, variances and
 exemptions, and enforcement actions
•' and general operations of State public
 water supply programs. Today's rule
 does not modify or require  additional
 reporting requirements. The State
 reporting requirements that will apply
 to the arsenic standard are the same as
 all other regulated inorganic
 contaminants.

< E. When Does a State Have To Apply for
-Primacy?  ,  .
   To maintain .primacy for the Public
• Water Supply Supervision (PWSS)
 program and to be eligible for interim
 primacy enforcement authority for
 future regulations, States must adopt
 today's final rule. A State must submit
 a  request for approval of program
 revisions that adopt the revised MCL
 and implement regulations  within two
 years of promulgation, unless EPA
 approves an extension per § 142.12(b).
 Interim primacy enforcement authority
 allows States to implement and enforce
 drinking water regulations once State
regulations are effective and the State
has submitted a complete and final
primacy revision application. To obtain
interim primacy, a State must have
primacy with respect to each existing
NPDWR. Under interim primacy
enforcement authority, States are
effectively considered to have primacy
during the period that EPA is reviewing
their primacy revision application.

F. What Are Tribes Required To Do
Under This Regulation?
   Currently, the Navajo Nation is the
only Tribe with primacy for all the
National Primary Drinking Water
Regulations, and it will be subject to the
same requirements as a State. There are
no other Federally recognized Indian
tribes with primacy to enforce any of the
drinking water regulations. EPA's
Regions have responsibility for
implementing the rules for all Tribes
except the Navajo Nation under section
1451(a)(l) of SDWA. To obtain primacy
authority for the revised arsenic MCL,
Tribes must submit a primacy

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
application to regulate inorganic
contaminants (i.e., the Phase H/V rule).
V. Responses to Major Comments
Received
A. General Comments
1. Sufficiency of Information and
Adequacy of Procedural Requirements
To Support a Final Rule
  A number of commenters challenged
EPA's basis for promulgating a final
rule, arguing that (1) there was
insufficient technical information
provided with the proposed rule, (2)
various expert technical evaluations
were not adequately considered, or (3]
procedural requirements (e.g.,
Unfunded Mandates Reform Act
(UMRA), Small Business Regulatory and
Enforcement Flexibility Act (SBREFA))
have not been fully satisfied. EPA
respectfully disagrees, and we believe
that the record of our actions is
sufficient to support a final rulemaking.
Other portions of the preamble to
today's rule explain the technical
evaluations performed in support of the
proposed rule and the revised analyses
conducted, based  on comments and
information submitted in response to
the proposal. EPA recognizes that
various questions about different
aspects of this rulemaking have been the
subject of an array of analyses and
reports by various investigators. This
area of investigation has also been
dynamic, and there will undoubtedly be
additional analyses after promulgation
of the final rule that the Agency will
need to consider in light of the
requirement to periodically review (and
revise  as appropriate) all final drinking
water regulations  as provided by section
1412(b)(9) of SDWA. However, we
believe that we have fully and
appropriately considered all available
and relevant information for the final
rulemaking and do not need to
repropose as several commenters
suggest. We also believe that we have
fully satisfied the procedural
requirements of the pertinent  statutory
and Executive Order requirements.
Section VI. of the  preamble to today's
final rule discusses these procedural
requirements in more detail.
2. Suggestions for Development of an
Interim Standard
   Several commenters advocated an
interim standard in view of the
uncertainties associated with the health
effects data, the costs of compliance
with the final rule, and concerns over
the interpretation of the "anti-
backsliding" provision of SDWA related
to review and revision of existing
standards (section 1412(b)(9)). While
                         EPA appreciates these concerns, we do
                         not believe that they provide a sufficient
                         basis for concluding that an interim
                         standard be set. We agree with the
                         recommendation of the National
                         Academy of Sciences that there is
                         sufficient information available now to  ,
                         develop a new lower drinking water
                         standard for arsenic. We further believe
                         that available information is sufficient
                         to support a final, rather than an
                         interim, standard. Finally, there is
                         simply no authority in SDWA to
                         establish an interim standard that does
                         not comply with' sections 1412(b)(4) and
                         1412(b)(6). However, we are committed
                         to reviewing and revising, if
                         appropriate, the final standard every six
                         years (or sooner, if pertinent new
                         information becomes available). In so
                         doing, we must ensure that the revised
                         standard provides for "equal or greater
                         protection to the health of persons" as
                         compared to the standard it replaces.

                         3. Public Involvement and Opportunity
                         for Comment
                            Some commenters questioned
                         whether the extent of public
                         involvement in the development of
                         today's rule was sufficient. Some
                         commenters also suggested that the
                         Agency use a negotiated rulemaking
                         process for the final rule pursuant to the
                         Federal Advisory Committee Act
                         (FACA). EPA believes that public
                         involvement throughout the
                         development of this rule, has been
                         extensive and far-reaching. As discussed
                         in section I.N. earlier in this preamble,
                         during the period 1996-2000, EPA
                         conducted a number of Agency
                         workgroup meetings on arsenic and
                         advertised six stakeholder meetings
                         (held in five locations) in the Federal
                         Register. Five States also provided
                         written comments on implementation
                         issues during the workgroup process.
                         Representatives of eight Federal
                         agencies, 19 State offices, 16
                         associations representing the breadth of
                         the public water system community, 13
                         corporations, 14 consulting engineering
                         companies, two environmental
                         organizations, three members of the
                         press, 37 public utilities and cities, four
                         universities, and one Indian tribe
                         attended the stakeholder meetings on
                         arsenic. EPA presented an overview of
                         the arsenic rulemaking to over 900
                         Tribal representatives in 1998 and
                         provided more detailed information in
                         1999 to 25 Tribal council members and
                         water utility operators from 12 Indian
                         tribes, In addition, EPA provided
                         updates on our rulemaking activities at
                         national and regional meetings of
                         various groups and trade associations.
                         We also participated in the American
Water Works Association's (AWWA)
technical workgroup meetings. As part
of the Small Business Regulatory and
Enforcement Flexibility Act (SBREFA)
process, EPA also received valuable
input from discussions with small entity
representatives during SBREFA
consultations for the arsenic rule. EPA
obtained recommendations from the
National Drinking Water Advisory
Council (NOWAC) on the rule as a
whole as well as on our approach
benefits analysis and small systems
affordability. We also posted discussion
papers produced for our stakeholder
interactions on the EPA Office of
Ground Water and Drinking Water
(OGWDW) Internet site and sent them
directly to participants at stakeholder
meetings and others who expressed
interest. EPA also received over 1,100
comments on the June 22, 2000
proposed rule. EPA took these
comments into consideration in
developing today's final rule.
  EPA agrees that the FACA-negotiated
rulemaking process has been an
effective one in the past for other
complex rulemakings. However, EPA
does not believe that a negotiated
rulemaking at this point is consistent
with the deadlines set by Congress for
this rulemaking. We would point out,
however, that the Agency has taken a
number of active steps to ensure broad-
based stakeholder involvement, as
described previously, and has solicited
expert points of view outside the
Agency. Some of these actions included
a charge to the National Academy of
Sciences (NAS) to fully explore the most
current health effects issues. A charge
was also given to EPA's Science
Advisory Board (SAB) to review key
aspects of the proposed rule and EPA's
underlying rationale. EPA believes that
this combination of actions ensured that
full and complete stakeholder
involvement occurred, and that further
negotiations would be unnecessary.

4. Relation of MCL to the Feasible Level
  Several commenters questioned the
feasible level of 3 |ig/L contained in the
proposed rule. Commenters believed
that EPA has not accurately assessed the
capabilities of laboratories to achieve
the practical quantitation level (PQL) or
of treatment technologies to reliably and
consistently treat down to the feasible
level. EPA disagrees and still believes
that 3 ug/L is feasible from the
standpoints of both analytical methods
and treatment technologies. EPA
discusses these issues in more detail in
section III.B. of the preamble to today's
final rule. Many of the comments on the
proposed rule were concerned by the
close proximity of the proposed

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                                                                      7025
standard (5 jig/L) to the proposed
feasible level (3 |ig/L). However,
comments regarding whether or not the
proposed standard of 5 (ig/L is feasible
are not particularly germane to the
setting of the final standard, which is
well above any level identified by most
commenters as being feasible.

5. Relationship of MCL to Other
Regulatory Programs

   Many commenters expressed
concerns about the possible impact of a
new revised drinking water standard for
arsenic on other regulatory standards for
arsenic. In particular, several
commenters recommended that EPA
consider the prospective costs of future
Comprehensive Environmental
Response, Compensation and Liability
Act (CERCLA) site clean-up actions,
RCRA hazardous waste management
costs, or national permit discharge
elimination system (NPDES) permits to
the extent that a new arsenic in drinking
water standard leads to more stringent
regulatory actions under those
respective statutes. EPA disagrees and
notes that SDWA specifically excludes
from consideration under the HRRCA
such prospective, ancillary costs in
developing a drinking water standard
(see section 1412(b)(3KC) of SDWA).
6. Relation of MCL to WHO Standard

   Several commenters on the proposed
rule expressed a concern that the
drinking water standard in the U.S.
should be no more stringent than the
standard developed for the World
Health Organization (WHO). This
comment dealt primarily with the
proposed level of 5 (ig/L and does not
apply to the final MCL of 10 |Og/L,
which is identical to the WHO standard.
However, while the thrust of the
comment is now moot, EPA notes that
the basis for the final MCL and the
WHO standard are different.,EPA's
standard is based on consideration of all
of the risk management factors required
to be evaluated under SDWA (e.g., risk,
costs, benefits, treatment technology
and analytical method capabilities,
small systems affordability, etc.) while
the WHO standard is based solely on
health effects, without regard to any
implementation considerations. Further,
the health basis for the WHO standard
is primarily an assessment of arsenic-
induced skin cancer, whereas there are
a number of health endpoints of concern
in EPA's analysis including lung and
bladder cancer. In summary, the two
levels (the WHO standard and EPA's
final MCL) happen to be the same but
a possible future change in the WHO
standard would not necessarily require
 a revision to EPA's MCL, for the reasons
 just discussed.
 7. Regulation of Non-Transient Non-
 Community Water Systems (NTNCWSs)
   Several commenters objected to the
 approach outlined in the proposed rule
 for addressing NTNCWSs (monitoring
 and reporting only) and pointed out the
 need for consistency in coverage of
 NTNCWSs in EPA's rules. These
 commenters noted that the rules
 originally promulgated in 1976 (arsenic
 and radionuclides) have not required
 coverage of NTNCWSs, whereas more
 recently promulgated rules have. In
 addition, EPA's proposed radon rule
 suggested not covering NTNCWSs and
 the recently promulgated radionuclides
 rule did not require coverage of
 NTNCWSs, but instead deferred this
 issue for future resolution. EPA agrees
 that the outcomes of its recent decisions
 with respect to coverage of NTNCWSs
 have been different. However, we
 considered the merits of each
 rulemaking on a case-by-case basis
 using a consistent set of criteria, namely
 the cost/benefit analysis required under
 section 1412(b)(4).
   For the proposed arsenic rule, EPA
 carefully examined the risks posed by
 NTNCWSs and concluded preliminarily
 that the risks were such that, without
 coverage, consumers of water from
 NTNCWSs were projected to be within
 the target risk range. EPA acknowledges,
 however, that there is uncertainty
 associated with its information about
 exposure patterns for consumers of
 water from NTNCWSs and the
 demographics of these facilities. Thus,
 our understanding of the health risks
 (and associated possible benefits of
 removal) to consumers of water from
 NTNCWSs is uncertain. In the case of
 arsenic, EPA believes the additional
 uncertainty in the overall risk analysis
 argues  against any finding at this point
 that these systems are substantially
 different in terms of exposure than
 community water systems. EPA also
 believes the decision to cover these
 facilities in today's rule is supported by
 consideration of the risks to certain
 subpopulations within the general
 population, such as children who
 consume water at day care facilities or
 schools that are served by NTNCWSs.
  Concerns were also expressed about
whether commenters were provided
with sufficient information about the
 costs of full coverage. These
 commenters noted that EPA could not,
without violating the notice and
comment provisions of the
Administrative Procedure Act, move to
full coverage of these facilities in the
final rule. EPA disagrees with this
 comment. The proposal clearly
 indicated that full coverage of
 NTNCWSs was an option on which
 comment was being requested and the
 supporting documents provided
 complete information about the costs of
 full coverage. (EPA, 2000h, see Table 6-
 9).
 8. Extension of Effective Date for Large
 Systems
   Commenters were generally
 supportive of EPA's proposed national
 determination (pursuant to section
 1412(b)(10) of SDWA) that water
 systems covered by the rule, serving less
 than 10,000 persons, and needing to
 make capital improvements to comply
 with the new standard would need more
 than 3 years from the time of rule
 promulgation to accomplish this. Thus,
 the proposed rule suggested allowing a
 two-year extension for compliance with
 the new standard, beyond the three
 years provided after the promulgation
 date. However, several commenters
 suggested that this finding and the
 additional two years for compliance
 should be applicable to all systems,
 including those serving more than
 10,000 persons, since extensive
 planning, design, and new equipment
 will also generally be needed by larger
 systems in a similar situation to comply
 with the new standard. EPA was
 persuaded by these comments, and has,
 as part of the implementation
 requirements for today's final rule,
 elected to apply this two-year extension
 to all facilities covered by today's rule.
 B. Health Effects of Arsenic
 1. Epidemiology Data
  Many commenters were critical of the
 Taiwan epidemiologic study as a basis
 for EPA decision making, quantitative
 dose-response assessment, extrapolation
 of the dose-response from the observed
 range of exposure, and application of
 the same risk estimate to the U.S.
 population. No commenters challenged
 the EPA conclusion that this study and
 the other epidemiologic studies together
 show that arsenic is carcinogenic to
 humans. Some supported the risk
 analysis in the proposed rule and the
 notice of data availability (NODA)
because it is relatively risk averse;
 others had criticisms.
  The following issues were raised
 about the use of the Taiwan risk
 assessment to represent U.S. risk:
Arsenic exposure from food and via
 cooking with contaminated water in
Taiwan is higher than is typical for the
U.S. population; exposure groupings
were made at the village level and were
assigned the median of the

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
concentration of arsenic measured in
the wells serving that village; not all
wells serving all villages were measured
and well concentrations varied
seasonally; the Taiwan population was
a rural population that was not well
nourished, having deficits of selenium,
possibly methionine or choline (methyl
donors), zinc and other essential
nutrients; and the Taiwan population
may have unknown differences in
genetic polymorphisms from the U.S.
population. Similar concerns were
raised about the South American
studies.
  Commenters also cited studies in the
U.S. (Lewis et al., 1999, Utah
population) and Europe (Buchet et al.,
1999; Kurttio ef al., 1999) as support for
the position that the risks from the
Taiwan study overestimated the risks in
the U.S.
  Many commenters were convinced
that the Lewis et al. (1999) study of a
U.S. population is the best study to use
in estimating U.S. risk. Since the Utah
study did not observe cancer outcomes
that one would expect if risks were as
large as the Taiwan or South American
studies suggest, these commenters
believe that risks estimates from studies
of populations outside of the U.S.
overestimate U.S. risks.
  Scientists generally agree that high
doses of arsenic are associated with
various  cancer and noncancer health
effects in humans. Epidemiology studies
in humans demonstrate that arsenic
induces skin and internal (e.g., bladder
and lung) cancers and non-cancer
effects such as skin keratoses and
vascular abnormalities when ingested in
drinking water at high doses.
  The epidemiologic investigations that
have been most thorough in
investigating the exposure and effects
on humans of ingesting ground water
contaminated with arsenic are those of
populations in Taiwan (Chen et al.,
1985; 1988; 1992; Wu et al., 1989),
Argentina (Hopenhayn-Rich ef al., 1996;
1998), Chile (Smith et al., 1998), and the
U.S. (Lewis et al., 1999). All of these
and other, smaller studies have been
considered in the Agency's
deliberations on this rule.
  The studies from Taiwan, Chile,
Argentina and the U.S. employed the
proper endpoints, selected correct study
groups and grouped the people into
discrete exposure groups. They also
used acceptable methods and accounted
for some knoxvn confounders. These
studies, due to their relative sizes,
varied in their statistical power to detect
differences. The Utah study (Lewis et
al., 1999) contained 4,000 people while
the Taiwan study had approximately
40,000 people and the two South
                         American studies each had over 200,000
                         people. All of these epidemiology
                         studies were ecological and
                         retrospective studies. The Taiwan and
                         South American studies had no
                         individual exposure data. The Utah
                         study associated persons with wells that
                         had measured concentrations though
                         exposure was calculated based on both
                         level of arsenic and length of exposure.
                         The Utah study followed exposed
                         individuals to discern causes of later
                         disease through carefully kept church
                         records.
                           The Agency chose to make its
                         quantitative estimates of risk based on
                         the Taiwan study. This choice was
                         endorsed by the EPA Science Advisory
                         Board (SAB, 2000q; NRC, 1999). The
                         database from Taiwan has the following
                         advantages: Mortality data were drawn
                         from a cancer registry; arsenic well
                         water concentrations were measured for
                         each of the 42 villages; there was a large,
                         relatively stable study population that
                         had life-time exposures to arsenic; there
                         are limited measured data for the food
                         intake of arsenic in this population; age-
                         and dose-dependent responses with
                         respect to arsenic in the drinking water
                         were demonstrated; the collection of
                         pathology data was unusually thorough;
                         and the populations were quite
                         homogeneous in terms of lifestyle.
                         Studies in Argentina and Chile also
                         showed lung and bladder risk of similar
                         magnitude at comparable levels of
                         exposure. EPA recognizes that there are
                         problems with the Taiwan study that
                         introduce uncertainties to the risk
                         analysis such as: the ecological study
                         design; the use of median exposure data
                         at the village level; the low income and
                         relatively poor diet of the Taiwanese
                         study population (high levels of
                         carbohydrates, low levels of protein,
                         selenium and other essential nutrients);
                         and high exposure to arsenic via food
                         and cooking water.
                           As urged by many commenters, the
                         Agency has considered and made
                         adjustments in its dose-response
                         assessment to reflect the quantitative
                         effect of the high Taiwanese exposure to
                         arsenic via food and cooking water. The
                         Agency made an adjustment to the
                         lower bound risk estimates to take into
                         consideration the effect of exposure to
                         arsenic through water used in preparing
                         food in Taiwan. In addition, an
                         adjustment was made to the lower
                         bound risk estimates to take into
                         consideration the relatively high arsenic
                         concentration in the food consumed in
                         Taiwan as compared to the U.S. We also
                         considered several additional factors
                         qualitatively in our final decision. These
                         included the effect of the median well
                         exposure data from the Taiwan study
and the effects of nutritional factors
such as selenium and methyl donors.
However, we did not feel that there
were sufficient data to account for these
factors quantitatively.
  The U.S. population cannot be
considered to be made up entirely of
well-nourished, genetically uniform
persons. People of the Asian and Pacific
Islander group make up about 4%
(approximately 11 million) of the more
than 270 million people in the U.S.
(U.S. Census Bureau, 2000). In addition,
there is a significant portion of the U.S.
population living in poverty with poor
nutrition. Thus, the Agency continues to
believe that the Taiwan study is •
appropriate as a basis for risk
assessment. The fact that the whole of
the Taiwanese population was
nutritionally vulnerable is a factor that
the Agency has considered qualitatively
as an uncertainty in risk assessment that
may on average lead to overestimation
of risk when applied to the U.S.
  The Utah study (Lewis et al., 1999)
did not find any excess bladder or lung
cancer risk after exposure to arsenic at
concentrations of 14 to 166 |ig/L. An
important feature of the study is that it
estimated excess risk by comparing
cancer rates among the study population
in Millard County, Utah to background
rates in all of Utah. But the cancer rates
observed among the study population,
even those who consumed the highest
levels of arsenic, were significantly
lower than in all of Utah. This is
evidence that there are important
differences between the study and
comparison populations besides their
consumption of arsenic. One such
difference is that Millard County is
mostly rural, while Utah as a whole
contains some large urban populations.
Another difference is that the subjects of
the Utah study were all members of the
Church of Jesus Christ of Latter Day
Saints, who for religious reasons have
relatively low rates of tobacco and
alcohol use. For these reasons, the
Agency believes that the comparison of
the study population to all of Utah is
not appropriate for estimating excess
risks. An alternative method of analysis
is to compare cancer rates only among
people within  the study population who
had high and low exposures.  The
Agency performed such an analysis on
the Utah data,  using the statistical
technique  of Cox proportional hazard
regression (U.S. EPA, 2000x; Cox and
Oakes, 1984). The results showed no
detectable increased risk of lung or
bladder cancers due to arsenic, even
among subjects exposed to more than
100 jig/L on average. On the other hand,
the excess risk could also not be
distinguished statistically from the

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             Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                       7027
levels predicted by model 1 of Morales
et al. (2000). These results show that the
Utah study is not powerful enough to
estimate excess risks with enough
precision to be useful for the Agency's
quantitative arsenic risk analysis.
Furthermore, the SAB noted that
"(a)lthough the data provided in
published results of the Lewis, et al.,
1999 study imply that there was no
excess bladder or lung cancer in this
population, the data are not in a form
that allows dose-response to be assessed
dependably" (EPA, 2000q). Other    •  ,
studies in the U.S. (Morton et al., 1976;
Valentine et al., 1992; Wong et al., 1992)
and Europe (Buchet et al., 1999; Kurttio
et al., 1999) were also considered in
EPA's evaluation of the risk from
arsenic. However, these studies were
not sufficient to develop a dose-
response relationship.
2. Dose-Response Relationship
  Numerous comments were received
about the quantitative estimation of
potential cancer risks to U.S.
populations from drinking water  , .
exposure to arsenic. Concerns were
raised about the extrapolation of the
dose (exposure)—response relationship
observed in a study of cancer incidence
in an arseniasis-endemic area of Taiwan
with high levels of arsenic in water
(Chen et al, 1988; Wu et al., 1989; Chen
ef at., 1992) to estimate potential
response in the U.S. to arsenic in water
at lower levels.
  Some commenters asked whether it is
appropriate to assume a linear dose
response for arsenic given that arsenic
does not appear to be directly reactive
with DNA. Other commenters urged
strict adherence to the linear approach,
and recommended choosing an MCL
that is below the 1/10,000 level of
estimated risk based on that approach.
  Some commenters also noted that
independent scientific panels (EPA,
2000q; NRG, 1999; EPA, 1997e; EPA,
1988) who have considered the Taiwan
study have raised the caution that using
the Taiwan study to estimate U.S. risk
at lower levels may result in an overly
conservative estimation of U.S. risk. The
independent panels have each said that
below the observed range of the high
level of contamination in Taiwan the
shape of the dose-response relationship
is likely to be sublinear. Thus, an
assumption that the effects seen per
dose increment remain the same from
high to low levels of dose may overstate
the U.S. risk. Some commenters have
urged that the Agency model the dose-
response relationship as a sublinear one,
rather than as a linear one as in the
proposal and NODA for the rule. These
commenters consider adherence to the
linear model as a failure of the Agency
to use the best available, peer-reviewed
science as required by SDWA.
  After consideration of the arguments
made by the commenters, the Agency
continues to believe that the best
approach, given the uncertainties
associated with the available data, is to
use the linear approach to set the MCLG
for arsenic. In the proposal and the
NODA, EPA discussed the fact that the
available data on arsenic's carcinogenic
mode of action point to several potential
modes of action, but which one is
operative is unknown. For this reason,
the data do not support use of an
alternative to linearity. The Agency
recognizes that the dose-response
relationship may be sublinear. The
Agency has considered both a linear
extrapolation and a nonlinear approach
in the selection of an MCL in this final
rule, (see section III.D.l.g. and the
comment response document for a
thorough discussion of the Agency's
position on the dose-response
assessment for arsenic.)
3. Suggestions That EPA Await Further
Health Effects Research
  Several commenters expressed the
opinion that EPA should delay setting a
standard for arsenic until more research
studies have been completed. These
commenters focused on research areas
such as health effects (especially at low
doses), the mode of action, and the
dose-response curve. Other commenters
questioned EPA's support of new
research and tracking of ongoing
research.
  Since developing the Arsenic
Research Plan  as required by the 1996
SDWA amendments, EPA and
stakeholders have established a
substantial research program.
Significant research has been
completed, and further research is
underway. EPA is tracking the progress
of Ongoing research and will make
research results available to the public.
EPA is committed to issuing the arsenic
regulation based on best available
science and believes that the research
currently available is sufficient to do so.
  EPA believes that the research
underway may provide important new
data for future rulemakings on arsenic.
However, EPA does not believe that a
determination on the arsenic MCL must
be delayed  until this research is
complete. Indeed, the U.S. Court of
Appeals for the District of Columbia
Circuit found that EPA:
cannot reject the "best available" evidence
simply because of the possibility of
contradiction in the future by evidence
unavailable at the time of action—a
possibility that will always be present" and
that "[a]ll scientific conclusions are subject
to some doubt; future hypothetical findings
always have the potential to resolve the
doubt. What is significant is Congress's
requirement that the action be taken on the
basis of the best available evidence at the
time of rulemaking. The word "available"
would be senseless if construed to mean
"expected to be available at some future
date" (Chlorine Chemistry Council v. EPA,
206 F.3d 1286,1290-91 (D.C. Cir. 2000)).

In the future, as part of the 6-year
review process, the Agency will
evaluate new data to determine if the
MCLG and/or MCL promulgated in
today's regulation should be revised.
  Research pertaining to arsenic in the
drinking water is a priority for the EPA.
In addition, EPA supports and
encourages other organizations to
sponsor new epidemiology and
toxicology studies on arsenic. The
nature of scientific research is that as
each study attempts to address or
resolve a particular issue, it also raises
more questions for investigation. EPA
recognizes that even when the ongoing
set of studies are complete, more are
likely to follow. Uncertainty is inherent
in science; at no point will "all"
research be finished and "all" questions
be answered.

4. Sensitive Subpopulations
  Some commenters encouraged EPA to
set the arsenic standard as low as
possible to protect vulnerable
populations. These commenters felt that
EPA should consider human
development and reproduction and
variously defined vulnerable
populations as persons with immune,
cardiovascular, and nervous system
disorders, children, low-income people,
Native Americans, diabetics, and
geriatric populations.
  The 1996 SDWA amendments include
specific provisions in section
1412(b)(3)(C)(i)(V) that require EPA to
assess the effects of a contaminant on
the general population and on groups
within the general population such as ,
infants, children, pregnant women, the
elderly, individuals with a history of
serious illness, or other subpopulations
that are identified as likely to be at
greater risk of adverse health effects due
to exposure to contaminants in drinking
water than the general population. The
NRC subcommittee (NRG, 1999) noted
that there is a marked variation in
susceptibility to arsenic-induced toxic
effects which may be influenced by
factors such as genetic polymorphisms
(especially in metabolism), life stage at
which exposures occur,  sex, nutritional
status, and concurrent exposures to
other agents  or environmental factors.
EPA shares the view of the NRC report

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
which concluded that there is
insufficient scientific information to
permit separate cancer risk estimates for
potential subpopulations such as
pregnant women, lactating women, and
children and that factors that influence
sensitivity to or expression of arsenic-
associated cancer and noncancer effects
need to he hetter characterized. The EPA
agrees with NRG that there is not
enough information to make risk
conclusions regarding any specific
subpopulations. However, EPA believes
it is appropriate to consider effects on
infants due  to their greater consumption
of water per body weight and is
considering whether to issue a health
advisory that will address this issue.
  A study of a population in Chile
exposed to about 800 ug/L in its
drinking water for a period of years
showed significant  association with this
exposure and fetal and infant mortality
that declined to background when the
water was treated to remove arsenic.
This study was cited by a commenter as
indicating more general sensitivity of
fetuses and  infants. The dose was one
that had a range of significant arsenic
toxicity effects on the adult population.
It is logical that fetuses of mothers so
exposed would be affected and infants
would have received several times the
adult exposure per kg body weight and,
consequently, more toxicity. This study
does not indicate disproportionate
effects on fetuses or infants at low
doses. Once the water was treated the
effects declined to background
(Hopenhayn-Rich et al., 2000).

5. EPA's risk analysis
  Several commenters felt that EPA did
not follow the NRG recommendations
that "the final calculated risk should be
supported by a range of analyses over a
fairly broad feasible range of
assumptions", misinterpreted the NRG
report, or relied solely on the NRG
report and thus did not do an
appropriate risk assessment for arsenic.
Others viewed the NRG report as  lacking
peer review or as being politically
motivated.
  The SAB (EPA, 2000q, pgs. 2-3]
discussed EPA's use of the NRG report.
In the cover letter to the Administrator
they stated:
  *  * * The NRG also noted a number of
factors that likely differ between the
Taiwanese study population and the U.S.
population and which might influence the
validity of arsenic cancer risk estimates in
the United States. Even though the Agency
did its own risk characterization (i.e., they
combined the NRG risk factors with U.S.
exposure information  and arsenic occurrence
distributions to obtain a range of risks for use
in their benefits analysis), they chose not to
                          quantitatively take any of these factors into
                          account at this time.
                            The Panel agrees with conclusions reached
                          by the NRG in its 1999 report on arsenic,
                          especially their conclusion that "there is
                          sufficient evidence from human
                          epidemiological studies * * * that chronic
                          ingestion of inorganic arsenic arsenic [sic]
                          causes bladder and lung, as well as skin
                          cancer." The NRG also stated that currently
                          the Taiwanese data are the best available for
                          quantifying risk * *  *. We note, however,
                          that this Panel does not believe that
                          resolution of all these factors can nor must
                          be accomplished before EPA promulgates a
                          final arsenic rule in response to the current
                          regulatory deadlines. However, resolution of
                          the critical factors *  * *. in time for the next
                          evaluation cycle for the arsenic regulation
                          should be considered as a goal.

                            In closing the cover letter to the
                          Administrator, the SAB stated:
                            Specifically, the majority of the Panel
                          members felt that there is adequate basis for
                          the Agency to consider use of its
                          discretionary authority under the Safe
                          Drinking Water Act of 1996 to consider MCLs
                          other than the proposed 5 ug/L.
                            * *  * The ultimate risk number derived
                          from the Taiwanese study has proven very
                          sensitive to the decision about the
                          appropriateness of the comparison
                          population. This of course, has important
                          implications for the use of the data to
                          estimate risk in the U.S. Also a study in Utah
                          suggests that some U.S. populations may be
                          less susceptible to the development of
                          cancer, than those in Taiwan * * *. Also, a
                          recently published study suggests that the
                          incremental increases in lung and bladder
                          cancers observed in the Taiwan study are of
                          roughly the same magnitude, rather than the
                          NRC's inference of a potentially two- to five-
                          fold greater rate of lung cancer relative to
                          bladder cancer.
                            As noted by the NRG, the mechanisms
                          associated with arsenic-induced cancer most
                          likely have a sublinear character, which
                          implies that linear models, such as those
                          used by the Agency, overestimate risk * *  *
                          Nonetheless, the Panel agrees with the NRG
                          that available data do not yet meet EPA's new
                          criteria for departing from linear
                          extrapolation of cancer risk.

                            The NRG Subcommittee on Arsenic in
                          Drinking Water explored a number of
                          model approaches using the Taiwan
                          epidemiology data for bladder cancer.
                          Although there are indications that the
                          dose-response relationship for arsenic
                          may be nonlinear at low doses, a
                          convincing biological argument for
                          selecting a nonlinear model is not yet
                          available. Thus, according to EPA's draft
                          1996 guidelines and consistent with the
                          1986 guidelines, EPA determined that a
                          point of departure approach was most
                          appropriate to estimate low-dose risks.
                          EPA agreed with NRC's choice of the
                          Poisson model. In the NODA, based on
                          the Morales et al. study (2000), EPA
                          conducted a re-analysis of the bladder
                          and lung cancer data using a Poisson
model with no comparison population
to estimate points of departure for each
health endpoint. In addition to the re-
analysis of bladder and lung cancer risk,
EPA did a sensitivity analysis of the
effect of exposure to arsenic through
water used in preparing food in Taiwan.
In response to comments received on
the proposed rule and the NODA, EPA
has also analyzed the effect of exposure
to arsenic through food and considered
the effect of village level exposure data.
In summary, EPA's final risk  calculation
is supported by analyses of the effect of
various assumptions and uncertainties
on the risk estimate and reflects the best
available science.
  EPA believes that it has done a
thorough risk analysis on arsenic.
Arsenic health risks have remained a
high priority at EPA for over 20 years,
and EPA scientists have closely
followed all scientific developments.
EPA established four independent
scientific panels to evaluate arsenic
health risks (EPA, 2000q; NRG, 1999;
EPA, 1997e; EPA, 1988) and provided a
sense of the views of the broader
scientific community. EPA participated
in conducting one of the major cancer
mortality studies available on arsenic
(Lewis et al., 1999). In the proposed rule
and NODA, EPA used the 1999 NRG
report's analysis of the Taiwan data as
well as other published scientific papers
to characterize the potential health
hazards of ingested arsenic. The NRG
report represents a thorough
examination of the best available, peer
reviewed science through the late 1990s.
Other studies  that were important in
EPA's analysis were the Utah study
(Lewis et al., 1999) and the Morales et
al. (2000) study. In selecting the
proposed MCL, EPA considered the
uncertainties of the quantitative dose-
response assessment, particularly the
possible nonlinearity of the dose-
response. EPA also considered the
unquantifiable risks from arsenic such
as noncancer effects. In response to
commenters, EPA expanded its analysis
of the Utah study (U.S. EPA, 2000x) and
delved further into the uncertainties in
the Taiwan data. The Agency made an
adjustment to the lower-bound risk
estimates to take into consideration the
effect of exposure to arsenic through
water used in  preparing food  in Taiwan.
In addition, an adjustment was made to
the lower-bound risk estimates to take
into consideration the relatively high
arsenic concentration in the food
consumed in Taiwan as compared to the
U.S. EPA also investigated the effect of
the ecological exposure data on its risk
estimates. When villages with only one
arsenic measurement were removed

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                                                                      7029
from the data set (on the theory that the
exposure data was too uncertain), or
when village means instead of medians
were used for the exposure estimates,
there was no statistically significant.
change in the estimated point of
departure, using Model 1 of Morales et
al. (2000). In summary, EPA believes
that it has completed a thorough risk
analysis on arsenic that used the best
available, peer reviewed science.
  The NRC subjected their draft report
to a very rigorous external peer review
using its own procedures that are well
established and generally acknowledged
as being independent and objective. The
SAB also reviewed the NRC report and
EPA's risk analysis, which was, in part,
based on the NRC report. In addition,
the public was provided an opportunity
to comment on the EPA risk analysis as
a part of the arsenic proposal and
NODA.
  EPA disagrees that the NRC report
was politically motivated. The NRC
Subcommittee on Arsenic in Drinking
Water was composed of 16 highly
respected scientific experts. EPA
believes that this panel produced an
impartial analysis of the data available
on the toxicity of arsenic.
6. Setting the MCLG and the MCL
  Some commenters were confused
about the difference between MCLGs
and MCLs, how EPA sets MCLGs and
MCLs based on legal, scientific, and
policy principles, and the relationship
between the MCLG and costs and
benefits. Other commenters were
concerned about a perceived "anti-
backsliding" provision for MCLGs and
MCLs in SDWA.
  In accordance with SDWA, standards
set for contaminants consist of two
components, a maximum contaminant
level goal (MCLG) and a national
primary drinking water regulation
(NPDWR) (section 1412(b)(l)(A)), which
specifies either "a maximum
contaminant level (MCL) for  such
contaminant which is generally set as
close to the maximum contaminant ,
level goal as is feasible" (section
1412(b)(4)(B)) or a treatment technique
if "it is not economically or
technologically feasible to ascertain the
level of the contaminant" (section
  SDWA defines an MCLG as "the level
at which no known or anticipated
adverse effects on the health of persons
occur and which allows an adequate
margin of safety" (section
1412(b)(4)(A)). MCLGs for all
carcinogens are set at zero unless
adequate scientific data support a higher
MCLG. hi accordance with the SDWA,
the MCLG is based on the best available
peer reviewed science. An MCLG is a
goal, not a regulatory limit that the
Agency expects to be attained by water
systems.
  The MCLG must be proposed
simultaneously with a national primary
drinking water regulation (section
1412(a)(3)), which specifies a maximum
contaminant level (MCL) as close to the
MCLG as technically feasible. The MCL
is the enforceable standard. SDWA
allows EPA to make an exception to
setting the MCL as close to the MCLG
as is feasible where the "Administrator
determines *  * * that the benefits of a
maximum contaminant level *  *  *
would not justify the costs of complying
with the level." In this case, EPA  may
propose and promulgate an MCL  "that
maximizes health risk reduction
benefits at a cost that is justified by the
benefits" (section 1412(b)(6)). This
exception was used to set the MCL for
arsenic. EPA found that at the feasible
level of 3 ng/L, the benefits of
compliance did not justify the costs.
The Agency determined that an MCL of
10 ng/L maximizes the health risk
reduction benefits at a cost that is
justified by the benefits (see preamble
discussion of the risk management
decision that was made for arsenic in
section III.F.)
  Some commenters argued that EPA
sets the MCL within a risk-range of 10 ~4
to 10~B without proper regard to  the
statutory requirements discussed above.
This is not the case. As noted in the
proposal, EPA has historically
considered this risk range as protective
of public health, and accordingly has
sought to ensure that drinking water
standards are within this risk range.
However, the risk-range represents a
policy goal for EPA, and is not a
statutory factor in setting  an MCL. In the
case of arsenic, EPA did the benefit-cost
analysis required by the statute. Having
found that the benefits of an MCL at the
feasible level were not justified by the
costs, EPA set the MCL at 10 fig/L. This
MCL maximizes health risk reduction
benefits at a cost that is justified by the
benefits.
  EPA is required to review and revise
as appropriate,  each national primary
drinking water regulation, at least every
6 years. Revisions to current regulations
"shall maintain, or provide for greater
protection of the health of persons"
(section 1412(b)(9)). When new
scientific data become available, the
Agency may reevaluate the MCLG and
MCL.

C. Occurrence
  The principal concerns raised by the
commenters and our responses are as
follows:
1. Occurrence data
  Several commenters expressed
concern that EPA estimated occurrence
using data from only 25 States and that
the national estimate was thus not as
robust as it should have been. Many of
these commenters suggested that EPA
should request data from all States/more
systems before issuing the final rule.
  It is true that we based our occurrence
estimate on data from only 25 States.
However, we believe that we have
compiled the most comprehensive and
accurate occurrence estimate possible
with currently available  data, and that
"this estimate adequately supports our
various analyses and final decisions.
  For our occurrence analysis, we relied
on data submitted voluntarily by State
drinking water agencies. In doing so, we
collected the largest available database
on arsenic in drinking water, consisting
of almost 77,000 observations from more
than 26,600 public water systems in 25
States. We received but did not use data
from six States (Florida,  Idaho, Iowa,
Louisiana, Pennsylvania, and South
Dakota), because the data either could
not be linked to PWSs; did not indicate
if results were censored; were all zero;
did not provide analytical or reporting
limits; or were rounded to the nearest 10
Hg/L.
  In response to our request in the
proposed rule for additional occurrence
data,  we received additional data from
several States. However, in each case,
the submitted data either corresponded
closely to observations already in our
data set (California, New Mexico, Utah),
or were of the wrong kind or insufficient
quantity to use in our estimation (Iowa,
Maryland, Nebraska, Oklahoma,
Vermont, West Virginia).
  Of the States from whom we did not
receive usable data, we believe that
many do not have databases of the kind
and quality that we would need for our
occurrence analysis. We therefore could
not have obtained such information
from  other States without requiring, in
some instances, new monitoring to be
undertaken and new data to be
compiled.
  In forming our occurrence estimate,
we did not ignore States for which we
have  no suitable data.  We accounted for
these States by assigning regional
occurrence distributions to them. Our
resulting national estimates compare
relatively closely with those developed
by the utility industry and by the U.S.
Geological Survey (EPA, 2000r).
  Some commenters indicated EPA
should not use data from the U.S.
Geological Survey's National Ambient
Water Quality Assessment (NAWQA) or
EPA's NIRS, SDWIS, or Rural Water

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Survey (RWS) to estimate occurrence. In
forming our occurrence estimates, we
used arsenic concentrations drawn only
from our 25-State arsenic compliance
monitoring database. We did not use
observations from NAWQA, SDWIS,
RWS, NAOS, NIRS, NOMS, Community
Water System Survey (CWSS) or any
other surveys or studies. As the
preamble of the proposed rule (65 FR
38888 at 38903) states, we used National
Organic Monitoring Survey (NOMS),
RWS, and the 1978 CWSS in previous
arsenic occurrence analyses, but did not
use them for the present analysis
because of their age and relatively high
detection limits. The only information
we used from SDWIS was the type and
size of particular systems, and the
numbers of systems and population
served in different categories of systems.
We used NAWQA, NAOS and NIRS
only for comparison to our finished
results.
2. Occurrence Methodology
  Some commenters stated their belief
that EPA had underestimated national
occurrence because they believe that
EPA did not have enough data with
which to develop the estimate.
Commenters also believed that, since
the national occurrence is
underestimated, noncompliance/co-
occurrence are also underestimated.
  We do not agree that we have
underestimated arsenic occurrence. We
have the largest existing database of
arsenic in drinking water, with almost
77,000 observations from more than
26,600 public water systems.in 25
States. We did not ignore States for
which we have no data, but accounted
for them by assigning regional
occurrence distributions to them. Our
data and methodology have been
approved by an independent expert peer
review panel. Our occurrence estimates
are close to those of the NAOS and
USGS.
  Some commenters believe EPA's
occurrence methodology is inconsistent
with the way compliance is determined
and that EPA should use a running
annual average for estimating
noncompliance.
  We acknowledged in the proposed
rule (65 FR 38888 at 38907) that our
method of estimating occurrence is
different from the method used for
determining compliance with the MCL.
Our method usually gives higher
estimates, because we substitute non-
zero values for non-detects, while under
the regulatory definition of compliance,
non-detects are assumed to equal zero.
We believe our method is the best one
despite the difference, for two reasons. .
First, our goal is to characterize arsenic
                         occurrence as accurately as possible.
                         Given a sound characterization of
                         system-mean occurrence and of intra-
                         system and intra-source variability, the
                         numbers of systems and points of entry
                         expected to fail the regulatory definition
                         of compliance at some MCL option can
                         be determined. The reverse calculation,
                         on the other hand, is generally not
                         possible. Second, as analytical methods
                         improve and detection limits decrease,
                         the difference between the two methods
                         will decrease.
                           To the extent that our estimates
                         disagree with those used for
                         determining compliance, our estimates
                         will be higher and thus will cause us to
                         slightly overestimate the costs
                         associated with any MCL option. Our
                         estimates of benefits, on the other hand,
                         should not be biased one way or the
                         other by our occurrence estimate, since
                         health risks are mainly determined by
                         mean exposure over time, which we
                        1 accurately characterize. The same
                         would not be true if we used the
                         regulatory definition of non-detects,
                         which underestimates mean occurrence.
                           Commenters also pointed out that
                         occurrence estimates in different parts
                         of the rule and support documents are
                         inconsistent. Although the analysis is
                         internally consistent, apparent
                         inconsistencies in the numbers arise
                         from three sources: System versus site
                         considerations, year of the SDWIS
                         inventory, and use 'of best point or
                         regressed estimates. With respect to the
                         first point, because most large ground
                         water systems have multiple entry
                         points, some systems which have
                         average concentrations below the MCL
                         will still have impacted entry points. As
                         a consequence, the number of impacted
                         systems is much larger than the number
                         of systems with mean concentrations
                         above the MCL. In the proposal, this
                         difference amounted to several hundred
                         systems.
                           In connection with the second point,
                         year of the SDWIS inventory, it is not
                         unusual for there to be a change from
                         year to year in the inventory of
                         hundreds of water systems. This results
                         from restructuring and consolidations,
                         among other factors. In the final rule
                         and supporting documents, we have
                         tried to address this issue by
                         consistently using a single set of
                         baseline estimates, taken from EPA's
                         Drinking Water Baseline Handbook
                         (EPA, 2000b). Regardless, this factor is
                         only responsible for a one or two
                         percent variation in the impact estimate,
                        . and is not of sufficient significance to
                         impact the decision making process.
                           The third issue relates to the      ••
                         representation of the mean system
                         arsenic occurrence. In many tables,
mean arsenic concentrations are
presented which reflect our best point
estimates. Nevertheless, the best
estimate of national cost impacts derives.
from use of a best fit equation which
incorporates all of the data. We have
used these regressed fits in the
development of the costs and benefits.
The two sets of estimates are described
in section III.C.4.

3. Co-Occurrence
  Some commenters believe EPA has
underestimated the co-occurrence of
arsenic with radon.We agree that, based
on the NWIS  data, most systems with
arsenic greater than 10 ug/L will also
have radon greater than 300 pCi/L.
However,  only about 8% of all systems
exceed both standards. Moreover, about
85% of such systems (again based on
NWIS) have radon in the range of 300
to 1000 pCi/L, where incidental removal
of radon will  be most effective. We
expect, for example, that systems with
300 to 1000 pCi/L of radon will be more
likely to treat for arsenic by coagulation
and microfiltration, which removes
most radon incidentally by aeration.
Therefore, we believe that the impact of
co-occurrence of radon and arsenic will
be small.
  Some commenters believed that EPA
did not evaluate the effect of different
sulfate levels in its  decision tree. We did
evaluate several ranges of
concentrations of sulfate and arsenic
against each other (see 65 FR 38888 at
38938). The sulfate concentration ranges
included 0 to 25, 25 to 120,120 to 250,
250 to 500, and >500 mg/L. The arsenic
concentration ranges included 0 to 2, 2
to 5, 5 to 10,10 to 20, and >20 ug/L.
For these ranges, there was no apparent
change in  co-occurrence of sulfate and
arsenic as  the concentrations increased.
However, the Agency took the co-
occurrence of arsenic and sulfate and
the impact on anion exchange
technology into consideration in the
decision tree at sulfate levels of <20, 20
to 90, 90 to 120, and >120 mg/L. The
revised decision tree for today's final
rule only applies anion exchange when
sulfate levels  are less than 50 mg/L.
  Some commenters expressed their
belief that NWIS is inadequate to
estimate national co-occurrence of
arsenic and radon and that NWIS data
should be  verified as representative of
PWS water use by requesting data from
States. It is true that NWIS includes
samples from non-drinking water
supplies. NWIS is, however, the largest
and best data base available for studying
co-occurrence with over 40,000 ambient
water samples. To the extent that non-
drinking water samples affect our
estimates,  they should cause us to

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                                                                      7031
overestimate occurrence and therefore
also co-occurrence. We realize that
NWIS may not reflect conditions in any
given State or water system; we use it
only for deriving national estimates.

D. Analytical Methods
1. Analytical Interferences
  Commenters expressed concern about
the potential for matrix interferences in
the analysis of arsenic at low levels. A
potential for chloride interference when
using ICP-MS with samples containing
high levels of chloride was specifically
noted by commenters. A commenter
also stated that some investigators had
reported arsenic results in drinking
water samples that differed depending
on the valence state of the arsenic in the
sample (i.e., As (III) or (V)) when using
methods that used GHAA technology.
The Agency agrees that interferences
may be encountered when determining
arsenic using the methods proposed in
the June 2000 rale (including the GHAA
technique). However, the Agency
disagrees that the interferences are
unexpected or impede compliance with
the arsenic MCL of 0.01 mg/L. Four
different measurement technologies are
approved for the analysis of arsenic: AA
furnace, AA-Platform, GHAA and ICP-
MS with respective MDLs of 0.001 mg/
L, 0.0005 mg/L, 0.001 mg/L, and 0.0014
mg/L. These technologies have been
used for compliance determinations of
arsenic for many years. The methods
written around each of these
technologies identify potential
interferences and  contain corrective
procedures. In particular, the ICP-MS
method warns of potential interferences
from chloride and provides instructions
to eliminate this problem.
  2. Demonstration of PQL (Includes
Acceptance Limits)
  Several commenters agreed with the
±30% acceptance limit and the 0.003
mg/L PQL derived and proposed for
arsenic. Other commenters expressed
concerns that the PQL was not correctly
derived or that the acceptance limits
were too broad.
  A commenter stated that the Agency
should set the PQL at 5 to 10 times the
method detection limits of O.OOlmg/L
which would result in a PQL range of
0.005 to 0.010 mg/L. As previously
explained in section III.B.l of this
preamble, EPA only uses the MDL
multiplier approach to derive a PQL
when there is insufficient
interlaboratory data to statistically
derive a PQL. For arsenic, the Agency
had ample WS data to derive a PQL
using the interlaboratory approach.
  Several commenters were concerned
that the "PQL study is not realistic and
does not account for matrix interference
in real drinking water samples." In
addition, some commenters stated that
the "PQL should be set at a level that
is achievable by laboratories on a
routine basis." EPA disagrees that the
PQL for arsenic is unrealistic, or that it
has been set at a level that is
unachievable on a routine basis. As
explained in section III.B.l of this
preamble, EPA used the interlaboratory
data from six recent WS studies to
derive the arsenic PQL. The WS studies
utilize reagent grade water (i.e., blank
water free of interferences) for the PE-
samples that are analyzed in the WS
study. Use of reagent water to prepare
a test sample conforms with an accepted
and longstanding practice in which a
method developer validates an
analytical method in blank water before
looking for possible inaccuracies from
matrix effects when the method is
applied to a  sample matrix (e.g., a
compliance drinking water sample).
Reagent water is used as an initial
benchmark for method development
and testing, because it is interference-
free and can be readily produced in any
competent laboratory. A lab
subsequently identifies and corrects for
matrix effects by comparing its
performance on reagent water to the
results on the matrix (contaminated
drinking water) or spiked matrix (clean
drinking water spiked with arsenic)
sample.
  All of the methods approved for
SDWA and Clean Water Act (CWA)
compliance monitoring require that
laboratories  demonstrate acceptable
performance in reagent grade water
before drinking water samples are
tested. A study conducted by Eaton
(Eaton, 1994) found that the type of
matrix and the analytical method used
had no significant effect on the
derivation of their PQL. This study
included drinking waters with high total
dissolved solids and total organic
carbon, and arsenic concentrations that
ranged from 0.001 to 0.010 mg/L. Thus,
EPA disagrees with the comment that
the PQL would be significantly different
if derived in various drinking waters
instead of in reagent water.
  The Agency also believes that the
derived PQL of 0.003 mg/L is realistic
and is achievable on a routine basis. The
derivation of the PQL for arsenic is
consistent with the longstanding
process used to determine PQLs for
other metal contaminants regulated
under SDWA. In deriving the PQL for
arsenic, the Agency took into
consideration the issue of laboratory
capability, laboratory capacity, and the
ability of laboratories to achieve a
quantitation level on a routine basis.
The PQL for arsenic was derived from
data collected in WS studies in which
PE-samples were prepared with reagent
water spiked with low concentrations,
<0.006 mg/L, of arsenic. These studies
were conducted from 1992 to 1995. The
number of EPA Regional and State
laboratories that participated in each
study ranged from 26 to 45 laboratories.
Using acceptance limits of ±30% a
linear regression analysis of this data
yielded a PQL of 0.00258 mg/L. The
Agency rounded up to derive the
proposed PQL of 0.003 mg/L (3 p.g/L)
with a ±30% acceptance limit. Over
75% of the EPA Regional and State
laboratories were able to report arsenic
concentrations within ±30% of 3 ug/L.
In addition, 62% of non-EPA
laboratories that participated in these
same WS studies were equally
successful. The number of non-EPA
laboratories in these WS studies ranged
from 360 to 619 laboratories, which
means that the number of laboratories
that successfully analyzed the low
concentration arsenic PE-samples
ranged from 223 to 384. This data
indicate that neither laboratory capacity
nor capability will be a problem at a
PQL of 3 ug/L ±30%. EPA, therefore,
believes that competent laboratories are
available, and with the use of the
quality control instructions in the
compliance methods will routinely
achieve this level of performance.
  Several commenters felt the
acceptance limit of ±30% is too wide.
The ±30% acceptance limit was based
on a recommendation from the SAB.
The SAB recommendation was to
choose an acceptance limit similar to
that set for other regulated metals (EPA,
1995). These limits range from ±15% for
barium, beryllium, and chromium to
±30% for mercury and thallium
(§ 141.23(k)(3)). EPA chose the upper
(i.e., wider) limit on this range to ensure
that a sufficient number of laboratories
could be certified for arsenic
determinations (the number of
laboratories that can achieve the
accuracy acceptance limit increases as
the limit is widened). Several
commenters agreed with the proposed
±30% acceptance limit, because they
shared EPA concerns about insufficient
laboratory capacity if this limit was
narrowed.
3. Acidification of samples
  A commenter stated that the Agency
needed to clarify that a sample can be
collected in the field without
acidification, and that acidification of
the sample can be done later at the
laboratory. The commenter believes that
delaying acidification does not affect the
compliance determination and that a

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laboratory is a better place in which to
handle acids. The Agency agrees with
this comment and had previously
clarified in a final rule (64 FR 67450;
December 1,1999; see page 67452, item
11 and page 67456, item 3; EPA, 1999p),
that acidification of samples may be
conducted in the field or laboratory
with acidification at the laboratory
being the better and safer choice. In the
1999 rule, EPA noted that this change
would be affected by amending footnote
one to the table at § 141.23(k)(2) to read
as follows:
  For cyanide determinations samples must
ba adjusted with sodium hydroxide to pH >
12 at the time off collection. When chilling
is indicated the sample must be shipped and
stored at 4EG or less. Acidification of nitrate
or metals samples may be with a
concentrated acid or a dilute (50% by
volume) solution of the applicable
concentrated acid. Acidification of samples
for metals analysis is encouraged and
allowed at the laboratory rather than at the
time of sampling provided the shipping time
and other instructions in Section 8.3 of EPA
Methods 200.7 or 200.8 or 200.9 are
followed.
Although the June 2000 proposal
inadvertently omitted this footnote,
today's final rule contains the correct
footnote.
  Another commenter believed that
because the proposed sample
preservation requirement for arsenic
was new and supposedly untested, data
collected under the previous
requirements might not be comparable
to data resulting from the  new sample
preservation requirement. These are not
new analytical requirements. The
commenter may have been misled by
the statement in the preamble to the
June 2000 arsenic proposal that EPA
proposed to add a "new" requirement to
the preservation and holding time table
at § 141.23(k)(2). It is only new in the
sense that EPA has codified the
requirements in today's rule. Arsenic
compliance data collected in the past
and the arsenic data discussed in the
June 2000 proposal were collected using
these preservation and holding time
conditions.

E, Monitoring and Reporting
Requirements

1. Compliance Determinations
  Most of the comments regarding
compliance determinations requested
the Agency to provide further
clarification on this issue. Many
commenters specifically asked EPA to
specify whether samples collected
quarterly as a result of an MCL violation
are defined as compliance samples or
confirmation samples. In today's final
rule, the Agency has provided further
                         clarification in the regulatory language
                         to eliminate any misinterpretation.
                           The Agency defines quarterly samples
                         as compliance samples that must be
                         used to determine compliance.
                         Confirmation samples are any samples
                         that the State requires that go beyond
                         the minimum Federally required
                         samples defined in the following
                         paragraph.
                           Systems will determine compliance
                         based on the compliance samples
                         obtained at each sampling point. If any
                         sampling point is in violation of an
                         MCL, the system has a MCL violation.
                         For systems monitoring more than once
                         per year, compliance with the MCL is
                         determined by a running annual average
                         at each sampling point. Systems
                         monitoring annually or less frequently
                         whose sample result exceeds the MCL
                         for inorganic contaminants in
                         § 141.23(c), or whose sample result
                         exceeds the trigger level for organic
                         contaminants listed in §§ 141.24(f) or
                         141.24(h) must revert to quarterly
                         sampling in the next quarter. The
                         system will not be considered in
                         violation of the MCL until it has
                         completed one year of quarterly
                         compliance sampling. If any sample
                         result will cause the running annual
                         average to exceed the MCL at any
                         sample point (i.e., the analytical result
                         is greater than four times the MCL), the
                         system is out of compliance with the
                         MCL immediately. Systems may not
                         monitor more frequently than specified
                         by the State to determine compliance
                         unless it has applied to and obtained
                         approval from the State. If a system does
                         not collect all required samples when
                         compliance is based on a running
                         annual average of quarterly samples,
                         compliance will be based on the
                         running annual average of the samples
                         collected. If a sample result is less than
                         the detection limit, zero will be used to
                         calculate the annual average. States
                         have the discretion to delete results of
                         obvious sampling or analytic errors.
                           States still have the flexibility to
                         require confirmation samples for
                         positive or negative results. States may
                         require more than one confirmation
                         sample to determine the average
                         exposure over a 3-month period.
                         Confirmation samples must be averaged
                         with the original analytical result to
                         calculate an average over the 3-month
                         period. The 3-month average must be
                         used as one of the quarterly
                         concentrations for determining the
                         running annual average. The running
                         annual average must be used for
                         compliance determinations.
                            Some commenters requested rule
                         language that clearly specifies how to
                         determine compliance and others
requested approval of scientific
methodologies that more accurately
reflect the average annual contaminant
exposure. Today's rule requires that
monitoring be conducted at all entry
points to the distribution system.
However, the State has discretion to
require monitoring and determine
compliance based on a case-by-case
analysis of individual drinking water
systems.
  The Agency cannot in this rule
address all of the possible outcomes that
may occur at a particular water system;
therefore, EPA encourages drinking
water systems to inform State regulators
of their individual circumstances. Some
systems have implemented elaborate
plans including targeted, increased
monitoring that is much more
representative of the average annual
mean contaminant concentration to
which individuals are being exposed.
(Some States determine compliance
based on a time or flow weighted
average.) In many cases, the State can
demonstrate that compliance is being
calculated based on scientific methods
that are more representative of the true
contaminant concentration that
individuals are being exposed to over a
year, but it substantially increases the
sampling and analytical costs.
  Some States require that systems
collect samples from wells that only
operate for 1 month out of the year
regardless of whether they are operating
during scheduled sampling times. The
State may determine compliance based
on several factors including, but not
limited to, the quantity of water
supplied by a source, the duration of
service of the source, and contaminant
concentration.

2. Monitoring of POU Devices
  Several commenters indicated that
there will be many implementation
problems with POU devices. EPA agrees
that some issues such as scheduling and
access for routine maintenance of POU
devices, liability, and monitoring may
be difficult but believes they can be
alleviated with sufficient planning. The
Agency will be providing POU
operation and maintenance guidance for
small systems after publication of the
final rule. In general, EPA believes that
POU systems can be easily installed,
maintained,  and monitored for removal
efficacy.
  EPA believes that it is feasible for ,
public water systems to own, control,
and maintain POE/POU devices for
arsenic MCL compliance either directly
or through a contract with a qualified
party. This approach, however, requires
more recordkeeping to monitor
individual devices than does centralized

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                                                                     7033
treatment. Both POU AA and RO can be
obtained with mechanical warnings to
ensure that customers are notified of
operational problems. In the case of
activated alumina, such warnings
include shut-off valves that are triggered
prior to the adsorptive capacity of the
media being exhausted, based on the
volume of water treated. Reverse
osmosis POU devices come with total
dissolved solids detectors that activate
warning lights when membrane
integrity is compromised.
  Systems having high arsenic
concentrations in the finished water that
choose to achieve compliance using
POU treatment would shift from
monitoring at a central location to
monitoring at the POU devices. As is the
case with any system that installs
treatment to lower contaminant
concentrations to levels below the MCL,
the monitoring frequency is part of the
compliance agreement between the
Primacy Agency and the system. The
compliance agreement must require
monitoring that is as protective as
monitoring for systems using
centralized treatment and may not be
less frequent than the routine
monitoring required in today's rule (i.e.,
annual samples for surface water
systems and one sample every three
years for ground water systems). The
Primacy Agency will be responsible for
negotiating the monitoring schedule
with the system for POU devices and
may amend the compliance agreement
with the system to increase or reduce
the monitoring frequency to an alternate
schedule depending upon maintenance,
public responses, the implementation of
the service agreement, and the initial
monitoring results. For  purposes of
forecasting national compliance costs,
EPA assumed that all POU devices
would be monitored for arsenic with
one sample taken the first year  .
following installation, samples taken
annually in subsequent years, and
replacement of the filter cartridge at
each POU site every 6 months.
3. Monitoring and Reporting for
NTNCWSs
   Most commenters disagreed with
EPA's approach  of requiring NTNCWSs
to monitor and provide public
notification. Instead, the majority of
commenters indicated that EPA should
either require full coverage or not
regulate NTNGWSs. In today's rale
making, EPA is requiring NTNCWSs to
comply with the arsenic regulation,
including the monitoring and reporting
requirements associated with arsenic in
§ 141.23, the MCL listed in § 141.62, and
the public notification requirements
(NTNCWSs are subject  to the same
requirements as those of CWSs). EPA
acknowledges that there is uncertainty
associated with its information about
exposure patterns for consumers of
water from NTNCWSs and the
demographics of these facilities. Thus,
our understanding of the health risks to
consumers of water from NTNCWSs is
uncertain. In the case of arsenic,
however, EPA believes the additional
uncertainty in the overall risk analysis
supports the decision to treat these
facilities the same as CWSs. EPA also
believes the decision to cover these
facilities is underscored by
consideration of the risks to children
who consume water at day care facilities
or schools that are served by NTNCWSs.
4. CCR Health Language and Reporting
Date
  Comments received on EPA's
proposed consumer confidence
reporting (CCR) requirements were
equally split. Some commenters
supported EPA's proposal to  include
health effects language in CCRs if a
system detects arsenic above  the revised
MCL prior to the effective date. Others
disagreed with the proposal because
they believed providing this information
prior to the effective date would be
confusing to consumers and would not
allow sufficient time to inform
consumers about the risks associated
with arsenic. These dissenting
commenters generally felt that it would
be more useful for systems to provide
notice to consumers that the MCL has
been revised and systems will be
required to comply by the effective date
of the revision.
   The Agency believes  that it is
important to provide customers with the
most current understanding of the risk
presented by arsenic as soon  as possible
after establishing the new standard. In
today's rule, community water systems
that detect arsenic between the revised
and existing MCL must include health
effects language in their consumer
confidence reports prior to the effective
date of the revised MCL. The Agency -
does not believe that inclusion of this
information will be unnecessarily
confusing to consumers because, under
the CCR rule systems have the flexibility
to place this information in context.
EPA expects that affected systems will
include not only the health effects
language but also an explanation that
the current MCL has been revised and
the system is not in violation because
the new standard has not yet taken
effect.
   EPA is finalizing an MCL somewhat
higher than the technologically feasible
MCL. Since some commenters
expressed concern about the  risk that a
higher-than-feasible MCL might present
to certain consumers, EPA is requiring
systems that detect arsenic at
concentrations greater than 5 (ig/L and
up to and including 10 ug/L to provide
additional information to their
customers. EPA believes that consumers
should be aware of the uncertainties
surrounding the risks presented by very
low levels of arsenic. While EPA
addressed many of the sources of
uncertainty in its risk analysis of arsenic
in support of the final rule, several
sources of uncertainty remain and will
be considered in the future in the
context of the periodic review and
revision, if appropriate, of drinking
water regulations as required by section
1412(b)(9)ofSDWA.
5. Implementation Guidance
  EPA appreciates the fact that the final
rule will place a new implementation
burden on many water systems,
particularly small systems. This is
particularly true of small ground water
systems that heretofore have not been
obliged to install, operate, and maintain
a treatment facility. EPA also
understands that new or more
sophisticated treatment technologies
will have obvious implications in terms
of operator capacity. EPA has addressed
this issue in several ways, and does not
believe that it is an impediment to
promulgating this new MCL. In brief,
some of the ways these implementation
concerns have been addressed are as
follows. EPA has identified a number of
affordable small system treatment
technologies that are based on
consideration of the capabilities of small
system operators. Systems will have the
latitude to choose the type of treatment
technology that is most cost effective
and appropriate (from an operation and
maintenance standpoint) for their
particular situation. EPA also plans to
publish implementation guidance for
small systems within 60 days of
publication of the final rule that will
provide helpful information to aid small
systems in both selecting and operating
small treatment technologies. EPA has
exercised its statutory authority under
section 1412(b)(10) of SDWA to provide
an additional 2 years for small systems
to comply with this rule (for a total of
5 years). Individual small systems may
apply for exemptions with extensions
that can provide for a total of an
additional 9 years to comply with the
requirements of this rule. Finally, EPA
notes that the final rule provides more
"buffer" between the feasible level (3
|ig/L) and the MCL of 10 ug/L as
compared to the proposed level of 5 Hg/
L. Thus, treatment facilities that
experience operation difficulties would

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Federal Register/Vol.  66, No. 14/Monday, January 22, 2001/Rules and  Regulations
 have more latitude in terms of the
 timing and type of corrective measures
 that would need to be taken than would
 be the case with a more stringent final
 MCL. For all of the above reasons, EPA
 does not believe that there are any
 insurmountable implementation
 problems associated with the final MCL
 for arsenic.

 6. Rounding Analytical Results
   Today's rule requires that data be
 reported to the nearest 0.001 mg/L (3
 significant figures). Some commenters
 felt that the rounding approach
 described in the proposed rule would
 significantly impact State programs. The
 proposed rule solicited comment on an
 approach requiring all values greater
 than or equal to 6 to be rounded up and
 all values less than or equal to 4 to be
 rounded down (i.e. a value of 0.0056
 mg/L would be rounded to 0.006 mg/L).
 Results ending in 5 would round the
 third significant digit to the closest
 "even" number. Therefore, a result of
 0.0155 mg/L would be rounded to 0.016
 mg/L,  and 0.0145 mg/L would be
 rounded to 0.014 mg/L. Some
 commenters supported EPA's rounding
 approach. Other commenters indicated
 that implementing this revision would
 affect State data management operations
 and would require staff training.
   The Agency recognizes that
 implementing a revision to the existing
 rounding guidance may impact State
 database and computer programs. In
 today's final rule, the Agency is
 encouraging States to continue using the
 rounding scheme that EPA
 recommended in the "Water Supply
 Guidance #72", dated April 6,1981.
 EPA stated in this guidance that:
 All MCLs contained in the National Interim
 Primary Drinking Water Regulations are
the specified analytical procedures. Data
reported to the State or EPA should be in a
form containing the same number of
significant digits as the MCL. In calculating
data for compliance purposes, it is necessary
to round-off by dropping the digits that are
not significant. The last significant digit
should be increased by one unit if the digit
dropped is 5, 6, 7, 8, or 9. If the digit is 0,
1,2,3, or 4 do not alter the preceding
number.
For example, analytical results for
arsenic of 0.0105 mg/L would round off
to 0.011 mg/L while a result of 0.0104
mg/L would round off to 0.010 mg/L.

F. Treatment Technologies

1. Demonstration of Technology
Performance
  Many comments on the proposed
arsenic rule (EPA, 20001) expressed the
                          concern that the treatment options that
                          EPA designated as BAT for compliance
                          with the arsenic MCL have not been
                          adequately demonstrated in full-scale
                          operation for arsenic removal.
                          Commenters noted that there are
                          relatively few arsenic treatment
                          facilities in the U.S., and these facilities
                          are generally small and were designed
                          for an arsenic MCL of 50 Ug/L. Although
                          many of the treatment options
                          designated as  BAT are widely used for
                          other water treatment objectives,
                          commenters stated that the limited
                          application of these technologies to
                          arsenic removal, especially in large
                          plants, creates uncertainty as to their
                          efficacy and feasibility for this purpose.
                          Commenters alleged that this situation
                          makes it difficult for water systems to
                          determine appropriate compliance
                          technology choices and raises questions
                          regarding the validity of EPA's estimates
                          of costs for compliance with the arsenic
                          MCL.
                           EPA notes that SDWA section 1412(b)(4)(E)
                          states: [E]ach national primary drinking
                          water regulation which establishes a
                          maximum contaminant level shall list the
                          technology, treatment technique, and other
                          means which the Administrator'finds to be
                          feasible for purposes of meeting such
                          maximum contaminant level.
                           SDWA defines feasible in section
                          1412(b)(4)(D) as follows:
                           For the purposes of this subsection, the
                          term "feasible" means feasible with the use
                          of the best technology, treatment techniques,
                          and other means which the Administrator
                          finds, after examination for efficacy under
                          field conditions and not solely under
                          laboratory conditions, are available (taking
                          cost into consideration).
                          Thus, SDWA requires EPA to list
                          feasible compliance treatment options
                         based on demonstration of efficacy
                         under field conditions and taking cost
                         into consideration.
                           For compliance with the arsenic MCL,
                         EPA judged technologies to be a best
                         available technology when the following
                         criteria were satisfactorily  met:
                           • The capability of a high removal
                         efficiency;
                             A history of full scale operation;
                             General geographic applicability;
                             Reasonable cost;
                             Reasonable service life;
                             Compatible with other water
                         treatment processes; and
                           • The ability to bring all of the water
                         in a system into compliance.
                           After reviewing a number of
                         technologies, EPA identified the
                         following as BAT for arsenic removal:
                         ion exchange, activated alumina, reverse
                         osmosis, modified coagulation/
                         filtration, modified lime softening,
                         electrodialysis reversal, and oxidation/
 filtration. EPA believes that all of these
 treatment options meet the SDWA
 criteria of demonstrated efficacy under
 field conditions and, further, meet the
 additional criteria listed above which
 EPA has historically used to identify
 BAT. Studies which support this
 assessment are described in
 "Technologies and Costs for Removal of
 Arsenic from Drinking Water" (EPA,
 2000t). Consequently, identification of
 these technologies as BAT is
 appropriate.
   EPA recognizes that application of the
 arsenic BAT  treatment options to full-
 scale plants where they are optimized
 specifically for arsenic removal is
 limited. This is especially true in regard
 to large plants. Nevertheless, as stated
 previously, it is appropriate for EPA to
 identify these technologies as BAT
 because they have been demonstrated to
 be effective for arsenic removal under
 field conditions. Moreover, all of the
 technologies  listed as BAT have an
 established history of successful
 application at full scale in water
 treatment plants for related treatment
 objectives, specifically including the
 removal of inorganic contaminants
 (EPA, 2000t). Ion exchange is applied in
 both municipal and POE/POU treatment
 for softening  (i.e., removal of calcium
 and  magnesium), as well as for removal
 of nitrate, arsenic, chromium, radium,
 uranium, and selenium. Activated
 alumina is used in water treatment
 plants to remove contaminants such as
 fluoride, arsenic, selenium, silica, and
 natural organic matter. Reverse osmosis
 has traditionally been employed to
 desalinate brackish water and sea water.
 Electrodialysis reversal systems are
 often used in treating brackish water to
 make it suitable for drinking, and have
 also  been applied for wastewater
 recovery. Oxidation followed by
 filtration is utilized extensively in
 public water  systems for removal of iron
 and manganese. Lime softening is
 widely applied for reducing calcium,
 magnesium, and other metals in large
 water treatment systems. Most surface
 water systems' use coagulation/filtration
 processes for particulate removal, and a
 growing number of systems have
 modified these processes to increase
 removal of dissolved constituents,
 primarily TOG and certain metals.
  EPA believes that the successful
 application of the arsenic BAT
treatment options for the removal of
 contaminants other than arsenic is
relevant to their ability to remove
 arsenic in full-scale plants. The physical
and chemical mechanisms operative  in
these technologies for the removal of
hardness, sodium, fluoride, TOG and
other dissolved species are analogous to

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              Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and  Regulations
                                                                      7035
the mechanisms by which these
technologies remove arsenic. In
addition, none of these technologies
have characteristics that would make
them ineffective or infeasible at large
scale or under long-term operation. The
specific conditions under which
optimized performance is achieved may
differ somewhat between removal of
arsenic and removal of other
contaminants, just as they may differ
from plant to plant based on water  '
matrix and other treatment processes in
•use. However, because it has been
shown that these technologies can
remove arsenic under field conditions,
and because these technologies have an
established history of use for the
removal of inorganic contaminants in
full-scale systems, EPA believes it is
appropriate and technically justified to
conclude that they can be successfully
used for arsenic removal in full-scale ~
plants.
2. Barriers to Technology Application
  EPA received many comments on the
proposed arsenic rule (EPA, 2000i) that
described challenges that systems
would face in applying the technologies
identified by EPA for compliance with
the arsenic MCL. Among such
challenges asserted by comments were
the following: the cost and availability
of adequately trained, certified
operators, especially in small systems;
hazards associated with the shipping,
handling, and storage  of chemicals,
especially in regard to wells located in
residential areas; and the infeasibility of
water loss from treatment processes in
arid regions. Note that comments
dealing with residuals handling and
disposal are addressed subsequently in
section V.F.4 of this preamble.
   In regard to water treatment plant
operators, EPA believes that operator
competency is critical for the protection
of public health and the maintenance of
safe, optimal, and reliable performance
of water treatment and distribution
facilities. Pursuant to SDWA section
1419(a), EPA has developed guidelines
for the certification and recertification
of the operators of community and
nontransient noncommunity public
water systems. These guidelines require
that all operating personnel who make
process control/system integrity
decisions about water quality or
quantity that affect public health must
be properly certified by the State. EPA
recognizes and has considered  that the
treatment technologies, which systems
will install to comply with the  arsenic
MCL, may add complexity to existing
treatment works or may be applied to
previously untreated ground water.
These situations will necessitate
additional operator training to ensure
that treatment processes are properly
operated, and systems will incur
additional costs associated with
operator labor.
  EPA believes there will be sufficient
numbers of adequately trained and
certified operators available to public
water systems. Operator training
programs are available throughout the
U.S. through home study courses,
classroom settings, and in-plant
training. Current and new water
treatment operators can obtain the
training necessary to operate any of the
treatment technologies considered for
compliance with the arsenic MCL. EPA
is developing a grants program pursuant
to SDWA section 1419(d) to reimburse
training and certification costs for
operators employed by community
.water systems and nontransient,
noncommunity water systems serving
3,300 or fewer people. This funding will
reduce the compliance burden on these
small systems, thereby increasing the
likelihood that the systems will be able
to reliably operate and maintain new
treatment. Today's rule offers five years
between promulgation and the time
systems must be in compliance.  An
exemption can provide three additional
years to achieve compliance, and this
exemption may be renewed for up to six
years for small systems. The Agency
believes this amount of time will offer
ample opportunity for States' operator
training and certification programs to
prepare operators.
  EPA's Operator Certification
Guidelines require that a certified
operator be responsible, in charge, and
available to all community and
nontransient, noncommunity water
systems. However, this does not mean a
certified operator must be on site at
every treatment facility 24 hours a day,
7 days a week. The treatment
technologies do not necessarily require
constant supervision of operators.
Depending upon State requirements,
regional certified operators could travel
from facility to facility on a regular basis
to oversee the efforts of the non-certified
operators provided the certified  operator
was also available to the system on an
on-call basis. Systems must consider
their operational constraints in selecting
treatment technologies and in
establishing appropriate operational
controls.
  EPA has accounted for additional
labor costs associated with the operation
of treatment technologies for
compliance with the arsenic MCL. The
Agency's analyses of additional costs
are described in "Technologies and
Costs for Removal  of Arsenic from
Drinking Water" (EPA, 2000t). The labor
rates used to develop operation and
maintenance costs are conservative
estimates based on loaded rates for
certified operators in large and small
systems.
  Concerns expressed by commenters
on the storage, handling, and
application of chemicals used in arsenic
treatment centered on hazards to the
public health and safety if an accidental
release occurred. These comments
hinged on the fact that ground water
systems may have wells located in
residential and high population-density
areas. Several commenters asserted that
the risks from chemical application in
these areas may outweigh the hazards
associated with potentially elevated
arsenic concentrations. Among the
chemicals of concern are chlorine for
pre-oxidation, and acids and bases for
pH adjustment.
  While EPA understands the nature of
this concern, EPA does not believe that
chemical usage for compliance with the
arsenic MCL poses a significant risk.
Systems using chemicals should employ
established safety and emergency
response procedures, along with
effective operator training and
certification. Measures that can be taken
to alleviate potential problems with
chemical handling and storage include:
review chemical documentation to
check quantity and quality; visually
inspect chemicals and conduct
appropriate verification tests; label and
secure unloading points; verify adequate
receiving tank capacity; inspect
chemical containers for any damage or
evidence of leaks; specify delivery at
scheduled times; specify equipment
necessary for safe handling and transfer
of chemicals; and supervise unloading
with trained personnel  (Casale and
LeChevallier, 2000).
  Many community water systems
currently disinfect with chlorine. This
includes many small systems and
ground water systems with wells in
residential areas. Small systems and
ground water systems typically apply
chlorine as hypochlorite that carries
relatively little risk. Liquified chlorine
gas is generally cheaper and is used by
many large systems. The use of chlorine
gas involves certain risks associated
with accidental leakage. However, these
risks are well understood and are
managed through high standards of
equipment specification, operation and
management procedures, and training of
personnel (Porter et al., 2000).
  Systems using activated alumina may
lower the pH of the feedwater in order
to increase process efficiency, and
subsequently raise the pH to stabilize
the water. EPA believes that most large
systems have a sufficient level of

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technical expertise to modify pH
without difficulty. However, EPA
recognizes that very small systems may
lack the operator capacity to
successfully rely on pH modification as
a component of a treatment process. In
estimating costs for compliance with the
arsenic MCL, EPA assumed that most
very small systems using activated
alumina would not adjust the raw water
pH. These plants would run under less-
than-optimal conditions but would still
meet the arsenic MCL. Furthermore, for
small systems and for other systems that
may lack the technical expertise to
adjust pH, other treatment options are
available. Because of the number and
flexibility of treatment options available
to systems, along with the training and
certification of operators, EPA believes
that hazards to the public as a result of
arsenic treatment will be minimal.
  In regard to concerns with water
scarcity, EPA notes that of the
technologies listed in the proposed rule
as BAT, only reverse osmosis (RO) and
electrodialysis reversal (EDR) produce
reject water in a quantity likely to make
them undesirable in arid regions. While
EDR and RO were listed as BAT in the
proposed rule, they were not used in the
final national cost estimate because
other options are more cost effective and
do not reject a large volume of water
like these two technologies. Thus, we
did not assume that any systems would
chose EDR and assumed that RO would
only be used by a small fraction of small
systems and only in POU devices. POU
devices  treat only a small fraction of the
household water, so that any water loss
is minimized. Consequently, EPA does
not believe that commenters' concerns
about water scarcity alter EPA's
projections of systems' ability to comply
with the arsenic MCL. Moreover, in
today's rule EPA has established the
MCL for arsenic at 10 ppb. At this level,
it would be possible for many systems
to use RO or EDR in a split-stream
mode, treating a portion of the "water,
and blending treated and untreated
water to achieve compliance. This
option would enable systems to
significantly reduce the amount of reject
water produced were they to select
these technologies.
  In cases where the available water
resources are limited, systems may
select technologies like activated
alumina, anion exchange, and
coagulation assisted microfiltration
where water loss is limited to a few
percent or less. As discussed in
"Technologies and Costs for Removal of
Arsenic from Drinking Water" (EPA,
2000t), the principal water losses
associated with anion exchange and
activated alumina result from the
                         rinsing of the beds after regeneration
                         and, in some limited cases, backwashing
                         for removal of solids. In normal
                         operating conditions, EPA expects this
                         waste water to amount to a small
                         percentage of the total water produced.

                         3. Small System Technology
                         Application
                           A number of commenters raised
                         concerns over the small system
                         compliance technologies described in
                         the proposal. Many of these comments
                         questioned the ability of small systems
                         to apply these technologies. EPA has
                         carefully considered these comments
                         and responses to the significant issues...
                         are provided below (see section I.G. for
                         a discussion of the affordable small
                         system compliance technologies under
                         today's final rule).
                           The most significant issues raised by
                         comments addressed the application of
                         Point-of-Use/Point-of-Entry (POU/POE)
                         treatment in small systems. Comments
                         cited requirements for preoxidation for
                         activated alumina (AA) units as reasons
                         why the POU/POE devices would not be
                         desirable. EPA notes that many small
                         systems have disinfection treatment
                         systems in place that could act as
                         preoxidation for POE/POU units.
                         Comments also raised concerns
                         regarding the brine or concentrate
                         stream generated by reverse osmosis
                         (RO) POU/POE units. Commenters
                         questioned whether the systems would
                         waste precious water in arid areas. EPA
                         believes systems in arid areas are more
                         likely to select activated alumina (AA)
                         or another centralized treatment
                         technology. Commenters also raised
                         concern over the disposal of the
                         concentrate from these units into sewer
                         or septic systems. In response, EPA
                         believes it would be highly unlikely for
                         the concentrate stream to pose problems
                         because only about 1% of the household
                         water is treated, thereby minimally
                         influencing the quality of the sewage
                         discharged from the household. Finally,
                         commenters questioned the ability of
                         small systems to maintain POE/POU
                         devices which are installed in private
                         homes. EPA believes it is feasible for
                         public water systems to own, control,
                         and maintain POE/POU devices for
                         arsenic MCL compliance either directly
                         or through a contract with a qualified
                         party. While EPA recognizes that access
                         to homes for maintenance may be an
                         issue for some systems, we believe that
                         such access would be permitted in
                         others, especially if significant cost
                         savings could be achieved.

                         4. Waste Generation and Disposal
                           Many comments stated that EPA did
                         not adequately consider problems with
waste generation and disposal when
evaluating which technologies would be
most appropriately used for achieving
compliance. Commenters expressed
particular concern with anion exchange,
activated alumina, and reverse osmosis
because wastes generated from these
processes, depending upon their
operating and site specific conditions,
could be hazardous or difficult to
dispose of. Comments indicated that
many utilities would have difficulty in
achieving compliance with the
proposed rule while also maintaining
compliance with other environmental
laws and regulations (e.g., RCRA and   '
CWA). Commenters  questioned EPA's
analysis for the proposed rule that
indicated that no RCRA hazardous
wastes would need to be disposed in the
decision tree.
  Arsenic treatment technologies
produce three different types of wastes:
Brines, sludges and spent media.
Depending upon arsenic concentration
and the characteristics of the waste,
each of these wastes can pose disposal
challenges and has the potential for
being classified as hazardous.
  Arsenic wastes are defined as      :
hazardous if their toxicity characteristic
(TC) exceeds 5 mg/1  of arsenic. The
Toxicity Characteristic Leaching
Procedure (TCLP) is a method by which
waste is evaluated to determine if it
exceeds the TC. If waste is < 0.5% dry-
weight solids, then the liquid is defined
as the TCLP extract and concentrations
in it are compared against the TC level
to determine if it is hazardous. If the
waste is S 0.5 % dry-weight solids, then
a TCLP that conservatively simulates
leaching from a landfill is used to
determine if the TC level would be
exceeded. EPA considered TC and TCLP
results from residuals produced by the
treatment technologies under
consideration and selected only those
technologies that would not produce a
hazardous waste.
  Upon the review of public comments
and further analysis, EPA agrees with
comments that some of the treatment
train technologies in the decision tree of-
the proposed rule could have created
hazardous wastes under certain
operational circumstances. Thus, EPA
has narrowed its selection of available
technologies in the decision tree for the
final rule as indicated in Table V.F-4.1.
EPA believes that the treatment options
included in Table V.F-4.1 can address
all treatment challenges without
creating hazardous wastes, while being
able to achieve compliance with the
final rule. EPA has revised its national
costs upward to reflect the changes in
the decision tree. These costs are
described in more detail in this

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              Federal Register/Vol.  66,  No. 14/Monday,  January 22, 2001/Rules  and Regulations
                                                                      7037
 preamble and in support documents for
 this rule (EPA, 200po and EPA, 2000t).
   More specific rationale for the
 changes in the treatment train
 technologies considered in the decision
 tree are discussed in the following
 paragraphs and in the "Technology and
 Cost Document" (EPA, 2000t).
   a. Anion exchange. When anion
 exchange resins are cleaned, they create
 a regeneration brine. Influent sulfate
 and arsenic concentrations, regeneration
 level, and rinse volume influence the
 resultant brine concentration levels of
 arsenic. EPA conducted modeling to
 determine the feasible operating
 conditions and source water arsenic and
 sulfate concentrations under which
 anion exchange could effectively
 remove arsenic without creating an
 arsenic brine that exceeded an arsenic
 concentration of 5 mg/L. Based on this
 analysis (EPA, 2000t), EPA determined
 brine arsenic concentrations could
 exceed 5 mg/L when: (a) Arsenic
 influent levels exceed 15 ug/L and
 sulfate concentrations exceed 25 mg/L,
 and (b) when arsenic influent levels
 exceed 25 ug/L and sulfate
 concentrations ranged between 25 and
 90 mg/L. Based on this analysis, EPA
 eliminated landfills and evaporation
 ponds from the final decision tree for
 the conditions indicated in Table V.K-
 4.1.
   As part of its proposed and final
 decision tree evaluation, EPA assumed
 that brine streams with < 0.5% solids
 could potentially be disposed of through
 domestic sewage or mixtures of
 domestic sewage to POTWs regardless
 of the TC, since this is excluded from
 regulation under RCRA. Piping the brine
 directly to the POTW without passing
 through the sewer system does not meet
 the exclusion, nor does trucking the
 brine to the POTW. Even though brine
 disposal via sewage to POTWs is not
restricted by RCRA, EPA recognizes that
brine disposal can be restricted by the
POTW's pretreatment programs. POTWs
 may establish Technically Based Local
Limits (TBLLs) for arsenic to control:
arsenic concentrations in POTW
biosolids, arsenic concentration in the
POTW discharge, or total dissolved
solids (TDS) in the POTW discharge.
  Many comments indicated that
significant increases in total dissolved
 solids would make brine disposal to a
 POTW unacceptable, especially in the
 Southwest where water resources are
 scarce. Even under the lowest
 regeneration level of 5.1 lb/ft3 assumed
 in EPA's analysis, TDS increases would
 likely be prohibited by POTWs when
 influent sulfate concentrations exceed
 90 mg/L, and limited to POTWs where
 brine volume is very small compared to
 total volume for sulfate concentrations
 between 25 and 90 mg/L. Therefore, as
 described in section I.F., EPA modified
 the compliance decision tree to assume
 systems with sulfate concentrations
 greater than 50 mg/L would not select
 anion exchange as a treatment
 technology. In its final decision tree,
 EPA assumed that drinking water plants
 with sulfate concentrations of less than
 20 mg/1 and with a regeneration
 frequency of 1500 bed volumes, or with
 sulfate concentrations between 20 and
 50 mg/1 and a regeneration frequency of
 700 bed volumes, might use anion
 exchange with waste disposal via
 sewage to POTWs and be able to comply
 with local TBLLs. In the final decision
 tree less than 10% of the systems are
 assumed to use anion exchange versus
 over 50%  of the systems being assumed
 to use this technology under the
 proposal.
  b. Activated alumina. The proposed
 rule considered activated alumina with
 regeneration and listed discharge to a
 sanitary sewer as the disposal
 mechanism for the brines. Many
 comments on the proposed rule noted
that TBLLs for arsenic or total dissolved
 solids might restrict discharge of brine
 streams to the sanitary sewer. Under
today's final rule (see section I.F.),
regeneration of activated alumina media
is not recommended for a number of
reasons, including the difficulty of
disposing of the brines. In the final
decision tree, EPA assumes disposal of
spent AA media (either from central
treatment or POU) to landfills as the
waste disposal method for AA. EPA
believes that spent AA media will be
nonhazardous because the TCLP test is
conducted using weak acid at a pH of
5 which is near the optimal pH for
adsorption of arsenic onto AA (Kempic,
2000). Wang et al. (2000) evaluated AA
spent media from two small systems
 having treating influent arsenic
 concentrations of > 50 u,g/l and found
 TCLP with arsenic concentrations of
 0.07 mg/L or less, well below the TCLP
 limit of 5 mg/L. Some public comments
 indicated concern that the TCLP test
 conditions at the pH of 5 may not reflect
 conditions at landfills which may have
 higher pHs. In response, EPA notes that
 the TCLP is the defining test specified
 in 40 CFR 261.24 for determining
 whether a waste is TC hazardous, and
 it applies regardless of the actual
 management of the waste unless some
 exemption applies.
  In the  final decision tree, EPA has
 revised the treatment train assumptions
 for AA to be operated in series (i.e., two
 treatment units in sequence rather than
 as singular units as was considered
 under the proposal) under various pH
 conditions (see Table V.F-4.2),
 Operation in series will allow longer-
 run times and more cost-efficient
 disposal of spent media. The range of
 pH conditions is assumed in
 consideration of public comments that
 some utilities will prefer to operate
 without pH adjustment, thereby
 minimizing oversight and the
 "footprint" of land needed for the
 treatment facilities (since no additional
 chemical feed or storage facilities are
 needed). While pH adjustment to low
 levels will optimize AA removal of
 arsenic, this may not be an option for
 certain facilities depending upon land
 availability. Therefore, EPA considers a
 wide range of pH conditions of AA in
 the series mode.
  c. Reverse osmosis. Except for POU
 treatment, EPA did not use reverse
 osmosis in the decision tree of either the
 proposed or final rule (EPA, 2000h);
 EPA, 2000o).  The concentrate stream
 from POU devices can be disposed of
 through discharge into domestic
 wastewater and thereby be exempt from
 RCRA regulation. It would also be
 highly unlikely for the concentrate
 stream to pose problems with TBLLs
because only about 1% of the household
water is treated, thereby minimally
 influencing the quality of the sewage
reaching  the POTW. Therefore, the
 decision tree to the final rule includes
POU reverse osmosis.
          TABLE V.F-4.1 .—TREATMENT TRAINS IN FINAL VERSUS PROPOSED ARSENIC RULE DECISION TREE
Treatment train: treatment & residuals manage-
ment combination
Regionalization 	
Alternate Source 	
Modify* Lime Softening 	
National cost estimate assumes will be selected by
systems in
Proposed rule
NO 	 	
NO
YES 	 : 	
Final rule
NO
NO
YES 	
Reason for change
N/A
N/A
N/A

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7038
Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules  and Regulations
     TABLE V.F-4.1 .—TREATMENT TRAINS IN FINAL VERSUS PROPOSED ARSENIC RULE DECISION TREE—Continued
Treatment train: treatment & residuals manage-
ment combination

Anlon Exchange (25 mg/L sulfate) & POTW dis-
charge.
Anion Exchange (150 mg/L sulfate) & POTW dis-
charge.
Anion Exchange (25 mg/L sulfate) & Evaporation
Pond, Landfill.
Anion Exchange (150 mg/L sulfate) & Evaporation
Pond, Landfill.
Activated Alumina (16500 Bed Volumes) & Landfill
Activated Alumina (3000 Bed Volumes) & Landfill

Reverse Osmosis & Chemical Precipitation, Land-
fill.
Coagulation Microfiltration & Mech. Dewatering,
Landfill.
Coagulation Microfiltration & Non-Mech.
Dewatering, Landfill.
Anion Exchange (25 mg/L sulfats) & Chem Pre-
cipitation, Landfill.
Anlon Exchange (150 mg/L sulfate) & Chem Pre-
cipitation, Landfill.
Arlh/atpri Alumina Mfi^OO B\A & POTW
Activated Alumina (3000 BV) & POTW

Anlon Exchange (90 mg/L sulfate) & Evaporation
Pond, Landfill.

Point-of-Use Activated Alumina 	
National cost estimate assumes will be selected by
systems in
Proposed rule
YES 	
YES
NO
YES 	
NO
YES 	
NO 	
NO 	
NO 	 	 	 .....
NO
YES
YES
YES
YES
YES 	
NO 	 	
NO 	
YES
YES 	
YES 	
YES 	
YES 	
Final rule
YES 	
YES 	 	
NO 	
NO 	 	
NO 	
REVISED 	 	 	
NO 	
NO 	
NO 	
NO 	
YES 	 	 	
YES 	
YES 	 	
NO 	
NO 	
NO 	
NO 	
REVISED 	
NO 	 	 	
NO 	
YES 	
YES 	 	 	
Reason For Change
N/A
Treatment name revised — Anion Ex-
change (<20 mg/L sulfate).
N/A
Brine stream may be hazardous
waste. Commenter issue— EPA
evaluation. ,
N/A
Revised approach uses multiple, col-
umns in series operation.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Brine stream may be hazardous
waste. Commenter issue — EPA
evaluation.
Brine stream may be hazardous
waste. Commenter issue — EPA
evaluation.
N/A
N/A
Lower sulfate concentration selected
to minimize total dissolved , solids
increase. Commenter issue— EPA
evaluation.
Brine stream may be hazardous
waste. Commenter issue — EPA
evaluation.
Run length only exceeds six months
when finished water pH <7.5
N/A
N/A
  TABLE V.F-4.2.—NEW OR REVISED
         TREATMENT TRAINS
   Treatment Train
Activated Alumina
  (pH7-pH8) & Land-
  fill.
Activated Alumina
  (pH8-8.3) & Landfill.
Activated Alumina
  (pH adjusted to
  pH6—23,100 Bed
  Volumes) & Landfill.
Activated Alumina
  (pH adjusted to
  pHS—15,400 Bed
  Volumes) & Landfill.
Anion Exchange (20-
  50 mg/L sulfate) &
  POTW.
                         Revision
       Series Operation.


       Series Operation.

       Series Operation.



       Series Operation.
       Use 700 Bed Vol-
        umes as Run
        Length.
   5, Emerging Technologies
   A number of comments state that
 several of the emerging technologies
discussed in the proposal (e.g., granular
ferric hydroxide, see section I.F) are
likely to be the most cost effective
treatment option for systems,
particularly small systems. These
comments state that systems may not
select these emerging technologies
because they have not been listed as
BAT. In response, EPA must clarify that
systems are not required to use BAT to
achieve compliance with the MCL. A
system may use any technology that is
accepted by the State primacy agency
provided the technology achieves
compliance with the MCL. However, if
a system  is unable to meet the MCL with
its chosen technology, the system will
not be eligible for a variance unless the
installed technology is listed as BAT-
Other comments indicated that there
will not be sufficient time for further
testing of these emerging technologies
prior to the effective date of the MCL.
EPA notes that because of the capital
improvements required for compliance
with the MCL, the effective date of
today's rule is 5 years from the date of
promulgation for all system sizes. This
should provide systems with adequate
time for testing of the emerging
technologies. Moreover, States may, as
described in section I.H, provide small
systems with up to an additional nine
years to comply through exemptions.

G. Costs

1. Disparity of Costs

  Many public comments stated that
EPA substantially underestimated costs
for implementing the proposed rule.
Comments pertained to national cost or
regional cost estimates and system level
cost estimates. Commenters stated that
EPA's national cost estimates were low
because: (a) The decision tree led to an
over selection of technologies with low
associated costs, and (b) the system

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              Federal Register/Vol.  66, No., 14/Monday, January 22, 2001/Rules and Regulations
                                                                       7039
 level costs associated with the selected
 technologies were low. Elaboration of
 public comment concerns and EPA's
 response in each of these categories
 follows. Also, since many public
 comments referred to the report "Cost
 Implications of a Lower Arsenic MCL"
 (Frey et al, 2000) as a basis for their
 comments, EPA analyzed the report in
 detail. As noted below, the Agency
 disagrees with the approach Frey et al.
 (2000) used to produce the cost
 estimates in this report.
   a. What is EPA's response to major
 comments on the decision tree for the
 proposed rule? Gommenters indicated
 that EPA's decision tree did not
 adequately recognize constraints in
 technology selection including
 feasibility of waste disposal, concerns
 with compliance with other EPA
 regulations (e.g., RCRA and CWA), land
 availability, complexity of operation
 and availability of skill level
 (particularly for small systems), and ..
 excess use of water in water scarce
 areas. Particular concern was raised by
 the extent to which EPA predicted that
 anion exchange would be used given
 concerns with sulfate and total
 dissolved solids, chromatographic
 peaking (possible rapid breakthrough of
 arsenic at above influent concentration
 levels due to competition from other
 ions), and handling of regeneration
 process streams and disposal of wastes
 (some of which may be hazardous).
 Commenters also suggested that EPA
 over predicted the use of greensand
 filtration since it only removes a limited
 amount of arsenic at low iron
 concentrations. Comments suggested
 that EPA should consider much greater
 use of activated alumina in the spent
 media replacement mode with disposal
 to landfills because of facility of
 operation and low costs. Comments also
 suggested use of reverse osmosis and
 nano-filtration in areas unlikely to have
 a water scarcity problem. Although
 central treatment with reverse osmosis
 was listed as one of the possible
 compliance technologies under the
 proposed rule, it was not used in the
 EPA's decision tree.
  In preparing the cost estimate for the
.proposed rule, EPA predicted
 compliance outcomes by considering:
 (1)  Technologies already in place, (2)   '
 feasibility of application of the
 technology, and (3) least cost of
 technology. Given all available
 information at the time of proposal, EPA
 developed its decision tree. EPA
 received many informative comments
 pertaining to the feasibility of various
 treatment technologies considered. EPA
 agrees with public comments that some
 of the waste disposal options considered
 with anion exchange under the
 proposed rule could create hazardous
 wastes (see V.F.4. of this preamble). To
 address this concern EPA has
 eliminated the following treatment
 trains from its final decision tree: Anion
 exchange with chemical precipitation
 and disposal of waste to landfills, and
 anion exchange with discharge to
 evaporation ponds and disposal of
 waste to landfills.
   EPA agrees with public comments
 that activated alumina is likely to be
 used by many more systems than EPA
 predicted in the proposal. In response to
 comments, EPA revised the treatment
 train assumptions for AA to be operated
 in series under various pH conditions.
 Operation in series will allow longer
 run times and more cost-efficient
 disposal of spent media. The range of
 pH conditions is assumed in
 consideration of public comments that
 some utilities will prefer to operate
 without pH adjustment, thereby
 minimizing oversight and the
 "footprint" needed for the treatment
 facilities. While pH adjustment to pH
 6.0 will optimize AA removal of arsenic,
 this may not be an option for certain
 facilities depending upon available land
 and expertise. Thus, EPA recognizes
 higher operational costs for AA for a
 substantial number of systems operating
 at less than optimal pH.
   Research (Subramanian et al., 1997)
 indicates that oxidation filtration
 (greensand filtration) achieved about
 80% removal of arsenic when the iron
 to arsenic ratio was 20:1 but less than
 50% removal when the iron to arsenic
 ratio was 7:1. In developing national
 cost estimates, EPA assumed that
 systems would opt for this type of
 technology only if more than 300 ug/L
 of iron was present in the source water
 and no more than 50% arsenic removal
 was needed to achieve the MCL. EPA
 believes that its applicability
 assumptions for greensand filtration  are
 conservative and therefore continues to
 support its usage in the decision tree for
 the final rule. Greensand filtration is a
 relatively inexpensive technology that
 may be appropriate for those systems
 that do not require much arsenic
 removal and have high iron in their
 source water. However, in the decision
 tree for the final rule, EPA lowered the
 expected use of greensand filtration to
 systems serving less than 3,300 (versus
 in systems  serving less than 10,000
 under the proposed rule) and reduced
 its usage by about Va (EPA, 2000h; EPA,
 2000h). This drpp is mainly attributed
to the change in the MCL and fewer
systems having arsenic at levels
between 5 ug/L and 10 ug/L than
between 10 and 20 ug/L. The ranges 5-
 10 ug/L and 10-20 ug/L reflect the
 arsenic concentration ranges that
 systems would have to fall within to be
 able to consider greensand, if only 50%
 removal efficiency is assumed.
   EPA continues to believe that reverse
 osmosis, while a very effective
 technology for removing arsenic, is not
 likely to be used as a centralized
 treatment option (even in areas of ample
 water supply) because of higher costs
 relative to other treatment options. EPA
 did not consider nanofiltration a likely
 compliance technology because of high
 costs relative to other technologies and
 decreased removal efficiency when
 operated to constrain production of
 waste streams.
   b. What is EPA's response to
 comments on system level costs? Under
 the proposed rule EPA only included
 activated alumina (AA) costs for small
 systems. A number of comments
 indicated that EPA should revise its
 decision tree to include AA and
 associated costs for all system sizes
 because AA is more economical than
 anion exchange. After considering the
 information provided by these
 comments, EPA expanded estimates of
 the use of AA in the decision tree for the
 final rule. EPA also revised its decision
 tree and developed costs for four      '
 different types of AA treatment for all
 system sizes—two for unadjusted pH
 and two where the pH has been adjusted
 to the optimal pH of 6. (The effects of
 these changes in the decision tree
 analysis are described in section V.G.I).
 The main change between the design
 used for the proposed rule versus the
 final rule is  that smaller columns
 containing the activated alumina are
 operated in  series rather than as a single
 column. This will provide greater
 utilization of the media before disposal
 and is more consistent with the designs
 used by commenters  in evaluating
 disposable activated alumina. EPA's
 new AA costs specify different unit cost
 equations and flow boundary conditions
 for small versus large systems. Also,
 EPA has included new operating and
 maintenance (O&M) costs for waste
 disposal of spent AA media. The effect
 of all these changes is, in general, to
 decrease capital costs but to increase
 O&M costs and to increase overall AA
 system level costs within a particular
 size category. Despite these increases in
 costs for AA, AA is by far the most used
 technology among ground water systems
 in the final decision tree. The "Arsenic
Technologies and Costs" (T&C)
 document (EPA, 2000t) for the final rule
 describes in detail the basis for the unit
costs used for each of the new types of
AA treatment.

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7040
Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and  Regulations
  Several comments indicated that
EPA's cost estimates were calculated for
flow rates outside of their boundary
conditions and thus the accuracy of
many of the unit costs are in error. EPA
analyzed the data provided by these
comments and revised the cost
equations used to estimate unit costs for
the final rule. We modified cost
equations and flow boundary conditions
for AA, modified coagulation filtration,
modified lime softening, anion
exchange, coagulation microfiltration,
and POU treatment. Most of the unit
costs increased relative to those used for
the proposed rule. The T&C document
(EPA, 20001) describes the basis for the
unit costs used for the final rule.
  A number of comments stated that
EPA's cost estimates should include
pre-oxidation costs with AA in ground
waters since many systems may not
already be disinfecting. EPA must
clarify that the cost estimates included
prechlorination costs for any system
that did not have existing disinfection
treatment. For ground water systems,
13% to 54% (depending upon system
size) of systems predicted to use AA
were assumed to add pre-oxidation.
  Several comments indicated that
EPA's cost estimates for the proposal
did not include corrosion control costs.
However, the corrosion control costs
were included as a component of the
unit costs for the following
technologies: modified lime softening,
modified coagulation filtration,
coagulation assisted microfiltration, and
activated alumina options operating at
the optimal pH. EPA believes that
through appropriate use of corrosion
control, systems will be able to comply
with the lead and copper rule and meet
the arsenic MCL.
  c. What is EPA's response to
comments  that state the report "Cost
Implications of a Lower Arsenic MCL"
(Frey et al., 2000), be used as a basis for
reflecting more realistic national costs
than EPA's estimates? A number of
comments noted that the report "Cost
Implications of a Lower Arsenic MCL"
(Frey et al, 2000), "the Cost
Implications Report," or "the report,"
provides best-case national estimated
annualized costs of $1,460 million at the
5 ug/L arsenic MCL option and $605
million at the 10 ug/L MCL option.
Many comments stated that EPA's
national cost estimates were
unrealistically low based upon the Cost
Implications Report.
   EPA appreciates the substantial level
of information available from the Cost
Implication Report in regard to
evaluation of technological feasibility
for arsenic removal. This report was one
of several sources that influenced EPA
                         to predict much less use of anion
                         exchange and much greater use of
                         activated alumina in the decision tree
                         for the final rule. However, EPA
                         believes that  some parts of the report's
                         analysis contributed to overestimating
                         national cost estimates. These issues
                         include differences in flow rate
                         assumptions, unit costs, and national
                         estimates for arsenic occurrence,
                         summarized below. A more detailed
                         analysis is available in EPA's Response
                         to Comment Document for the final rule.
                            Flow rate assumptions. Flow rate
                         assumptions  are used with engineering
                         cost models to estimate system level
                         treatment costs for various technologies
                         considered appropriate for achieving
                         compliance. If flow rates are
                         overestimated, system level treatment
                         and national  costs will be
                         overestimated. EPA uses design flow
                         rates to estimate capital costs and
                         average flow rates to estimate
                         operational and maintenance costs.
                            The Cost Implications Report (Frey et
                         al., 2000) uses significantly higher flow
                         rates than EPA (EPA, 2000h; EPA,
                         2000o) for conducting national cost
                         impact analysis for alternative arsenic
                         MCLs. For most population categories of
                         systems ranging between 3301 and 1
                         million people, AWWARF used flow
                         rates that were 2-4 times higher than
                         EPA's assumptions. Based on EPA's
                         analysis of the Cost Implication Report
                         it appears that the report used more
                         system size categories than EPA and
                         transferred flow rates for larger-system
                         size categories into smaller-system size
                         categories. EPA believes that differences
                         in the flow rate assumptions would
                         produce an estimate of at least $400
                         million per year higher than an estimate
                         using EPA's flow rates for the proposed
                         arsenic MCL option of 5 ug/L.
                            Since the release of the Cost
                         Implications Report, the authors revised
                         their analysis to include different flow
                         rates (Frey et al., October 2000), "the
                         Updated Cost Implications Report." The
                         updated report based its new flow rates
                          on the equations provided in the
                         Proposed Arsenic in Drinking Water
                         Rule Regulatory Impact Analysis (EPA,
                          2000h). The  flow rates for ground water
                          systems were based on the population/
                          flow equations for publicly owned
                         ground water systems and the authors
                          selected the midpoint in each
                          population category (e.g., using a flow of
                          systems serving 550,000 persons to
                          estimate costs for systems serving
                         between 100,000 and 1 million people).
                          In the Updated Cost Implications Report
                          the authors state that:
                            [T]he cost response to the difference in
                          flow rates is mixed due to the large flow
increases in the two largest population
categories (100,0000 to 1 million and > 1
million) versus the decreases in the other
flow categories (5,000 to 100,000).
 • EPA believes that the revised analysis
with the new flow rates in the Updated
Cost Implications Report still
overestimates costs. First, the revised
design and average flows are only larger
for ground water systems with
populations greater than 1 million
people. Second, estimating flow rates
for systems within a category using the
population midpoint assumptions in the
revised analysis continues to cause cost
overestimates because many more
systems in each population size
category occur in the lower part of the
range than the upper part of the range.
For example, EPA's data indicate that,
in the flow category of ground water
systems serving 100,000 to 1 million
people, one-half of the systems  have
populations under 173,000 people (EPA,
December 1997 Freeze of Safe Drinking
Water Information System) and that the
mean, population among systems is
248,000 people (EPA, 2000a). In its cost
estimates, EPA considers the
distribution of flow rates within each
size category for estimating system level
cost contributions to the national impact
(EPA, 2000h; EPA, 2000o). Third, Table
4.6 of the Cost Implication Report (Frey
et al., 2000) provides a distribution of
ground water systems nationally by
system size and arsenic concentration,
and indicates there are no ground water
systems serving more than 1,000,000
projected to have arsenic concentrations
that exceed 5 ug/L. Since no ground
water systems serving more than
1,000,000 people need to treat for MCL
options of 5 ug/L or higher, the national
costs given in the revised report due to
the revised flow rate  assumptions in all
categories should be lower for MCL
options at or above 5 ug/L.
   On a related issue, EPA believes that
the operation and maintenance cost
equations for anion exchange, activated
alumina, coagulation/microfiltration,
and nanofiltration in the Cost
Implication Report (Frey et al., 2000)
were based on design flow rather than
average flow. Using the operational and
maintenance cost equations based on
design flow rather than average flow
significantly increases cost estimates,
particularly for smaller systems (EPA's
analysis indicates that for systems with
a design flow of 1 M.D., the total
annualized costs would increase by
about 25% and for systems with a
design flow of 10 M.D., the total
annualized costs would increase by
about 5%).
   Unit Cost assumptions: The Cost
Implication Report (Frey et al., 2000)

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                                                                       7041
 develops unit cost equations for a   !  "•
 technology type based on a wide range
 of operating conditions, some of which
 may not be very cost effective (e.g.,
 anion exchange with sulfate
 concentrations ranging from 25 to 150
 mg/1). Because of their recognized lack
 of cost effectiveness for particular
 situations, the technologies have limited
 application in the national compliance
 forecast, even in situations with sulfate
 concentrations less than 25 mg/L. This
 costing approach tends to overestimate
 costs for systems with favorable site
 specific conditions. On the other hand,
 EPA developed cost equations for \
 technology types within an operating1
 range for which the technology  can most
 cost effectively operate (e.g., anion
 exchange with sulfate concentrations of
 less than 25 mg/L) and used these
 equations for the limited number of
 systems that would meet the
 constraints. Utilities would not  likely
 choose technologies unless they were
 favorable to use and thus only those
 conditions at which the technology is
 used should be costed, in our view.
   EPA believes that the Cost Implication
 Report case study costs for activated
 alumina were significantly
 overestimated due to the vessel  costs.
 The vendor quote used for vessel costs
 is for a complete activated alumina
 system, including the costs for vessels, •
 media, pipes and valves, chemical feed
 and storage, start-up, shipping and
 contingencies. The vendor quote
 presents budget prices for three  design
 flows and different size vessels are used
 for each design flow. The vessel sizes
 are listed with the budget price, along
 with many additional costs, which may
 have been a source of confusion. Since
 activated alumina is the most used
 technology in the compliance forecast in
 the Cost Implications Report, double
 counting full system costs for activated
 alumina will significantly affect
 national cost estimates, particularly for
 smaller systems.
  Arsenic occurrence assumptions. The
 occurrence distributions based on the
 Frey and Edwards (1997) National
 Arsenic Occurrence Survey (NAOS)
 change throughout Chapter 4 of the Cost
 Implication Report.  The national
 compliance costs are based on the
 occurrence distribution with the highest
 number of systems above the MCL
 options, but no basis is given for this
 selection. EPA believes that the arsenic
 occurrence distribution used in the
report for the compliance forecast
 analysis significantly overestimates the
 distribution of arsenic occurrence above
 20 ug/L and this significantly biases
costs upward.
 2. Affordability,      '          .     :.
   Many cpmmenters expressed concern
 that their system, or many households.
 served by their system, would be unable
 to afford to comply with the proposed
 arsenic standard and that the DWSRR
 would be incapable.of providing
 significant assistance: Concerns relating
 to costs and burden contributed to the
 Agency's decision to promulgate a
 standard of. 10 ug/L rather than the
 proposed standard of 5 ug/L. The
 Agency's decision to promulgate a
 standard of 10 ug/L significantly
 reduces the impacts on small systems.,
 At the proposed standard of 5 ug/L,
 about 6,500 community water systems
 would have needed to install treatment.
 At the promulgated standard of 10 ug/
 L, about 2,800 small community water
 systems  (and 1100 NTNCWS) will need
 to install treatment. Total capital costs
 for the promulgated standard are 57%
 lower (for both community water
 systems and NTNCWS) than they would
 have been for the proposed standard.
 Although the number of systems
 needing to treat at the promulgated
 standard is well under  one half of the
 number that would have needed to treat
 at the proposed standard, the household
 level impact for those systems needing
 to treat is about the same.
 ,  The Agency believes that affordability
 of drinking water at the household level
 is a function of two key variables: price
 of the water and the ability of the
 household to pay. Each of these two key
 variables is, in turn, a function of a
 number of other variables. A
 comprehensive and meaningful analysis
 of affordability for an individual system
 must include a complete  assessment of
 all of the variables that influence both
 price and ability to pay. These variables
 are highly site specific. That is why the
 framework for addressing affordability
 concerns in-SDWA consists of two
 distinct parts: (1) A national level
 affordability analysis focused on
 assessing what would be affordable
 (from a national perspective) for typical
 systems in a size class, and (2) State-
 level analysis, using State-developed
 criteria, to assess affordability for any
 specific system.
   The price  of drinking water (the
 actual charge imposed oh the household
 for its water service) reflects the
 complex interplay of many variables.
 These variables include the water
 system's full cost of doing business,
 subsidies or other forms of financial
 assistance that offset some of the
 system's costs, and the allocation of
costs by the water system to its users
and the rate design employed by the
water system. The system's cost of
 providing service is influenced by many
 different factors, e.g., the quality of the
 source water available to the system, the
 type of treatment employed and the skill
 of its operation, and the basic
 organizational or institutional structure
 of the water system. Systems that
 effectively work together, perhaps by
 combining management, will realize
 lower overall costs compared to the
 same systems working independently.
 Section I.L discusses Federal financial
 assistance which is available to help
 systems comply with arsenic and other
 drinking water standards. Section III.E.4
 further discusses issues considered by
 EPA in assessing the affordability of the
 arsenic rule.
   One commenter submitted a study
 which concludes that establishing a new
 arsenic MCL at a level of 5 ug/L (or
 lower) will raise serious concerns about
 the affordability of water service for a
 majority of affected ground water
 systems. The Agency reviewed the
 study and notes a number of significant
 deficiencies in its assumptions and
 general methodology. The Agency
 disagrees with the commenter's
 selection of $50 per household per year
 as affordable on the basis of
 expenditures on lottery tickets and with
 the commenter's selection of $100 per
 household/year as posing "serious
 affordability concerns" on the basis of it
 representing some percentage of
 expenditures on health care or
 telephone service. The Agency notes
 that the Consumer Expenditure Survey,
 compiled by the Bureau of Labor
 Statistics, offers a broad overview  of
 expenditure patterns across households
 of various incomes. The Consumer
 Expenditure Survey's data do not
 necessarily support the contention that
 an increase in water bills would force a
 low-income household to trade off
 health care or some other "essential"
 expenditure to pay the water bill.
 Clearly, however, individual household
 circumstances vary greatly and certain
 individual households may face
 difficult choices. Another important
 consideration is that assessing
 expenditure trade offs by low-income
 households must fully account for all
 the assistance such households can
 receive, including subsidized housing,
 medical care through Medicaid, food
 stamps, and so on. Simply looking at a
 low-income household on the basis of
its cash income can overlook important
assistance available. The commenter
also assumes that if a regulation
increases the  cost of water by 0.5% of
median household income in a
community, it might raise an
affordability concern. The commentor

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justifies this value by asserting that such
an increase would be more than a 50%
increase in the water bill for a typical
household. The Agency finds this
argument unconvincing. For a
household with the median income, the
water bill would represent about 0.9%
of income. It is widely acknowledged
that water has been historically
underpriced. Thus, saying that no more
than a 50% increase would be
affordable is to accept the historic
underpricing as appropriate. The
commenter also assumes the cost
estimates that EPA believes are
significantly overestimated are correct.
Thus, the commenter's conclusion that
establishing a low arsenic standard will
raise serious concerns about the
affordability of water service for a
majority of affected ground water
systems is unsupported. The subsequent
conclusion that existing variance and
grant programs would not be adequate
to alleviate affordability concerns is
likewise unsupported. (See section I.H.
of today's preamble for a discussion of
variances and exemptions and section
I.L. for a discussion of financial
assistance available for complying with
this rule.)
  A number of commenters indicated
that they did not agree with EPA's
approach for assessing national level
affordability. Affordability is a complex
concept. Numerous different approaches
have been developed for assessing
affordability of drinking water and/or
wastewater service. Many of these
approaches are summarized in the
Agency's publication "Information for
States on Developing Affordability
Criteria for Drinking Water" (EPA,
1998a). It is essential that the specific
purpose for which any affordability
criterion is developed be clearly
understood. EPA's national affordability
criteria are developed and applied for a
very narrow and specific purpose.
  Section 1412(b)(4)(E)(ii) of SDWA, as
amended, requires EPA to list
technology (considering source water
quality) that achieves compliance with
the MCL and is affordable for systems in
three specific population size categories:
25-500, 501-3300, and 3301-10,000
when promulgating a national primary
drinking water regulation which
establishes an MCL. If, for any given
size category/source water quality
combination, an affordable compliance
technology cannot be identified,  section
1412(b)(15)(A) requires the Agency to
list a variance technology. Variance
technologies may not achieve full
compliance with the MCL but they must
achieve the maximum contaminant
reduction that is affordable considering
the size of the system and the quality of
                          the source water. In order for the
                          technology to be listed, EPA must
                          determine that this level of contaminant
                          reduction is protective of public health.
                           Thus, EPA developed national
                          affordability criteria for the narrow and
                          specific purpose of determining whether
                          or not an affordable compliance
                          technology exists, from a national
                          perspective, for the specified size
                          categories of systems, considering the
                          quality of source waters available to
                          them. The key point at issue here is
                          what EPA should consider "affordable"
                          from a national perspective. EPA does
                          not define national level affordability in
                          terms of what would be  affordable to the
                          least affluent water systems. Likewise,
                          EPA does not define national level
                          affordability in terms of what would be
                          affordable to the most affluent water
                          systems. Rather, a determination of
                          national level affordability is concerned
                          with identifying, for each of the given
                          size categories, some central tendency
                          or typical circumstance  relating to their
                          financial wherewithal.
                           The metric EPA selected for this
                          purpose is the median household
                          income for communities of the specified
                          sizes. Some commenters expressed
                          concern that EPA was using the national
                          median household income (across all
                          sizes of systems) in making judgments
                          on national-level affordability. The
                          Agency wishes to clarify that this was
                          not the case. We used median
                          household income for communities of
                          the specified size categories, as
                          documented in EPA's August 6,1998
                          Federal Register notice  (EPA, 1998h).
                          The household is thus the focus of the
                          national-level affordability analysis.
                          EPA considers treatment technology
                          costs affordable to the typical household
                          if they represent a percentage of MHI
                          that appears reasonable  when compared
                          to other household expenditures. This
                          approach is based on the assumption
                          that the affordability to the median
                          household served by the CWS can serve
                          as an adequate proxy for the
                          affordability of technologies to the
                          system itself. The national-level
                          affordability criteria have two major
                          components: current annual water bills
                          (baseline) and the affordability
                          threshold (total % of MHI directed to
                          drinking water). Current annual water
                          bills were derived directly from the
                          1995 Community Water System Survey.
                          Based on 1995 conditions, 0.75-0.78%
                          of MHI is being directed to water bills
                          for systems serving fewer than 10,000
                          persons.
                           The fundamental, core question in
                          establishing national-level affordability
                          criteria is: what is the threshold beyond
                          which drinking water would no longer
be affordable for the typical household
in each system size category? Based   .
upon careful analysis, EPA believes this
threshold to be 2.5% of MHI. In
establishing this threshold, the Agency
considered baseline household
expenditures (as documented in the
1995 Consumer Expenditure Survey,
Bureau of Labor Statistics) for piped
water relative to expenditure
benchmarks for other household goods,
including those perceived as substitutes
for higher quality piped water such as
bottled water and POU/POE devices.
Based on these considerations, EPA
concluded that current household water
expenditures are low enough, relative to
other expenditures, to support the cost
of additional risk reductions. The
detailed rationale for the selection of
2.5% MHI as the affordability threshold
is provided in the guidance document
entitled "Variance Technology Findings
for Contaminants Regulated Before
1996" (EPA, 19981). The difference
between the affordability threshold and
current water bills is the available
expenditure margin. This represents the
dollar amount by which the water bill
of the typical (median) household could
increase before exceeding the
affordability threshold of 2.5% of MHI.
  The Agency recognizes that baseline
costs change over time as water systems
comply with new regulations and
otherwise update and improve their
systems. MHI also changes from year to
year, generally increasing in constant
dollar terms. For example, since 1995
MHI has increased (in 1999$) by 9.6%.
Thus, to determine the available
expenditure margin (the difference
between the affordability threshold and
the baseline) for each successive rule,
adjustments would need to be made in
both the baseline and the MHI. The
Agency believes that, for purposes of
assessing national-level affordability of
the arsenic rule, the unadjusted baseline
and unadjusted MHI are appropriate.
Making adjustments to these two factors
would not materially alter the outcome
of the analysis, since both the baseline
and the MHI would  increase, and not by
dramatically differing percentages. Thus
the difference between the two would 0
not significantly change.             ,,
  By definition, the MHI is the income
value exactly in the  middle of the
income distribution. The median is a
measure of central tendency; its purpose
is to help characterize the nature of a
distribution of values. The Agency
recognizes that there will be half the
households in each size category with
incomes above the median, and half the
households with incomes below the
median. The objective of a national-
level affordability analysis is not to

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                                                                       7043
 determine what is affordable to the
 poorest household in the U.S. Nor is it.
 to determine what the richest household
 in the U.S. could afford. Rather, it is to
 look across all the households in a given
 size category of systems and determine ?
 what is affordable to the typical, or
 "middle of the road" household.
   The distinction between national-
 level affordability criteria and
 affordability assessments for individual
 systems cannot be over-emphasized.
 The national-level affordability criteria
 serve only to guide EPA on the listing
 of an affordable compliance technology
 versus a variance technology for a given
 system size/source water combination
 for a given contaminant. In the case  pf
 arsenic, EPA determined that nationally
 affordable technologies exist for all
 system size categories and has therefore
 not identified a variance technology for
 any system size/source water
 combination. This means that EPA
 believes that the typical household in
 each system size category  can afford the
 costs associated with the listed
 compliance technologies. EPA
 recognizes that individual water
 systems may serve a preponderance  of
 households with incomes  well below
 the median, or may face unusually high
 treatment costs due to some unusual
 local circumstance. As discussed more
 fully in sections I.H, I.L, and III.F.4,
 there are a number of tools available to
 address affordability concerns for these
 individual water systems.  The major
 tools are financial assistance (low-
 interest loans and grants); extended
 compliance time-frames under a State-
 issued exemption; life-line and other
 types of rate structures that systems may
 use; and, restructuring of system
 management and  operations through
 partnerships among systems.
 3. Combined Cost of New Regulations
   A number of commenters expressed
 concern about the cumulative cost to
 water systems of new drinking water
 regulations. The Agency recognizes this
 concern and acknowledges that there is
 a small percentage of systems faced with
 co-occurrence and for whom there will
 be multiple treatment requirements.
 However, for such systems, the Agency
 notes that installation of treatment for
 one contaminant (such as arsenic, in
 this case) may often reduce the amount
 of treatment needed to remove many
 types of subsequently regulated
 contaminants, since the initial treatment
will likely remove at least some of the
 subsequently regulated contaminant;
particularly, certain types of inorganic
contaminants.
  The most common cumulative impact
will be that associated with initial
 monitoring. Most systems will-need-to-
 conduct at-least some limited initial
 monitoring for most regulated        ,
 contaminants. However, for the vast
 majority of systems that will not detect
 the contaminant at levels of concern,
 subsequent monitoring will be limited
 and infrequent, with monitoring
 variances available for up to once every
 nine years.

 4. Projected Effects of the New Standard
 on Other Regulatory Programs

   Several commenters felt that EPA has
 underestimated the costs of the
 proposed rule by failing to fully
 consider the possible costs of a new,
 lower drinking water standard on other
 regulatory programs, particularly
 hazardous waste. EPA disagrees and
 does not believe that certain ancillary
 costs identified by commenters should
 be considered in the cost of compliance
 analysis nor should they be a factor
 considered in establishing the MCL. For
 instance, the prospective costs of future
 CERCLA site clean-up actions are not
 among the factors that SDWA requires
 EPA to consider in establishing an MCL.
 Moreover,  there are a host of site-
 specific factors taken in account in any
 CERCLA site clean-up situation beyond
 the clean-up standard itself (which may
 be an MCL under the CERCLA
 requirement to consider "applicable or
 relevant and appropriate requirements"
 (ARARs)). In the case of RCRA, EPA
 notes that the  arsenic in drinking water
 final rulemaking does not necessarily
 trigger a revision of the Toxicity
 Characteristic  standard under RCRA.
 Thus, there are not necessarily any new
 costs to entities affected by RCRA
 requirements as a result of this
 rulemaking. In any case, SDWA section
 1412(b)(3)(C)(i)(IH) specifically excludes
 consideration  of such costs from other
 regulatory programs in the development
 of drinking water standards.

 H. Benefits of Arsenic Reduction

  Significant comments on the benefits
 analysis for the proposed arsenic rule
 addressed the topics of the timing of
 health benefits accrual (latency); the use
 of the Value of Statistical Life (VSL) as
 a measure of health benefits; the use of
 alternative  methodologies for benefits
 estimation; the Agency's consideration
 of non-quantifiable benefits in its
regulatory decision-making process; the
Agency's analysis of incremental costs
and benefits of the proposed arsenic
rule; and, the Agency's assumption that
health risk reduction  benefits will begin
to accrue at the same  time costs begin
to accrue.
 1. Timing of Benefits Accrual (Latency)
   Some commenters argued that EPA
 should have discounted its health
 benefits for the arsenic rule over a
 cancer latency period. As noted in the
 proposed rule, EPA committed to taking
 this issue before the Science Advisory
 Board (SAB) for its advice and
 recommendations.
   EPA brought this issue before the SAB
 in a meeting held on February 25, 2000
 in Washington, DC (65 FR 5638,
 February 4, 2000; EPA, 2000a). The SAB
 submitted a final report on their
 findings and recommendations to us on
 July 27, 2000 (EPA, 2000J). This final
 report was made available on the EPA
 website at www.epa.gov/sab/
 eeacf013.pdf.
   The SAB Panel noted that benefit-cost
 analysis, as described in the Agency's
 Guidelines [for economic analysis], is
 not the only analytical tool nor is
 efficiency the only appropriate criterion
 for social decision making, but notes
 that it is important to carry out such
 analyses in an unbiased manner with as
 much precision as possible. In its report,
 the SAB recommended that the Agency
 continue to use a wage-risk based VSL
 as its primary estimate; any appropriate
 adjustments that are made for timing
 and income growth should be part of the
 Agency's main analysis while any other
 proposed adjustments should be
 accounted for in sensitivity analyses to
 show how results would change if the
 VSL were adjusted for some of the major
 differences in the characteristics of the
 risk and of the affected populations.
   Specifically, the SAB report
 recommended that: (1) Health benefits
 brought about by current policy
 initiatives (i.e., after a latency period)
 should be discounted to present value
 using the same rate that is used to
 discount other future benefits and costs
 in the primary analysis; (2) adjustments
 to the VSL for a "cancer premium"
 should be made as part of a sensitivity
 analysis; (3) adjustments to the VSL for
 voluntariness and controllability should
 be made as part of a sensitivity analysis;
 (4) altruism should be addressed in a
 sensitivity analysis and separately from
 estimation of the value of a statistical
 cancer fatality and the circumstances
 under which altruism can be included
 in a benefit-cost analysis are restrictive;
 (5) estimates of VSLs accruing in future
y&ars should be adjusted in the primary
analysis to reflect anticipated income
growth, using a range of income
elasticities; (6)  adjustments to the VSL
for risk aversion should be made in a
sensitivity analysis; (7) it is theoretically
appropriate to calculate WTP for
individuals whose ages correspond to

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Federal Register/Vol. 66, No. 14/Monday,  January 22, 2001 /Rules and Regulations
those of the affected population, but that
more research should he conducted in
this area; and (8) no adjustment should
he made to the VSL to reflect health
status of persons whose cancer risks are
reduced.
  Consistent with the recommendations
of the SAB, EPA developed a sensitivity
analysis of the latency structure and
associated benefits for arsenic, a
summary of which is shown in Section
III.E of the final preamble. This analysis
consists of health-risk reduction benefits
which reflect adjustments for
discounting, incorporation of a range of
latency period assumptions,
adjustments for growth in income, and
incorporation of other factors such as a
voluntariness and controllability.
Although the SAB recommended
accounting for latency in a primary
benefits analysis, the Agency believes
that, in the absence of any sound
scientific evidence of latency periods for
arsenic related cancers, discounted
benefits estimates for arsenic are more
appropriately accounted for in a
sensitivity analysis. Sensitivity analyses
are generally reserved for examining the
effects of accounting for highly
uncertain factors, such as latency
periods, on health risk reduction
benefits estimates.
2. Use of the Value of Statistical Life
(VSL)
  Some commenters felt that the Value
of Statistical Life (VSL) used by EPA in
its analysis of benefits for the arsenic
rule was incorrect. EPA disagrees with
these commenters for several reasons.
First, the VSL used by the Agency in its
benefits analysis is based on the most
current data available. The VSL, as
recommended by Agency guidance and
EPA's SAB, is derived from a statistical
distribution of the values found in 26
wage-risk studies, which were chosen as
the best such studies available from a
larger body of studies. This examination
of studies was undertaken by EPA's
Office on Air and Radiation in the
course of its Clean Air Act retrospective
analysis. EPA believes the VSL estimate
($6.1 million, 1999 dollars) to be the
best estimate at this time and is
recommending that this value be used
by the various program offices within
the Agency. This estimate may,
however, be updated in the future as
additional information becomes
available to assist the Agency in refining
its VSL estimate. The VSL estimate is
consistent with current Agency
economic analysis guidance, which was
reviewed by EPA's SAB.
   Also, the use of the VSL for benefits
valuation is consistent with
recommendations from EPA's SAB,
                         which discussed this issue in their
                         meeting on .February 25, 2000 in
                         Washington, DC. The SAB's report on
                         their findings and recommendations
                         from the February meeting stated that:
                         despite limitations of the VSL estimates,
                         these seem to offer the best available basis at
                         present for considering the value of fatal
                         cancer risk reduction. We therefore
                         recommend that the Agency continue to use
                         a wage-risk-based VSL as its primary
                         estimate, including appropriate sensitivity
                         analyses to reflect the uncertainty of these
                         estimates (EPA, 2000J).

                            In addition, some commenters
                         disagreed with EPA's valuation of a
                         human life. EPA disagrees with these
                         commenters because the VSL does not
                         represent the value of an actual human
                         life. Rather, the VSL represents the
                         value of people's willingness to pay for
                         small changes in the risk of a fatality.

                         3. Use of Alternative Methodologies for
                         Benefits Estimation

                            Several commenters  suggested that
                         the Agency use a Quality Adjusted Life
                         Years (QALYs) or a Life Years approach
                         in its valuation of health benefits for the
                         arsenic rule. EPA disagrees with these
                         commenters because the current
                         economic literature does not support
                         these methodologies and EPA believes
                         these approaches are not sufficient for
                         use in economic analyses.
                            The use of alternative methodologies,
                         such as Quality Adjusted Life Years
                          (QALYs) and a Life-Years approach, has
                         been extensively discussed both within
                         EPA and also before the Environmental
                         Economics Advisory Committee (EEAC)
                         of EPA's SAB. The QALY method
                         allows information on life expectancy
                         and quality of life to be combined into
                         a single number for benefits valuation
                         purposes. QALYs involve rating each
                         year of life on a scale from zero to one,
                         where one represents perfect health and
                          zero represents the worst possible
                         health state. Because patients
                          themselves, or sometimes citizens of the
                          community, are responsible for "rating"
                          each year, these quality-of-life tradeoffs
                          are highly subjective and may not be
                          very meaningful. Regarding die use of
                          QALYs, the SAB committee stated that
                          "there are no published studies that
                          show that persons with physical
                          limitations or chronic illnesses are
                          willing to pay less to increase their
                          longevity than persons without these
                          limitations. People with physical
                          limitations appear to adjust to their
                          conditions, and their WTP to reduce
                          fatal risks is therefore not affected. The
                          EEAC suggests that no adjustments be
                          made to the VSL to reflect the health
                          status of persons whose cancer risks are
reduced, unless additional research
documents such effects" (EPA, 2000J).
  A Life-Years approach involves use of
a Value of Statistical Life Year (VSLY)  ;
measure. The VSLY measure values life-
years that would be lost if an individual
were to die prematurely. The
relationship between the value of risk
reductions and expected life years
remaining is complex; current research
does not provide a definitive way of   '
developing estimates of VSLY that are
sensitive to such factors  as current age,
latency of effect, life years remaining,
and social valuation of risk reduction.
While age adjustments may be desirable
from a theoretical standpoint, in the
absence of such information, the
mainstream economics literature does
not support developing VSLY estimates.
  The SAB's Environmental Economics
Advisory Committee (EEAC), in its
report, confirmed this finding. The use
of VSLY for valuing life-years lost was
found by the EEAC to not have a
sufficient theoretical and empirical
basis for making any adjustments at this
time. While the EEAC agreed that the
theoretically appropriate method is to
calculate WTP for individuals whose
ages correspond to those of the affected
population, the Committee
recommended that more research be
conducted on this topic before the
Agency makes any adjustments for age
in its estimates of health risk reduction
benefits.
  Therefore, because of the limitations
enumerated above, EPA  disagrees with
the use of the VSLY as a measure of.
benefits. This position has also been
incorporated in the Agency's Guidelines
for Preparing Economic Analyses (EPA,
2000n). The Agency's  economic analysis
guidelines were reviewed and approved
by the Regulatory Policy Council and
are considered when the Agency makes
economic policy determinations.
  At this time, current Agency policy is
to use VSL estimates for the
monetization of health risk reduction
benefits. As noted already, this policy is
also consistent with recommendations
from the EPA's SAB, which discussed
this issue  in a meeting held on February
25, 2000 in Washington, DC.
4. Comments on EPA's Consideration of
Nonquantifiable Benefits
  Some commenters felt that EPA did
not fully consider nonquantifiable
benefits in their decision-making
process. EPA respectfully disagrees with
these commenters. SDWA requires that
the Agency take into consideration any
potential quantifiable  and
nonquantifiable benefits associated with
regulating arsenic in drinking water. To
this end, the Agency displayed

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               Federal Register/Vol. 66, No. 14/Monday, January  22,  2001/Rules and Regulations        7045
  quantifiable costs and benefits and
  nonquantifiable benefits in the same
  table in the proposal (see Table XI-1 of
  the proposed rule), so that quantifiable
  and nonquantifiable benefits were given
  equal consideration in the
  determination of a regulatory level. In
  selecting a proposed MCL of 5 ug/L, the
  Agency based its fisk management"
  decision on both the quantifiable
  bladder and lung cancer benefits and
  also on the significant amount of
  nonquantifiable benefits associated with
  regulating arsenic in drinking water. In
  addition, EPA has provided analysis
  and considered the nonqualified
  benefits in the same manner for the final
  rule.
    By definition, nonquantifiable
  benefits cannot be measured and were
  not measured in the benefit-cost
  analysis for the arsenic rule. EPA
  attempted to consider these potential
  benefits in both the proposed and final
  rule since the Agency believes they
  might occur. Such nonquantifiable
  benefits may include skin cancer,
  kidney cancer, cancer of the nasal
  passages, liver cancer, prostate cancer,
  cardiovascular effects, pulmonary
  effects, immunological effects,
  neurological effects, endocrine effects,
  and customer peace-of-mind benefits
  from knowing their drinking water has
  been treated for arsenic.
   As stated in section 1412(b)(4)(C) of
 the SDWA, "*  * * the Administrator
 shall publish a determination as to
 whether the benefits of the maximum
 contaminant level justify, or do not
 justify, the costs based on the analysis
 conducted under paragraph'(3)(C)."
 Paragraph (3)(C) contains the
 description of the seven Health Risk
 Reduction and Cost Analysis elements
 that the Agency must consider. These
 seven elements include quantifiable and
 nonquantifiable heath risk reduction
 benefits, quantifiable and
 nonquantifiable health risk reduction
 benefits from reducing co-occurring
 contaminants, quantifiable and
 nonquantifiable costs, incremental costs
 and benefits, effects of the contaminant
 on the general population as well as on
 any sensitive sub-populations, possible
 increased health risks, and uncertainties
 in the analysis of any of these  elements.

 5. Comments on EPA's Assumption of
 Benefits Accrual Prior to Rule
 Implementation
  As noted by some commenters, EPA
 does not make a benefits adjustment for
 the period prior to rule compliance.
EPA does not make this adjustment for
two reasons. First, EPA assumes that
costs accrue during the same period and
does not adjust these costs to account
  for a phasing in of the rule. Therefore,
  the analysis treats benefits and costs in
  exactly the same manner. Second, the
  Agency anticipates that many systems
  will begin installing treatment prior to
  the compliance date. This will ensure
  they are in compliance on the date that
  the rule takes effect. As treatment is
  installed to meet the compliance date,
  benefits will begin to accrue to those
  served by these systems.

  /. Risk Management Decision

  1. Role of Uncertainty in Decision
  Making

    Several commenters questioned the
  proposed MCL on the basis of the
  uncertainties associated with aspects of
  the technical analyses supporting this
  rulemaking. Most of these comments
  dealt with the Agency's analysis of the
  health effects of arsenic. Section V.B. of
  today's preamble responds to these
  comments in more detail, and thus, only
  a relatively brief response to these
  comments, as they affect the risk
  management decision, is offered here:
  The uncertainties pointed out by
  commenters, together with the
  considerable costs of compliance with a
  new, lower standard, led several
  commenters to suggest that the Agency
  promulgate a significantly higher MCL
  than was proposed.
   In response, EPA believes that several
  considerations are important. First, we
  note that humans  are more sensitive to
  arsenic than laboratory animals. Thus,
 assessments of the health effects of
 arsenic necessarily rely, in part, on
 studies in which human populations
 have been exposed to relatively high
 levels (where demonstrable effects can
 be clearly seen and distinguished) and
 in which extrapolations to safe levels
 can be performed, and very low
 probabilities of adverse effects are
 projected. Uncertainties are inherent in
 any such analysis and would attach to
 similar kinds of contaminants (for
 which humans are more sensitive than,
 animals and where no animal model
 exists). Second, EPA has more fully
 considered the various uncertainties to
 which many commenters refer and has
 striven to account for them either
 qualitatively and quantitatively. Third,
 the Agency requested and has carefully
 considered the advice of the National
 Research Council of the National
 Academy of Sciences and the Drinking
 Water Committee of the Science
 Advisory Board on these issues as a part
 of our deliberations leading to a final
 MCL. In summary,  we believe that our
analysis of the health risks of arsenic in
drinking water is fully supportive of the
final MCL and is based upon the best
  available science. While we
  acknowledge that uncertainties in our
  understanding of the health effects of
  arsenic remain, we believe there is
  sufficient information to support today's
  promulgated standard.

  2. Agency's Interpretation of Benefits
  Justify Costs Provision
    Many commenters offered a variety of
  points of view on EPA's cost-benefit
  analysis and on its interpretation of the
  provision of SDWA allowing the
  Administrator to set a level higher than
  the feasible level if the benefits of a
  standard do not justify the costs (section
  1412(b)(6) of SDWA). EPA appreciates
  the many comments on its cost-benefit
  analysis, but respectfully disagrees with
  those comments that suggest its analysis
  is fundamentally flawed and does not
  support the proposed or final rule.
  Assessment of cost and benefits in cases
  where not all information can be
  precisely known, as is the case here, is
  a challenging exercise. Sections V.G.
  and V.H. of this preamble to the final
  rule provide a more detailed response to
  the various cost and benefit estimation
  comments received. In summary, we
  believe these costs and benefits have
  been correctly calculated, within the
  limits of available data and information,
  and that they adequately support both
  the proposed and final rule. Consistent
  with our statutory requirements, we
  have carefully considered costs and
 benefits analysis in proposing and
 promulgating a final rule that includes
 an MCL higher than the feasible level.
 Based on our further analysis of a
 variety of factors, including the costs
 and benefits, and after consideration of
 the various comments, we have decided
 to establish the final MCL at a higher
 level than proposed. As discussed in
 detail in section III.F. of this preamble,
 the Agency believes that, at an MCL of
 10 ug/L, the benefits justify the costs. In
 our deliberations, we examined total
 national costs and benefits, incremental
 costs and benefits across various
 optional regulatory levels, and
 household costs for various system size
 categories. However, it is important to
 recognize that the Agency is also
 required to comply with the statutory
 requirement to "maximize health risk
 reduction." Thus, while evaluation of
 costs and benefits is a key consideration
 in the exercise of the discretionary
 authorities under  section 1412(b)(6) of
 the SDWA, the decision criteria used in
 developing a final MCL also has an
 important risk reduction component.
  Some commenters also stated their
belief that the benefits must exceed the
costs in order for a particular standard
to be "justified" in accordance with

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Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
section 1412(b)(6) of SDWA. EPA
disagrees and believes, for several
reasons, that the benefits of the final
standard do justify the costs. First, in
connection with this rulemaking, EPA
notes that there are a number of non-
monetizable benefits that limit the value
of a strict numeric comparison of costs
and benefits. Second, EPA has
calculated a range of monetizable
benefits and believes that a portion of
the range of benefits do, in fact,
"overlap" the costs. Finally, EPA notes
that Congressional report language
clarifies the intent of section 1412tb)(6)
and indicates that benefits do not need
to strictly equal or exceed costs in order
for a particular regulatory standard
associated with those  costs to be
justified, (see S. Rep. 104-169,104th
Cong., 1st Sess. at 33.)
3. Alternative Regulatory Approaches
  A number of commenters suggested
that EPA tailor the arsenic drinking
water standard in light of local or
regional considerations. Market-based
and seasonal standards were suggested
in this regard. EPA understands these
comments and the desire of these
commenters to exercise flexibility in
local or Regional decision-making in
order to reflect information about local
arsenic occurrence patterns, local public
health priorities, available resources, or
other pertinent factors. EPA notes that
SDWA does provide for local and
Regional flexibility in the
implementation of new standard in a
variety of ways. State decisions on use
 of State Revolving Loan Funds and
Public Water System  Supervision grant
funds should be based upon local needs,
local priorities, and available local
 funds. In addition, States may provide
 variances to qualifying systems under
 section 1415 (a) of SDWA. States may
 also grant exemptions to qualifying
 water systems to provide additional
 time to comply with a new standard
 (with an opportunity for extensions) to
 help address the kinds of situations that
 many commenters are concerned  about.
 However, SDWA does not provide a
 basis for establishing regional, local, or
 further-tailored drinking water
 standards as these commenters suggest.
 Rather, SDWA is designed to ensure
 uniform levels of public health
 protection across the country (except as
 specifically provided for in variances
 from the standard). In addition, certain
 Executive Orders such as Executive
 Order Number 12898 (Environmental
 Justice) reinforce this SDWA
 requirement and are  specifically
 designed to ensure that disadvantaged
 communities are not protected at levels
 that are less than those afforded
                         nationally. Thus, EPA disagrees with
                         the suggestion that the level of the final
                         standard be altered to address local or
                         regional considerations, or otherwise
                         tailored, except as specifically provided
                         for by SDWA.

                         4. Standard for Total Arsenic vs.
                         Species-Specific Standards
                            Several commenters expressed
                         concern that an arsenic in drinking
                         water standard based on total arsenic ,
                         may unfairly penalize many drinking
                         water systems, since these commenters
                         felt that only inorganic forms of arsenic
                         are considered to be toxic. Thus, the
                         argument goes: the portion of a
                         compliance sample that is comprised of
                         organic arsenic would unfairly "count
                         against" the utility when determining
                         whether or not the concentration of
                         arsenic in the sample exceeds the MCL.
                         EPA believes, based on our
                         understanding of occurrence patterns of
                         arsenic, that source waters
                         overwhelmingly contain inorganic
                         arsenic. However, EPA also believes that
                         there is a recent body of scientific
                         evidence that indicates organic arsenic
                         may also be toxic. Thus, it is important
                         to know the total amount of arsenic
                          present—both inorganic and organic.
                            Allowing for only the relative
                          concentration of inorganic arsenic to be
                          measured in compliance samples would
                          impose an additional expense and
                          would only account for a portion of the
                          potentially toxic arsenic present. EPA
                          does not believe such an approach is
                          appropriate for the reasons discussed
                          and instead believes the final MCL
                          should be expressed as total arsenic.

                          /. Health Risk Reduction and Cost
                          Analysis (HRRCA)
                          1. Notice and Comment Requirement
                            Several commenters stated that EPA
                          was required to publish the HRRCA for
                          public comment prior to proposing the
                          arsenic regulation. EPA respectfully
                          disagrees with these commenters.
                          SDWA section 1412(b)(3)(C) states that
                          "when proposing any national primary
                          drinking water regulation that includes
                          a maximum contaminant level, the
                          Administrator shall, with respect to a
                          maximum contaminant level that is
                          being considered in accordance with
                          paragraph (4) and each alternative
                          maximum contaminant level that is
                          being considered pursuant to paragraph
                          (5) or (6)(A), publish, and seek comment
                          on, and use for purposes of paragraphs
                          (4), (5), and (6) an analysis of * * *"the
                          quantifiable and nonquantifiable health
                          risk reduction benefits, the quantifiable
                          and nonquantifiable health risk
                          reduction benefits from reducing co-
occurring contaminants, the quantifiable
and nonquantifiable costs, the
incremental costs and benefits, the
effects of the contaminant on the general
population as well as on any sensitive
subpopulations, any possible increased
health risks, and uncertainties in the
analysis of any of the aboVe factors.
  The above section of the statute
provides for the publication of the
HRRCA for any contaminant, except
radon in drinking water, concurrently .
with the proposed regulation. Had
Congress intended for the arsenic
HRRCA to be published in advance of
the proposal, the statute would have
specifically provided for that, as it did
in the case of radon. Section
1412(b)(13)(C) refers to the specific
requirements for radon in drinking
water. In this section of the statute,
Congress required the Agency to publish
the HRRCA for radon in drinking water
six months in advance o_f the proposal.'
   In the proposed arsenic rule, the
Agency provided an analysis of the   •
costs, benefits, and other HRRCA
requirements, which was shown in
Section XIII of the preamble to the
proposed rule. The public was provided
a 90-day comment period in which to
submit comments on all aspects of the
proposed rule, including costs, benefits,
and HRRCA requirements.

2. Conformance With SDWA
Requirements                  -   • . ?.
   Some commenters felt that EPA did
not meet the statutory requirements for
conducting a HRRCA in section
1412(b)(3)(C)(i) and did not analyze the
incremental costs and benefits
associated with each alternative
maximum contaminant level considered
in conformance with SDWA
requirements. EPA has met these
requirements by conducting a HRRCA
and an incremental analysis which are
 described in section XIII.D. of the
preamble for the proposed rule. The
 HRRCA requirements, incremental
 costs, and incremental benefits are also
 discussed in the Economic Analysis of
 the proposed rule.          ' *  •
   Some commenters also noted that
 EPA's incremental cost-benefit analysis
 lacked significant detail. The Agency
 addressed these concerns by adding
 more text to the incremental analysis
 section in the preamble for the final
 rule.
   Several other commenters stated that
 the proper interpretation of SDWA is to
 use only an incremental analysis to
 determine if the benefits justify the
 costs. EPA respectfully disagrees with
 this interpretation because section
 1412(b)(4)(C) of SDWA states"* *  *
 the Administrator shall publish a

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              Federal Register /Vol. 66, No.  14/Monday, January  22,  2001/Rules and Regulations
                                                                      7047
determination as to whether the benefits
of the maximum contaminant level
justify, or do not justify, the costs based
on the analysis conducted under
paragraph (3)(C)." Paragraph (3)(C)
contains the description of the seven
Health Risk Reduction and Cost
Analysis elements that the Agency must
consider. These seven elements include
quantifiable and nonquantifiable health
risk reduction benefits, quantifiable and
nonquantifiable health risk reduction
benefits from reducing co-occurring
contaminants, quantifiable and
nonquantifiable costs, incremental costs
and benefits, effects of the contaminant
on the general population as well as on
any sensitive subpopulations, possible
increased health risks, and uncertainties
in the analysis of any of these elements.
The Agency must consider all seven
elements, not just incremental benefits
and costs, when making a determination
as to whether the benefits of the
proposed rule justify the costs.
VI. Administrative and Other
Requirements
A. Executive Order 12866: Regulatory
Planning and Review
  Under Executive Order 12866, (58 FR
51735, October 4,1993) the Agency
must determine whether the regulatory
action is "significant" and therefore
subject to OMB review and the
requirements of the Executive Order.
The Order defines "significant
regulatory action" as one that is likely
to result in a rule that may:
  • Have an annual effect on the
economy of $100 million or more or
adversely affect in a material way the
economy, a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State) local, or Tribal governments or
communities;
  • Create a serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
  • Materially alter the budgetary
impact of entitlements, grants, user fees,
or loan programs or the rights and
obligations of recipients thereof, or;
  • Raise novel legal or policy issues
arising out of legal mandates, the
President's priorities, or the principles
set forth in the Executive Order.
  Pursuant to the terms of Executive
Order 12866, it has been determined
that this rule is a "significant regulatory
action" because it will have annual
costs of more than $100 million.  As
such, this action was reviewed by OMB.
Changes made in response to OMB
suggestions or recommendations are
documented in the public record. EPA
prepared an Economic Analysis (EA)
 pursuant to Executive Order 12866 and
 a revised version of the EA is in the
 docket for this rule (EPA, 2000o).

 B. Regulatory Flexibility Act (RFA), as
 Amended by the Small Business
 Regulatory Enforcement Fairness Act of
 1996 (SBREFA), 5 U.S.C. 601 et seq.
  The RFA generally requires an agency
 to prepare a regulatory flexibility
 analysis of any rule subject to notice
 and comment rulemaking requirements
 under the Administrative Procedure Act
 or any other statute unless the agency
 certifies that the rule will not have a
 significant economic impact on a
 substantial number of small entities.
 Small entities include small businesses,
 small organizations, and small
 governmental jurisdictions.
  The RFA provides default definitions
 for each type of small entity. It also
 authorizes an agency to use alternative
 definitions for each category of small
 entity, "which are appropriate to the
 activities of the agency" after proposing
 the alternative definition(s) in the
 Federal Register and taking comment (5
 U.S.C. 601(3)-{5).) In addition to the
 above, to establish an alternative small
 business definition, agencies must
 consult with the Small Business
 Administration's (SBA) Chief Counsel
 for Advocacy.
  For purposes of assessing the impacts
 of today's rule on small entities, EPA
 considered small entities to be PWSs
 serving fewer than 10,000 persons. In
 accordance with the RFA requirements,
 EPA proposed using this alternative
 definition in the Federal Register (63 FR
 7620, February 13,1998), requested
 comment, consulted with the SBA, and
 finalized the alternative definition in
 the Consumer Confidence Reports
 regulation (63 FR 44511, August 19,
 1998). As stated in that final rule, the
 alternative definition would be applied
 to this regulation as well.
  In accordance with section 603 "of the
 RFA, EPA prepared an initial regulatory
 flexibility analysis (IRFA) for the
 proposed rule and convened  a Small
 Business Advocacy Review Panel to
 obtain advice and recommendations of
representatives of the regulated small
 entities in accordance with section
 609(b) of the RFA. A detailed discussion
 of the Panel's advice and
recommendations is found in the Panel
Report (EPA 1999e). A summary of the
Panel's recommendations is presented
at (65 FR 38963, June 22, 2000). All
Panel's recommendations directly
applicable to this rulemaking are
 included in this final rule.
  As required by section 604 of the
RFA, EPA also prepared a final
regulatory flexibility analysis (FRFA) for
 today's final rule. The FRFA in
 combination with today's preamble,
 addresses the issues raised by public
 comments on the IRFA, which was part
 of the proposal of this rule. The FRFA
 is available for review in the docket,
 (EPA 2000w). and is summarized below.
  The RFA requires EPA to address the
 following when completing an FRFA:
  (1) A succinct statement of the need
 for, and objectives of, the rule;
  (2) A summary of the significant
 issues raised by the public comments on
 the IRFA, a summary of the assessment
 of those issues, and a statement of any
 changes made to the proposed rule as a
 result of those comments;
  (3) A description of the reporting,
 recordkeeping, and other compliance
 requirements of the rule, including an
 estimate of the classes of small entities
 which will be subject to the rule and the
 type of professional skills needed to
 prepare the report or  record;
  (4) A  description of the types and
 number of small entities to which the
 rule will apply, or an explanation why
 no estimate is available; and
  (5) a description of the steps taken to
 minimize the significant impact on
 small entities consistent with the stated
 objectives of the applicable statutes,
 including a statement of the factual,
 policy, and legal reasons why EPA
 selected the alternative the final rule
 and why the other significant
 alternatives to the rule that were
 considered which affect the impact on
 small entities were rejected.
  The following is a summary of the
 FRFA. The first requirement is
 discussed in section II. and III.D.l of
 this preamble.  The second, third, fourth
 and fifth requirements are summarized
 as follows.
  a. Comments on the IRFA.
 Commenters on the IRFA raised a
 number of issues, largely concerned
 with the potential cost of the  rule. In the
 proposed arsenic rule and the RIA
 supporting the proposal (EPA 2000h),
 EPA estimated the costs for small
 systems for the four arsenic MCL
regulatory options and requested
 comment on the IRFA. Some
 commenters felt that EPA had
underestimated the costs for small
 systems to comply with the arsenic
proposal. In  response to the comments,
the Agency re-evaluated the economic
effects on small entities after
publication of the proposal (as
discussed in greater detail in Section
III.). EPA updated its assessment for the
FRFA based  on comments and the final
regulatory decisions, i.e., the final MCL
level, full coverage of NTNCWS, and
updated costs of compliance, including
waste disposal costs.

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Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and  Regulations
  b. Reporting, Recordkeeping and
Other Requirements for Small Systems.
The arsenic rule continues to require
small systems to maintain records and
to report arsenic concentration levels at
the point-of-entry to the water system's
distribution system. NTNCWSs are
added to the systems that must meet the
MCL for arsenic by this rulemaking.
Small systems are also required to
provide arsenic information in the
Consumer Confidence Report or other
public notification  if the system exceeds
specific arsenic finished water
concentrations including the MCL.
Arsenic monitoring and reporting will
be required annually for surface water
                         (and mixed surface and ground water
                         systems) or once every three years for
                         ground water systems, unless the small
                         system obtains a monitoring waiver
                         from the State, demonstrating
                         compliance with the proposed MCL.
                         Other existing information and
                         reporting requirements, such as
                         Consumer Confidence Reports and
                         public notification requirements, will be
                         revised to include the lower arsenic
                         MCL and a reporting requirement when
                         one half of the MCL is exceeded (see
                         section V.E.). As is the case for other
                         contaminants, required information on
                         system arsenic levels must be provided
                         by affected systems and is not
considered to be confidential. The
professional skills necessary for      ,
preparing the reports are the same skill
level required by small systems for
current reporting and monitoring'
requirements for other drinking water  '
standards.                  '•"•."'•
  The classes of small entities that are
subject to the proposed arsenic rule
include public water systems serving
less than 10,000 people.
  c. Number of Small Entities Affected.
The number of small entities subject to
today's rule is shown in Table VI.B-1
below.
    TABLE Vl.B-1 .—PROFILE OF THE UNIVERSE OF SMALL WATER SYSTEMS REGULATED UNDER THE ARSENIC RULE
Water system type
Publicly-Owned:
cws 	
NCWS 	 	 ....i 	
Privately-Owned:
CWS .. 	 •
NCWS 	
Total Systems:
CWS 	 	 	
NCWS 	
Total 	
System size category
<100
1,729
1,783
13,640
8,178
15,369
9,961
25,330
101-500
5,795
3,171
11,266
4,162
17,061
7,333
24,394
501-1,000
3,785
1,182
2,124
902
5,909
2,084
7,993
1,001-3,300
6,179
361
1,955
411
8,134
772
8,906
3,301-10,000
3,649
29
654
' "'**
4,303
85
4,388
  Source: Safe Drinking Water Information System (SDWIS), December 1998 freeze.
  EPA's FRFA estimates that the
economic impact of the final rule will
not be significant for the vast majority
of small systems. Of the 71,011 small
entities potentially affected by the
Arsenic Rule, 94% are expected to incur
average annualized costs of less than
540. This average reflects total costs for
systems that will not need to modify or
install treatment to meet the MCL and
mostly reflects monitoring costs. This
equates to approximately 0.001% of
average annual revenue. The remaining
6%, 3,907 systems, estimated to need
additional or modified treatment to
meet the MCL are expected to incur
average annualized costs of
approximately $20,816, or 0.70% of
average annual revenue. Although EPA
has worked with small communities to
minimize the burden of compliance
with this rule, the Agency anticipates
that several hundred systems may
nevertheless experience costs in excess
of 3% of annual  revenues. As noted
below, financial  assistance and
exemptions (providing additional time)
are available for  small systems for
compliance.
  d. Minimizing small system impact
and the final MCL. As discussed in more
detail in section  I.L. of this preamble,
                         EPA notes that $1.7 billion is available
                         each year through the SRF and RUS
                         program to support necessary capital
                         improvements to ensure compliance.
                         SDWA also provides small systems
                         additional time to comply through a
                         provision for exemptions. Systems
                         serving fewer than 3,300 persons can
                         apply for an exemption from the State
                         (SDWA section 1416(b)(3)) that can
                         provide up to an additional nine years
                         to comply (for a total of 14 years from
                         the effective date of the rule). EPA
                         discusses in section III.F. of this
                         preamble the decisions to select the
                         final MCL. EPA is preparing a small
                         entity compliance guide to help small
                         entities comply with this rule as
                         required by Section 212 of SBREFA.
                         This guide will be available for small
                         systems within a few months of the
                         promulgation date of this rule. Small •
                         systems may obtain a copy of the guide
                         from EPA's web site, www.epa.gov/
                         safewater.

                         C. Unfunded Mandates Reform Act
                         (UMRA)ofl995

                           Title II of the Unfunded Mandates
                         Reform Act of 1995 (UMRA), Public
                         Law 104—4, establishes requirements for
                         Federal agencies to assess the effects of
their regulatory actions on State, Tribal,',
and local governments and the private
sector. Under UMRA section 202, EPA
generally must prepare a written
statement, including a benefit-cost
analysis, for proposed and final rules
with "Federal mandates" that may
result in expenditures by State, Tribal,
and local governments, in the aggregate,
or to the private sector, of $100 million
or more in any one year. Before   .
promulgating an EPA rule, for which a
written statement is needed, section 205
of the UMRA generally requires EPA to
identify and consider a reasonable
number of regulatory alternatives and
adopt the least costly, most cost-
effective or least burdensome alternative
that achieves the objectives of the rule.
The provisions of section 205 do not
apply when they are inconsistent With
applicable law. Moreover, section 205 .
allows EPA to adopt an alternative other
than the least costly, most cost effective
or least burdensome alternative if the
Administrator publishes with the final
rule an explanation why that alternative
was not adopted.
  Before EPA establishes any regulatory
requirements that may significantly or
uniquely affect small governments,  .'
including Tribal governments, it must ,

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              Federal Register/Vol.  66,  No. 14/Monday, January 22, 2001/Rules and Regulations
                                                                       7049
 have developed, under section 203 of
 the UMRA, a small government agency
 plan. The plan must provide for
 notifying potentially affected small
 governments, enabling officials of
 affected small governments to have
 meaningful and timely input in the
 development of EPA regulatory
 proposals with significant Federal
 intergovernmental mandates and
 informing, educating, and advising '
 small governments on compliance with
 the regulatory requirements.
   EPA has determined that this rule
 contains a Federal mandate that may
 result in expenditures of $100 million or
 more for State, Tribal, and local
 governments, in the aggregate, or the
 private sector in any one year. A
 detailed description  of this analysis is
 presented in EPA's Economic Analysis
 of the arsenic rule (EPA, 2000o) which
 is included in the Office of Water docket
 for this rule. Accordingly, EPA has
 prepared under section 202 of the
 UMRA a written statement which is
 summarized below.
   a. Authorizing legislation. Today's
 rule is issued pursuant to section
 1412(b)(13) of the 1996 amendments to
 SDWA that requires EPA to propose and
 promulgate a national primary drinking
 water regulation for arsenic,  establishes
 a statutory deadline of January 1, 2000,
 to propose this rule, and establishes a
 statutory deadline of January 1, 2001,
 (and subsequently amended to June 22,
 2001) to promulgate this rule.
   b. Cost-benefit analysis. Section III.  of
 this preamble, describing the Economic
 Analysis (EA) (EPA, 2000o), health risk
 analysis and the cost and benefit
 analysis for arsenic, contains a detailed
 analysis in support of the arsenic rule..
 Today's final rule is expected to have  a
 total annualized cost of approximately
 $181 million (Exhibit 6-9, EPA,  2000o).
 This,total annualized cost includes the
 total annual administrative costs of
 State, Tribal, and local governments, in
 aggregate, less than 1% of the cost, and
 total annual treatment, monitoring,
 reporting, and record keeping impacts .
 on public water systems, in aggregate, of
 approximately $1.3 million. EPA
 estimates the total annual costs of
 administrative activities for compliance
 with the MCL to be approximately $2.7
 million.                              •
  The EA includes both qualitative and
 monetized benefits for improvements in
health and safety. EPA estimates the
final arsenic rule will have total annual
monetized benefits for bladder and lung
cancer of approximately $140 to  198
million for the MCL of 10 ug/L. The
monetized health benefits of reducing
arsenic exposures in drinking water are
attributable to the reduced incidence of
 fatal and non-fatal bladder and lung
 cancers. At ari arsenic level of 10 (ig/L,
 an estimated 21 to 30 fatal bladder arid
 lung cancers and 12 to 26 non-fatal
 bladder and lung cancers per year are
 prevented.
   In addition to quantifiable benefits,
 EPA has identified several potential
 non-quantifiable benefits associated
 with reducing arsenic exposures in
 drinking water. These potential benefits
 include health effects that are difficult
 to quantify because of the uncertainty
 surrounding their estimation. Non-
 quantifiable benefits may also include
 any peace-of-mind benefits specific to
 reduction of arsenic risks that may not
 be adequately captured in the Value of
 Statistical Life (VSL) estimate.
   c. Financial Assistance. Section III of
 this preamble describes the various
 Federal programs available to provide
 financial assistance to State, Tribal, and
 local governments to administer and
 comply with this and other drinking  •
 water rules. The Federal government
 provides funding to States that have a
 primary enforcement responsibility for
 their drinking water programs through
 the Public Water Systems Supervision
 (PWSS) Grant program. Additional
 funding is available from other
 programs administered either by EPA or
 other Federal agencies. These include
 the Drinking Water State Revolving
 Fund (DWSRF) and Housing and Urban
 Development's Community
 Development Block Grant Program.
 Also, the Rural Utilities Service (RUS) •
 of the United States Department of
 Agriculture  (USDA) operates a Water
 and Waste Disposal Loan and Grant
 Program. This program provides low-
 interest loans and grants to public
 entities and  noMcr-profit corporations
 serving populations of 10,000 or fewer
 persons.                   ,      •
   d. Estimates of future compliance
 costs and disproportionate budgetary
 effects: To meet the requirement in
 section  202 of the UMRA, EPA analyzed
 future compliance costs and possible
 disproportionate budgetary effects of an
 arsenic MCL of 10 ug/L to the extent
 reasonably feasible. The Agency    '•
 believes that the cost estimates, .-
 indicated previously and discussed in ,-
 more detail in section III of today's rule,
 accurately characterize future
 compliance costs of the rule.           .
  With regard to the disproportionate
 impacts, EPA considered available data
 sources in analyzing the          ,   .
 disproportionate impacts upon .
geographic or social segments of the
nation or industry. While the percentage
of systems impacted varies from region •
to region, no area has impacts
substantial enough to create a  ,
 disproportionate burden. For the
 proposal, EPA did identify (Table V-2,
 p. 38908) that there are a larger
 percentage of systems in the Western
 and New England regions, whose
 drinking water quality currently would
 exceed the MCL for arsenic. For such
 regions, total compliance; therefore,
 may be incrementally costlier than for
 systems in regions where a smaller
 percentage currently exceed the arsenic
 MCL. However, even this difference is
 not considered by EPA to represent a
 disproportionate impact.
   To estimate the potential
 disproportionate impacts on social
 segments of this rule, this analysis also
 developed three other measures:
   (1) Reviewing the impacts on small
 versus large CWSs;
   (2) Reviewing the costs to public
 versus private CWSs;,and
   (3) reviewing the household costs for
 the rule.
 Table 6-11 of the EA (EPA, 20QOo)
 shows that the total treatment costs for
 small CWSs (serving fewer than 10,000
 persons) is less than the total treatment
 for large CWSs; therefore, there is no
 disproportionate impact on small
 systems versus large systems. Table 8-
 29 of the EA shows that there is not a
 disproportionate impact when
 comparing costs for public CWSs to
 costs for private CWSs of the same size.
 Public systems have slightly higher
 costs than public CWSs. Table 8-30 of
 the EA show household costs by system
 size. Cost per household increases as
 system size decreases. Cost per
 household  is higher for households
 served by smaller systems than larger
 systems. These values are expected for
 two reasons. First, smaller systems serve
 far fewer households than larger
 systems and, consequently, each
 household must bear a greater
 percentage  share of the system's costs.
 Second, smaller systems tend to have
 higher influent arsenic concentrations
 that, on a per.-capita or per-household
 basis, require more expensive treatment
 methods to achieve the target arsenic
 level.
  Moreover, even if there were a  ;
 disproportionate impact associated with
 the final MCL, EPA does not have any
 authority to tailor the regulation to
 provide regional or ownership relief.
 Finally, as previously noted, EPA
 adopted a 10'ug/L arsenic MCL rather •
than the proposed (5 ji/L) or feasible
 level (3 (ig/L) of arsenic MCL in part
because of the benefit cost issues raised
by commenters. This should serve to
mitigate the costs of the rule to some
degree. EPA also provided delayed
compliance deadlines for all systems

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which should also reduce the economic
effect on systems with higher ground
water arsenic levels.
  EPA will prepare a small entity
compliance guide, a monitoring/
analytical manual, and a small systems
technology manual that will assist the
public and private sector.
  e. Macro-economic effects. As required
under UMRA § 202, EPA is required to
estimate the potential macro-economic
effects of the regulation. These types of
effects include those on productivity,
economic growth, full employment,
creation of productive jobs, and
international competitiveness. Macro-
economic effects tend to be measurable
in nationwide econometric models only
if the economic impact of the regulation
reaches 0.25% to 0.5% of Gross
Domestic Product (GDP). In 1998, real
GDP was $7,552 billion so a rule would
have to cost at least $18 billion annually
to have a measurable effect. A regulation
with a smaller aggregate effect is
unlikely to have any measurable impact
unless it is highly focused on a
particular geographic region or
economic sector. The macro-economic
effects on the national economy from
the arsenic rule should be negligible
based on the fact that, assuming 100%
compliance, the total annual costs, are
approximately $181 million, and the
costs are not expected to be highly
focused on a particular geographic
region or industry sector.
  /. Summary ofEPA's consultation
with State, Tribal, and local
governments; In developing the
proposed rule, EPA consulted with
small governments pursuant to its plan
established under section 203 of the
UMRA  to address impacts of regulatory
requirements in the rule that might
significantly or uniquely affect small
governments. Consistent with the
intergovernmental consultation
provisions of section 204 of UMRA, EPA
held, prior to proposal, consultations
with the governmental entities affected,
by this  rule. EPA held four public
meetings for stakeholders prior to
proposal and an additional meeting after
proposal. The Agency convened a Small
Business Advocacy Review (SBAR)
Panel in accordance with the Regulatory
Flexibility Act (RFA) as amended by the
Small Business Regulatory Enforcement
Fairness Act (SBREFA) to address small
entity concerns, including small local
governments. EPA consulted with small
entity representatives prior to convening
the Panel to get their input on the
arsenic rule. Two of the small entities
represented small governments. A
detailed description of the SBREFA
process can be found in the docket of
this rulemaking (EPA, 1999e). EPA also
                         made presentations at Tribal meetings
                         in Nevada, Alaska, and California. In
                         addition, EPA made presentations at
                         meetings of the American Water Works
                         Association (AWWA)i the Association
                         of State Drinking Water Administrators
                         (ASDWA), the Association of California
                         Water Agencies (ACWA), and the
                         Association of Metropolitan Water
                         Agencies (AMWA). Participants in
                         EPA's stakeholder meetings also
                         included representatives from the
                         National Rural Water Association,
                         AMWA, ASDWA, AWWA, ACWA,
                         Rural Community Assistance Program,
                         State departments of environmental
                         protection, State health departments,
                         State drinking water programs, and a
                         Tribe.
                           g. Natute of State, Tribal, and local
                         government concerns and how EPA
                         addressed these concerns. In general,
                         Comments oh the proposed UMRA
                         discussion continued to cite costs and
                         funding for compliance as concerns.
                         EPA has further revised the costs for
                         this final rule based on comments and
                         continues to believe that there are
                         affordable technologies (see section
                         III.E.). Cost was one of the issues EPA
                         considered in deciding to exercise its
                         discretionary authority under section
                         1412(b)(6) of SDWA to propose that the
                         MCL be set a level higher than the
                         feasible level in the proposed rtile of 5
                         fig/L and to set the final level of 10 ng/
                         L. Commenters asked that funding be
                         increased to the Drinking Water State
                         Revolving Fund (DWSRF) or somehow
                         fully fund compliance with the
                         proposed requirements. While the
                         DWSRF program is proving to be a
                         significant source of funding, it cannot
                         be viewed as the only source of funding.
                         There are strategies other than Federal
                         funding (such as system bundling) for
                         meeting the arsenic rule. Federal, State
                         arid local governments, private business
                         and utilities will need to work in
                         partnership to help address the
                         significant infrastructure needs for
                         complying with today's rule.'
                            h. Regulatory alternatives considered.
                         As required under section 205 of the   ,
                          UMRA, EPA considered several
                          regulatory alternatives in developing an
                          MCL for arsenic in drinking water. In
                          preparation for this consideration, the
                          Regulatory Impact Analysis (EPA,
                          2000h) and Health Risk Reduction and
                          Cost Analysis (HRRCA) for the proposed
                          arsenic rule (EPA, 20001, see section
                          XIII.) evaluated arsenic levels of 3 ug/L,
                          5 ug/L, 10 ug/L, and 20 ug/L. (see
                          section III. of the proposed rule for more
                          discussion of the regulatory alternatives
                          considered.)
                            L Selection of the regulatory
                          alternative. As explained in section
III.F. of today's preamble, the Agency
selected an MCL of 10 ug/L which is the
most cost-effective alternative since it
maximizes benefits.

D. Paperwork Reduction Act (PRA)
  The Office of Management and Budget
(OMB) has approved the information
collection requirements contained in
this rule under the provisions of the
Paperwork Reduction Act, 44 U.S.C.
3501 etseq, and has assigned OMB
control number 2040-0231.  .
  Under this rule, respondents to the
monitoring, reporting, and
recordkeeping requirements include the
owners and operators of community
water systems and State officials that
must report data to the Agency.
Monitoring for arsenic is required at
each entry point to the distribution
system. States will have discretion in
grandfathering existing  data for
determining initial monitoring baselines
for the currently regulated
contaminants.
  EPA has estimated  the burden
associated with the specific information
collection, record keeping and reporting
requirements of the proposed rule in the
accompanying Information Collection1
Request (ICR). The ICR  for today's final
rule compares the current requirements
to the revised requirements for
information collection,  reporting and
record-keeping. The States and the
PWSs must perform start-up activities in
preparing to comply with the arsenic  •
rule. Start-up activities  include reading
the final rule to become familiar with
the requirements and training staff to
perform the required  activities.
  For PWSs, the number of hours-
required to perform each activity may  .
vary by system size. This rule applies to
community water systems and non-
transient non-community water
systems. There are approximately
74,607 PWSs and 56  States and
territories considered in this  ICR.
During the first three years after
promulgation of this  rule, the average
burden hours per respondent per year is
estimated to be 8 hours for PWSs and
915 hours for States.  During this period,
the total burden hour per year for the
approximately 74,663 respondents
covered by this rule is estimated to be
667,179 hours to prepare to comply
with this final arsenic rule. The average
number of responses  per year by PWSs ,
is 49,738. The average number of
responses for the States is expected to
be 75 per year during the first three-year
period. The average burden hours per
response for PWSs is 4. The average
burden hours per response for States is
229. Total annual labor costs during this
first 3-year period are expected to be

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                                                                       7051
 about $9.9 million per year for PWSs.
 The information collected is not
 confidential.
   Burden means the total time, effort, or
 financial resources expended by persons
 to generate, maintain, retain, or disclose
 or provide information to or for a
 Federal agency. This includes the time
 needed to review instructions; develop,
 acquire, install, and utilize technology
 and systems for the purposes  of
 collecting, validating, and verifying
 information, processing and
 maintaining information, and disclosing
 and providing information; adjust the
 existing ways to comply with any
 previously'applicable instructions and
 requirements; train personnel to collect
 information; search data sources;
 complete and review the collection of
 information; and transmit or otherwise
 disclose the information.
   An agency may not conduct or
 sponsor, and a person is not required to
 respond to a collection of information
 unless it displays a currently valid OMB
 control number. The OMB control
 numbers for EPA's regulations are listed
 in 40 CFR part 9 and 48 CFR chapter 15.
 EPA is amending the table in Chapter 9
 of currently approved ICR control
 numbers issued by OMB for various
 regulations to  list the information
 requirements contained in this final
 rule.

 E. National Technology Transfer and
 Advancement Act (NTTAA)
   Section 12(d) of the National
 Technology Transfer and Advancement
 Act of 1995 (NTTAA), (Pub. L. No. 104-
 113, sectionl2(d), 15 U.S.C. 272 note),
 directs EPA to use voluntary consensus
 standards in its regulatory activities
 unless to do so would be inconsistent
 with applicable law or otherwise
 impractical. Voluntary consensus
 standards are technical standards (e.g.,
 material specifications, test methods,
 sampling procedures, business
 practices) that are developed or adopted
 by voluntary consensus standard bodies.
 The NTTAA directs EPA to provide to
 Congress, through OMB, explanations
 when the Agency decides not to use
 available and applicable voluntary
 consensus standards.
  Today's rule does not establish any
 technical standards; thus, NTTAA does
 not apply to this rule. However, it
 should be noted that systems complying
 with this rule need to use previously
 approved technical standards already
 included in § 141.23. As discussed in
the proposed rule for arsenic (65 FR
 38888) and in today's final rule (section
I.F.I.), one consensus method (SM
3120B) and one EPA method (EPA
200.7), are withdrawn by this rule
 because the method detection limits for
 these methods are inadequate to reliably
 determine the presence of arsenic at the
 MCL of 10 ug/L, After the removal of
 these methods, the four remaining
 analytical methods currently approved
 for compliance monitoring of arsenic in
 drinking water are published by
 consensus organizations. The four
 methods published by these consensus
 organizations include SM 3113B, SM
 3114B, ASTM 2972-93B and ASTM
 2972-93C. These methods are described
 in the "Annual Book of ASTM     •
 Standards" (American Society for
 Testing and Materials, 1994 and 1996)
 and in "Standards for the Examination
 of Water and Wastewater" (APHA, 1992
 and 1995).

 F. Executive Order 12898:
 Environmental Justice
   Executive Order 12898 establishes a
 Federal policy for incorporating
 environmental justice into Federal
 agencies' missions by directing agencies
 to identify and address
 disproportionately high and adverse , "
 human health or environmental effects
 of its programs, policies, and activities
 on minority and low-income
 populations. The Agency has
 considered environmental justice
 related issues concerning the potential
 impacts of this action and  Consulted
 with minority and low-income
 stakeholders.
   On March 12,1998,* the Agency held
 a stakeholder meeting to address various
 components of pending drinking water
 regulations and how they may impact
 sensitive sub-populations, minority
 populations, and low-income
 populations. Topics discussed included
 treatment techniques, costs and benefits,
 data quality, health effects, and the
 regulatory process. Participants
 included national, State, Tribal,
 municipal, and individual stakeholders.
 EPA conducted the meetings by video
 conference call between 11 cities. This  .
 meeting was a continuation of
 stakeholder  meetings that started in
 1995 to obtain input on the Agency's
 drinking water programs. The major
 objectives for the March  12,1998
 meeting were:
  • Solicit ideas from stakeholders on
 known issues concerning current
 drinking water regulatory efforts;
  • Identify key issues of concern tp
 stakeholders, and;
  • Receive suggestions from
 stakeholders concerning ways to
 increase representation of communities
 in EPA regulatory efforts.
  In addition, EPA developed a plain-
English guide specifically for this
meeting to assist stakeholders  in
 understanding the multiple and
 sometimes complex issues surrounding
 drinking water regulation.

 G. Executive Order 13045: Protection of
 Children from Environmental Health
 Risks and Safety-Risks.
   Executive Order 13045, "Protection of
 Children from Environmental Health
 Risks and Safety Risks," (62 FR 19885
 April 23,1997) applies to any rule that:
 (1) Is determined to be "economically
 significant" as defined under Executive
 .Order 12866, and (2) concerns an
 environmental health or safety risk that
 EPA has reason to believe may have a
 disproportionate effect on children. If
 the regulatory action meets both criteria,
 the Agency must evaluate the
 environmental health or safety effects of
 the planned rule on children, and
 explain why the planned regulation is
 preferable to other potentially effective
 and reasonably feasible alternatives
 considered by the Agency.
   This final rule is not subject to the
 Executive Order because the Agency
 does not have reason to believe the
 environmental health risks or safety
 risks addressed by this action present a
 disproportionate risk to children.
 H. Executive Order 13132: Federalism
   Executive Order 13132,  entitled
 "Federalism" (64 FR 43255, August 10,
 1999), requires EPA to develop an
 accountable process to ensure
 "meaningful and timely input by State
 and local officials in the development of
 regulatory policies that have federalism
 implications." "Policies that have
 federalism implications" is defined in
 the Executive Order to include
 regulations that have "substantial direct
 effects on the States, on the relationship
 between the national government and
 the States, of on the distribution of
 power and responsibilities among the
 various levels of government."
   Under section 6 of Executive Order
 13132, EPA may not issue a regulatipn
 that has federalism implications,
 imposes substantial direct  compliance
 costs, and is not required by statute
 (unless the Federal government
 provides the funds necessary to pay the
 direct compliance costs incurred by
 State and local governments, or EPA
 consults with State and local officials
 early in the process of developing the
 proposed regulation). EPA  also may not
 issue a regulation that has federalism
 implications and preempts State law,
 unless the Agency consults with State
 and Ipcal officials early in the process
 of developing the proposed regulation^
  If EPA complies by consulting,
Executive Order 13132 requires EPA to
provide to the Office of Management

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Federal Register /Vol. 66, No.  14/Monday, Januarj 22,  2001/Rules and Regulations
and Budget (OMB), in a separately
identified section of the preamble to the
rule, a federalism summary impact
statement (FSIS). The FSIS must include
a description of the extent of EPA's
prior consultation with State and local
officials, a summary of the nature of
their concerns and the agency's position
supporting the need to issue the
regulation, and a statement of the extent
to which the concerns of State and local
officials have been met. Also, when EPA
transmits a draft final rule with
federalism implications to OMB for
review pursuant to Executive Order
12868, EPA must include a certification
from the agency's Federalism Official
stating that EPA has met the  ,
requirements of Executive Order 13132
in a meaningful and timely manner.
  EPA has concluded that this rule will
have federalism implications. This rule
will impose substantial direct
compliance costs on State and local
governments, and the Federal
government will not provide the funds
necessary to pay those costs.
Accordingly, EPA provides the
following FSIS as required by section
6(b) of Executive Order 13132.
  EPA consulted with State and local
officials early in the process of
developing the proposed regulation to
permit them to have meaningful and
timely input into its development.
Summaries of the meetings nave been
included in the docket for this proposed
rulemaking. EPA consulted extensively
with State, Tribal, and local
governments. For example, EPA held
four public stakeholder meetings in
Washington, B.C. (two meetings); San   ,
Antonio, Texas; and Monterey,
California. An additional public
stakeholder meeting was held after the
proposal was published in Reno,
Nevada. A summary of this meeting is
included in the docket of this
rulemaking. Invitations to stakeholder
meetings were extended to the National
Association of Counties, The National
Governors' Association, the National
Association of Towns and Townships,
the National League of Cities, and the
National Conference  of State Legislators.
In addition, several elected officials
were part of the Small Business
Advocacy Review Panel convened by
EPA (as required by section 609(b) of
the Regulatory Flexibility Act). EPA
officials presented a summary of the
rule to the National Governor's
Association in a meeting on May 24,
2000. hi addition, EPA scheduled a one-
day stakeholders' meeting for the trade
associations that represent elected
officials on May 30, 2000 to discuss and
solicit'comment on this and other
upcoming contaminant rules.
                           Several issues were raised by
                         stakeholders (including elected officials)
                         regarding the arsenic rule provisions,
                         most of which were related to reducing
                         burden and maintaining flexibility. The
                         Office of. Water was able to reduce
                         burden and increase flexibility for the
                         proposal in a number of areas in
                         response to these comments (see section
                         XIV.G. of the proposed rule).
                           Commenters on the proposed rule
                         continued to request a reduction of
                         burden and increased flexibility as well
                         as to question the need for the rule.
                         Section V. of this preamble and the
                         Comment Response Document  (EPA,
                         2000u) discuss the comments and EPA's
                         response in detail.  The Agency
                         exercised its discretionary authority
                         under section 14l2(b)(6) of'SDWA to
                         propose that the MCL be set at a level
                         higher than the feasible level in the
                         proposed rule and, in the final rule, to
                         move from the proposed level of 5 ug/
                         LtolOng/L.
                         /. Executive Orders 13084 and 13175:
                         Consultation and Coordination With
                         Indian Tribal Governments
                           On November 6, 2000, the President
                         issued Executive Order 13175 (65 FR
                         .67249) entitled, "Consultation and
                         Coordination with Indian Tribal
                         Governments." Executive Order 13175
                         took effect on January 6, 2001, and
                         revokes Executive  Order 13084 (Tribal
                         Consultation) as of that date. EPA
                         developed this final rule, however,
                         during the period when Executive Order
                         13084 was in effect; thus, EPA
                         addressed tribal considerations under
                         Executive Order 13984.
                           Under Executive Order 13084,
                         "Consultation and Coordination with
                         Indian Tribal Governments," 63 FR
                         27655 (May 19,1998), EPA may not
                         issue a regulation that: is not required
                         by statute, significantly or uniquely
                         affects the communities of Indian Tribal
                         governments, and imposes substantial
                         direct compliance  costs on those
                         communities, unless the Federal
                         government provides the funds
                         necessary to pay the direct compliance
                         costs incurred by the Tribal
                         governments, or EPA consults with
                         those governments. If EPA complies by
                         consulting, Executive Order 13084
                         requires EPA to provide the Office of
                         Management and Budget, in a separately
                         identified section of the preamble to the
                         rule, a description of the extent of EPA's
                         prior consultation with representatives
                         of affected Tribal governments, a
                         summary of the nature of their  concerns,
                         and a statement supporting the need to
                         issue the regulation. In addition,
                         Executive Order 13084 requires EPA to
                         develop an effective process permitting
elected officials and other
representatives of Indian Tribal
governments "to provide meaningful
and timely input in the development of
regulatory policies on matters that
significantly or uniquely affect their
communities."
  EPA has concluded that this rule may
significantly or uniquely affect
communities of Indian tribal
governments. It may also impose
substantial direct compliance costs on
such communities, and the Federal
government will not provide the funds
necessary to pay the direct costs
incurred by the Tribal governments in
complying with this rule. In developing
the rule, EPA consulted with Tribal
governments to permit them to have
meaningful and timely input into its
development.
  In order to inform and involve Tribal
governments prior to proposing the
arsenic rule, EPA staff attended the 16th
Annual Consumer Conference of the
National Indian Health Board on
October 6-8,1998, convened a Tribal
consultation meeting on February 24-
25,1999, and conducted a series of
workshops at the Annual Conference of
the National Tribal Environmental
Council on May 18-20,1999. Tribal
representatives were generally
supportive of an arsenic standard that
ensures a high level of water quality, but
raised concerns over funding for
regulations. With regard to the proposed
arsenic rule, many Tribal
representatives saw the health benefits
as highly desirable, but felt that unless
additional funds were made available,
implementing the regulation would be
difficult for many Tribes. Comments
submitted on the proposed arsenic rule
repeated the concern that Tribes might
not be able to afford to meet the arsenic
requirements.
  The Agency believes that the
requirements of this final rulemaking
are affordable nationally, including
Tribal PWSs. As discussed in section
I.G. of this preamble, EPA has
developed and applied a national
affordability criterion to the projected
costs of compliance of this rule for small
systems (those serving less than 10,000
persons). Using this approach, EPA has
identified affordable compliance
technologies that small systems
(including Tribal PWSs) may use to
comply with today's final rule.

/. Plain Language
  Executive Order 12866 and the
President's memorandum of June 1,
1998 require each agency to write its
rules in plain language. Readable
regulations help the public find
requirements quickly and understand

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             Federal Register/Vol. 66, No.  14/Monday, January 22, 2001/Rules and Regulations
                                                                     7053
them easily. They increase compliance,
strengthen enforcement, and decrease
mistakes, frustration, phone calls,
appeals, and distrust of government. Of
the several techniques typically utilized
for writing readably, using a question
and answer format, and using the word,
"you" for whoever must comply, do the
most to improve the look and sound of
a regulation. The preamble for today's
final rule uses the first principle and
was developed using a plain language
question and answer format. Today's
final rule language does not use these
principles since the rule only modifies
or adds to existing regulatory language
that is in the previous regulatory
language format. EPA received
comments on the use of plain language.
Commenters suggested that the Agency
had not clearly explained certain terms
for example, "dose-response" and
"parts per billion." The comments were
centered around technical and scientific
issues and terms that are often difficult
to discuss in a plain language format.
EPA considered these comments in
writing the  section of this final rule to
which those comment apply. EPA made
every effort to write this preamble to the
final rule in as clear, concise, and
unambiguous manner as possible.
K. Congressional Review Act
  The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this rule and other
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of the rule in
the Federal Register. A major rule
cannot take effect until 60 days after it
is published in the Federal Register.
This action is a "major rule" as defined
by 5 U.S.C.  804(2). This rule will be
effective March 23, 2001.
L. Consultations With the Science
Advisory Board, National Drinking
Water Advisory Council, and the
Secretary of Health and Human Services
  In accordance with section 1412 (d)
and (e) of SDWA, the Agency discussed
or submitted possible arsenic rule
requirements to the Science Advisory
Board (SAB), National Drinking Water
Advisory Council (NDWAC), and to the
Secretary of Health and Human Services
and requested comment from the
Science Advisory Board (SAB) on the
  On March 13th and 14th, 2000 in
Washington DC, the Agency met with
the Science Advisory Board during
meetings open to the public where
several of die Agency's Drinking Water
Rules were discussed. A copy of the
SAB's comments may be found in the
docket. SAB provided substantive
comments on the proposed arsenic rule
which are discussed in sections V.B.
and V.F. of this preamble.
  In addition, the National Drinking
Water Advisory Council was consulted
on this rulemaking on several occasions
throughout the rule's development (e.g.,
November 1999 in Baltimore, Maryland;
April 2000 in San Francisco, CA;
November 2000 in Arlington, VA). The
summary of the deliberations and
recommendations of the Council may be
found in the docket for this rule.
  The Agency coordinated with the
Department of Health and Human
Services in several ways.
Representatives of the Centers for
Disease Control and Prevention (CDC),
the Agency for Toxic Substances and
Disease Registry (ATSDR), and the Food
and Drug Administration (FDA) were
invited to the Agency's stakeholder
meetings on the arsenic rulemaking and
on the mailing list for updates. We
provided FDA staff with summaries of
the meetings, meeting materials, and a
briefing paper. In addition, the Agency
maintained contact with CDC
representatives on the status of CDC-
funded research on skin adsorption that
could have a bearing on the Agency's
deliberations. EPA commented on and
monitored the progress of the updated
"Toxicological Profile for Arsenic"
issued by ATSDR. Finally, we provided
ongoing progress reports on  the
Agency's arsenic in drinking water
rulemaking activities to representatives
of FDA relative to the timing of bottled
water regulations that need to follow the
promulgation of the Agency's final rule.
M. Likely Effect of Compliance With the
Arsenic Rule on the Technical,
Financial, and Managerial Capacity of
Public Water Systems
  Section 1420(d)(3) of SDWA as
amended requires that, in promulgating
a NPDWR, the Administrator shall
include an analysis of the likely effect
of compliance with the regulation on
the technical, financial, and managerial
capacity of public water systems. The
following summarizes the analysis
performed to fulfill this statutory
obligation. (EPA, 2000v)
  Overall water system capacity is
defined in guidance (EPA, 1998g) as the
ability to plan for, achieve, and
maintain compliance with applicable
drinking water standards. Capacity has
three components: technical,
managerial, and financial. Technical
capacity is the physical and operational
ability of a water system to meet SDWA
requirements. Technical capacity refers
to the physical infrastructure of the
water system, including the adequacy of
source water and the adequacy of
treatment, storage, and distribution
infrastructure. It also refers to the ability
of system personnel to adequately
operate  and maintain the system and to
otherwise implement requisite technical
knowledge. Managerial capacity is the
ability of a water system to conduct its
affairs in a manner enabling the system
to achieve and maintain compliance
with SDWA requirements. Managerial
capacity refers to the system's
institutional and administrative
capabilities. Financial capacity is a
water system's ability to acquire and
manage sufficient financial resources to
allow the system to achieve and
maintain compliance with SDWA
requirements.
  The arsenic rule establishes five
requirements that may impact the TMF
capacity of PWSs:
  (1) Compliance with MCL revised to
10 Hg/L from 50 Hg/L (40 CFR 141.62);
  (2) Revised arsenic monitoring
schedule [(modified to join the standard
monitoring framework (SMF) used for
other inorganic contaminants (IOCs)]
(§ 141.23(c))—includes requirement for
public notification of MCL exceedance,
but not Consumer Confidence Report
(CCR) requirements  (§ 141.154);
  (3) New source monitoring (§ 141.24);
  (4) Removal of EPA Method 200.7 and
SM 3120 from list of approved
analytical methods to demonstrate
compliance (§ 141.23); and
  (5.) Inclusion of arsenic health effects
language in CCRs (§ 141.154).
  The arsenic rule applies to all CWSs
(54,370  systems) andNTNCWSs (20,255
systems)—74,625 systems in all (EPA,
2000b).  However, many systems will not
be affected by the new arsenic
requirements. Table VI.M-1 provides a
complete listing of the requirements and
a description of the type and number of
systems affected by each requirement.

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Federal Register/Vol.  66,  No. 14/Monday,  January 22, 2001/Rules and Regulations
              TABLE VI.M-1 .—REQUIREMENTS OF THE ARSENIC RULE AND NUMBER OF SYSTEMS AFFECTED
Requirement
Compliance with revised MCL (10 ng/L) 	
Rovissd monitoring schedule 	
Now source monitoring 	
Removal of'specified analytical methods 	
Inclusion of health effects lanquaqe in CCR 	
Affected systems 1
Description
Systems with As > 1 0 ug/L
CWSs with As between 3 ng/L
(PQL) and 50 ug/L and all
NTNCWSs.
Systems that develop a new
source to meet the revised
MCL.
All CWSs that currently use
banned methods.
CWSs with As >5-25 ua/L 	
Number
CWSs
3,024
10,590
-0
<100
-4.000
NTNCWSs
1,080
20,255
~0
N/A
N/A
Total
4,104
30,845
<100
<100
-4.000
  1 Estimates derive from actual system impacts projected in cost benefit analysis. Will differ from system-level figures discussed earlier in pre-
amble. Reflect all systems having impacts, including those partially impacted.
  Those systems whose current
source(s) will not meet the revised MCL
must either develop a new source,
install new treatment processes, or
enhance their existing treatment
processes. (The impact of developing a
new source are included in the analysis
of the new source requirement.) The
installation, operation, and maintenance
of new treatment technologies will
require a substantial enhancement of
these systems' technical capacity.
Specifically, source water adequacy will
be reduced (marginal sources may no
longer be viable), the system will be
required to greatly enhance its
infrastructure (particularly its treatment
processes) to meet the technical
challenge posed by the revised MCL,
and system operators will require
correspondingly greater technical
expertise to successfully operate new
and more advanced treatment processes.
  The impacts to the managerial
capacity of systems affected by the
revised arsenic MCL are not anticipated
to be as great as the technical and
financial challenges. Nonetheless, many
system managers will need to review the
implications of the revised MCL and
may need to hire a more highly certified
operator or provide additional training
for the existing operator.
  In addition, systems will need to rely
upon and improve their interactions
with the service community and
technical/financial assistance providers.
System management will need to
explain the following issues: (1) The
reason why the arsenic standard was
revised, (2) the safety of the water that
the system provides, and (3) the reason
for new or higher fees. These activities
are in addition to the inclusion of the
health effects language in the CCR and
therefore will impact the managerial
capacity of a system.
                           The impacts of the arsenic rule
                         requirements to the technical capacity
                         of systems are closely tied to financial
                         impacts. Systems that must install
                         additional treatment processes or
                         upgrade their current treatment
                         processes may face significant costs.
                         These costs may be especially difficult
                         for many of the affected systems to
                         absorb since many of them are relatively
                         small (i.e., serving less than 3,300
                         customers), and therefore typically have
                         a smaller revenue base and fewer
                         households over which they may
                         distribute the additional costs. The rule
                         specifically allows the use of centrally
                         managed POU-treatment devices to
                         achieve compliance with the revised
                         arsenic MCL. However, the installation,
                         operation, maintenance,  and
                         management of these devices still
                         represents a substantial expense for
                         small systems.
                           To obtain funding from either public
                         or private sources, systems will need to
                         demonstrate sound financial accounting
                         and budgeting practices,  and the ability
                         to repay their debts. As a result,  many
                         of the smallest systems that do not
                         currently charge  explicitly for water
                         service (e.g., mobile home parks, camp
                         grounds, etc.) may need to begin to bill
                         their customers. Those systems that
                         already charge for water service will
                         likely need to increase their rates
                         (sometimes requiring approval of the
                         local public utilities commission
                         (PUC)), and improve their
                         recordkeeping procedures.
                           EPA anticipates that the revised
                         monitoring and reporting framework
                         will have a relatively limited impact on
                         system capacity even though some
                         CWSs will no longer be eligible for
                         reduced monitoring and others will no
                         longer be able to  composite. NTNCWSs
                         will be required to monitor for arsenic
                         for the first time.  To comply with this
requirement system management will
need to ensure that staff understand the
new requirements, that monitoring
records are properly maintained, and
that the appropriate reports are
provided to the State primacy agency
and EPA. In addition, systems will face
a slight increase in monitoring costs that
may require systems to adjust their
budgeting practices  and fee structures.
Nonetheless, since most systems are
already familiar with the SMF for lOCs,
the impact to capacity is minimal.
  There will be a substantial impact on
capacity for those systems that must
develop a new source to meet the
revised MCL. In addition to the
monitoring requirements specified in
the arsenic proposal, these systems will
expend substantial effort and money to
ensure that their new source(s) will
consistently provide reliable production
of high quality water.
  Removing two currently approved
analytical methods should not have a
large impact on system capacity. Since
similarly priced alternative methods are
available, it was estimated that there
would be little to no impact to the
managerial and financial capacity of
systems that currently rely on this
method (or whose laboratory relies on
this method). A system may need to
ensure that the systems' laboratory uses
an approved method and may need to
ensure that the operator is aware of the
change in approved  analytical methods.
  The requirement for affected systems
(those with arsenic levels above half the
revised MCL) to immediately begin
incorporating health affects language
into their CCRs will  principally impact
the managerial capacity of systems.
Specifically, systems will need to: (1)
incorporate information about arsenic
into their CCRs; (2) explain to the
service community the reason why they
are including such information; (3)

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                                                                     7055
explain the health implications of
current arsenic levels; and potentially,
(4) explain how the system anticipates
meeting the revised MCL. Moreover,
affected systems will also need to
prepare to respond to customer queries
regarding the new arsenic information
and the system's compliance status.
  The arsenic rule will have a
substantial impact on the capacity of the
4,100 CWSs and NTNCWSs that must
reduce arsenic levels or develop new
sources to meet the revised MCL.
However, while the impact to these
systems is significant, only five percent
of all systems regulated under the
Arsenic Rule (4,104 of 74,625) will be
affected by this requirement. The new
monitoring and reporting requirements,
removal of approved analytical
methods, and inclusion of health effects
language in the CCR are expected to
impact the capacity of approximately an
additional 26,000 systems to a small
degree. About 31,000 systems (i.e., 40%
of regulated systems) are expected to
experience minimal impact on their
capacity as a result of the arsenic rule.

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                           Wester, R.C., H.I. Maibach, L:  Sedik,
                         J. Melendres and M. Wade. 1993. In vivo
                         and in vitro percutaneous absorption
                         and skin decontamination of arsenic
                         from water and soil. Fundamental
                         Applied Toxicology 20:336-340.
                           WHO (World Health Organization).
                         1981. Environmental Health Criteria 18
                         Arsenic. United Nations Environment
                         Programme, International Labour
                         Organisation, and the World Health
                         Organization.
                           WHO (World Health Organization).
                         1993. Guidelines for Drinking-Water
                         Quality. Volume 1. Recommendations.
                         World Health Organization. Geneva.
                           WHO (World Health Organization).
                         1998. International Agency for Research
                         on Cancer, World Health Organization,
                         "Cancer Survival in Developing
                         Countries,"  Publication No. 145,1998.
                           Winship,  K.A. 1984. Toxicity  of
                         Inorganic Arsenic Salts. Adverse Drug
                         Reactions and Acute Poisoning Reviews.
                         3:129-160.
                           Wong, O., M.D. Whorton, D.E. Foliart
                         and R. Lowengart. 1992. An ecologic
                         study of skin cancer and environmental
                         arsenic exposure. International Archives
                         Occupational Environmental Health
                         64:235-241.
                           Woods, J.S. and B.A. Fowler. 1977.
                         Environmental Health Perspectives
                         19:209-213.
                           Wu, M.M., T.L. Kuo, Y.H. Hwang and
                         CJ. Chen. 1989. Dose-Response Relation
                         Between Arsenic Concentration  in Well
                         Water and Mortality From Cancers and
 Vascular Diseases. American Journal of
 Epidemiology. 130(6):1123-1132.
  Yost, L.J., R.A. School, and R. Aucoin.
 1998. Intake of inorganic arsenic in the
 north American diet. Human and
 Ecological Risk Assessment: 4(1):137-
 152.
  Yeh, S. 1973. Skin Cancer in Chronic
 Arsenicism. Human Pathology.
 4(4):469-485.
  Zaldivar, R. 1974, Arsenic
 Contamination of Drinking Water and
 Food-Stuffs Causing Endemic Chronic
 Poisoning. Beitr. Pathology. 151:384-
 400.
  Zaldivar, R., L. Prunes and G. Ghai.
 1981. Arsenic Dose in Patients with
 Cutaneous Carcinoma and Hepatic
 Hemangio-Endothelioma After
 Environmental and Occupational
 Exposure. Archives of Toxicology.
 47:145-154.

 List of Subjects

 40 CFR Part 9

  Reporting and recordkeeping
 requirements.

 40 CFR Part 141

  Environmental protection, Chemicals,
 Indian lands, Incorporation by
 reference, Intergovernmental relations,
 Radiation protection, Reporting and
 recordkeeping requirements, Water
 supply.

 40 CFR Part 142

  Environmental protection,
 Administrative practice and procedure,
 Chemicals, Indian lands,
 Intergovernmental relations, Radiation
 protection, Reporting and recordkeeping
 requirements, Water supply.
  Dated: January 16, 2001.
 Carol M. Browner,
 Administrator.

  For reasons stated in the preamble,
 the Environmental Protection Agency
 amends 40 CFR parts 9^141 and 142 as
 follows:

 PART 9—OMB APPROVALS UNDER
 THE PAPERWORK REDUCTION ACT

  1. The authority citation for part 9
 continues to read as follows:
  Authority: 7 U.S.C. 135 et seq., 136-136y;
 15 U.S.C. 2001, 2003, 2005, 2006, 2601-2671;
 21 U.S.C. 331J, 346a, 348; 31 U.S.C. 9701; 33
U.S.C. 1251 etseq., 1311,1313d, 1314, 1318,
 1321,1326-1330,1324, 1344, 1345 (d) and
 (e), 1361; E.G. 11735, 38 FR 21243, 3 CFR,
 1971-1975 Comp. p. 973; 42 U.S.C. 241,
242b, 243, 246, 300f, 300g, 300g-l, 300g-2,
300g-3, 300g-4, 300g-5, 300g-6, 300J-1,
300J-2, 300J-3, 300J-4, 300J-9,1857 etseq.,
6901-6992k, 7401-7671q, 7542, 9601-9657,
11023, 11048.

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              Federal Register/Vol. 66, No. 14/Monday, January 22, 2001/Rules and Regulations
                                                                                    7061
   2. Amend the table in § 9.1 by
 removing the entry for 141.23-141.24
 and adding new entries for 141.23(a)-
 (b), 141.23 (c), and 141.23(d)-141.24 to
 read as follows:

 § 9.1  OMB approvals under the Paperwork
 Reduction Act.
       40 CFR citation
OMB control
    No.
  National Prmary Drinking Water Regulations

 141.23A(a)-(b)	   2040-0090
 141.23(C) 	   2040-0231
 141.23(d)-141.24  	   2040-0090
 PART 141—NATIONAL PRIMARY
 DRINKING WATER REGULATIONS

   1. The authority citation for part 141
 continues to read as follows:
  Authority: 42 U.S.C. 300f, 300g-l, 300g-2,
 300g-3, 300g-4, 300g-5, 300g-6, 300J-4,
 300J-9, and 300J-11.

 Subpart A—[Amended]

 §141.2  [Amended]
   2. In 40 CFR 141.2 revise the
 definition heading for "Point-of-entry
 treatment device" to read "Point-of-
 entry treatment device (POE)", and
 revise the definition heading for "Point-
 of-use treatment device" to read "Point-
 of-use treatment device (POU)".
   3. Amend § 141.6 by revising
 paragraphs (a) and (c), and adding
 paragraphs (j) and (k) to read as follows:

 §141.6  Effective dates.
   (a) Except as provided in paragraphs
 (b) through (k) of this section, and in
 § 141.80(a)(2), the regulations set forth
 in this part shall take effect on June 24,
 1977.
 *****
  (c) The regulations set forth in
 §§141.11(d); 141.21(a), (c) and (i);
 141.22(a) and (e); 141.23(a)(3) and (a)(4);
 141.23(f); 141.24(e) and (f); 141.25(e);
 141.27(a); 141.28(a) and (b); 141.31(a),
 (d) and (e); 141.32(b)(3); and 141.32(d)
 shall take effect immediately upon
 promulgation.
 *****
  (j) The arsenic maximum contaminant
 levels (MCL) listed in § 141.62 is
 effective for the purpose of compliance
 on January 23, 2006.
  Requirements relating to arsenic set
 forth in §§ 141.23(i)(4), 141.23(k)(3)
 introductory text, 141.23(k)(3)(ii),
 141.51(b), 141.62(b), 141.62(b)(16),
 141.62(c), 141.62(d), and 142.62(b)
 revisions in Appendix A of subpart O
 for the consumer confidence rule, and
 Appendices A and B of subpart Q for
 the public notification rule are effective
 for the purpose of compliance on
January 23, 2006. However, the
 consumer confidence rule reporting
requirements relating to arsenic listed in
 § 141.154(b) and (f) are effective for the
purpose of compliance on March 23,
 2001.
  (k) Regulations set forth in
            141.24(0(15), 141.24(f)(22),
            141.24(h)(ll), 141.24(hJ(20), 142.16(e),
            142.16(j), and 142.16(k) are effective for
            the purpose of compliance on January
            22, 2004.

            Subpart B— [Amended]

              4. Amend § 141.11 by revising the
            second sentence of paragraph (a) and
            revising paragraph (b) to read as follows:
 § 141.11  Maximum contaminant levels for
 inorganic chemicals.
   (a) *  * * The analyses and
 determination of compliance with the
 0.05 milligrams per liter maximum
 contaminant level for arsenic use the
 requirements of § 141.23.
   (b) The maximum contaminant level
 for arsenic is 0.05 milligrams per liter
 for community water systems until
 January 23, 2006.
 Subpart C—[Amended]

   5. Amend §141.23 by:
   a. Adding a new entry for "Arsenic"
 in alphabetical order to the table in
 paragraph (a)(4)(i) and adding endnotes
 6, 7 and 8,
   b. Revising paragraphs (a)(5) and (c)
 introductory text,
   c. Adding paragraph (c)(9),
   d. Revising paragraphs (f)(l), (i)(l),
 and (i)(2),
   e.-h. Adding paragraph (i)(4),
   i. Revising the entries for arsenic in
 the table in paragraph (k)(l),
   j. Revising paragraph (k)(2)
 introductory text,
   k. Adding a new entry for "Arsenic"
 in alphabetical  order to the table to
paragraph (k)(2) and revising footnote 1,
   1. Revising the last sentence in
paragraph (k)(3) introductory text, and
  m. Adding a new entry for "Arsenic"
in alphabetical  order to the table in
paragraph (k)(3)(ii).
  The revisions and additions read as
follows:

§ 141.23  Inorganic chemical sampling and
analytical requirements.
  (a) * *  *
  [£\ * *  *
  (i) * * *
                                  DETECTION LIMITS FOR INFORGANIC CONTAMINANTS
Contaminant
Arsenic 	



*
MCL (mg/l)
*
6 0.01



*
Methodology
* * *
Atomic Absorption; Furnace
Atomic Absorption; Platform — Stabilized Temperature 	
Atomic Absorption; Gaseous Hydride 	 	 	
ICP-Mass Spectrometry 	
* * *
Detection Limit
(mg/l)
* *
0001
	 7Q 0005
	 0 001
	 800014
* *
  6 The value for arsenic is effective January 23, 2006. Unit then, the MCL is 0.05 mg/L.
  7The MDL reported for EPA method 200.9 (Atomic Absorption; Platform—Stablized Temperature) was determined using a 2x concentration
step during sample digestion. The MDL determined for samples analyzed using direct analyses (i.e., no sample digestion) will be higher. Using
multiple depositions, EPA 200.9 is capable of obtaining MDL of 0.0001 mg/L
  8 Using selective ion monitoring, EPA Method 200.8 (ICP-MS) is capable of obtaining a MDL of 0.0001 mg/L.
  (5) The frequency of monitoring for
asbestos shall be in accordance with
paragraph (b) of this section: the
           frequency of monitoring for antimony,
           arsenic, barium, beryllium, cadmium,
           chromium, cyanide, fluoride, mercury,
           nickel, selenium and thallium shall be
                                       in accordance with paragraph (c) of this
                                       section; the frequency of monitoring for.
                                       nitrate shall be in accordance with
                                       paragraph (d) of this section; and the

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7062
Federal Register/Vol. 66,  No. 14/Monday, January 22, 2001/Rules  and  Regulations
frequency of monitoring for nitrite shall
be in accordance with paragraph (e) of
this section.
  (c) The frequency of monitoring
conducted to determine compliance
with the maximum contaminant levels
in § 141.62 for antimony, arsenic,
barium, beryllium, cadmium,
chromium, cyanide, fluoride, mercury,
nickel, selenium and thallium shall be
as follows:
*****

  (9) All new systems or systems that
use a new source of water that begin
operation after January 22, 2004 must
demonstrate compliance with the MCL
within a period of time specified by the
State. The system must also comply
with the initial sampling frequencies
specified by the State to ensure a system
can demonstrate compliance with the
MCL. Routine and increased monitoring
frequencies shall be conducted in
accordance with the requirements in
this section.
   ffl
                             (1) Where the results of sampling for
                          antimony, arsenic, asbestos, barium,
                          beryllium, cadmium, chromium,
                          cyanide, fluoride, mercury, nickel,
                          selenium or thallium indicate an
                          exceedance of the maximum
                          contaminant level, the State may require
                          that one additional sample be collected
                          as soon as possible after the initial
                          sample was taken (but not to exceed two
                          weeks) at the same sampling point.
                          *****
                             (i) * *  *
                             (1) For systems which are conducting
                          monitoring  at a frequency greater than
                          annual, compliance with the maximum
                          contaminant levels for antimony,
                          arsenic, asbestos, barium, beryllium,
                          cadmium, chromium, cyanide, fluoride,
                          mercury, nickel, selenium or thallium is
                          determined by a running annual average
                          at any sampling point. If the average at
                          any sampling point is greater than the
                          MCL, then the system is out of
                          compliance. If any one sample would
                          cause the annual average to be
                          exceeded, then the system is out of
                          compliance immediately. Any sample
                          below the method detection limit shall
                          be calculated at zero for  the purpose of
determining the annual average. If a
system fails to collect the required
number of samples, compliance (average
concentration) will be based on the total
number of samples collected.
  (2) For systems which are monitoring
annually, or less frequently, the system
is out of compliance with the maximum
contaminant levels for antimony,
arsenic, asbestos, barium, beryllium,
cadmium, chromium, cyanide, fluoride,
mercury, nickel, selenium or thallium if
the level of a contaminant is greater
than the MCL. If confirmation samples
are required by the State, the
determination of compliance will be
based on the annual average of the
initial MCL exceedance and any State-
required confirmation samples. If a
system fails to collect the required
number of samples, compliance (average
concentration) will be based on the total
number of samples collected.
*,****
  (4) Arsenic sampling results will be
reported to the nearest 0.001 mg/L.
*****
  (k) *  *  *
  (D*
               Contaminant and methodology13
                                                            EPA
                                                                      ASTM a
                                                                                   SM4
                                                                                                      Other
 Arsenic14:
    Inductively Coupled Plasma is	     2200.7  	   153120B
    ICP-Mass Spectrometry	     2200.8  	
    Atomic Absorption; Platform 	     2200.9  	
    Atomic Absorption; Furnace	    D-2972-93C     3113B
    Hydride Atomic Absorption 	    D-2972-93B     3114B
  a "Methods for the Determination of Metals in Environmental Samples-Supplement I", EPA-600/R-94-111, May 1994. Available at NTIS, PB
 95-125472.
  a Annual Book of ASTM Standards, 1994 and 1996, Vols. 11.01 and 11.02, American Society for Testing and Materials. The previous versions
 of D1688-95A, D1688-95C (copper), D3559-95D (lead], D1293-95 (pH), D1125-91A (conductivity) and D859-94 (silica) are also approved.
 These previous versions D1688-90A, C;  D3559-90D, D1293-84, D1125-91A and  D859-88, respectively are located in the Annual Book of
 ASTM Standards, 1994, Vols. 11.01. Copies  may be obtained from the American Society for Testing and Materials, 100 Barr Harbor Drive, West
 Conshohocken, PA 19428.                                                                              .   ,
  418th and 19th editions of Standard Methods for the Examination of Water and Wastewater, 1992 and 1995, respectively, American Public
 Health Association; either edition may be used. Copies may be obtained from the American Public Health Association,  1015 Fifteenth Street
 NW., Washington, DC 20005.
  •       •       *       *     *
  "Because MDLs reported in EPA Methods 200.7 and 200.9 were determined using  a 2X preconcentration step during sample digestion,
 MDLs determined when samples are analyzed by direct analysis (i.e., no sample digestion) will be higher. For direct analysis of cadmium and ar-
 senic by Method 200.7, and arsenic by Method 3120 B sample preconcentration using pneumatic nebulization may be required to achieve lower
 detection limits. Preconcentration may also be required for direct analysis of antimony, lead, and thallium by Method 200.9; antimony and lead by
 Method 3113 B; and lead by Method D3559-90D unless multiple in-furnace depositions are made.
  •<4lf ultrasonic nebulization is used in the determination of arsenic by Methods 200.7, 200.8, or SM 3120 B, the arsenic  must be in the penta-
 valent state to provide  uniform signal response. For methods 200.7 and 3120 B, both samples and standards must be diluted in the same mjxed
 acid matrix concentration of nitric and hydrochloric acid with the addition of 100 nL of 30% hydrogen peroxide per 100ml of solution. For direct
 analysis of arsenic with method 200.8 using ultrasonic nebulization, samples and standards must contain one mg/L of sodium hypochlorite.
  1sAfter January 23, 2006 analytical methods using the ICP-AES technology, may not be used because the detection limits for these methods
 are 0.008 mg/L or higher. This  restriction means that the two ICP-AES methods (EPA Method 200.7 and SM 3120 B) approved for use for the
 MCL of 0.05 mg/L may not be used for compliance determinations for the revised MCL of  0.01 mg/L. However, prior to 2005 systems may have
 compliance samples analyzed with these less sensitive methods.

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             Federal Register/Vol. 66, No. 14/Monday,  January 22,  2001/Rules  and Regulations
                                                                       7063
  (2) Sample collection for antimony,
arsenic, asbestos, barium, beryllium,
cadmium, chromium, cyanide, fluoride,
mercury, nickel, nitrate, nitrite,
selenium, and thallium under this
section shall he conducted using the
sample preservation, container, and
maximum holding time procedures
specified in the table below:
Contami-
nant
*
Arsenic

*
Preserva-
tive1
* *
Cone
HMOs to
pH<2.
Con-
tainer2
*
PorG

*
Time3
*
6 months

•
  1For cyanide determinations-samples must
be adjusted with sodium hydroxide to pH 12 at
the time off collection, when chilling  is indi-
cated the sample must be shipped and stored
at 4°C or less. Acidification of nitrate or metals
samples may be with a concentrated acid or a
dilute (50% by volume) solution of the applica-
ble concentrated acid. Acidification of samples
for metals analysis is encouraged and allowed
at the  laboratory rather than at the time of
sampling provided the shipping time and other
instructions in Section 8.3  of EPA Methods
200.7 or 200.8 or 200.9 are followed.
  2P = plastic, hard or soft; G = glass, hard or
soft.
  3 In  all cases samples should be analyzed
as soon after collection as possible.  Follow
additional (if any) information on preservation,
containers or holding times that is specified in
method.
   (3) *  * * To receive certification to
 conduct analyses for antimony, arsenic,
 asbestos, barium, beryllium, cadmium,
 chromium, cyanide, fluoride, mercury,
 nickel, nitrate, nitrite and selenium and
 thallium, the laboratory must:
 *****         •
   (ii)*  *  *

  Contaminant        Acceptance limit
 Arsenic	  ±30 at S0.003 mg/L
   6. Amend § 141.24 by:
   a. Adding a new sentence to the end
 of paragraph (f)(15) introductory text,
   b. Revising paragraphs (f)(15Ki) and
 (f)(15)(ii) and adding new paragraphs
 (f)(15)(iii) through (f)(15)(v),
   c. Adding paragraph (f)(22),
   d. Adding a new sentence to the end
 of paragraph (h)(ll) introductory text,
   e. Revising paragraphs (h)(ll)(i) and
 (h)(ll)(ii) and adding new paragraphs
 (h)(ll)(iii) through (h)(ll)(v), and
   f. Adding paragraph (h)(20).
   The revisions and additions read as
 follows:
§ 141.24 Organic chemicals other than
total trihalomethanes, sampling and
analytical methods.
  [f)*  * *
  (15) * *  * If one sampling point is in
violation of an MCL, the system is in
violation of the MCL.
  (i) For systems monitoring more than
once per year, compliance with the MCL
is determined b'y a running annual
average at each sampling point.
  (ii) Systems monitoring annually or
less frequently whose sample result
exceeds the MCL must begin quarterly
sampling. The system will not be
considered in violation of the MCL until
it has completed one year of quarterly
sampling.
  (iii) If any sample result will cause the
running annual average to exceed the
MCL at any sampling point,  the system
is out of compliance with the MCL
immediately.
 . (iv) If a system fails to collect the
required number of samples,
compliance will be based on the total
number of samples collected.
  (v) If a sample result is less than the
detection limit, zero will be  used to
calculate the annual average.
*     *     *    *     *
  (22) All new systems or systems that
use a new source of water that begin
operation after January 22, 2004 must
demonstrate compliance with the MCL
within a period of time specified by the
State. The system must also  comply
with the initial sampling frequencies
specified by the State to ensure a system
can demonstrate compliance with the
MCL. Routine and increased monitoring
frequencies shall be conducted in
accordance with the requirements in
this section.
*****
   (h)* * *
   (11)* *  * If one sampling point is in
violation of an MCL, the system is in
violation of the MCL.
   (i) For systems monitoring more than
once per year, compliance with the MCL
is determined by a running annual
average at each sampling point.
   (ii) Systems monitoring annually or
less frequently whose sample result
exceeds the regulatory detection level as
defined by paragraph (h)(18) of this
section must begin quarterly sampling.
The system will not be considered in
violation of the MCL until it has
 completed one year of quarterly
 sampling.
   (iii) If any sample result will cause the
 running annual average to exceed the
 MCL at any sampling"point, the system
 is out of compliance with the MCL
 immediately.
   (iv) If a system fails to collect the
 required number of samples,
compliance will be based on the total
number of samples collected.
  (v) If a sample result is less than the
detection limit, zero will be used to
calculate the annual average.
*****
  (20) All new systems or systems that
use a new source of water that begin
operation after January 22, 2004 must
demonstrate compliance with the MCL
within a period of time specified by the
State. The system must also comply
with the initial sampling frequencies
specified by the State to ensure a system
can demonstrate compliance with the
MCL. Routine and increased monitoring
frequencies shall be conducted in
accordance with the requirements in
this section.

Subpart F—[Amended]

  7. Amend the table in § 141.51(b) by
adding a new entry for "Arsenic" in
alphabetical order and adding a new
endnote to read as follows:

§ 141.51  Maximum contaminant level goals
for inorganic contaminants.
*****
  (b) *  * *
     Contaminant
MCLG (mg/L)
 Arsenic  	  zero1
     *       *        *       *    *

  1 This  value for arsenic is effective January
 23, 2006. Until then, there is no MCLG.

 Subpart G—[Amended]

  8. Amend § 141.60 by adding
 paragraph (b)(4) to read as follows:

 § 141.60  Effective dates.
 *****
  (b) *  * *
  (4) The effective date for
 § 141.62(b)(16) is January 23, 2006.
  9. Amend §141.62 by:
  a. Revising the first sentence of
 paragraph (b) introductory text,
  b. Adding a new entry "(16)" for
 arsenic to the table in paragraph (b),
  c. Adding a new entry for "Arsenic"
 in alphabetical order, adding new
 endnotes 4  and 5, adding a new item 12
 and revising items 2 and 6 to list of
 "Key to BATs in Table" and revising the
 heading to the table in paragraph (c),
   d. Adding paragraph (d).
   The revisions and additions read as
 follows:

 § 141.62 Maximum Contaminant Levels for
 inorganic contaminants.
 *****
   (b) The maximum contaminant levels
 for inorganic contaminants specified in

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 7064
Federal Register/Vol. 66, No. 14/Monday, January 22,  2001/Rules  and  Regulations
 paragraphs (b) (2)-(6), (b)(10), and (b)
 (11}-(16) of this section apply to
 community water systems and non-
 transient, non-community water
 systems. *  *  *
                             BAT   FOR   INORGANIC   COM-
                             POUNDS  LISTED  IN  SECTION
                             141.62(8)
                              Chemical Name
                                                     BAT(s)
      Contaminant
           MCL (mg/L)
 (16) Arsenic	  0.01

   (c) * *  *
                                         Arsenic4	  1, 2, 5, 6, 7, 9,125
                            4 BATs for Arsenic V. Pre-oxidation may be
                          required to convert Arsenic III to Arsenic V.
                            sTo obtain high  removals, iron to arsenic
                          ratio must be at least 20:1.

                          Key to BATs in Table
                          1 = Activated Alumina
                          2 = Coagulation/Filtration (not BAT for
                            systems < 500 service connections)
 5 = Ion Exchange
 6 = Lime Softening (not BAT for systems
   < 500 service connections)
 7 = Reverse Osmosis
 *****

 9 = Electrodialysis
 *****

 12 = Oxidation/Filtration
 *****

   (d) The Administrator, pursuant to
 section 1412 of the Act, hereby
 identifies in the following table the
 affordable technology, treatment
 technique, or other means available to
 systems serving 10,000 persons or fewer
 for achieving compliance with the
 maximum contaminant level for arsenic:
                         SMALL SYSTEM COMPLIANCE TECHNOLOGIES (SSCTs)1 FOR ARSENIC 2
               Small system compliance technology
                                                        Affordable for listed small system categories3
 Activated Alumina (centralized)	
 Activated Alumina (Point-of-Use)4 ...,
 Coagulation/Filtration 5	,
 Coagulation-assisted Microfiltration ..,
 Electrodialysis reversal8	,
 Enhanced coagulation/filtration 	
 Enhanced lime softening (pH> 10.5).
 Ion Exchange	
 Lime Softenings 	
 Oxidation/Filtration7	
 Reverse Osmosis (centralized)6	
 Reverse Osmosis (Point-of-Use)4 ....
                                              All size categories.
                                              All size categories.
                                              501-3,300, 3,301-10,000.
                                              501-3,300, 3,301-10,000.
                                              5p1-3,300, 3,301-10,000.
                                              All size categories
                                              All size categories.
                                              All size categories.
                                              501-3,300, 3,301-10,000.
                                              All size categories.
                                              501-3,300,3,301-10,000.
                                              All size categories.
  'Section 1412(b)(4)(E)(ii) of SDWA specifies that SSCTs must be affordable and technically feasible for small systems.
  2SSCTs for Arsenic y. Pre-oxidation may be required to convert Arsenic III to Arsenic V.
  3The Act (ibid.) specifies three categories of small systems: (i) those serving 25 or more, but fewer than 501, (ii) those servinq more than 500
but fewer than 3,301, and (iii) those serving more than 3,300, but fewer than 110,001.
  «When POU or POE devices are used for compliance, programs to ensure proper long-term operation,  maintenance, and monitorinq must be
provided by the water system to ensure adequate performance.
  ^Unlikely to be installed solely for arsenic removal. May require pH adjustment to optimal range if high removals are needed.
  ^Technologies reject a large volume of water—may not be appropriate for areas where water quantity may be an issue.
  7To obtain high removals, iron to arsenic ratio must be  at least 20:1.
Subpart O—[Amended]

  10. Amend § 141.154 by revising
paragraph (b) and adding paragraph (f)
to read as follows:

§ 141.154  Required additional health
Information.
*****
  (b) Ending in the report due by July
1, 2001, a system which detects arsenic
at levels  above 0.025 mg/L, but below
the 0.05 mg/L, and beginning in the
report due by July 1, 2002, a system that
detects arsenic above 0.005 mg/L and up
to and including 0.01 mg/L:
  (1) Must include in its report a short
informational statement about arsenic,
                          using language such as: While your
                          drinking water meets EPA's standard for
                          arsenic, it does contain low levels of
                          arsenic. EPA's standard balances the
                          current understanding of arsenic's
                          possible health effects against the costs
                          of removing arsenic from drinking
                          water. EPA continues to research the
                          health effects of low levels of arsenic,
                          which is a mineral known to cause
                          cancer in humans at high concentrations
                          and is linked to other health effects such
                          as skin damage and circulatory
                          problems.
   (2) May write its own educational
statement, but only in consultation with
the Primacy Agency.
*****
   (f) Beginning in the report due by July
1, 2002 and ending January 22, 2006, a
community water system that detects
arsenic above 0.01 mg/L and up to and
including 0.05 mg/L must include the
arsenic health effects language
prescribed by Appendix A to Subpart O.
   11. Amend Appendix A to Subpart O
by revising the entry for arsenic under
"Inorganic contaminants:" and adding
an endnote to read as follows:

Appendix A to Subpart O—Regulated
Contaminants

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                Federal Register/Vol.  66, No. 14/Monday,  January 22, 2001/Rules and Regulations
                                                                                      7065

Contaminant
(units)


Traditional
MCL
in mg/L

To
convert
for
CCR,
multiply
by

MCL in . .„. ~
CCR units MCLG


Major Sources
in
drinking water


Health effects language

 Inorganic contaminants:
         *


     Arsenic (ppb)	
10.01         1000         MO           10  Erosion of natural depos-
                                              its; Runoff from or-
                                              chards; Runoff from
                                              glass and electronics
                                              production wastes.
                                                                                                     Some people who drink
                                                                                                      water containing arsenic
                                                                                                      in excess of the MCL
                                                                                                      over many years could
                                                                                                      experience skin damage
                                                                                                      or problems with their
                                                                                                      circulatory system, and
                                                                                                      may have an increased
                                                                                                      risk of getting cancer.
   1. These arsenic values are effective
 January 23, 2006. Until then, the MCL is 0.05
 mg/L and there is no MCLG.

 Subpart Q—[Amended]

   12. Amend Appendix A to Subpart Q
 by:
            a. Revising the entry for "2. Arsenic"
          under "B. Inorganic Chemicals (IOCs)",
            b. Redesignating endnotes 8 through
          17 as endnotes 10 through 19 in the
          table and at the end of the table, and
            c. Adding endnotes 8 and 9.
            The revisions and additions read as
          follows:
 Appendix A to Subpart Q—NPDWR
 Violations and Other Situations
 Requiring Public Notice1
                                                                     MCL/MRDL/TT violations2
                           Contaminant
                                                                                                Monitoring & testing procedure
                                                                                                         violations
                                                                   Tier of public
                                                                   notice required
                                                    Citation
                                                                Tier of public
                                                                notice required
                                                                                                                 Citation
 B. Inorganic Chemicals (IOCs).
        *                 *


 2. Arsenic 	
                                                                                    8141.62(b)
                                                                           3  9141.23(a), (c)
Appendix A—Endnotes

  1. Violations and other situations not listed
in this table (e.g., reporting violations and
failure to prepare Consumer Confidence
Reports), do not require notice, unless
otherwise determined by the primacy agency.
Primacy agencies may, at their option, also
require a more stringent public notice tier
(e.g., Tier 1 instead of Tier 2 or Tier 2 instead
of Tier 3) for specific violations and
situations listed in this Appendix, as
authorized under § 141.202(a) and
§141.203(aJ.
            2. MCL-Maximum contaminant level,
          MRDL-Maximum residual disinfectant level,
          TT-Treatment technique.
          *****
            8. The arsenic MCL citations are effective
          January 23, 2006. Until then, the citations are
          § 141.11(b) and § 141.23(n).
            9. The arsenic Tier 3 violation MCL
          citations are effective January 23, 2006. Until
          then, the citations are § 141.23(a), (1).
          *****

            13. Amend Appendix B to Subpart Q
          by:
  a. Revising entry "9. Arsenic" under
"C. Inorganic chemicals (IOCs)",
  b. Redesignating endnotes 11 through
21 as endnotes 12 through 22 in the
table and at the end of the table, and
  c. Adding endnote 11.
  The revisions and additions read as
follows:

Appendix B to Subpart Q—Standard
Health Effects Language for Public
Notification
          Contaminant
                                  MCLG1 mg/L    MCL2 mg/L
                                     Standard health effects language for public notification
9. Arsenic11
                                                        0.01  Some people who drink water containing arsenic in excess of the MCL
                                                                over many years could experience skin damage or problems with
                                                                their circulatory system, and may have an increased risk of getting
                                                                cancer.

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7066
Federal Register/Vol.  66,  No. 14/Monday, January 22, 2001/Rules and Regulations
          Contaminant
                  MCLG1 mg/L    MCL2 mg/L
                                                                 Standard health effects language for public notification
Appendix B—Endnotes
  1. MCLG-Maximum contaminant level
goal.
  2. MCL-Maximum contaminant level.
*****
  11. These arsenic values are effective
January 23,2006. Until then, the MCL is 0.05
mg/L and there is no MCLG.
PART 142—NATIONAL PRIMARY
DRINKING WATER REGULATIONS
IMPLEMENTATION

  1. The authority citation for part 142
continues to read as follows:
  Authority: 42 U.S.C. 300f, 300g-l, 300g-2,
300g-3, 300g-4, 300g-5, 300g-6, 300J-4,
300J-9, and 300J-11.

Subpart B—[Amended]

  2. Amend § 142.16 by revising
paragraph (e) introductory text,
reserving paragraph (i), and adding
paragraphs (j) and (k) to read as follows:

§142.16  Special primacy requirements.
*****
  (e) An application for approval of a
State program revision which adopts the
requirements specified in §§ 141.11,
141.23,141.24,141.32,141.40,141.61
and 141.62 for a newly regulated
contaminant must contain the following
(in addition to the general primacy
requirements enumerated elsewhere in
this part, including the requirement that
State regulations he at least as stringent
as the federal requirements):
*****
  (i) [reserved]
  (j) An application for approval of a
State program revision which adopts the
requirements specified in §§ 141.11,
141.23,141.24,141.32,141.40,141.61
and 141.62 for an existing regulated
contaminant must contain the following
(in addition to the general primacy
requirements enumerated elsewhere in
this part, including the requirement that
                          State regulations be at least as stringent
                          as the federal requirements):
                           (1) If a State chooses to issue waivers
                          from the monitoring requirements in
                          §§ 141.23,141.24, and 141.40, the State
                          shall describe the procedures and
                          criteria which it will use to review
                          waiver applications and issue wavier
                          determinations. The State shall provide
                          the same information required in
                          paragraph (e)(l)(i) and (ii) of this
                          section. States may update their existing
                          waiver criteria or use the requirements
                          submitted under the National Primary
                          Drinking Water Regulations for the
                          inorganic and organic contaminants
                          (i.e., Phase H/V rule) in 16(e) of this
                          section. States may simply note in their
                          application any revisions to existing
                          waiver criteria or note that the same
                          procedures to issue waivers will be
                          used.
                            (2) A monitoring plan by which the
                          State will ensure all systems complete
                          the required monitoring by the
                          regulatory deadlines. States may update
                          their existing monitoring plan or use the
                          same monitoring plan submitted under
                          the National Primary Drinking Water
                          Regulations for the inorganic and
                          organic contaminants (i.e. Phase II/V
                          rule) in 16(e) of this section. States may
                          simply note in their application any
                          revisions to an existing monitoring plan
                          or note that the same monitoring plan
                          will be used. The State must
                          demonstrate that the monitoring plan is
                          enforceable under State law.
                            (k) States establish the initial
                          monitoring requirements for new
                          systems and new sources. States must
                          explain their initial monitoring
                          schedules and how these monitoring
                          schedules ensure that public water
                          systems and sources comply with MCL's
                          and monitoring requirements. States
                          must also specify the time frame in
                          which new systems will demonstrate
                          compliance with the MCLs.
  3. Amend the table in § 142.62(b) by
adding a new entry for "Arsenic" in
alphabetical order, adding new
endnotes 4 and 5, adding a new item 12
to list of "Keys to BATs in Table" and
revising the heading to the table in
paragraph (b) to read as follows:

§ 142.62 Variances and exemptions from
the maximum contaminant levels for
organic and inorganic chemicals.
*    *    *    *  -  *

  (b) * *  *

  BAT FOR INORGANIC COMPOUNDS
        LISTED IN §141.62(6)
 Chemical name
  BAT(s)
Arsenic4 ,
51,2,5,6,7,9, 12
  4 BATs for Arsenic V. Pre-oxidation may be
required to convert Arsenic 111 to Arsenic V.
  5 To obtain high removals, iron to arsenic
ratio must be at least 20:1.
Key to BATs in Table

1 = Activated Alumina
2 = Coagulation/Filtration (not BAT for
  systems < 500 service connections)
*****

5 = Ion Exchange
6 = Lime Softening (not BAT for systems
  < 500 service connections)
7 = Reverse Osmosis
*****

9 = Electrodialysis
*****

12 = Oxidation/Filtration
*****
[FR Doc. 01-1668 Filed 1-19-01; 8:45 am]
BILLING CODE 6560-50-P

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