#53.2-0'  oof
Friday,

January 12, 2001
Part H



Environmental

Protection Agency

40 CFR Parts 122 and 412
National Pollutant Discharge Elimination
System Permit Regulation and Effluent
Limitations Guidelines and Standards for
Concentrated Animal Feeding Operations;
Proposed Rule

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2960
Federal  Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Parts 122 and 412
[FRL-6921-4]
RIM 204O-AD19

National Pollutant Discharge
Elimination System Permit Regulation
and Effluent Limitations Guidelines
and Standards for Concentrated
Animal Feeding Operations

AGENCY: Environmental Protection
Agency (EPA).
ACTION: Proposed rule.

SUMMARY: Today the Environmental
Protection Agency proposes to revise
and update two regulations that address
the impacts of manure, wastewater, and
other process waters generated by
concentrated animal feeding operations
(CAFOs) on water quality. These two
regulations are the National Pollutant
Discharge Elimination System (NPDES)
provisions that define which operations
are CAFOs and establish permit
requirements, and the Effluent
Limitations Guidelines for feedlots
(beef, dairy, swine and poultry
subcategories), which establish the
technology-based effluent discharge
standards for CAFOs. EPA is proposing
revisions to these regulations to address
changes that have occurred in the
animal industry sectors over the last 25
years, to clarify and improve
implementation of CAFO permit
requirements, and to improve the
environmental protection achieved
under these rules.
  Environmental concerns being
addressed by this rule include both
ecological and human health effects.
Manure from stockpiles, lagoons, or
excessive land application can reach
waterways through runoff, erosion,
                    spills, or via groundwater. These
                    discharges can result in excessive
                    nutrients (nitrogen, phosphorus, and
                    potassium), oxygen-depleting
                    substances, and other pollutants in the
                    water. This pollution can kill fish and
                    shellfish, cause excess algae growth,
                    harm marine mammals, and
                    contaminate drinking water.
                      Today's action co-proposes two
                    alternatives for how to structure the
                    revised NPDES program for CAFOs; the
                    alternatives offer comparable
                   . environmental benefits but differ in
                    their administrative approach. EPA also
                    requests comment on two other
                    alternatives that the Agency is
                    considering and may pursue after
                    evaluating the comments.
                      EPA is also proposing to revise
                    effluent guidelines applicable to beef,
                    dairy, swine, and poultry operations
                    that are defined as CAFOs, pursuant to
                    the NPDES revisions. The proposed
                    effluent guidelines include regulations
                    for both new and existing animal
                    feeding operations that meet the
                    definition of a CAFO. Today's effluent
                    guidelines revisions do not alter the
                    requirements for horses, ducks, sheep or
                    lambs.
                    DATES: Comments must be received or
                    postmarked on or before midnight May
                    2, 2001.
                    ADDRESSES: Public comments regarding
                    this proposed rule should be submitted
                    by mail to: Concentrated Animal
                    Feeding Operation Proposed Rule,
                    Office of Water, Engineering and
                    Analysis Division (4303), USEPA, 1200
                    Pennsylvania Avenue, NW.,
                    Washington, DC 20460. Hand deliveries
                    (including overnight mail) should be
                    submitted to the Concentrated Animal
                    Feeding Operation Proposed Rule,
                    USEPA, Waterside Mall, West Tower,
                    Room 611, 401 M Street, SW.,
                    Washington, DC 20460. You also may
submit comments electronically to
CAFOS.comments@epa.gov. Please
submit any references cited in your
comments. Please submit an original
and three copies of your written
comments and enclosures. For
additional information on how to
submit comments, see "SUPPLEMENTARY
INFORMATION, How May I Submit
Comments?"

FOR FURTHER INFORMATION CONTACT: For
additional technical information contact
Karen Metchis or Jan Goodwin at (202)
564-0766.

SUPPLEMENTARY INFORMATION:

What Entities Are Potentially Regulated
by This Action?

  This proposed rule would apply to
new and existing animal feeding
operations that meet the definition of a
concentrated animal feeding operation,
or which are designated by the
permitting authority as such.
Concentrated animal feeding operations
are defined by the Clean Water Act as
point sources for the purposes of the
NPDES program. (33 U.S.C. § 1362).
  The following table lists the types of
entities that are potentially subject to
this proposed rule. This table is not
intended to be exhaustive, but rather
provides a guide for readers regarding
entities likely to be regulated by this
action. Other types of entities not listed
in the table could also be regulated. To
determine whether your facility would
be regulated by this action, you should
carefully examine the applicability
criteria proposed at § 122.23(a)(2) of the
rule. If you have questions regarding the
applicability of this action to a
particular entity, consult one of the
persons listed for technical information
in the preceding FOR FURTHER
INFORMATION CONTACT section.
Category
Federal, State and Local
Government
Industry 	












Examples of regulated entities

Operators of animal production operations that meet
the definition of a concentrated animal feeding oper-
ation.
Beef cattle feedlots 	
Hogs 	 .• 	
Sheep and goats 	
General livestock, except dairy and poultry 	
Dairy farms 	
Broilers, fryers, and roaster chickens 	
Chicken eggs 	 	
Turkey and turkey eggs
Poultry hatcheries 	 	
Poultry and eggs NEC 	 	
Ducks 	 . .
Horses and other eauines 	
North American Industry
Code
(NAIC)
See below 	
112112 	
11221 	
1241, 11242 	
11299 	
112111, 11212 	
11232 	
11231 	
11233
11234 	
1 1239 	
1 12390 	
11292 	
Standard Industrial
Classification Codes
See below
0211
0213
0214
0219
0241
0251
0252
0253
0254
0259
0259
0272

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Federal Register /Vol.  66, No.  9 /Friday, January 12, 2001 /Proposed Rules
                                                                                                                  2961

Category



Examples of regulated entities
Meat packing or poultry processing companies that
may be a potential co-permittee because of sub-
stantial operational control over a CAFO. .
Owners or operators of crop .production operations
that may receive CAFO manure for use as a fer-
tilizer substitute.
Crop Production 	 	 	 	 • 	

North American Industry
Code
(NAIC)
31 16 	 	 	
111 	 .-. 	

Standard Industrial
Classification Codes
02
01
How May I Review the Public Record?
  The record (including supporting
documentation) for this proposed rule is
filed under docket number OW-00-27
(proposed rule). The record is available
for inspection from 9 a.m. to 4 p.m. on
Monday through Friday, excluding legal
holidays, at the Water Docket, Room EB
57, USEPA Headquarters, 401M Street,
SW, Washington, DC 20460. For access
to docket materials, please call (202)
260-3027 to schedule an appointment
during the hours of operation stated
above.
How May I Submit Comments?
   To ensure that EPA can read,
understand, and therefore properly
respond to comments, the Agency
requests that you cite, where possible,
the paragraph(s) or sections in the
preamble, rule, or supporting
documents to which each comment
refers. You should use a separate
paragraph for each issue discussed.
   If you want EPA to acknowledge
receipt of your comments, enclose a
self-addressed, stamped envelope. No
faxes will be accepted. Comments may
also be submitted electronically to
CAFOS.comments@epa.gov. Electronic
comments must be submitted as an
ASCII, WordPerfect 5.1, WP6.1, or WPS
file avoiding the use of special
characters and forms of encryption.
Electronic comments must be identified
by the docket number OW-00-27. EPA
will accept comments and  data on disks
 in WordPerfect 5.1, 6.1, or  8 format or
 in ASCII file format. Electronic
 comments on this notice may be filed
 on-line at many Federal depository
 libraries.
 Table of Contents
 I. Legal Authority.
 II. Purpose and Summary of the Proposed
   Regulation.
 III. Background.
   A. The Clean Water Act.
   B. History of EPA Actions to Address
     CAFOs..
   C. Which Requirements Apply to CAFOs.
   D. How Do Today's Proposed Revisions
     Compare to the Unified National AFO
     Strategy?
                      IV. Why is EPA Changing the Effluent
                        Guidelines for Feedlots and the NPDES
                        CAFO Regulations?
                        A. Main Reasons for Revising the Existing
                          Regulations.
                        B. Water Quality Impairment Associated
                          with Manure Discharge and Runoff.
                        C. Recent Changes in the Livestock and
                          Poultry Industry.
                        D. Improve Effectiveness of Regulations.
                      V. What Environmental and Human Health
                        Impacts are Potentially Caused by CAFOs?
                        A. Which Pollutants Do CAFOs Have the
                          Potential to Discharge and Why are They
                          of Concern?
                        B. How Do These Pollutants Reach Surface
                          Waters?
                        C. What are the Potential and Observed
                          Impacts?
                      VI.  What are Key Characteristics of the
                        Livestock and Poultry Industries?
                        A. Introduction and Overview.
                        B. Beef Subcategory.
                        C. Dairy Subcategory.
                        D. Hog Subcategory.
                        E. Poultry Subcategory.
                      VII. What Changes to the NPDES CAFO
                        Regulations are Being Proposed?
                        A. Summary of Proposed NPDES
                          Regulations.
                        B. What Size AFOs Would be Considered
                          CAFOs?
                        C. Changes to the NPDES Regulations.
                        D. Land Application of CAFO-generated
                          Manure.
                        E. What are the Terms of an NPDES
                          Permit?
                        F. What Type of NPDES Permit is
                          Appropriate for CAFOs?
                      VIII.What Changes to the Feedlot Effluent
                        Limitations Guidelines are Being
                        Proposed?
                        A, ~
                        B
                          Applicability.
                        C. Changes to Effluent Limitations and
                          Standards.
                       IX. Implementation of Revised Regulations.
                        A. How do the Proposed Changes Affect
                          State CAFO Programs?
                        B. How Would EPA's Proposal to Designate
                          CAFOs Affect NPDES Authorized States?
                        C. How and When Will the Revised
                          Regulations be Implemented?
                         D. How Many CAFOs are Likely to be
                          Permitted in Each State and EPA Region?
                         E. Funding Issues.
                         F. What Provisions are Made for Upset and
                          Bypass?
                         G. How Would an Applicant Apply for
                          Variances and Modifications to Today's
                          Proposed Regulation?
X. What are the Costs and Economic Impacts
  of the Proposed Revisions?
  A. Introduction and Overview.
  B. Data Collection Activities.
  C. Method for Estimating Compliance
    Costs.
  D. Method for Estimating Economic
    Impacts.
  E. Estimated Annual Costs of the Proposed
    Regulatory Options/Scenarios.
  F. Estimated Economic Impacts of the
    Proposed Regulatory Options/Scenarios.
  G. Additional Impacts.
  H. Cost-Effectiveness Analysis.
  I. Cost-Benefit Analysis.
  J. Initial Regulatory Flexibility Analysis.
XI. What are the Environmental Benefits of
  the Proposed Revisions?
  A. Non-Water Quality Environmental
    Impacts.
  B. Quantitative and Monetized Benefits.
XII. Public Outreach.
  A. Introduction and Overview.
  B. Joint USDA/EPA Unified AFO Strategy
    Listening Sessions.
  C. Advisory Committee Meeting.
  D. Farm Site Visits.
  E. Industry Trade Associations.
  F. CAFO Regulation Workgroup.'
  G. Small Business Advocacy Review Panel.
XIII. Administrative 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.
  D. Executive Order 13045: "Protection of
    Children from Environmental Health
    Risks and Safety Risks".
  E. Executive Order 13084: Consultation
    and Coordination with Indian Tribal
    Governments.
  F. Paperwork Reduction Act.
  G. Executive Order 13132: "Federalism".
  H. Executive Order 12898: "Federal
    Actions to Address Environmental
    Justice in Minority Populations and Low-
    Income Populations".
  I. National Technology Transfer and
    Advancement Act.
 XIV. Solicitation of Comments.
  A. Specific Solicitation'of Comment and
    Data.
   B. General Solicitation of Comment.

 I. Legal Authority
   Today's proposed rule is issued under
 the authority of sections 301,  304, 306,
 307, 308, 402, and 501 of the Clean

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Federal Register/Vol. 66, No.  9/Friday, January  12, 2001/Proposed Rules
 Water Act (CWA), 33 U.S.C. 1311,1314,
 1316,1317,1318,1342, and 1361.
 II, Purpose and Summary of the
 Proposed Regulation
  Today, the Environmental Protection
 Agency proposes to revise and update
 two regulations that address the impacts
 on water quality from manure,
 wastewater, and other process waters
 generated by concentrated animal
 feeding operations (CAFOs). The
 National Pollutant Discharge
 Elimination System (NPDES) provisions
 in 40 CFR Part 122 define which
 operations are CAFOs and establish
 permit requirements for those operation.
 The Effluent Limitations Guidelines
 (ELG), or effluent guidelines, for
 feedlots in 40 CFR Part 412 establish
 technology-based effluent discharge
 standards that are applied to CAFOs.
 Both regulations were originally
 promulgated in the 1970s. EPA is
 proposing revisions to these regulations
 to address changes that have occurred in
 the animal industry sectors over the last
 25 years, to clarify and improve
 implementation of CAFO permit
 requirements, and to improve the
 environmental protection achieved
 under these rules.
  Environmental concerns being
 addressed by this rule include both
 ecological and human health effects.
Manure from stockpiles, lagoons, or
 excessive land application rates can
reach waterways through runoff,
 erosion, spills, or via groundwater.
These discharges can result in excessive
nutrients (nitrogen, phosphorus, and
potassium), oxygen-depleting
substances, and other pollutants in the
water. This pollution can kill fish and
shellfish, cause excess algae growth,
harm marine mammals, and
contaminate drinking water.
  On October 30,1989, Natural
Resources Defense Council, Inc., and
Public Citizen, Inc., filed an action
against EPA in which they alleged,
among other things, that EPA had failed
to comply with CWA section 304(m).
                    Natural Resources Defense Council,
                    Inc., et al. v. Reilly, Civ. No. 89-2980
                    (RCL) (D.D.C.). Plaintiffs and EPA
                    agreed to a settlement of that action in
                    a consent decree entered on January 31,
                    1992. The consent decree, which has
                    been modified several times, established
                    a schedule by which EPA is to propose
                    and take final action for eleven point
                    source categories identified by name in
                    the decree and for eight other point
                    source categories identified only as new
                    or revised rules, numbered 5 through
                    12. After completing a preliminary
                    study of the feedlots industry under the
                    decree, EPA selected the swine and
                    poultry portion of the feedlots industry
                    as the subject for New or Revised Rule
                    #8, and the beef and dairy portion of
                    that industry as the subject for New or
                    Revised Rule #9. Under the decree, as
                    modified, the Administrator was
                    required to sign a proposed rule for both
                    portions of the feedlots industry on or
                    before December 15, 2000, and must
                    take final action on that proposal no
                    later than December 15, 2002. As part of
                    EPA's negotiations with the plaintiffs
                    regarding the deadlines for this
                    rulemaking, EPA entered into a
                    settlement agreement dated December 6,
                    1999, under which EPA agreed, by
                    December 15, 2000, to also propose to
                    revise the existing NPDES  permitting
                    regulations under 40 C.F.R. part 122 for
                    CAFOs. EPA also agreed to perform
                    certain evaluations, analyses or
                    assessments and to develop certain
                    preliminary options in connection with
                    the proposed CAFO rules.  (The
                    Settlement Agreement expressly
                    provides that nothing in the Agreement
                    requires EPA to select any of these
                    options as the basis for its proposed •
                    rule.)
                      The existing regulation defines
                    facilities with 1,000 animal units
                    ("AU") or more as CAFOs. The
                    regulation also states that facilities with
                    300-1000 AU are CAFOs if they meet
                    certain conditions. The term AU is a
                    measurement established in the 1970
                    regulations that attempted to equalize
the characteristics of the wastes among
different animal types.
  Today's proposals presents two
alternatives for how to structure the
revised NPDES program for CAFOs. The
first alternative is a "two-tier structure"
that simplifies the definition of CAFOs
by establishing a single threshold for
each animal sector. This alternative
would establish a single threshold at the
equivalent of 500 AU above which
operations would be defined as CAFOs
and below which facilities would
become CAFOs only if designated by the
permit authority. The 500 AU
equivalent for each animal sector would
be as follows.
500 cattle excluding mature dairy or
  veal cattle
500 veal cattle
350 mature dairy cattle (whether milked
  or dry)
1,250 mature swine weighing over 55
  pounds
5,000 immature swine weighing 55
  pounds or less
50,000 chickens
27,500 turkeys
2,500 ducks
250 horses
5,000 sheep or lambs
  The second proposal would retain the
"three-tier structure" of the existing
regulation. Under this alternative, all
operations with 1,000 AU or more
would be defined as CAFOs; those with
300 AU to 1,000 AU would be CAFOs
only if they meet certain conditions or
if designated by the permit authority;
and those with fewer than 300 AU
would only be CAFOs if designated by
the permit authority. These conditions
are detailed in section VII of this
preamble and differ from those in the
current rule. Facilities with 300 AU to
1,000 AU would certify that they do not
meet the conditions for being defined as
a CAFO or apply for a permit. The 300
AU and 1,000 AU equivalent number of
animals for each sector would be as
follows:
Animal type
Cattle excluding mature dairy or veal cattle 	
Veal 	
Mature Dairy Cattle 	 	 	
Swins weighing more than 55 pounds 	
Swine weighing 55 pounds or less 	
Chickens 	 	 	
Turkeys 	
Ducks 	
Horses 	
Sheep or Lambs 	

1,000 AU
equivalent
(no. of
animals)
1 000
1 noo
700
2 500
10 000
100 000
55 000
5 000
500
10 000

300 AU
equivalent
(no. of
animals)
30()
or\A
200
750
3 000
30 000
1 6 500
1 500
150
3 000


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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                                                                     2963
  The Agency is also taking comment
on two other alternatives that the
Agency is considering and may pursue
after evaluating comments.
.  Today's proposal would also expand
the regulatory definition of CAFOs to
include all types of poultry operations
regardless of the type of manure
handling system or watering system
they use, and also would include
standalone immature swine and heifer
operations.
  Under the two-tier proposal, EPA is
proposing to simplify the criteria for
being designated as a CAFO by
eliminating two specific criteria that
have proven difficult to implement, the
"direct contact" criterion and the "man
made device" criterion. Under the three-
tier proposal, EPA is proposing to retain
those criteria for designating operations
which have less than 300 AU. Both
proposals retain the existing
requirement for the permit authority to
consider a number of factors to
determine whether the facility is a,
significant contributor of pollution to
waters of the U.S., and the requirement
for an on-site inspection prior to
designation. EPA is also proposing to
clarify that EPA has the authority to
designate CAFOs both in states where
EPA is the permit authority and in
States with NPDES authorized
programs.
  EPA is proposing to eliminate the 25-
year, 24-hour storm event permit
exclusion and to impose a broader,'more
explicit duty for all CAFOs to apply for
a permit (with one exception as
described below). Under the current
regulations, facilities are excluded from
being defined as, and thus subject to
permitting as, CAFOs if they  discharge
only in the event of a 25-year, 24-hour
storm. This exclusion has proven to be
problematic in practice, as described
below, and ultimately unnecessary.
There are many operations that
currently may be avoiding permitting by
an inappropriate reliance on this
exclusion. The Agency believes there-is
no reason to retain this exclusion from
the definition of a CAFO. However, EPA
is proposing to retain the 25-year, 24-
hour storm standard as a design
standard in the effluent guidelines for
certain sectors (specifically, the beef and
dairy sectors). CAFOs in those sectors
would need to obtain permits, but the
permits would allow certain  discharges
as long as the facility met the 25-year,
24-hour storm design standard.
   In sum, under today's proposal, all
operations that meet the definition of a
CAFO under either of the two
alternative structures (as well as all
operations that are designated as
CAFOs) would be required to apply for
a permit. There would, however, be one
exception to this requirement, as
described in more detail below: If the
operator could demonstrate to the
permitting authority that the facility has
"no potential to discharge," then a
permit application and a permit would
not be required.
  Under the two-tier structure, the net
effect of the revisions for determining
which facilities are CAFOs is to require
approximately 26,000 operations to
apply for a NPDES permit. Under the
three-tier structure, EPA estimates that
approximately 13,000 operations would
be required to apply for a.permit, and
an additional 26,000 operations could
either certify that they are not a CAFO
or apply for a permit. Under the existing
regulation, EPA estimates that about
12,000 facilities should be permitted but
only 2,530 have actually applied for a
permit.
  Today's proposal would clarify the
definition of a CAFO as including both
the production areas (animal
confinement areas, manure storage
areas, raw materials storage areas and
waste containment areas) and the land
application areas that are under the
control of the CAFO owner or operator.
As the  industry trend is to larger, more
specialized feedlots with less cropland
needing the manure for fertilizer, EPA is
concerned that manure is being land
applied in excess of agricultural uses
and, therefore, being managed as a
waste product, and that this practice is
causing runoff or leaching to waters of
the U.S. The permit would address
practices at the production area as well
as the land application area, and would
impose record keeping and other
requirements with regard to transfer of
manure off-site.
  EPA is further proposing to clarify
that entities that exercise "substantial
operational control" over the CAFO are
"operators" of the CAFO and thus
would need to obtain a permit along
with the CAFO owner or operator. The
trend toward specialized animal
production under contract with
processors, packers and other
integrators has increasingly resulted in
concentrations of excess manure beyond
agricultural needs in certain geographic
areas. Especially in the  poultry and
swine sector, the processor provides the
animals, feed, medication and/or
specifies growing practices. EPA
believes that clarifying that both parties
are liable for compliance with the terms
of the permit as well as responsible for
the excess manure generated by CAFOs
will lead to better management of
manure.
   The proposed effluent guidelines
revisions would apply only to beef,
dairy, swine, poultry and .veal
operations that are defined or
designated as CAFOs under either of the
two alternative structures and that are
above the threshold for the effluent
guideline. For those CAFOs below the
threshold for being subject to the
•effluent guidelines, the permit writer
would use best professional judgment
(BPJ) to develop the site-specific permit
conditions.
  Today's proposed effluent guidelines
revisions would not alter the existing
effluent guideline regulations for horses,
ducks, sheep or lambs. In these sectors,
only facilities with 1,000 AU or more
are subject to the effluent guidelines.
Permits for operations in these
subcategories with fewer than 1,000 AU '
would continue to be developed based
on the best professional judgement of
the permit writer.
  The proposed effluent guidelines
regulations for beef, dairy, swine,
poultry and veal operations will
establish the Best Practicable Control
Technology (BPT), Best Conventional
Pollutant Control Technology (BCT),
and the Best Available Technology
(BAT) limitations as well as New Source
Performance Standards,  including
specific best management practices
which ensure that manure storage and
handling systems are inspected and
maintained adequately. A description of
these requirements is in Section III.
  Under the BPT requirements for all of
the subcategories, EPA is proposing to
require zero discharge from the
production  area except that an  overflow
due to catastrophic or chronic storms
would be allowed if the  GAFO  met a
certain design standard for its
containment structures.  If a CAFO uses
a liquid manure handling system, the
storage structure or lagoon would be
required to be designed, constructed
and maintained to capture all process
wastewater and manure, plus all .the
storm water runoff from the 25-year, 24-
hour storm. •
   The proposed BPT limitations als.o
include specific requirements on the
application of manure and wastewater
to land that is owned or under  the
operational control of the CAFO. EPA is .
proposing to require that CAFOs apply
their manure at a rate calculated to meet
the requirements of the crop for either
nitrogen or  phosphorus  (depending on
the soil conditions for phosphorus).
Livestock manure tends to be
phosphorus rich, meaning that if
manure is applied to meet the nitrogen
requirements of a crop, then phosphorus
is being applied at rates higher than
needed by the crop. Repeated
 application of manure on a nitrogen
basis may build up phosphorus levels in

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Federal  Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
the soil, and potentially result in
saturation, thus contributing to the
contamination of surface waters through
erosion, snow melt and rainfall events.
Therefore, EPA is also proposing that
manure must be applied to cropland at
rates not to exceed the crop
requirements for nutrients and the
ability of the soil to absorb any excess
phosphorus. BPT establishes specific
record keeping requirements associated
with ensuring the achievement of the
zero discharge limitation for the
production area and that the application
of manure and wastewater is done in
accordance with land application
requirements. EPA also proposes to
require the CAFO operator to maintain
records of any excess manure that is
transported off-site.
  BAT limitations for the beef and dairy
subcategories would include all of the
BPT limitations described above and, in
addition, would require CAFOs to
achieve zero discharge to ground water
beneath the production area that has a
direct hydrologic connection to surface
water. In addition, the proposed BAT
requirements for the swine, veal and
poultry subcategories would eliminate
the provision for overflow in the event
of a chronic or catastrophic storm.
CAFOs in the swine, veal and poultry
subcategories typically house their
animals under roof instead of in open
areas, thus avoiding or minimizing the
runoff of contaminated storm water and
the need to contain storm water.
  EPA is also proposing to revise New
Source Performance Standards (NSPS)
based on the same technology
requirements as BAT for the beef and
dairy subcategories. For the swine, veal
and poultry subcategories, EPA
proposes revised NSPS based on the
same technology as BAT with the
additional requirement that there be no
discharge of pollutants through ground
water beneath the production area that
has a direct hydrological connection to
surface waters. Both the BAT and NSPS
requirements have the same land
application and record keeping
requirements as proposed for BPT.
  Today's proposal would make several
other changes to the existing regulation,
which would:
  • require the CAFO operator to
develop a Permit Nutrient Plan for
managing manure and wastewater at
both the production area'and the land
application area;
  • require certain record keeping,
reporting, and monitoring;
  • revise the definition of an animal
feeding operation (AFO) to more clearly
exclude areas such as pastures and
rangeland that sustain crops or forage
                    during the entire time that animals are
                    present;
                     , • eliminate the mixed-animal type
                    calculation for determining which AFOs
                    are CAFOs; and
                      • require permit authorities to
                    include the following conditions in
                    permits to:
                      (1) require retention of a permit until
                    proper facility closure; (2) establish the
                    method for operators to calculate the
                    allowable manure application rate; (3)
                    specify restrictions on timing and
                    methods of application of manure and
                    wastewater to assure use for an
                    agricultural purpose (e.g., certain
                    applications  to frozen, snow covered or
                    saturated land) to prevent impairment of
                    water quality; (4) address risk of
                    contamination via groundwater with a
                    direct hydrological connection to
                    surface water; (5) address the risk of
                    improper manure application off-site by
                    either requiring that the CAFO operator
                    obtain from off-site recipients a
                    certification  that they are land applying
                    CAFO manure according to proper
                    agricultural practices or requiring the
                    CAFO to provide information to manure
                    recipients and keep appropriate records
                    of off-site transfers, or both; and (6)
                    establish design standards to account for
                    chronic storm events.
                     • Today's proposal would also:
                      • clarify EPA's interpretation of the
                    agricultural storm water exemption and
                    its implications for land application of
                    manure both at the CAFO and off-site;
                    and
                      • clarify application of the CWA to
                    dry weather  discharges at AFOs.
                      EPA is seeking comment on the entire
                    proposal. Throughout the preamble,
                    EPA identifies specific components of
                    the proposed rule on which comment is
                    particularly sought.

                    m. Background

                    A. The Clean Water Act
                      Congress passed the Federal Water
                    Pollution Control Act (1972), also
                    known as the Clean Water Act (CWA),
                    to "restore and maintain the chemical,
                    physical, and biological integrity of the
                    nation's waters." (33 U.S.C. § 125l(a)).
                    The CWA establishes a comprehensive
                    program for protecting our nation's
                    waters. Among its core provisions, the
                    CWA prohibits the discharge  of
                    pollutants  from a point source to waters
                    of the U.S. except as authorized by a
                    National Pollutant Discharge
                    Elimination System (NPDES)  permit.
                    The CWA establishes the NPDES permit
                    program to authorize and regulate the
                    discharges of pollutants to waters of the
                    U.S. EPA has issued comprehensive
                    regulations that implement the NPDES
program at 40 CFR Part 122. The CWA
also provides for the development of
technology-based and water quality-
based effluent limitations that are
imposed through NPDES permits to
control discharges of pollutants.

1. The National Pollutant Discharge
Elimination System (NPDES) Permit
Program
  Under the NPDES  permit program, all
point sources that directly discharge
pollutants to waters of the U.S. must
apply for a NPDES permit and may only
discharge pollutants in compliance with
the terms of that permit. Such permits
must include any nationally established,
technology based effluent discharge
limitations (i.e., effluent guidelines)
(discussed below,  in subsection III.A.2).
In the absence of national effluent
limitations, NPDES permit writers must
establish technology based limitations
and standards on a case-by-case basis,
based on their "best professional
judgement (BPJ)."
  Water quality-based effluent limits
also are included in a permit where
technology-based limits are not
sufficient to ensure compliance with
State -water quality standards that apply
to the receiving water or where required
to implement a Total Maximum Daily
Load (TMDL). Permits may also include
specific best management practices to
achieve effluent limitations and
standards, typically included as special
conditions. In addition, NPDES permits
normally include monitoring and
reporting requirements, and standard
conditions (i.e., conditions that apply to
all NPDES permits, such as the duty to
properly operate and maintain
equipment and treatment systems).
  NPDES permits may be issued by EPA
or a State, Territory,  or Tribe authorized
by EPA to implement the NPDES
program. Currently, 43 States and the
Virgin Islands are authorized to
administer the base NPDES program
(the base program  includes the federal
requirements applicable to AFOs and
CAFOs). Alaska, Arizona, the District of
Columbia, Idaho, Maine, Massachusetts,
New Hampshire, and New Mexico are
not currently authorized to implement
the NPDES program. In addition,
Oklahoma, while authorized to
administer the NPDES program, does
not have CAFO regulatory authority. No
tribe is currently authorized.
  A NPDES permit may be either an
individual permit tailored for a single
facility or a general permit applicable to
multiple facilities within a specific
category. Prior to the-issuance of an
individual permit, the owner or operator
submits a permit application with
facility-specific information to 'the

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permit authority, who reviews the
information and prepares a draft permit.
The permit authority prepares a fact
sheet explaining the draft permit, and
publishes the draft permit and fact sheet
for public review and comment.
Following consideration of public
comments by the permit authority, a
final permit is issued. Specific
procedural requirements apply to the
modification, revocation and reissuance,
and termination of a NPDES permit.
NPDES permits are subject to a
maximum 5-year term.
  General NPDES permits are available
to address a category of discharges that
involve similar operations with similar
wastes. General permits are not
developed based on facility-specific
information. Instead, they are developed
based on data that characterize the type
of operations being addressed and the
pollutants being discharged. Once a
general permit is drafted, it is published
for public review and comment
accompanied by a fact sheet that
explains the permit. Following EPA or
State permit authority consideration of
public comments, a final general permit
is issued. The general permit specifies
the type or category of facilities that
may obtain coverage under the permit.
Those facilities that fall within this
category then must submit a "notice of
intent" (NOI) to be covered under the
general permit to gain permit coverage.
[Under 40 CFR 122.28(b)(2)(vi), the
permit authority also may notify a
discharger that it is covered under a
general permit even where that
discharger has not submitted a notice of
intent to be covered by the permit.] EPA
anticipates that the Agency and
authorized States will use general
NPDES permits to a greater extent than
individual permits to address CAFOs.
2. Effluent Limitation Guidelines and
Standards
  Effluent limitation guidelines and
standards (which we also refer to today
as "effluent guidelines" or "ELG") are
national regulations that establish
limitations on the discharge of
pollutants by industrial category and
subcategory.  These limitations are
subsequently incorporated into NPDES
permits. The effluent guidelines are
based on the degree of control that can
be achieved using various levels of
pollution control technology,  as
outlined below. The effluent guidelines
may also include non-numeric effluent
limitations in the form of best
management practices requirements or
directly impose best management
practices as appropriate.
   a. Best Practicable Control
 Technology Currently Available (BPT)—r
 Section 304(b)(l) of the CWA. In the
 guidelines for an industry category, EPA
 defines BPT effluent limits for
 conventional, toxic, and non-
 conventional pollutants. In specifying
 BPT, EPA looks at a number of factors.
 EPA first considers the cost of achieving
 effluent reductions in relation to the
 effluent reduction benefits. The Agency
 also considers the age of the equipment
 and facilities, the processes employed
 and any required process changes,
 engineering aspects of the control
 technologies, non-water quality
 environmental impacts (including
 energy requirements), and such other
 factors as the Agency deems appropriate
 (CWA 304(b)(l)(B)). Traditionally, EPA
! establishes BPT effluent limitations
 based on the average of the best
 performances of facilities within the
 industry of various ages, sizes, processes
 or other common characteristics. Where
 existing performance is uniformly
 inadequate, EPA may require higher
 levels of control than currently in place
 in an industrial category if the Agency
 determines that the technology can be
 practically applied.
   b. Best Available Technology
 Economically Achievable (BAT)—
 Section 304(b)(2) of the CWA. In
 general, BAT effluent Limitations
 represent the best existing economically
 achievable performance of direct
 discharging plants in the industrial
 subcategory or category. The factors
 considered in assessing BAT include the
 cost of achieving BAT effluent
 reductions, the age of equipment and
 facilities involved, the processes
 employed, engineering aspects of the
 control technology, potential process
 changes, non-water quality
 environmental impacts (including
 energy requirements), and such factors
 as the Administrator deems appropriate.
 The Agency retains considerable
 discretion in assigning the weight to be
 accorded to these factors. An additional
 statutory factor considered in setting
 BAT is economic achievability.
 Generally, the achievability is
 determined on the basis of the total cost
 to the industrial subcategory and the
 overall effect of the rule on the
 industry's financial health. BAT
 limitations may be based on effluent
 reductions attainable through changes
 hi a facility's processes and operations.
 As with BPT, where existing
 performance is uniformly inadequate,
 BAT may be based on technology
 transferred from a different subcategory
 within an industry or from another
 industrial category. BAT may be based
 on process changes or internal controls,
even when these technologies are not
common industry practice.'
  c. Best Conventional Pollutant Control
Technology (BCT)^-Section 304(b)(4) of
the CWA. The 1977 amendments to the
CWA required EPA to identify effluent
reduction levels for conventional
pollutants associated with BCT
technology for discharges from existing
industrial point sources. BCT is not an
additional limitation, but replaces Best
Available Technology (BAT)  for control
of conventional pollutants. In addition
to other factors specified in Section
304(b)(4)(B), the CWA requires that EPA
establish BCT limitations after
consideration of a two part "cost-
reasonableness" test. EPA explained its
methodology for the development of
BCT limitations in July 1986  (51 FR
24974). Section 304(a)(4) designates the
following as conventional pollutants:
biochemical oxygen demand (BOD5),
total suspended solids (TSS), fecal
coliform, pH, and any additional
pollutants defined by the Administrator
as conventional. The Administrator
designated oil and grease as an
additional conventional pollutant on
July 30,1979 (44 FR 44501).
  d. New Source Performance
Standards (NSPS)—Section 306 of the
CWA. NSPS reflect effluent reductions
that are achievable based on the best
available demonstrated control
technology. New facilities have the
opportunity to install the best and most
efficient production processes and
wastewater treatment technologies. As a
result, NSPS should represent the
greatest degree of effluent reduction
attainable through the application of the
best available demonstrated control
technology for all pollutants  (i.e.,
conventional, non-conventional, and
priority pollutants), hi establishing
NSPS, EPA is directed to take into
consideration the cost of achieving the
effluent reduction and any non-water
quality environmental impacts and
energy requirements.
B. History of EPA Actions to  Address
CAFOs
  EPA's regulation of wastewater and
manure from CAFOs dates to the 1970s.
The existing NPDES CAFO regulations
were issued on March 18,1976 (41 FR
11458). The existing national effluent
limitations guideline and standards for
feedlots were issued on February 14,
1974 (39 FR 5704).
  By 1992, it became apparent that the
regulation and permitting of CAFOs
needed review due to changes in the
livestock industry, specifically the
consolidation of the industry into fewer,
but larger operations. In 1992, the
Agency established a workgroup

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composed of representatives of State
agencies, EPA regional staff and EPA
headquarters staff to address issues
related to CAFOs. The workgroup
issued The Report of the EPA/State
Feedlot Workgroup in 1993. One of the  .
workgroup's recommendations was that
the Agency should provide additional
guidance on how CAFOs are regulated
under the NPDES permit program. The
Agency issued such guidance, entitled
Guide Manual On NPDES Regulations
For Concentrated Animal Feeding
Operations, in December 1995.
  Massive spills of hog manure (see
Section V.B.l.c) and Pfiesteria outbreaks
(see Section V.C.l.a.), continued
industry consolidation, and increased
public awareness of the potential
environmental and public health
impacts of animal feeding operations
resulted in EPA taking more
comprehensive actions to improve
existing regulatory and voluntary
programs. In 1997, dialogues were
initiated between EPA and the poultry
and pork livestock sectors. On
December 12,1997, the Pork Dialogue
participants, including representatives
from the National Pork Producers
Council (NPPC) and officials from EPA,
U.S. Department of Agriculture (USDA),
and several States, issued a
Comprehensive Environmental
Framework for Pork Production
Operations. Continued discussions
between EPA and the NPPC led to
development of a Compliance Audit
Program Agreement (CAP Agreement)
that is available to any pork producer
who participates in NPPC's
environmental assessment program. The
CAP Agreement for pork producers was
issued by the Agency on November 24,
1998. Under the agreement, pork
producers that voluntarily have their
facilities inspected are eligible for
reduced penalties for any CWA
violations discovered and corrected.
The Poultry Dialogue produced a report
in December 1998 that established a
voluntary program focused on
promoting protection of the
environment and water quality through
implementation of litter management
plans and other actions: Environmental
Framework and Implementation
Strategy: A Voluntary Program
Developed and adopted by the Poultry
Industry, Adopted at the December 8-9,
1998 meeting of the Poultry Industry
Environmental Dialogue (U.S. Poultry
and Egg Association).
  President Clinton and Vice President
Gore announced the Clean Water Action
Plan (CWAP) on February 19,1998. The
CWAP describes the key water quality
problems our nation faces today and
suggests both a broad plan and specific
                    actions for addressing these problems.
                    The CWAP indicated that polluted
                    runoff is the greatest source of water
                    quality problems in the United States
                    today and that stronger polluted runoff
                    controls are needed. The CWAP goes on
                    to state that one important aspect of
                    such controls is the expansion of CWA
                    permit controls, including those
                    applicable to large facilities such as
                    CAFOs.
                     The CWAP included two key action
                    items that address animal feeding
                    operations (AFOs). First, it stated that
                    EPA should publish and, upon
                    considering public comments,
                    implement an AFO strategy for
                    important and necessary EPA actions on
                    standards and permits. EPA published a
                    Draft Strategy for Addressing
                    Environmental and Public Health
                    Impacts from Animal Feeding
                    Operations in March 1998 (draft AFO
                    Strategy). In accordance with EPA's
                    draft AFO Strategy, EPA's Office of
                    Enforcement and Compliance Assurance
                    (OECA) also issued the  Compliance
                    Assurance Implementation Plan for
                    Animal Feeding Operations in March
                    1998. This plan describes compliance
                    and enforcement efforts being
                    undertaken to ensure that CAFOs
                    comply with existing CWA regulations.
                    Second, the CWAP stated that EPA and
                    USDA should jointly develop a unified
                    national strategy to minimize the water
                    quality and public health impacts of
                    AFOs. EPA and USDA jointly published
                    a draft Unified National Strategy for
                    Animal Feeding Operations (hereinafter
                    Unified National AFO Strategy) on
                    September 21,1998 and, after
                    sponsoring and participating in 11
                    public listening sessions and
                    considering public comments on the
                    draft strategy, published a final Unified
                    National AFO Strategy on March 9,
                    1999. This joint strategy was generally
                    consistent with and superceded EPA's
                    draft AFO Strategy.
                     The Unified National AFO Strategy
                    establishes national goals and
                    performance expectations for all AFOs.
                    The general goal is for AFO owners and
                    operators to take actions to minimize
                    water pollution from confinement
                    facilities and land where manure is
                    applied. To accomplish this goal, the
                    AFO Strategy established a national
                    performance expectation that all AFOs
                    should develop and implement
                    technically sound, economically
                    feasible, and site-specific
                    comprehensive nutrient management
                    plans (CNMPs) to minimize impacts on
                    water quality and public health.
                     The Unified National AFO Strategy
                    identified seven strategic issues that
                    should be addressed to better resolve
concerns associated with AFOs. These
include: (1) fostering CNMP
development and implementation; (2)
accelerating voluntary, incentive-based
programs; (3) implementing and
improving the existing regulatory
program; (4) coordinating research,
technical innovation, compliance
assistance, and technology transfer; (5)
encouraging industry leadership; (6)
increasing data coordination; and (7)
establishing better performance
measures and greater accountability.
Today's proposed rule primarily
addresses strategic issue three:
implementing and improving the
existing AFO regulatory program.-
  The Unified National AFO Strategy
observed that, for the majority of AFOs
(estimated in the AFO Strategy as 95
percent), voluntary efforts founded on
locally led conservation, education, and
technical and financial assistance would
be the principal approach for assisting
owners and operators in developing and
implementing site-specific CNMPs and
reducing water pollution and public
health risks. Future regulatory programs
would focus permitting and
enforcement priorities on high risk
operations, which were expected to
constitute the remaining 5 percent. EPA
estimates that today's proposal would
result in permit coverage for .
approximately 7 percent of AFOs under
the two-tier structure, and between 4.5
percent and 8.5 percent of AFOs under
the three-tier structure.
  Following publication of the Unified
National AFO Strategy, EPA issued on
August 6,1999 the Draft Guidance
Manual and Example NPDES Permit for
CAFOs for a 90-day public comment
period. EPA undertook development of
this new guidance manual in order to
provide permit writers with improved
guidance on applying the existing
regulations to a changing industry.
While the guidance manual has not
been finalized, many of the issues
discussed in the draft guidance manual
are also addresses in today's preamble.
EPA expects to issue final, revised
permitting guidance to reflect the
revised CAFO regulations when they are
published in final form.

C. What Requirements Apply to CAFOs?

  The discussion below provides an
overview of the scope and requirements
imposed under the existing NPDES
CAFO regulations and feedlot effluent
limitations guidelines.  It also explains
the relationship of these two
regulations, and summarizes other
federal and State regulations that
potentially affect AFOs.

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1. What are the Scope and Requirements
of the Existing NPDES Regulations for
CAFOs?
  Under existing 40 CFR 122.23, an
operation must be defined as an animal
feeding operation (AFO) before it can be
denned as a concentrated animal
feeding operation (CAFO). The term
"animal feeding operation" is  denned hi
EPA regulations as a "lot or facility"
where animals "have been, are, or will
be stabled or confined and fed or
maintained for a total of 45 days or more
in any 12 month period and crops,
vegetation!,] forage growth, or post-
harvest residues are not sustained in the
normal growing season over any portion
of the lot or facility." This definition is
intended to enable the NPDES
authorized permitting authority to
regulate facilities where animals are
stabled or confined and waste is
generated.
  Once a facility meets the AFO
definition, its size, based upon the total
numbers of animals confined, is a key
factor in determining whether it is a
CAFO. To define these various livestock
sectors, EPA established the concept of
an "animal unit" (AU), which varies
according to animal type. Each livestock
type, except poultry, is assigned a
multiplication factor to facilitate
determining the total number  of AU at
a facility with more than one animal
type. These multiplication factors are as
follows: Slaughter and feeder cattle—
1.0, Mature dairy cattle—1.4, Swine
weighing over 25 kilograms
(approximately 55 pounds)—0.4,
Sheep—0.1, Horses—2.0. There are
currently no animal unit conversions for
poultry operations. The regulations,
however, define the total number of
animals (subject to waste handling
technology restrictions) for specific
poultry types that make these operations
subject to the regulation. (40 GFR Part
122, Appendix B).
   Under the existing regulations, an
animal feeding operation is a
concentrated animal feeding operation if
it meets the regulatory CAFO  definition
or if it is designated as a CAFO. The
regulations automatically define an AFO
to be a CAFO if either more than 1,000
AU are confined at the facility, or more
than 300 AU are confined at the facility
and: (1) pollutants are discharged into
navigable waters through a manmade
ditch, flushing system,-or other similar
man-made device; or (2) pollutants are
discharged directly into waters that
originate outside of and pass over,
across, or through the facility or come
into direct contact with the confined
animals. However, no animal feeding
operation is defined as a CAFO if it
discharges only in the event of a 25-
year, 24-hour storm event (although it
sill may be designated as a CAFO).
Although they are not automatically
defined as a CAFO, facilities still may
be designated as a CAFO even if they
discharge only in a 25-year,  24-hour
storm event.
  An AFO can also become  a CAFO
through designation. The NPDES
permitting authority may, on a case-by-
case basis, after conducting  an bn-site
inspection, designate any AFO as a
CAFO based on a finding that the
facility "is a significant contributor of
pollution to the waters of the United
States." (40 CFR 122.23(c)).  Pursuant to
40 CFR 122.23(c)(l)(i)-(v) the permitting
authority shall consider several factors
making this determination, including:
(1) the size of the operation, and amount
of waste reaching waters of the U.S.; (2)
the location of the operation relative to
waters of the U.S.; (3) the means of
conveyance of animal waste and process
waste waters into waters of the U.S.; and
(4) the slope, vegetation, rainfall and
other factors affecting frequency of
discharge. A facility with 300 animal
units or less,  however, may  not be
designated as a CAFO unless pollutants
are discharged into waters of the U.S.
through a man-made ditch,  flushing
system, or other similar man-made
device, or are discharged  directly into
waters of the U.S. which originate
outside of the facility and pass over,
across or through the facility or
otherwise come into direct contact with
the animals confined in the operation.
  Once defined or designated as a
CAFO, the operation is subject to
NPDES permitting. As described above,
a permit contains the specific
technology-based effluent limitations
(whether based on the effluent
guidelines or BPJ); water  quality-based
limits if applicable; specific best
management practices; monitoring and
reporting requirements; and other.
standard NPDES conditions.
2. What are the Scope and Requirements
of the Existing Feedlot Effluent
Guidelines?
   In 1974, EPA promulgated effluent
limitations guidelines applicable to
CAFOs (40 CFR Part 412) and
established in those regulations the
technology-based effluent discharge
standards for the facilities covered by
the guidelines. The effluent guidelines
for the  feedlots point source category
have two subparts: Subpart B for ducks,
and Subpart A for all other  feedlot
animals. Under the existing regulation,
 Subpart A covers: beef cattle; dairy
 cattle; swine; poultry; sheep; and
horses. Further, the effluent guidelines
apply only to facilities with 1,000 AU or
greater. Today's revisions to the effluent
guidelines affect only the guidelines for
the beef, dairy, swine, poultry and veal
subcategories, while the NPDES
revisions are applicable to all confined
animal types.
  The current feedlot effluent
guidelines based on BAT prohibit
discharges of process wastewater
pollutants to waters of the U.S. except
when chronic or catastrophic storm
events cause an overflow from a facility
designed, constructed, and operated to
hold process-generated wastewater plus
runoff from a 25-year, 24-hours storm
event. Animal wastes and other
wastewater that must be controlled
include: (1) spillage or overflow from
animal or poultry watering systems,
washing, cleaning, or flushing pens,
barns, manure pits, or other feedlot
facilities, direct contact swimming,
washing, or spray cooling of animals,
and dust control; and (2) precipitation
(rain or snow) which comes into contact
with any manure, litter, or bedding, or
any other raw material or intermediate
or final material or product used in or ,;
resulting from the production of animals
or poultry or direct products (e.g., milk
or eggs). 40 CFR 412.11.
  As  described above, in those cases
where the feedlot effluent guidelines do
not apply to a CAFO (i.e., the operation
confines fewer than 1,000 animal units),
the permit writer must develop, for
inclusion in the NPDES permit,
technology-based limitations based on
best professional judgement (BPJ).
3. What Requirements May be Imposed
on AFOs Under the Coastal Zone Act
Reauthorization Amendments of 1990
(CZARA)?
   In the Coastal Zone Act
Reauthorization Amendments of 1990
(CZARA), Congress required States with
federally-approved coastal zone
management programs to develop and
implement coastal nonpoint pollution
control programs. Thirty-three (33)
States and Territories currently have
federally approved Coastal Zone
Management programs. Section 6217(g)
of CZARA called for EPA, in
consultation with other federal agencies,
to develop .guidance on "management
measures" for sources of nonpoint
source pollution in coastal waters. In
January 1993, EPA issued its Guidance
Specifying Management Measures for
Sources of Nonpoint Pollution in
Coastal Waters which addresses five
major source categories of nonpoint
pollution: urban runoff, agriculture
runoff, forestry runoff, marinas and
recreational boating, and
hydromodification.

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  Within the agriculture runoff
nonpoint source category, the EPA
guidance specifically included
management measures applicable to all
new and existing "confined animal
facilities." The guidance identifies
which facilities constitute large and
small confined animal facilities based
solely on the number of animals or
animal units confined (the manner of
discharge is not considered). Under the
CZARA guidance: a large beef feedlot
contains 300 head or more, a small
feedlot between 50-299 head; a large
dairy contains 70 head or more, a small
dairy between 20-69 head; a large layer
or broiler contains 15,000 head or more,
a small layer or broiler between 5,000-
14,999 head; a large turkey facility
contains 13,750 head or more, a small
turkey facility between 5,000-13,749
head; and a large swine facility contains
200 head or more, a small swine facility
between 100-199 head.
  The thresholds in the CZARA
guidance for identifying large and small
confined animal facilities are lower than
those established for defining CAFOs
under the current NPDES regulations.
Thus, in coastal States the CZARA
management measures potentially apply
to a greater number of small facilities
than the existing CAFO definition.
Despite the fact that both the CZARA
management measures for confined
animal facilities and the NPDES CAFO
regulations address similar operations,
these programs do not overlap or
conflict with each other. Any CAFO
facility, defined by 40 CFR Part 122,
Appendix B, that has a NPDES CAFO
permit is exempt from the CZARA .
program. If a facility subject to CZARA
management measures is later
designated a CAFO by a NPDES
permitting authority, the facility is no
longer subject to CZARA. Thus, an AFO
cannot be subject to CZARA and NPDES
permit requirements at the same time.
  EPA's CZARA guidance provides that
new confined animal facilities and
existing large confined animal facilities
should limit the discharge of facility
wastewater and runoff to surface waters
by storing such wastewater and runoff
during storms up to and including
discharge caused by a 25-year, 24-hour
frequency storm. Storage structures
should have an earthen or plastic lining,
be constructed with concrete, or
constitute a tank. All existing small
facilities should design and implement
systems that will collect solids, reduce
contaminant concentrations, and reduce
runoff to minimize the discharge of
contaminants in both facility   •
wastewater and in runoff caused by
storms up to and including a 25-year,  .
24-hour frequency storm. Existing small
                    facilities should substantially reduce
                    pollutant loadings to ground water. Both
                    large and small facilities should also
                    manage accumulated solids in an
                    appropriate waste utilization system.
                    Approved State CZARA programs have
                    management measures in conformity
                    with this guidance and enforceable
                    policies and mechanisms as necessary
                    to assure their implementation.
                     In addition to the confined animal
                    facility management measures, the
                    CZARA guidance also includes a
                    nutrient management measure that is
                    intended to be applied by States to
                    activities associated with the
                    application of nutrients to agricultural
                    lands (including the application of
                    manure). The goal of this management
                    measure is to minimize edge of field
                    delivery of nutrients and minimize the
                    leaching of nutrients from the root zone.
                     The nutrient management measures
                    provide for the development,
                    implementation, and periodic updating
                    of a nutrient management plan. Such
                    plans should address: application of
                    nutrients at rates necessary to achieve
                    realistic crop yields; improved liming of
                    nutrient application; and the use of
                    agronomic crop production technology
                    to increase nutrient use efficiency.
                    Under this management measure,
                    nutrient management plans include the
                    following core components: farm and
                    field maps showing acreage, crops, and
                    soils; realistic yield expectations for the
                    crops to be grown; a summary of the
                    nutrient resources available to the
                   'producer; an evaluation of field
                    limitations based  on environmental
                    hazards or concerns; use of the'limiting
                    nutrient concept to establish the mix of
                    nutrient sources and requirements for
                    the crop based on realistic crop
                    expectations; identification of timing.
                    and application methods for nutrients;
                    and provisions for proper calibration
                    and operation of nutrient application
                    equipment.

                    4. How Are CAFOs Regulated By States?
                     NPDES permits may be issued by EPA
                    or a State authorized by EPA to
                    implement the NPDES program.
                    Currently, 43 States and the Virgin
                    Islands are authorized to administer the
                    NPDES program. Oklahoma, however,
                    has not been authorized to administer
                    the NPDES program for CAFOs.
                     To become an authorized NPDES
                    state, the State's requirements must, at
                    a minimum, be as stringent as the
                    requirements imposed under the federal
                    NPDES program. States, however, may
                    impose requirements that are broader in
                    scope or more stringent than the
                    requirements imposed at the federal
                    level. In States not authorized to
implement the NPDES program, the
appropriate EPA Regional office is
responsible for implementing the
program.
  State efforts to control pollution from
CAFOs have been inconsistent to date
for a variety of reasons. Many States
have only recently focused attention on
the environmental challenges posed by
the emergence of increasing
consolidation of CAFOs into larger and
larger operations. Others have
traditionally viewed AFOs as
agriculture, and the reluctance to
regulate agriculture has prevented
programs from keeping pace with a
changing industry. Many states have
limited resources for identifying which
facilities are CAFOs, or which may be
inappropriately claiming the 25-year,
24-hour storm permit exclusion. Some
states with a large number of broiler and
laying operations do not aggressively try
to permit these facilities under NPDES
because the technology requirements for
these operations in the existing  •
regulation are outdated.
  Another reason States may not have
issued NPDES permits to CAFOs is the
concern over potentially causing
operations to lose cost-share money
available under EPA's Section 319
Nonpoint Source Program and other
assistance under USDA's Environmental
Quality Incentive Program (EQIP). Once
a facility is considered a point source
under NPDES, the operation is not
eligible for cost sharing under the
Section 319 nonpoint source program.
The USDA EQIP program, however, is
available to most facilities, and being a
permitted CAFO is not a reason for
exclusion from the EQIP program.
Although EQIP funds may not be used
to pay for construction of storage
facilities at operations with greater than
1,000 USDA animal units (USDA uses a
different definition of animal units than
EPA); EQIP is available to these
facilities for technical assistance and
financial assistance for other practices.
  To gather information on State
activities concerning AFOs, EPA
assembled information into a report
entitled, "State Compendium: Programs
and Regulatory Activities Related to
Animal Feeding Operations, Final
Report," dated December 1999, and
continues to update information
concerning state operations (see "Profile
of NPDES Permits and CNMP Permit
Requirements for CAFOs," updated
periodically). The following discussion
draws on information from these
reports.
  EPA estimates that, under the existing
EPA regulations, approximately 9,000
operations with more than 1,000 AU are
CAFOs and should be permitted, and

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                  Federal Register/Vol.  66,  No. 9/Friday, January 12, 2001/Proposed Rules
                                                                    2969
approximately 4,000 operations with
300 AU to 1,000 AU should be
permitted. However, only an estimated
2,520 CAFOs are currently covered
under either a general permit or an
individual permit. The 43 states
authorized to implement the NPDES
program for CAFOs have issued
coverage for approximately 2,270
facilities, of which about 1,150 facilities
are under general permits and about
1,120 facilities are under individual
permits. Of these states, 32 states
administer their NPDES CAFO program
in combination with some other State
permit, license, or authorization
program. Often, this additional State
authorization is a construction or
operating permit. Eight of the states
regulate CAFOs exclusively under their
State NPDES authority, while three
others have chosen to regulate CAFOs
solely under State non-NPDES
programs. EPA information indicates
that, as of December, 1999, seventeen of
the 43 states authorized to administer
the NPDES program for CAFOs have
never issued an NPDES permit to  a
CAFO.
   Of the seven states not authorized to
administer the NPDES program, four
rely solely on federal NPDES permits to
address CAFOs. As of December 1998,
EPA has issued coverage for
approximately 250 facilities under
general NPDES permits.
   Virtually all NPDES authorized states
use the federal CAFO definition in their
State NPDES CAFO program. Most
states also use the federal definition for
State non-NPDES CAFO programs. Five
States, however, have developed unique
definitions for their non-NPDES
livestock regulatory programs that do
not follow the federal definition. These
five States typically base their definition
on the number of animals confined,
weight of animals and design capacity
of waste control system, or gross income
of agricultural operation. For example,
Alabama's new general State NPDES
permit covers all operations with at
 least 250 animal units. Similarly,
 Minnesota issues State (non-NPDES)
 feedlot permits to facilities with more
 than 10 animal units. Minnesota also
 issues individual NPDES permits to
 CAFOs as defined under the existing
 federal regulations.
   The regulation of CAFOs is
 challenging, in part, because of the large
 number of facilities across the country.
 There are approximately 376,000 AFOs.
 Regulating, for example, 5 percent of
 AFOs would result in some 18,800
 permittees. One way of reducing  the
 administrative burden associated with
 permitting such large numbers of
 facilities is through the use of general
permits. NPDES regulations provide that
general permits may be issued to cover
a category of dischargers that involves
similar operations with similar wastes.
Operations subject to the same effluent
limitations and operating conditions,
and requiring similar monitoring are the
types of facilities most appropriately
regulated under a general permit. EPA
and some authorized States are using
general permits to regulate CAFOs, and
this trend appears to be increasing.
  As mentioned, seventeen of the 43
States authorized to issue NPDES CAFO
permits have never issued an NPDES
permit to a CAFO, although many,
regulate CAFOs under non-NPDES
programs. Under current regulations, an
animal feeding operation that discharges
only in the event of a 25-year, 24-hour
storm event is not considered to meet
the definition of a CAFO (although it
may still be designated as a CAFO). EPA
believes that many of these facilities
have in fact discharged in circumstance
other than the 25-year/24-hour storm
and should be required to obtain a
permit.
  The number of non-NPDES permits
issued to AFOs greatly exceeds the
number of NPDES permits issued.
Although the information may be
incomplete on the number of state
permits issued, more than 45,000 non-
NPDES permits or formal authorizations
are known to have been issued through
state AFO programs. The non-NPDES
State authorizations often are only
operating permits or approvals required
for construction of waste disposal
systems. While some impose terms and
conditions on discharges from the  •
CAFO, EPA believes that many would
not meet the standards for approval as
NPDES permits. Because these  are not
NPDES permits, none meet the
requirement for federal enforceability.
   Minnesota alone has issued nearly
 25,000 State feedlot permits. Kansas has
issued more than 2,400 State permits, of
which 1,500 have been to facilities with
 more than 300 animal units. Indiana has
 issued more than 4,000 letters of
 approval to AFOs within the State.
 South Carolina has issued 2,000
 construction permits.
   With regard to the discharge
 standards included in permits, 28
 NPDES authorized States have adopted
 the federal feedlot effluent guidelines,
 while five authorized States use a more
 stringent limit. These more stringent
 limits partially .or totally prohibit
 discharges related to storm events. For
 example, Arkansas regulations prohibit
 discharges from liquid' waste
 management systems, including those
 resulting from periods of precipitation
 greater than the 25-year, 24-hour storm
event. In addition, California and North
Carolina rules provide for no discharge
from new waste control structures even
during 100 year storms. Numerous State
CAFO permit programs also impose
requirements that are broader in scope
than the existing federal CAFO
regulations.
  Twenty-two States have adopted laws
that their environmental regulations
cannot be more restrictive than the
specific requirements in the federal
regulations. Should any of these states
experience environmental problems
with CAFOs, they must rely on
appropriate state regulations no more
stringent than the federal rules.
  Thirty-four States explicitly impose at
least some requirements that address
land application of manure and
wastewater as part of either their NPDES
or non-NPDES program. The most
common requirements among these
States is that CAFO manure and
wastewater, when managed through
land application, be land applied in
accordance with agronomic rates and
that the operator develop and use a
waste management plan. Although some
States do not address how agronomic
rates should be determined, many base
it on the nitrogen heeds of crops, while
some require consideration of
phosphorus as well. The complexity of
waste management plans also varies
between states. Some states have very
detailed requirements for content of
waste management plans, while others
do not.  Generally, CAFO operators are
asked to address estimates of annual
nutrient value of waste, schedules for
emptying and applying wastes, rates
and locations for applying wastes,
provisions for determining agronomic
rates, and provisions for conducting
required monitoring and reporting.
   Although data was not available for
all States, State agency staff dedicated to
AFOs has increased over the last five
years, hi general, State staff dedicated to
AFOs is relatively small, with average
staff numbers being below four full-time
employees. Several States do not have
any staff specifically assigned to manage
water quality impacts from AFOs,
However, States such as Arkansas,
Minnesota, Wisconsin, and Nebraska
 doubled their staff commitment to AFOs
within the last five years. The most
notable increases in State staff assigned
 to address AFOs were in Iowa and
 North Carolina. Kansas, Minnesota, and
 North Carolina have the largest AFO
 staffs in the country, with each having
 more than 20 full time employees.
   One  indication that States have an
 increasing interest in expanding their
 efforts  to control water quality impacts
 from AFOs is the promulgation of new

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Federal Register/Vol.  66, No. 9/Friday, January  12, 2001/Proposed Rules
State AFO regulations and program
initiatives. At least twelve states have
developed new regulations related to
AFOs since 1996. (AL, IN, KS, KY, MD,
MS, NC, OK, PA, VT, WA, WY). Kansas,
Kentucky, North Carolina, and
Wyoming passed legislation regarding
swine facilities, with Kentucky and
North Carolina imposing moratoriums
on the expansion of hog AFOs until
State management/regulatory plans
could be developed.  Similarly,
Mississippi also has imposed a 2-year
moratorium on any new CAFOs.
Alabama's recent efforts include
developing an NPDES general
permitting rule and a Memorandum of
Agreement with EPA outlining State
agency responsibilities as they relate to
CAFOs. Washington's Dairy Law
subjects all dairy farms with more than
300 animal units to permitting and
requires each facility to develop
                    nutrient management plans approved by
                    the National Conservation Resource
                    Service. Indiana's Confined Feeding
                    Control Law also requires AFOs to
                    develop waste management plans and
                    receive State approval for operating
                    AFOs.
                     In conclusion, the implementation of
                    CAFO programs varies from state-to-
                    state, as does the implementation of
                    NPDES programs for CAFOs by NPDES
                    authorized states. As animal production
                    continues to become more
                    industrialized nationwide, a coherent
                    and systematic approach to
                    implementing minimum standards is
                    needed to ensure consistent protection
                    of water quality. Today's proposal will
                    continue to promote a systematic
                    approach to establishing industry
                    standards that are protective of human
                    health and the environment.
D. How Do Today's Proposed Revisions
Compare to the Unified National AFO
Strategy?
  As described in section III.B, on
March 9,1999, EPA and the U.S.
Department of Agriculture jointly issued
the Unified National Strategy for
Animal Feeding Operations (Unified
AFO Strategy),,which outlined USDA
and EPA's plans for achieving better
control of pollution from animal
agriculture under existing regulations.
The following is a comparison chart that
illustrates how the proposed rule
compares to the Unified AFO Strategy.
Table 3-1 compares the proposed CAFO
rule requirements with the Unified AFO
Strategy and identifies whether the
proposed requirements are consistent
with or not addressed by the Unified
AFO Strategy. The table further shows
that, overall, the proposed rule meets
the intent of the Unified AFO Strategy.
                   TABLE 3-1 .—PROPOSED RULE/UNIFIED NATIONAL AFO STRATEGY COMPARISON
Summary of proposed rule
Consistent
with Unified
AFO
Strategy
Not
addressed
in Unified
AFO
Strategy
Comment
                                     Proposed Revisions to NPDES Regulations
Definition of AFO (122.23{a)(2))—
AFO includes land application area;'
Clarifies crop language.
Definition of CAFO (122.23(a)(3))—
Change 1,000 animal unit threshold
to 500.
Definition of CAFO (122.23(a)(3))—
Include dry poultry operations.
Definition of CAFO (122.23(a)(3))—
Include Immature animals.
Definition of CAFO (122.23)— Re-
moves 25 year/24-hour storm pro-
vision from definition of CAFO.
Definition of Operation
(122.23(a)(5)) — Includes a person
who exercises substantial oper-
ational control over a CAFO.
Designation as a CAFO (122.23(b))—
In authorized States EPA may des-
ignate an AFO as a CAFO. No in-
spection required a designate facil-
ity that was previously defined or
designated as a CAFO.
Who must apply for an NPDES per-
mit (122.23(c))— CAFOs must ei-
ther apply for a permit or seek a
determination of no potential to dis-
charge.
•
•
•
•
•
•
•
•
•




The Unified AFO Strategy states CNMPs should address land application
of manure. (Sec. 3.1 and 3.2)
Crop language not explicitly addressed in Unified AFO Strategy.
Alternative thresholds not explicitly addressed in Unified AFO Strategy, al-
though Strategy does state EPA will explore alternative ways of defining
CAFOs. (Sec. 5, Issue 3, Item 2.B.).
The Unified AFO Strategy states that regulatory revisions will consider risk,
burden, statutory requirements, enforceability, and ease of implementa-
tion (i.e., clarity of requirements). (Sec. 5, Issue 3, Item 2).
The Unified AFO Strategy states that 5 percent of the AFOs will be subject
to the regulatory program, however, this estimate is provided for the exr
isting regulatory program (see Figure 2). No specific percentage is speci-
fied in the Strategy for the revised regulations.
The Unified AFO Strategy states that in revising regulations EPA intends to
consider defining "...large poultry operations, consistent with the size for
other animal sectors, as CAFOs, regardless of the type of watering or
manure handling system." (Sec. 5, Issue 3, Item 2.B.).
Immature animals not explicitly addressed in Unified AFO Strategy.
The Unified AFO Strategy states EPA will consider "requiring CAFOs to
have an NPDES permit even if they only discharge during a 25-year, 24-
hour or larger storm event." (Sec. 5, Issue 3, Item 2.B.).
The Unified AFO Strategy states EPA will "explore alternative approaches
to ensuring that corporate entities support the efforts of individual
CAFOs to comply with permits and develop and implement CNMPs."
(Sec. 5, Issue 3, Item 2.B.).
The Unified AFO Strategy states EPA will consider "who may designate
and the criteria for designating certain AFOs as CAFOs." (Sec. 5, Issue
3, Item 2.B.).
The Unified AFO Strategy states "the NPDES authority will issue a permit
unless it determines that the facility does not have a potential to dis-
charge. (Sec. 4.2).

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    Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
2971
TABLE 3-1 .—PROPOSED RULE/UNIFIED NATIONAL AFO STRATEGY COMPARISON—Continued
Summary of proposed rule
Co-Permitting (1 22.23(c)(3))— Opera-
tors, including any person who ex-
ercises substantial operational con-
trol over a CAFO, must either.apply
for a permit or seek a determina-
tion of no potential to discharge. ,
Issuance of permit (122.23(d))— Di-
rector-must issue permit unless s/
he determines no potential to dis-
charge.
No potential to discharge
(122.23(e)) — Determination must
consider discharge from production
area, land application area, and via
ground waters that have a direct
hydrologic connection to surface
waters.
AFOs not defined or designated
. (122.23(g))— AFOs subject to
NPDES permitting requirements if
they have a discrete conveyance
(i.e., point source) discharge from
production or land .application that
is not entirely storm water.
Non-AFO land application
(122.23(h))— Land application in-
consistent with practices in
41 2.31 (b) arid that result in point
source discharge of pollutants to
Waters of the US may be des-
ignated under 122.26(a)(1)(v).
Agricultural Storm Water Exemp-
tion—Discharges from land applica-
tion area if manure is not applied in
quantities that exceed the land ap-
plication rates calculated using one
of the methods specified in 40 CFR
412.31(b)(1)(iv).
CAFO . permit requirement
(122.23(i)(2))— CAFOs subject to
effluent guidelines if applicable.
CAFO permit requirement
(122.23Q))— Prohibits land applica-
tion of manure that would not serve
agricultural purpose and would like-
ly result in pollutant discharge to
waters of the U.S.
CAFO permit requiremen
(122.23(j)(4))— Permittee must ei
ther provide information to recipien
or, under one co-proposal option
obtain certification that recipient wil
land apply per Permit Nutrient Plan
(PNP), obtain permit, use for othe
purpose, or transfer to 3rd party.
CAFO permit requiremen
(122.23(j)(5))— Permit must require
specified recordkeeping.
Closure (122.23(i)(3))— AFO mus
maintain permit until it no longe
has wastes generated while it wa
a CAFO.
Consistent
with Unified
AFO
Strategy
•
•
•
•
•
•
•



Not
addressed
in Unified
AFO
Strategy



•



••
•
•
Comment
The Unified AFO Strategy states EPA will "explore alternative approaches
'to ensuring that corporate entities support the efforts of individual
CAFOs to comply with permits and develop and implement CNMPs."
(Sec. 5, Issue 3, Item 2.B.).
The Unified AFO Strategy states "the NPDES authority will issue a permit
unless it determines that the facility does not have a potential to dis-
charge. (Sec. 4.2.).
The Unified AFO Strategy establishes a national performance expectation
that all AFOs should develop and implement CNMPs, and that such
CNMPs should address land application of manure. (Sec. 3.1 and 3.2).
The Unified AFO Strategy states "EPA believes that pollution of ground-
water may be a concern around CAFOs. EPA has noted in other docu-
ments that a discharge via hydrologically connected groundwater to sur-
face waters may be subject to NPDES requirements." (Sec. 4.2.).
The Unified AFO Strategy states EPA will consider protecting "sensitive or
highly valuable water bodies such as Outstanding Natural Resources,
sole source aquifers, wetlands, ground water recharge areas, zones of
significant ground/surface water interaction, and other areas." (Sec. 5,
Issue 3, Item 2.B.).
The Unified AFO Strategy states EPA will consider "clarifying whether and
under what conditions AFOs may be subject to NPDES requirements."
(Sec. 5, Issue 3, Item 2.B.).
The Unified AFO Strategy states EPA will consider "clarifying requirements
for effective management of manure and wastewater from CAFOs
whether they are handled on-site or off-site." (Sec. 5, Issue 3, Item 2.
B-). ,
The Unified AFO Strategy states EPA has in the past and will in the future
assume that discharges from the majority of agricultural operations are
exempt, but that the agricultural storm water exemption would not apply
where the discharge is associated with the land disposal of manure or
wastewater from a CAFO and the discharge is not the result of proper
agricultural practices. (Sec. 4.4).
The Unified AFO Strategy states the effluent guidelines revisions will be
closely coordinated with any charges to the NPDES permitting regula-
tions. (Sec. 5, Issue 3, Item 2. A.).
The Unified AFO Strategy provides that all AFOs should develop and im-
plement CNMPs, and that such CNMPs should address land application
of manure to minimize impacts on water quality and public health. (Sec.
3.1 and 3.2).
The Unified AFO Strategy states EPA will consider "clarifying requirements
for effective management of manure and wastewater from CAFOs
whether they are handled on-site or off-site." (Sec. 5, Issue 3, Item 2.
B.).
The Unified AFO Strategy states EPA will consider "establishing specific
monitoring and reporting requirements for permitted facilities." (Sec. 5,
Issue 3, Item 2. B.).
The Unified AFO Strategy provides records should be kept when manure
leaves the CAFO. (Sec.3.3).
Not explicitly addressed in Unified AFO Strategy.

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Federal  Register/Vol. 66, No.  9/Friday, January  12,  2001/Proposed Rules
              TABLE 3-1.—PROPOSED RULE/UNIFIED NATIONAL AFO STRATEGY COMPARISON—Continued
Summary of proposed rule
Public access (122.23(1) — Requires
public access to list of NOIsJist of
CAFOs that have prepared PNPs,
and access to executive summary
of PNP upon request.
General Permits (122.28)— Notice of
Intent must include topographic
map and statement re PNP; addi-
tional criteria specified for when in-
dividual permits may be required.
Consistent
with Unified
AFO
Strategy

•
Not
addressed
in Unified
AFO
Strategy
•
•
Comment
Not explicitly addressed in Unified AFO Stratecjv
NOI requirements not explicitly addressed in Unified AFO Strategy.
The Unified AFO Strategy states EPA will consider "requiring i
permits for CAFOs in some situations." (Sec. 5, Issue 3, Item 2.


idividual
B.).
                               Proposed Revisions to Feedlot Effluent Guidelines Regulations
Production Area— Beef/Dairy
(412.33(a): No discharge except
when designed for 25 year, 24-
hour storm, also inspect/ correct/
pump-out, manage mortalities.
Swine/Poultry (412.43{a)): No dis-
charge.
Land Application (412.33(b) and
412.43(b)) — Develop and Imple-
ment PNP covering the land appli-
cation areas under the control of
the CAFO. Also Include Best Man-
agement Practices.
Land Application (412.31(b)(1)(ii))—
PNP Approved by Certified Spe-
cialist.
New Source Performance Standards
(412.35/45): Various additional re-
quirements.
Additional Measures (412.37) —
Inspect/ correct/ pump-out, manage
mortalities; Land application BMPs,
sampling, training, recordkeeping.
•
•
•
•
•

•




The Unified AFO Strategy indicates the existing effluent guidelines is no
discharge when designed for 25 year, 24-hour storm. (Sec. 5, Issue 3,
Item 2. A).
Strategy states that in developing the revised effluent guidelines EPA is to
assess different management practices that minimize the discharge of
pollutants. (Sec. 5, Issue 3, Item 2. A).
PNP has been identified as a specific subset of a CNMP applicable to
AFOs subject to the regulation. In this manner it is consistent with the
Strategy. It also reinforces that the CNMP is applicable to all AFOs (reg-
ulatory/voluntary) while the PNP is only applicable to those that fall
under the regulatory program. It makes a clear distinction between the
regulatory and voluntary programs addressed in the Strategy.
The PNP is a subset of the CNMP The Strategy identified that CNMPs
"developed to meet the requirements of the NPDES program in general
must be developed by a certified specialist 	 ". (Sec. 4.6).
Strategy states that in developing the revised effluent guidelines EPA Is to
evaluate the need for different requirements for new or expanding oper-
ations. (Sec. 5, Issue 3, Item 2..A).
Strategy states that in developing the revised effluent guidelines EPA is to
assess different management practices that minimize the discharge of
pollutants. (Sec. 5, Issue 3, Item 2. A).
Strategy states that the regulatory revision process will include the estab-
lishment of specific monitoring and reporting requirements for permitted
facilities. • . .
IV. Why is EPA Changing the Effluent
Guidelines for Feedlots and the NPDES
CAFO Regulations?
A. Main Reasons For Revising the
Existing Regulations

  Despite more than twenty years of
regulation, there are persistent reports of
discharge and runoff of manure and
manure nutrients from livestock and
poultry operations. While this is partly
due to inadequate compliance with
existing regulations, EPA believes that
the regulations themselves also need
revision. Today's proposed revisions to
the existing effluent guidelines and
NPDES regulations for CAFOs are
expected to mitigate future water quality
impairment and the associated human
health and ecological risks by reducing
pollutant discharges from the animal
produQtion industry.
  EPA's proposed revisions also address
the changes that have occurred in the
animal production industries in the
                   United States since the development of
                   the existing regulations. The continued
                   trend toward fewer but larger
                   operations, coupled with greater
                   emphasis on more intensive production
                   methods and specialization, is
                   concentrating more manure nutrients
                   and other animal waste constituents
                   within some geographic areas. This
                   trend has coincided with increased
                   reports of large-scale discharges from
                   these facilities, and continued runoff
                   that is contributing to the significant
                   .increase in nutrients and resulting
                   impairment of many U.S. waterways.
                     EPA's proposed revisions of the
                   existing regulations will make the
                   regulations more effective for the
                   purpose of protecting or restoring water
                   quality. The revisions will also make the
                   regulations easier to understand and
                   better clarify the conditions under
                   which an AFO is a CAFO and, therefore,
                   subject to the regulatory requirements of
                   today's proposed regulations.
B. Water Quality Impairment Associated
with Manure. Discharge and Runoff
  EPA has made significant progress in
implementing CWA programs and in
reducing water pollution. Despite such
progress, however, serious water quality
problems persist throughout the
country. Agricultural operations,
including CAFOs, are considered a
significant source of water pollution in
the United States. The recently released
National Water Quality Inventory: 1998
Report to Congress was prepared under
Section 305(b) of the Clean Water Act.
Under this section of the Act, States
report their impaired water bodies to
EPA, including the suspected sources of
those impairments. The most recent
report indicates that the agricultural
sector (including crop production,
pasture and range grazing, concentrated
and confined animal feeding operations,
and aquaculture) is the leading
contributor to identified water quality
impairments in the nation's rivers and

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                   Federal Register/Vol.  66, No. 9/Friday, January 12, 2001/Proposed Rules
                                                                       2973
' streams, and also the leading
, contributor in the nation's lakes, ponds,
 and reservoirs. Agriculture is also
identified as the fifth leading
contributor to identified water quality
impairments in the nation's estuaries.
1998 National Water Quality Inventory
results are illustrated in table 4—1
below.
              TABLE 4-1.—FIVE LEADING SOURCES OF WATER QUALITY IMPAIRMENT IN THE UNITED STATES
Rank
••]


A
5 	
Rivers
Agriculture (59%) 	
Hydro modification (20%)
Urban Runoff/ Storm Sewers (11%) 	
Municipal Point Sources (1 0%)
Resource' Extraction (9%) 	
Lakes
Agriculture (31%) 	
Hydro modification (15%) 	
Urban Runoff/Storm Sewers (12%) 	
Municipal Point Sources (11%) 	
Atmospheric Deposition (8%) 	 	 	
Estuaries
Municipal Point Sources (28%)
Urban Runoff / Storm Sewers (28%)
Atmospheric Deposition (23%)
Industrial Discharges (15%)
Agriculture (15%)
   Source- National Water Quality Inventory: 1998 Report to Congress, USEPA, 2000. Percentage of impairment attributed to each source is
 shown in parentheses. For example, agriculture is listed as a source of impairment in 59 percent of impaired river miles. The portion of agricul-
 tural" impairment attributable to animal waste (as compared to crop production, pasture grazing, range grazing, and aquaculture) is not specified
 in this value. Figure totals exceed 100 percent because water bodies may be impaired, by more than one source.
   Table 4—2 presents additional
 summary statistics of the 1998 National
 Water Quality Inventory. These figures
 indicate that the agricultural sector
 contributes to the impairment of at least
 170,000 river miles, 2.4 million lake
 acres, and almost 2,000 estuarine square
 miles. Twenty-eight states and tribes
 identified specific agricultural sector
 activities contributing to water quality
 impacts on rivers and streams, and 16
 states and tribes identified specific .
agricultural sector activities
contributing to water quality impacts on
lakes, ponds, and reservoirs. CAFOs are
a subset of the agriculture category. For
rivejrs and streams, estimates from these
states indicate that 16 percent of the
total reported agricultural sector
impairment is from the animal feeding
operation industry (including feedlots,
animal holding areas, and other animal
operations), and 17 percent of the
agricultural sector impairment is from
both range and pasture grazing. For
lakes, ponds, and reservoirs, estimates
from these states indicate that 4 percent
of the total reported agricultural sector
impairment is from the animal feeding
operation industry, and 39 percent of
the agricultural sector impairment is
from both range and pasture grazing.
Impairment due specifically to land
application  of manure, was not reported.
                         TABLE 4-2.—SUMMARY OF U.S. WATER QUALITY IMPAIRMENT SURVEY
Total quantity in U.S.
Rivers 	 	 	 	
3,662,255 miles
Lakes, Ponds, and Reservoirs
41 .6 million acres
Estuaries
90,465 square miles
Waters assessed
23% of total
840,402 miles
42% of total
17.4 million acres
32% of total
28,687 square miles
Quantity impaired by all sources
35% of assessed
291 ,263 miles
45% of assessed
7.9 million acres
44% of assessed
12,482 square miles
Quantity impaired by agriculture3
59% of impaired.
170,750 miles.
31% of impaired.
2,417,801 acres.
15% of impaired.
1 ,827 square miles.
   Source: National Water Quality Inventory: 1998 Report to Congress, USEPA, 2000.
   aCAFOs are a subset of the agriculture category.
    Table 4-3 below lists the leading
  pollutants impairing surface water
  quality in the United States as identified
  in the 1998 National Water Quality
  Inventory. The animal production
  industry is a potential source of all of
  these, but is most commonly associated
 with nutrients, pathogens, oxygen-
 depleting substances, and solids
 {siltation). Animal production facilities
 are also a potential source of the other
 leading causes of water quality
 impairment, such as metals and
 pesticides, and can contribute to the
 growth of noxious aquatic plants due to
 the discharge of excess nutrients.
 Animal production facilities may also
 contribute' loadings of priority toxic
 organic chemicals and oil and grease,
 but to a lesser extent than other
 pollutants.
               TABLE 4-3.—FIVE LEADING CAUSES OF WATER QUALITY IMPAIRMENT IN THE UNITED STATES
Rank

2'
Q
4 	
5 	 	
Rivers
Siltation (38%)
Pathogens (36%) 	
Nutrients (29%) 	
Oxygen-Depleting Substances (23%) 	
Metals (21%) 	
Lakes
Nutrients (44%) 	
Metals (27%) 	 	 	
Siltation (15%) 	 	 	 '. 	
Oxygen-Depleting Substances (14%) 	
Suspended Solids (10%) 	
Estuaries
Pathogens (47%)
Oxygen-Depleting Substances (42%)
Metals (27%)
Nutrients (23%)
Thermal Modifications (18%)
  ini__...
  mal modifications are commonly associated with L		„ ..            ...
  Figure totals exceed 100 percent because water bodies may be impaired by more than one source.

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  Pollutants associated with animal
 production can also originate from a
 variety of other sources, such as
 cropland, municipal and industrial
 wastewater discharges, urban runoff,
 and septic systems. The national
 analyses described in Section V of this
 preamble are useful in assessing the
 significance of animal waste as a
 potential or actual contributor to water
 quality degradation across the United
 States. Section V also discusses the
 environmental impacts and human
 health effects associated with the
 pollutants found in animal manure.
 C. Recent Changes in the Livestock and
 Poultry Industry
  EPA's proposed revisions of the
 existing effluent guidelines and NPDES
 regulations take into account the major
 structural changes that have occurred in
 the livestock and poultry industries
 since the 1970s when the regulatory
 controls for CAFOs were first instituted.
 These changes include:
  • Increased number of animals
 produced annually;
  • Fewer animal feeding operations
 and an increase in the share of larger
 operations that concentrate more
 animals, manure and wastewater in a
 single location;
  • Geographical shifts in where
 animals are produced; and
  • Increased coordination between
 animal feeding operations and
 processing firms.
 1. Increased Livestock and Poultry
 Production
  Since the 1970s, total consumer
 demand for meat, eggs, milk and dairy
 products has continued to increase. To
 meet this demand, U.S. livestock and
 poultry production have risen sharply,
 resulting in an increase in the number
 of animals produced and the amount of
 manure and wastewater generated
 annually.
  Increased sales from U.S. farms is
 particularly dramatic in the  poultry
 sectors, as reported in the Census of
 Agriculture (various years). In 1997,
 turkey sales totaled 299 million birds. In
 comparison, 141 million turkeys were
 sold for slaughter in 1978. Broiler sales
 totaled 6.4 billion chickens in 1997, up
 from 2.5 billion chickens sold in 1974.
 The existing CAFO regulations
 effectively do not cover broiler
 operations because they exclude
 operations that use dry manure
 management systems. Red meat
 production also rose during  the 1974-
 1997 period. The number of hogs and
pigs sold increased from 79.9 million
hogs in 1974 to 142.6 million hogs in
 1997.  Sales data for fed cattle (i.e., '
                    USDA's data category on "cattle
                    fattened on grain and concentrates") for
                    1975 show that 20.5 million head were
                    marketed. By 1997, fed cattle marketings
                    totaled 22.8 million head. The total
                    number of egg laying hens rose from 0.3
                    million birds in 1974 to 0.4 million
                    birds in 1997. The number of dairy cows
                    on U.S. farms, however, dropped from
                    more than 10.7 million cows to 9.1
                    million cows over the same period.
                      Not only are more animals produced
                    and sold each year, but the animals are
                    also larger in size. Efficiency gains have
                    raised animal yields in terms of higher
                    average slaughter weight. Likewise,
                    production efficiency gains at egg laying
                    and dairy operations have resulted in
                    higher per-animal yields of eggs and
                    milk. USDA reports that the average
                    number of eggs produced per egg laying
                    hen was 218 eggs per bird in 1970
                    compared to 255 eggs per bird in 1997.
                    The National Milk Producers Federation
                    reports that average annual milk
                    production rose from under 10,000
                    pounds per cow in 1970 to more than
                    16,000 pounds per cow in 1997. In the
                    case of milk production, these efficiency
                    gains have allowed farmers to maintain
                    or increase production levels with fewer
                    animals. Although animal inventories at
                    dairy farms,may be lower, however, this
                    may not necessarily translate to reduced
                    manure volumes generated because
                    higher yields are largely attributable to
                    improved and often more intensive
                    feeding strategies that may exceed the
                    animal's ability for uptake. This excess
                    is not always incorporated by the
                    animal and may be excreted.

                    2. Increasing Share of Larger, More
                    Industrialized Operations
                      The number of U.S. livestock and
                    poultry operations is declining due to
                    ongoing consolidation in the animal
                    production industry. Increasingly,
                    larger, more industrialized, highly
                    specialized operations account for a
                    greater share of all animal production.
                    This has the effect of concentrating
                    more animals, and thus more manure
                    and wastewater, in a single location,
                    and raising the  potential for significant
                    environmental damages unless manure
                    is properly stored and handled.
                      USDA reports that there were 1.1
                    million livestock and poultry farms in
                    the United States in 1997, about 40
                    percent fewer than the 1.7 million farms
                    reported in 1974. Farms are closing,
                    especially smaller operations that
                    cannot compete with large-scale, highly
                    specialized, often lower cost, producers.
                    Consequently, the livestock and poultry
                    industries are increasingly dominated
                    by larger operations. At the same time,
                    cost and efficiency considerations are
pushing farms to become more
specialized and intensive. Steep gains in
production efficiency have allowed
farmers to produce more with fewer
animals because of higher per-animal
yields and quicker turnover of animals
between farm production and consumer
market. As a result, annual production
and sales have increased, even though
the number of animals on farms at any
one time has declined (i.e., an increase
in the number of marketing cycles over
the course of the year allows operators
to maintain production levels with
fewer animals at any given time,
although the total number of animals
produced by the facility over the year
may be greater).
  The increase in animal densities at
operations is evident by comparing the
average number of animals per
operation between 1974 and 1997, as
derived from Census of Agriculture
data. In the poultry sectors, the  average
number of birds across all operations is
four to five times greater in 1997 than
in 1974. In 1997, the number of broilers
per operation averaged 281,700 birds,
up from 73,300 birds in 1974. Over the
same  period, the average number of egg
laying hens per operation rose from
1,100 layers to 5,100 layers per  farm,
and the average number of turkeys per
operation rose from'2,100  turkeys to
8,600 turkeys. The average number of
hogs raised per operation rose from
under 100 hogs to more than  500 hogs
between 1974 and 1997. The average
number of fed cattle and dairy cows per
operation more than doubled during the
period, rising to nearly 250 fed cattle
and 80 milking cows by 1997.
  This trend toward fewer, larger, and
more  industrialized operations has
contributed to large amounts  of manure
being produced at a single geographic
location. The greatest potential risk is
from the largest operations with the
most animals given the sheer volume of
manure generated at these facilities.
Larger, specialized facilities often do not
have an adequate land base for manure
disposal through land application. A
USDA analysis of 1997 Census data
shows that animal operations with more
than 1,000 AU account for more than 42
percent of all confined animals but only
3 percent of cropland held by livestock
and poultry operations. As a result,
large facilities need to store significant
volumes of manure and wastewater
which have the potential, if not properly
handled, to cause significant water
quality impacts. By comparison, smaller
operations manage fewer animals and
tend to concentrate less manure at a
single farming location. Smaller
operations also tend to be more
diversified, engaging in both animal and

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crop production. These operations often
have sufficient cropland and fertilizer
needs to land apply manure generated
by the farm's livestock or poultry
business, without exceeding that land's
nutrient requirements.
   Another recent analysis from USDA
confirms that as animal production
operations have become larger and more
specialized operations, the opportunity
to jointly manage animal waste and crop
nutrients has decreased. Larger
'operations typically have inadequate
land available for utilizing manure
nutrients. USDA estimates that the
amount of nitrogen from manure
produced by confinement operations
.increased about 20 percent between
1982 and  1997, while average acreage
on livestock and poultry farms declined.
Overall, USDA estimates that cropland
controlled by operations with confined
animals has the assimilative capacity to
absorb about 40 percent of the
calculated manure nitrogen generated
by these operations. EPA expects this
excess will need to be transported
offsite.
3. Geographic Shifts in Where Animals
are Raised
   During the 1970s, the majority of
, farming operations were concentrated in
rural, agricultural areas and manure
nutrients generated by animal feeding
operations were readily incorporated as
a fertilizer for crop production. In an
effort to reduce transportation costs and
streamline distribution between the
animal production and food processing
sectors, livestock and poultry operations
, have tended to cluster near slaughtering
arid manufacturing plants as well as
near end-consumer markets. Ongoing
structural and technological change in
these industries also influences where
facilities operate and contributes to
locational shifts from the more
traditional farm production regions to
the more emergent regions.
   Operations in more traditional
producing states tend to grow both
livestock and crops and tend to have
adequate cropland for land application
of manure. Operations in these regions
also tend to be smaller in size. In
contrast, confinement operations in
more emergent areas, such as hog
operations in North Carolina or dairy
operations in the Southwest, tend to be
larger in size and more intensive types
of operations. These operations tend to
be more specialized and often do not
have adequate land for application of
manure nutrients. Production is growing
rapidly in these regions due to
competitive pressures from more
specialized producers who face lower
per-unit costs of production. This may
be shifting the flow of manure nutrients
away from more traditional agricultural
areas, often to areas where these
nutrients cannot be easily absorbed.
  As reported by Census data, shifts in
where animals are grown is especially
pronounced in the pork sector.
Traditionally, Iowa has been the top
ranked pork producing state. Between
1982 and 1997, however, the number of
hogs raised in that state remained
relatively constant with a year-end
inventory average of about 14.2 million
pigs. In comparison, year-end hog
inventories in North Carolina increased
from 2.0 million pigs in 1982 to 9.6
million pigs in 1997.  This locational
shift has coincided with reported
nutrient enrichment of the waters of the
Pamlico Sound in North Carolina.
Growth in hog production also occurred
in other emergent areas, including
South Dakota, Oklahoma, Wyoming,
Colorado, Arizona, and Utah.
Meanwhile, production dropped in
Illinois, Indiana, Wisconsin, and Ohio.
  The dairy industry has seen similar
shifts in where milk is produced,
moving from the more traditional
Midwest and Northeast states to the
Pacific and Southwestern states.
Between 1982 and 1997, the number of
milk cows in  Wisconsin dropped from
1.9 million to 1.3 million. MiJk cow
inventories have also declined in other
traditional states, including Illinois,
Indiana, Iowa, Minnesota, Missouri,
New York, Pennsylvania, Ohio,
Connecticut, Maryland, and Vermont.
During the same period, milk cow
inventories in California rose from 0.9
million in 1982 to 1.4 million in 1997.
In 1994, California replaced Wisconsin
as the top milk producing state. Milk
cow inventories have also increased in
Texas, Idaho, Washington, Oregon,
Colorado, Arizona, Nevada, and Utah.
.These locational shifts have coincided
with reported nutrient enrichment of
waters, including the Puget Sound and
Tillamook Bay in the northwest, the
Everglades in Florida, and Erath County
in Texas, and also elevated salinity
levels due to  excess manure near milk
production areas in southern
California's Chino Basin.
4. Increased Linkages between Animal
Production Facility and Food Processors
   Over the past few decades, closer ties
have been forged between growers and
various industry middlemen, including
packers, processors, and cooperatives.
Increased integration and coordination
is being driven by, the competitive
nature of agricultural production and
the dynamics of the food marketing
system, in general, as well as seasonal
fluctuations of production, perishability
of farm products, and the inability to
store and handle raw farm output.
Closer ties between the animal
production facility and processing
firms—either through contractual
agreement or through corporate
ownership of CAFOs—raises questions
of who is responsible for ensuring
proper manure disposal and
management at the animal feeding site.
This is especially true given the current
trend toward larger animal confinement
operations and the resultant need for
increased animal waste management. As
operations become larger and more
specialized, they may contract out some
phases of the production process.
  Farmers ana ranchers have long used
contracts to market agricultural
commodities. However, increased use of
production contracts is changing the
organizational structure of the
individual industries. Under a
production contract, a business other
than the feedlot where the animals are
raised and housed, such as a processing
firm, feed mill, or animal feeding
operation, may own the animals and
may exercise further substantial
operational control over the operations
of the feedlot. In some cases, the
processor may specify in detail the
production inputs used, including the
genetic material of the animals, the
types of feed used, and the production
facilities  where the animals are raised.
The processor may also influence the
number of animals produced at a site. In
general, these contracts do not deal with
management of manure and waste
disposal. Recently, however, some
processors have become increasingly
involved in how manure and waste is
managed at the animal production site.
  The use of production contracts in the
livestock and poultry industries varies
by commodity group. Information from
USDA indicates that production
contracts are widely used in the poultry
industry  and dominate broiler
production. Production contracting is
becoming increasingly common in the
hog sector, particularly for the finishing
stage of production in regions outside
the Corn Belt.
  Production contracting has played a
critical role in the growth of integrators
in the poultry sectors. Vertical
integration has progressed to the point
where large, multifunction producer-
packer-processor-distributor firms are
the dominant force in poultry and egg
production and marketing. Data from
USDA on animal ownership at U.S.
farms illustrates the use of production
contracts in these sectors. In 1997,
USDA reported that 97 percent of all
broilers raised on U.S. farms were not
owned by the farmer. In the turkey £ind

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001 /Proposed Rules
                                 lor
egg laying sectors, use of production
contracts is less extensive since 70
percent and 43 percent of all birds in
these sectors, respectively, were not
owned by the farmer. In the hog sector,
data from USDA indicate that
production contracting may account fc
66 percent of hog production among
larger producers in the Southern and
Mid-Atlantic states. This differs from
the Midwest, where production
contracting accounted for 18 percent of
hog production in 1997.
  By comparison, production contracts
are not widely used in the beef and
dairy sectors. Data from USDA indicate
that less than 4 percent of all beef cattle
and 1 percent of all milking cows were
not owned by the farmer in 1997.
However, production contracts are used
in these industries that specialize in a
single stage of livestock production,
such as to "finish" cattle prior to
slaughter or to produce replacement
breeding stock. However,  this use
constitutes a small share of overall
production across all producers.
  To further examine the  linkages
between the animal production facility
and the food processing firms, and to
evaluate the geographical implications
of this affiliation, EPA conducted an
analysis that shows a relationship
between areas of the country with an
excess of manure nutrients from animal
production operations and areas with a
large number of meat packing and
poultry slaughtering facilities. This
manure—if land applied—would be in
excess of crop uptake needs and result
in over application and enrichment of
nutrients. Across the pork and poultry •
sectors, this relationship is strongest in
northwest Arkansas, where EPA
estimates a high concentration of excess
manure nutrients and a large number of
poultry and hog processing facilities. By
sector, EPA's analysis shows that there
is excess poultry manure nutrients and
a large number of poultry processing
plants in the Delmarva Peninsula in the
mid-Atlantic, North Carolina, northern
Alabama, and also northern Georgia. In
the hog sector, the analysis shows
excess manure nutrients and a large
number of meat packing plants in Iowa,
Nebraska and Alabama. The analysis
also shows excess manure, nutrients
from hogs in North Carolina, but
relatively fewer meat packing facilities,
which is likely explained by continuing
processing plant closure and
consolidation in that state. More
information on this analysis is provided
in the rulemaMng record.
D. Improve Effectiveness of Regulations.
  As noted in Section IV.B, reports of
continued discharges and runoff from
 animal production facilities have
 persisted in spite of regulatory controls
 that were first instituted in the 1970s.
 EPA is proposing to revise the effluent
 guidelines and NPDES regulations to
 improve their effectiveness by making
 the regulations simpler and easier to
 understand and implement. Another
 change intended to improve the
. effectiveness of the regulations is
 clarification of the conditions under
 which an AFO is a CAFO and is,
 therefore, subject to the NPDES
 regulatory requirements.,!]! addition,
 EPA is revising the existing regulation
 to remove certain provisions that are no
 longer appropriate..
  The existing regulations were
 designed, to prohibit the release of
 wastewater from the feedlot site, but did
 not specifically address discharges that
 may occur when wastewater or solid
 manure mixtures are applied to crop,
 pasture, or hayland. The proposed
 regulations address the environmental
 risks associated with manure
 management. The proposed revisions
 also are more reflective of current farm
 production practices and waste
 management controls.
  Today's proposed revised regulations
 also seek to improve the effectiveness of
 the existing regulations by focusing on
 those operations that produce the
 majority of the animal manure and
 wastewater generated annually. EPA
 estimates that the proposed regulations
 will regulate, as CAFOs, about 7 to 10
 percent of all animal confinement
 operations nationwide, and will capture
 between 64 percent and 70 percent of
 the total amount of manure generated at
 CAFOs annually, depending on the
 proposed regulatory alternative
 (discussed in more detail'in Section
 VIA). Under the existing regulations,
 few operations have obtained NPDES
 permits. Presently, EPA and authorized
 States have issued approximately 2,500
 NPDES permits. This is less than 1
 percent of the estimated 376,000 animal
 confinement operations in the United
 States. EPA's proposed revisions are
 intended to ensure that all CAFOs, as
 defined under the proposed regulations,
 will apply for and obtain a permit.

 V. What Environmental and Human
 Health Impacts Are Potentially Caused
 by CAFOs?
   The 1998 National Water Quality
 Inventory, prepared under Section
 305(b) of the Clean Water Act, presents
 information on impaired water bodies
 based on reports from the States. This
 recent report indicates that the
 agricultural sector (which includes
 concentrated and confined animal
 feeding operations, along with
aquaculture, crop production, pasture
grazing, and range grazing) is the
leading contributor to identified water
quality impairments in the nation's
rivers and lakes, and the fifth leading
contributor in the nation's estuaries.
The leading pollutants or stressors of
rivers and streams include (in order of
rank) siltation, pathogens  (bacteria),
nutrients, and oxygen depleting
substances. For lakes, ponds, and
reservoirs, the leading pollutants or
stressors include nutrients (ranked first),
siltation (ranked third), oxygen
depleting substances (ranked fourth),
and suspended solids (ranked fifth). For
estuaries, the leading pollutants or
stressors include pathogens (bacteria) as
the leading cause, oxygen depleting
substances (ranked second), and
nutrients (ranked fourth).
  The sections which follow present the
pollutants associated with livestock and
poultry operators, of which CAFOs are
a subset, the pathways by which the
pollutants reach surface water, and their
impacts on the environment and human
health. Detailed information can be
found in the Environmental Assessment
of the Proposed Revisions to the
National Pollutant Discharge
Elimination System Regulation and
Effluent Guidelines for Concentrated
Animal Feeding Operations. The
Environmental Assessment and the
supporting references mentioned here
are included in Section 8.1 of the
Record for this proposal.

A. Which Pollutants Do CAFOs Have the
Potential to Discharge and Why Are  .
They of Concern?
  The primary pollutants associated
with animal Waste are nutrients
(particularly nitrogen and phosphorus),
organic matter, solids, pathogens, and
odorous/volatile compounds. Animal
waste is also a source of salts and trace
elements, and to a lesser extent,
antibiotics, pesticides, and hormones.
Each of these types of pollutants is
discussed hi the sections which follow.
The  actual composition of manure
depends on the animal species, size,
maturity, and health, as well as on the
composition (e.g., protein content) of
animal feed.
I. Nutrients (Nitrogen, Phosphorus, and
Potassium)
  The 1998 National Water Quality
Inventory indicates that nutrients are
the leading stressor in impaired lakes,
ponds, and reservoirs. They are the
third most frequent stressor in impaired
rivers and streams, and the fourth
greatest stressor in impaired estuaries.
The  three primary nutrients in manure
are nitrogen, phosphorus, and

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                                                                      2977
potassium. (Potassium also contributes
to salinity.)
•  Nitrogen in fresh, manure exists in
both organic forms -(including urea) and
inorganic forms (including ammonium,
ammonia, nitrate, and nitrite). In fresh
manure, 60 to 90 percent of total
nitrogen is present in organic forms.
Organic nitrogen is transformed via
microbial processes to inorganic forms,
which are bioavailable and therefore
have fertilizer value. As an example of
the quantities of nutrients discharged
from AFOs, EPA estimates that hog
operations in eastern North Carolina
generated 135 million pounds of
nitrogen per year as of 1995.
  Phosphorus exists in solid and
dissolved phases, in both organic and
inorganic forms. Over 70 percent of the
phosphorus in animal manure is in the
organic form. As the waste ages,
phosphorus mineralizes to inorganic
phosphate compounds which are
available to plants. Organic phosphorus
compounds are generally water soluble
and may leach through soil to
groundwater and run off into surface
waters. Inorganic phosphorus tends to
adhere to soils and is less likely to leach
into groundwater. Animal wastes
typically have lower
nitrogen:phosphorus ratios than crop
requirements. The application of
manure at a nitrogen-based agronomic
rate can, therefore, result in application
of phosphorus at several times the
agronomic rate. Soil test data in the
United States confirm that many soils in
areas dominated by animal-based
agriculture have elevated levels of
phosphorus.
  Potassium contributes to the  salinity
of animal manure which may in turn
contribute salinity to surface water
polluted by manure. Actual or
anticipated levels of potassium in
surface water and groundwater are
unlikely to pose hazards to human
health or aquatic life. However,
applications of high salinity manure are
likely to decrease the fertility of the soil.
  In 1998, USDA studied the amount of
manure nitrogen and phosphorus
production for confined animals relative
to crop uptake potential. USDA
evaluated the quantity of nutrients
available from recoverable livestock
manure relative to crop growth
requirements, by county, based on data
from the 1997 Census of Agriculture.
The analyses were intended to
determine the amount of manure that
can be recovered and used. The analyses
did not consider manure from grazing
animals in pasture, excluded manure
lost to the environment, and also
excluded manure lost in dry storage and
treatment. It is not currently possible to
completely recover all manure.
  Losses to the environment can occur
through runoff, erosion, leaching to
groundwater, and volatilization
(especially for nitrogen in the form of
ammonia). These losses can be
significant. Considering typical
management systems, the 1998 USDA
study reported that average manure
nitrogen losses range from 31 to 50
percent for poultry, 60 to 70 percent for
cattle (including the beef and dairy
categories), and 75 percent for swine.
The typical phosphorus loss is 15
percent.
  The USDA study also looked at the
potential for available manure nitrogen
and phosphorus generated in a county
to meet or exceed plant uptake and
removal in each of the 3,141 mainland
counties. Based on this analysis of 1992
conditions, available manure nitrogen
exceeds crop system needs in 266
counties, and available manure
phosphorus exceeds crop system needs
in 485 counties. The relative excess of  •
phosphorus compared to nitrogen is not
surprising, since manure is typically
nitrogen-deficient relative to crop needs.
Therefore, when manure is applied to
meet a crop's nitrogen requirement,
phosphorus is typically over-applied.
  USDA's analyses do not evaluate
environmental transport of applied
manure nutrients. Therefore, an excess
of nutrients iii a particular county does
not necessarily indicate that a water
quality problem exists. Likewise, a lack
of excess'nutrients does not imply the
absence of water quality problems.
Nevertheless, the  analyses provide a
general indicator of excess nutrients on
a broad basis. •

2. Organic Matter

  Livestock manures contain many
carbon-based, biodegradable
compounds. Once these compounds  •
reach surface water, they are
decomposed by aquatic bacteria and
other microorganisms. During this
process dissolved oxygen is consumed,
which in turn reduces the amount of
oxygen available for aquatic animals.
The 1998 National Water Quality
Inventory indicates that oxygen-
depleting substances are the second
leading stressor in estuaries. They are
the fourth greatest stressor both in
impaired rivers and streams, and in
impaired lakes, ponds, and reservoirs.
Biochemical oxygen demand (BOD) is
an indirect measure of the concentration
of biodegradable substances present in
an aqueous solution.
3. Solids
  The 1998 National Water Quality
Inventory indicates that suspended
solids are the fifth leading stressor in
lakes, ponds, and reservoirs. Solids are
measured as total suspended solids, or
TSS. (Solids can also be measured as
total dissolved solids, or TDS.) Solids
from animal manure include the manure
itself and any other elements that have
been mixed with it. These elements can
include spilled feed, bedding and litter
materials, hair, feathers, and corpses. In
general, the impacts of solids include
increasing the turbidity of surface
waters, physically hindering the
functioning of aquatic plants aiid
animals, and providing a protected
environment for pathogens.
4. Pathogens
  Pathogens are disease-causing
organisms including bacteria, viruses,
protozoa, fungi, and algae. The 1998
National Water Quality Inventory
indicates that pathogens (specifically
bacteria) are the leading stressor in
impaired estuaries and the second most
prevalent stressor in impaired rivers and
streams. Livestock manure contains
countless microorganisms, including
bacteria, viruses, protozoa, and
parasites. Multiple species of pathogens
may be transmitted directly from a host
animal's manure to surface water, and
pathogens already in surface water may
increase in number due to loadings of
animal manure nutrients and organic
matter. In 1998, the Centers for Disease
Control and Prevention reported on an
Iowa investigation of chemical and
microbial contamination near large scale
swine operations. The investigation
demonstrated the presence of pathogens
not only in manure lagoons used to
store swine waste before it is land
applied, but also in drainage ditches,
agricultural drainage wells, tile line
inlets and outlets, and an adjacent river.
  Over 150 pathogens found in
livestock manure are associated with
risks to humans. The protozoa
Cryptosporidium parvum and Giardia
species are frequently found in animal
manure and relatively low doses can
cause infection in humans. Bacteria
such as Escherichia coli O157:H7 and
Salmonella species are. also often found
in livestock manure and have also been
associated with waterborne .disease. A
recent study by USDA revealed that
about half the cattle at the nation's
feedlots carry E. coli. The bacteria
Listeria monocytogenes is ubiquitous in
nature, and is commonly  found in the
intestines of wild and domestic animals
without causing illness. L.
monocytogenes is commonly associated

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with foodborne disease. The pathogens
C. parvum, Giardia, E. coli O157:H7,
and L. monocytogenes are able to
survive and remain infectious in the
environment for long periods of time.
  Although the pathogen Pfiesteria
piscicida is not found in manure,
researchers have documented
stimulation of Pfiesteria growth by
swine effluent discharges, and have
strong field evidence that the same is
true for poultry, waste. Research has also
shown that this organism's growth can
be highly stimulated by both inorganic
and organic nitrogen and phosphorus
enrichments. Discussions of Pfiesteria
impacts on the environment and on
human health are presented later in this
section.
5. Salts
  The salinity of animal manure is
directly related to the presence of
dissolved mineral salts. In particular,
significant concentrations of soluble
salts containing sodium and potassium
remain from undigested feed that passes
unabsorbed through animals. Other
major cations contributing to manure
salinity are calcium and magnesium; the
major anions are chloride, sulfate,
bicarbonate, carbonate, and nitrate.
Salinity tends to increase as the volume
of manure decreases during
decomposition and evaporation. Salt
buildup deteriorates soil structure,
reduces permeability, contaminates
groundwater, and reduces crop yields.
  In fresh waters, increasing salinity can
disrupt the balance of the ecosystem,
making it difficult for resident species to
remain. Li laboratory settings,  drinking
water high in salt content has inhibited
growth and slowed molting of mallard
ducklings. Salts also contribute to
degradation of drinking water supplies.
6. Trace Elements
  The 1998 National Water Quality
Inventory indicates that metals are the
fifth leading stressor in impaired rivers,
the second leading stressor in impaired
lakes, and the third leading stressor in
impaired estuaries. Trace elements in
manure that are of environmental
concern include arsenic, copper,
selenium, zinc, cadmium, molybdenum,
nickel, lead, iron, manganese,
aluminum, and boron. Of these, arsenic,
copper, selenium, and zinc are often
added to animal feed as growth
stimulants orbiocides. Trace elements
may also end up in manure through use
of pesticides, which are applied to
livestock to suppress houseflies and
other pests. Trace elements have been
found in manure lagoons used to store
swine waste before it is land applied,
and in drainage ditches, agricultural
                    drainage wells, and tile line inlets and
                    outlets. They have also been found in
                    rivers adjacent to hog and cattle
                    operations.
                      Several of the trace elements in
                    manure are regulated in treated
                    municipal sewage sludge (but not
                    manure) by the Standards for the Use or
                    Disposal of Sewage Sludge, promulgated
                    under the Clean Water Act and
                    published in 40 C.F.R.  Part 503. These
                    include arsenic, cadmium, chromium,
                    copper, lead, mercury, molybdenum,
                    nickel, selenium, and zinc. Total
                    concentrations of trace elements in
                    animal manures have been reported as
                    comparable to those in some municipal
                    sludges, with typical values well below
                    the maximum concentrations allowed
                    by Part 503 for land-applied sewage
                    sludge. Based on this information, trace
                    elements in agronomically applied
                    manures should pose little risk to
                    human health and the environment.
                    However, repeated application of
                    manures above agronomic rates could
                    result in exceedances of the cumulative
                    metal loading rates established in Part
                    503, thereby potentially impacting
                    human health and the environment.
                    There is some evidence that this is
                    happening. For example, in 1995, zinc
                    and copper were found building to
                    potentially harmful levels on the fields
                    of a hog farm in North  Carolina.

                    7. Odorous/Volatile Compounds
                      Sources of odor and volatile
                    compounds include animal confinement
                    buildings, manure piles, waste lagoons,
                    and land application sites. As animal
                    wastes are degraded by microorganisms,
                    a variety of gases are produced. The four
                    main  gases generated are carbon
                    dioxide, methane, hydrogen sulfide, and
                    ammonia. Over 150 other odorous
                    compounds have also been identified
                    with animal manure. Aerobic conditions
                    yield  mainly carbon dioxide, while
                    anaerobic conditions generate both
                    methane (60 percent to 70 percent) and
                    carbon dioxide (30 percent). Anaerobic
                    conditions, which dominate in typical,
                    unaerated animal waste .lagoons, are
                    also associated with the generation of
                    hydrogen sulfide and about 40 other
                    odorous compounds, including volatile
                    fatty acids, phenols, mercaptans,
                    aromatics, sulfides, and various esters,
                    carbonyls, and amines. Once airborne,
                    these volatile pollutants have the .
                    potential to be deposited onto nearby
                    streams, rivers, and lakes.
                      Up to 50 percent or more of the
                    nitrogen in fresh manure may be in
                    ammonia form or converted to ammonia
                    relatively quickly once manure is
                    excreted. Ammonia is volatile and
                    ammonia losses from animal feeding
operations can be considerable. A study
of atmospheric nitrogen published in
1998 reported that, in North Carolina,
animal agriculture is responsible for
over 90 percent of all ammonia
emissions. Ammonia from manure
comprises more than 40 percent of the
total estimated nitrogen emissions from
all sources.

8. Antibiotics
  Antibiotics are used in animal feeding
operations and can be expected to
appear in animal wastes.  The practice of
feeding antibiotics to poultry, swine,
and cattle evolved from the 1949
discovery that very low levels usually
improved growth. Antibiotics are used
both to treat illness and as feed
additives to promote growth or to
improve feed conversion efficiency. In
1991, an estimated 19 million pounds of
antibiotics were used for  disease
prevention and growth promotion in
animals. Between 60 and 80 percent of
all livestock and poultry receive
antibiotics during their productive
lifespan. The primary mechanisms  of
elimination are in  urine and bile.
Essentially all of an antibiotic
administered is eventually excreted,
whether unchanged or in metabolite
form. Little information is available
regarding the concentrations of
antibiotics in animal wastes, or on their
fate and transport in the environment.
  Of greater concern than the presence
of antibiotics in animal manure is the
development of antibiotic resistant
pathogens. Use of antibiotics in raising
animals, especially broad spectrum
antibiotics, is increasing. As a result,
more strains of antibiotic resistant
pathogens are emerging, along with
strains that are growing more resistant.
Normally, about 2 percent of a bacterial
population are resistant to a given
antibiotic; however, up to 10 percent of
bacterial populations from animals'
regularly exposed to antibiotics have
been found to be resistant. In a study of
poultry litter suitable for land
application, about 80 to 100 percent of
bacterial populations isolated from the
litter were found to be resistant to
multiple antibiotics. Antibiotic-resistant
forms of Salmonella, Campylobacter, E.
coli, and Listeria are known or
suspected to exist. An antibiotic-
resistant strain of the bacteria
Clostridium perfringens was detected in
the groundwater below plots of land
treated with pig manure, while it was
nearly absent beneath unmanured plots.

9. Pesticides and Hormones
  Pesticides and hormones are
compounds which are used in animal
feeding operations and can be expected

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                                                                      2979
 to appear in animal wastes. Both of
 these types of pollutants have been
 linked with endocrine disruption.
  Pesticides are applied to livestock to
 suppress houseflies and other pests.
 There has been very little research on
 losses of pesticides in runoff from
 manured lands. A 1994 study showed
 that losses of cyromazine (used to
 control flies in poultry litter) in runoff
 increased with the rate of poultry
 manure applied and the intensity of
 rainfall.
  Specific hormones are used to
 increase productivity in the beef and
 dairy industries. Several studies have
 shown hormones are present in animal
 manures. Poultry manure has been
 shown to contain both estrogen and
 testosterone. Runoff from fields with
• land-applied manure has been reported
 to contain estrogens, estradiol,
 progesterone, and testosterone, as well
 as their synthetic counterparts. In 1995,
 an irrigation pond and three streams in
 the Conestoga River watershed near the
 Chesapeake Bay had both estrogen and
 testosterone present. All of these sites
 were affected by fields receiving poultry
 litter.
 B. How Do These Pollutants Reach
 Surface Waters?
   Pollutants found in animal manures
 can reach surface water by several
 mechanisms. These can be categorized
 as either surface discharges or other
 discharges. Surface discharges can occur
 as the result of runoff, erosion, spills,
 and dry-weather discharges. In surface
 discharges, the pollutant travels
 overland or through drain tiles with
 surface inlets to a nearby stream, river,
 or lake. Direct contact between confined
 animals and surface waters is another
 means of surface discharge. For other
 types of discharges, the pollutant travels
 via another environmental medium
 (groundwater or air) to surface water.

 1. Surface Discharges
   a. Runoff. Water that falls on man-
 made surfaces  or soil and fails to be
 absorbed will flow across the surface
 and is called runoff. Surface discharges
 of manure pollutants can originate from
 feedlots and from overland runoff at
 land application sites. Runoff is
 especially likely at open-air feedlots if
 rainfall occurs soon after application, or
 if manure is over-applied, or
 misapplied. For example, experiments
 by Edwards and Daniels in the early
 1990s show that, for all animal wastes,
 the application rate had a significant
 effect on the runoff concentration. In
 addition, manure applied to water-
 saturated or frozen soils is more likely
 to run off the soil surface. Other factors
that promote runoff to surface waters are
•steep land slope, high rainfall, low soil
porosity or permeability, and close
proximity to surface waters. Runoff of
pollutants dissolved into rainwater is a
significant transport mechanism for
water soluble pollutants, which
includes nitrate, nitrite, and organic
forms of phosphorus.
  Runoff of manure pollutants has been
identified by states, citizen's groups,
and the media as a factor in a number
of documented impacts from AFOs,
including hog, cattle, and chicken
operations. For example, in 1994,
multiple runoff problems were cited for
a hog operation in Minnesota, and in
1996 runoff from manure spread on land
was identified at hog and chicken
operations in Ohio. In 1997, runoff
problems were identified for several
cattle operations in numerous counties'
in Minnesota. More discussion of runoff
and its impacts on the environment and
human health is provided later in this
section.
  b. Erosion. In addition to runoff,
surface discharges can occur by erosion,
in which the soil surface is worn away
by the action of water or wind. Erosion
is a significant transport mechanism for
land-applied pollutants that are strongly
sorbed to soils, of which phosphorus is
one example. A 1999 report by the
Agricultural Research Service (ARS)
noted that phosphorus bound to eroded
sediment particles makes up 60 to 90
percent of phosphorus transported in
surface runoff from cultivated land. For
this reason, most agricultural
phosphorus control measures have
focused on soil erosion control to limit
transport of particulate phosphorus.
However, soils do not have infinite
adsorption capacity for phosphate or
any other adsorbing pollutant, and
dissolved pollutants including
phosphates can still enter waterways via
runoff and leachate even if soil erosion
is controlled.
   In 1998, the USDA Natural Resources
Conservation Service (NRCS)  reviewed
the manure production of a watershed
in South Carolina. Agricultural
activities in the project area are a major
influence on the streams and ponds in
the watershed, and contribute to
nutrient-related water quality problems
in the headwaters of Lake Murray.
NRCS found that bacteria, nutrients, and
sediment from soil erosion are the
primary contaminants affecting these
resources. The NRCS has calculated that
soil erosion, occurring on over 13,000
acres of cropland in the watershed,
ranges from 9.6 to 41.5 tons per acre per
year.
   c. Spills and Dry-Weather Discharges.
Surface discharges can occur through
spills or other discharges from lagoons.
Some causes of spills include
malfunctions such as pump failures,
manure irrigation gun malfunctions, and
pipes or retaining walls breaking.
Manure entering tile drains has a direct
route to surface water. (Tile drains are
a network of pipes buried in fields
below the root zone of plants to remove
subsurface drainage water from the root
zone to a stream, drainage ditch, or
evaporation pond. EPA does not
regulate most tile fields.) hi 1997, the
Ohio Department of Natural Resources
documented chicken manure traveling
through tile drains into a nearby stream.
In addition, spills can occur as a result
of lagoon overflows and washouts from
floodwaters when lagoons are sited on
floodplains. There^are also indications
that discharges from siphoning lagoons
occur deliberately as a means to reduce
the volume in overfull lagoons. Acute
discharges of this kind frequently result
in dramatic fish kills. In 1997, an
independent review of Indiana
Department of Environmental
Management records indicated that the
most common causes of waste releases
in that state were intentional discharge
and lack of operator knowledge, rather
than spills due to severe rainfall
conditions.
  Numerous such dry-weather
discharges have been identified. For
example, in 1995, two separate
discharges of 25  million gallons of
manure from hog farms in North
Carolina were documented, and both
resulted in fish kills. Subsequent
discharges of hundreds of thousands of
gallons of manure were documented
from hog operations in Iowa (1996),
Illinois (1997), and Minnesota (1997).
Fish kills were also reported as a result
of two of these discharges. Discharges of
over 8 million gallons of manure from
a poultry  operation in North Carolina in
1995 likewise resulted in a fish kill.
Between 1994 and 1996, half a dozen
discharges from  poultry operations in
Ohio resulted when manure entered
field tiles. In 1998, 125,000 gallons of
manure were discharged from a dairy
feedlot in Minnesota.
   d. Direct Contact between Confined
Animals and Surface Water. Finally,
surface discharges can occur as a result
of direct contact between confined
animals and the rivers or ponds that are
located within their reach. Historically,
farms were located near waterways for
both water access for animals and
discharge of wastes. This practice is
now restricted for CAFOs; however,
despite this restriction, enforcement.
actions are the primary means for
reducing direct access.

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  In the more traditional farm
production regions of the Midwest and
Northeast, dairy barns and feedlots are
often in close proximity to streams or
other water sources. This close
proximity to streams was necessary in
order to provide drinking water for the
dairy cows, direct access to cool the
animals in hot weather, and to cool the
milk prior to the wide-spread use of
refrigeration. For CAFO-size facilities
this practice is now replaced with more
efficient means of providing drinking
water for the dairy herd. In addition, the
use of freestall barns and modern
milking centers minimizes the exposure
of dairy cows to the environment. For
example, in New York direct access is
more of a problem for the smaller
traditional dairy farms that use older
methods of housing animals.
  In the arid west, feedlots are typically
located near waterbodies to allow for
cheap and easy stock watering. Many
existing lots were configured to allow
the animals direct access to the water.
Certain animals, particularly cattle, will
wade into the water, linger to drink, and
will often urinate and defecate there as
well. This direct deposition of manure
and urine contributes greatly to water  v
quality problems. Environmental
problems associated with allowing farm
animals access to waters that are
adjacent to the production area are well
documented in the literature. EPA
Region X staff have documented
dramatically elevated levels of
Escherichia coli in rivers downstream of
AFOs (including CAFOs) with direct
access  to surface water. Recent
enforcement actions against direct
access  facilities have resulted in the
assessment of tens of thousands of
dollars in civil penalties.
2. Other Discharges to Surface Waters
  a. Leaching to Groundwater. Leaching
of land-applied pollutants such as
nitrate dissolved into rainwater is a
significant transport mechanism for
water soluble pollutants. In addition,
leaking lagoons are a source of manure
pollutants to ground water. Although
manure solids purportedly "self-seal"
lagoons to prevent groundwater
contamination, some studies have
shown otherwise. A study for the Iowa
legislature published in 1999 indicates
that leaking is part of design standards
for earthen lagoons and that all lagoons
should be expected to leak. A1995
survey of hog and poultry lagoons in the
Carolines found that nearly two-thirds
of the 36 lagoons sampled had leaked
into the groundwater. Even clay-lined
lagoons have the potential to leak, since
they Can crack or break as they age, and
can be susceptible to burrowing worms.
                    hi a three-year study (1988-1990) of
                    clay-lined swine lagoons on the
                    Delmarva Peninsula, researchers found
                    that leachate from lagoons located in
                    well-drained loamy sand had a severe
                    impact on groundwater quality. •
                      Pollutant transport to groundwater is
                    , also greater in areas with high soil
                    permeability and shallow water tables.
                    Percolating water can transport
                    pollutants to groundwater, as well as to
                    surface waters via interflow.
                    Contaminated groundwater can deliver
                    pollutants to surface waters through
                    .hydrologic connections. Nationally,
                    about 40 percent of the average annual
                    stream flow is from groundwater. hi the
                    Chesapeake Bay watershed, the U.S.
                    Geological Survey (USGS) estimates that
                    about half of the nitrogen loads from all
                    sources to nontidal streams and rivers
                    originate from groundwater.
                      b. Discharge to the Air and
                    Subsequent Deposition. Discharges to
                    air can occur as a result of volatilization
                    of both pollutants already present in the
                    manure and pollutants generated as the
                    manure decomposes. Ammonia is very
                    volatile, and can have  significant
                    impacts on water quality through
                    atmospheric deposition. Other ways that
                    manure pollutants can enter the air is
                    from spray application methods for  land
                    applying manure and as particulates
                    wind-borne hi dust. Once airborne,
                    these pollutants can find their way into
                    nearby streams, rivers, and lakes. The
                    1998 National Water Quality Inventory
                    indicates that atmospheric deposition is
                    the third greatest cause of water quality
                    impairment for estuaries, and the fifth
                    greatest cause of water quality
                    impairment for lakes, ponds, and
                    reservoirs.
                      The degree of volatilization of manure
                    pollutants is dependent on the manure
                    management system. For example,
                    losses are greater when manure remains
                    on the land surface rather than being
                    incorporated into the soil, and are
                    particularly high when spray
                    application is performed.
                    Environmental conditions such as soil
                    acidity and moisture content also affect
                    the extent of volatilization.-Losses are
                    reduced by the presence of growing
                    plants. Ammonia also  readily volatilizes
                    from lagoons.
                      Particulate emissions from AFOs may
                    include dried manure, feed, epithelial
                    cells, hair, and feathers. The airborne
                    particles make up an organic dust,
                    which includes endotoxin (the toxic
                    protoplasm liberated when a
                    microorganism dies and disintegrates),
                    adsorbed gases, and possibly steroids.
                    At least 50 percent of dust emissions
                    from swine operations are believed to be
respirable (small enough to be inhaled
deeply into the lungs).
3. A National Study of Nitrogen Sources
to Watersheds
  In 1994, the USGS analyzed nitrogen
sources to 107 watersheds. Potential
sources included manure (both point
and nonpoint sources), fertilizers; point
sources, and atmospheric deposition.
The "manure" source estimates include
waste from both confined and
unconfined animals. As may be.
expected, the USGS found that
proportions of nitrogen originating from
various sources differ according to
climate, hydrologic conditions, land
use, population, and physical
geography. Results of the analysis for
selected watersheds for the 1987 base
year show that in some instances,
manure nitrogen is a large portion of the
total nitrogen added to the watershed.
The study showed that, for following
nine watersheds, more than 25 percent
of nitrogen originates from manure:
Trinity River, Texas; White River,
Arkansas; Apalachicola River, Florida;
Altamaha River, Georgia; Potomac
River, Washington, D.C.; Susquehanna
River, Pennsylvania; Platte River,
Nebraska; Snake River, Idaho; and San.
Joaquin River, California. Of these,
California, Texas, Florida, Arkansas,
and Idaho have large populations of
confined animals.
4. State Level Studies of Feedlot
Pollutants Reaching Surface Waters.
  There are many studies demonstrating
surface water impacts from animal
feeding operations. These impacts have
been documented for at least the past
decade. For example, in 1991, the U.S.
Fish and Wildlife Service (FWS)
reported on suspected impacts from a
large number of cattle feedlots on Tierra
Blanca Creek, upstream of the Buffalo
Lake National Wildlife Refuge in the
Texas Panhandle. FWS found elevated.
aqueous concentrations of ammonia,
chemical oxygen demand, coliform
bacteria, chloride, nitrogen, and volatile
suspended solids; they also found
elevated concentrations of the feed
additives copper and zinc in the .creek
sediment.
  According to Arkansas' 1996 Water
Quality Inventory Report, a publication
of the Arkansas Department of
Environmental Protection, water in the
Grand Neosho basin only partially
supports aquatic life. Land uses there,
primarily confined animal feeding
operations including poultry production
and pasture management, are major
sources of nutrients and chronic high
turbidity. Pathogens sampled in the
Muddy Fork Hydrologic  Unit Area, in

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                                                                      2981
the Arkansas River basin, also exceed
acceptable limits for primary contact
recreation (swimming). This problem
was reported in the 1994 water quality
inventory, and it, too, was traced to
extensive poultry, swine, and dairy
operations in the Moore's Creek basin.
Essentially, all parts of the
subwatershed are impacted by these
activities. Currently, the Muddy Fork
Hydrologic Unit Area Project is a USDA
agricultural assistance, technology
transfer, and demonstration project. A
section 319 water quality monitoring
operation is also ongoing in the
hydrologic unit area.
  In 1997, the Hoosier Environmental
Council documented the reduction in
biodiversity due to AFOs in a study of
three Indiana stream systems. That
study found that waters downstream of
animal feedlots (mainly hog and dairy
operations) contained fewer fish and a
limited number of species of fish in
comparison with reference sites. It also
found excessive algal growth, altered
oxygen content, and increased levels of
ammonia, turbidity, pH, and total
dissolved solids.
C. What Are the Potential and Observed
Impacts?
  Pollutants in animal manures can
impair surface waters. Such
impairments have resulted in fish kills;
eutrophication and algal blooms;
contamination of shellfish, and
subsequent toxin and pathogen
transmission up the food chain;
increased turbidity and negative
impacts to benthic organisms; and
reduced biodiversity when rivers and
streams become uninhabitable by
resident species. These manure
pollutants can also deteriorate soil
quality and make it toxic to plants. In
addition to these ecological impacts,
pollutants in animal manures can
present a range of risks to human health
when they contaminate drinking water
 or shellfish, and when they are present
in recreational waters.
 1. Ecological Impacts       . .
   a. Fish Kills and Other Fishery
 Impacts. Fish kills are one of the most
 dramatic impacts associated with
 manure reaching surface water. Spills,
 dry-weather discharges, and runoff can
 carry  pollutants in manure to rivers and
 streams and can result in serious fish
 kills. During the years 1987 through
 1997, at least 47 incidents of fish kills
 have been associated with hog manure.
 Another 8 fish kills were attributed to
 poultry waste, and 2 with beef/dairy
 manure. An additional 20 fish kills were
 associated with animal manure for
 which one specific animal type was not
identified. These incidents were
reporte'd by the Iowa Department of
Natural Resources, the Maryland
Department of the Environment, the
Natural Resources Defense Council,
several citizen's groups, and numerous
newspapers. These incidents are not
reflective of all states. In Illinois alone,
records indicate that 171 fish kills
attributable to manure discharges were
investigated by Illinois Environmental
Protection Agency personnel between
1979 and 1998. Thousands of fish are
typically killed by one of these events.
  Ammonia is highly toxic to aquatic
life and is a leading cause of fish kills.
In a May 1997 incident in Wabasha
County, Minnesota, ammonia in a dairy
cattle manure discharge killed 16,500
minnows and white suckers. Ammonia
and other pollutants in manure exert a
direct biochemical oxygen demand
(BOD) on the receiving water. As
ammonia is oxidized, dissolved oxygen
is consumed. Moderate depressions of
dissolved oxygen are associated with
reduced species diversity, while more
severe depressions can produce fish
kills.
   Nitrites pose additional risks to
aquatic life: if sediments are enriched
with nutrients, the concentrations of
nitrites on the overlying water may be
raised enough to cause nitrite poisoning
or "brown blood disease" in fish.
   Excess nutrients result in
eutrophication (see section V.C.I.b,
which follows). Eutrophication is
associated with blooms of a variety of
organisms that are toxic to both fish and
humans. This includes the estuarine
dinoflagellate Pfiesteria piscicida,
'which is implicated in several fish kills
and fish disease events. Pfiesteria has
been implicated as the primary
causative agent of many major fish kills
and fish disease events in North
Carolina estuaries and coastal areas, as
well as in Maryland and Virginia
tributaries to the Chesapeake Bay. In
 1997, hog operations were identified as
 a potential cause of a Pfiesteria outbreak
 in North Carolina rivers that resulted in
 450,000 fish killed. Also that same year,'
 poultry operations were linked to
 Pfiesteria outbreaks in the Pokomoke
 River and Kings Creek (both in
 Maryland) and in the Chesapeake Bay,
 in which tens of thousands of fish were
 killed.
   The presence of estrogen and
 estrogen-like compounds in surface
 water has caused much concern. These
 hormones have been found in animal.
 manures and runoff from fields where
 manure has been applied. The ultimate
 fate of hormones in the environment is
 unknown, although early studies
 indicate that common soil or fecal
bacteria cannot 'metabolize estrogen.
When present in high enough
concentrations in the environment,
hormones and other endocrine
disrupters including pesticides are
linked to reduced fertility, mutations,
and the death of fish. Estrogen
hormones have been implicated in
widespread reproductive disorders in a
variety of wildlife. There is evidence
that fish in some streams are
experiencing endocrine disruption and
that contaminants including pesticides
may be the cause, though there is no
evidence linking these effects to CAFOs.
  b. Eutrophication and Algal Growth.
Eutrophication is the'process in which
phosphorus and nitrogen over-enrich
water bodies and disrupt the balance of
life in that water body. As a result, the
excess nutrients cause fast-growing
algae blooms. The 1998 National Water
Quality Inventory indicates that excess
algal growth is the seventh leading
stressor in lakes, ponds, and reservoirs.
Rapid growth of algae can lower the
dissolved oxygen content of a water
body to levels insufficient to support
fish and invertebrates. Eutrophication
can also affect phytoplankton and
zooplankton population diversity,
abundance, and biomass, and increase
the mortality rates of aquatic species.
Floating algal mats can reduce the
penetration of sunlight in the water
column and thereby limit growth of
seagrass beds and other submerged
vegetation. This in turn reduces fish and
shellfish habitat. This reduction in
submerged aquatic vegetation adversely
affects both fish and shellfish
populations.
   Increased algal growth can also raise
the pH of waterbodies, as algae consume
 dissolved carbon dioxide to support
photosynthesis. This elevated pH can
harm the gill epithelium of aquatic
 organisms. The pH may then drop
rapidly at night, when algal
photosynthesis stops. In extreme cases,
 such pH fluctuations can severely stress
 aquatic organisms.
   Eutrophication is also a factor in the
 growth of toxic microorganisms, such as
 cyanobacteria (a toxic algae) and
 Pfiesteria piscicida, which can affect
 human health as well. Decay of algal
 blooms and night-time respiration can
 further depress dissolved oxygen levels,
 potentially leading to fish kills and
 reduced biodiversity. In addition, toxic
 algae such as cyanobacteria release
 toxins as they die, which can severely
 impact wildlife as well as humans.
 Researchers have documented
 stimulation of Pfiesteria growth by
 swine effluent discharges, and have
 shown that the organism's growth can
 be highly stimulated by both inorganic

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 and organic nitrogen and phosphorus
 enrichments.
   c. Wildlife Impacts. As noted earlier,
 reduction in submerged aquatic
 vegetation due to algal blooms is the
 leading cause of biological decline in
 Chesapeake Bay, adversely affecting
 both fish and shellfish populations. In
 marine ecosystems, blooms known as
 red or brown tides have caused
 significant mortality in marine
 mammals. In freshwater, cyanobacterial
 toxins have caused many incidents of
 poisoning of wild and domestic animals
 that have consumed impacted waters.
   Even with no visible signs of the algae
 blooms, shellfish such as oysters, clams
 and mussels can carry the toxins
 produced by some types of algae  in their
 tissue. Shellfish are filter feeders which
 pass large volumes of water over  their
 gills. As a result, they can concentrate
 a broad range of microorganisms  in their
 tissues. Concentration of toxins in
 shellfish provides a pathway for
 pathogen transmission to higher trophic
 organisms. Information is becoming
 available  to assess the health effects of
 contaminated shellfish on wildlife
 receptors. Earlier this year, the death of
 over 400 California sea lions was linked
 to ingestion of mussels contaminated by
 a bloom of toxic algae. Previous
 incidents associated the deaths of
 manatees and whales with toxic and
 harmful algae blooms.
  In August 1997, the National Oceanic
 and Atmospheric Administration
 (NOAA) released The  1995 National
 Shellfish Register of Classified Growing
 Waters. The register characterizes the
 Status of 4,230 shellfish-growing water
 areas in 21 coastal states, reflecting an
 assessment of nearly 25 million acres of
 estuarine  and non-estuarine waters.
 NOAA found that 3,404 shellfish areas
 had some level of impairment. Of these,
 110 (3 percent) were impaired to
 varying degrees by feedlots, and 280 (8
 percent) were impaired by "other
 agriculture" which could include land
 where manure is applied.
  Avian botulism and avian cholera
 have killed hundreds of thousands of
 migratory waterfowl in the past.
 Although outbreaks of avian botulism
 have occurred since the beginning of the
 century, most occurrences have been
 reported in the past twenty years, which
 coincides with the trend toward fewer
 and larger AFOs. The connection
between nutrient runoff, fish kills, and
 subsequent outbreaks of avian botulism
was made in 1999 at California's Salton
 Sea, when almost 8 million fish died in
one day. The fish kill was associated
with runoff from surrounding farms,
which carried nutrients and salts into
the Salton Sea. Those nutrients caused
                    algae blooms which in turn lead to large
                    and sudden fish kills. Since the 1999
                    die off, the number of endangered
                    brown pelicans infected with avian
                    botulism increased to about 35 birds a
                    day. In addition, bottom feeding birds
                    can be quite susceptible to metal
                    toxicity, because they are attracted to
                    shallow feedlot wastewater ponds and
                    waters adjacent to feedlots. Metals can
                    remain in aquatic ecosystems for long
                    periods of time because of adsorption to
                    suspended or bed sediments or uptake
                    by aquatic biota.
                      Reduction in biodiversity due to
                    AFOs has been documented in a 1997
                    study of three Indiana stream systems.
                    That study shows that waters
                    downstream of animal feedlots (mainly
                    hog and dairy operations) contained
                    fewer fish and  a limited number of
                    species of fish in comparison with
                    •reference sites. The study also found
                    excessive algal growth, altered oxygen
                    content, and increased levels of
                    ammonia, turbidity, pH, and total
                    dissolved solids. Multi-generation
                    animal studies have found decreases in
                    birth weight, post-natal  growth, and
                    organ weights among mammals
                    prenatally exposed to nitrite. Finally,
                    hormones and pesticides have been
                    implicated in widespread reproductive
                    disorders in a variety of wildlife.
                      d. Other Aquatic Ecosystem
                    Imbalances. Changes to  the pH balance
                    of surface water also threaten the
                    survival of the  fish and other aquatic
                    organisms. Data from Sampson County,
                    North Carolina show that "ammonia
                    rain" has increased as the hog industry
                    has grown, with ammonia levels in rain
                    more than doubling between 1985 and
                    1995. In addition, excess nitrogen can
                    contribute to water quality decline by
                    increasing the acidity of surface waters.
                      In fresh waters, increasing salinity can
                    also disrupt the balance of the
                    ecosystem, making it difficult for
                    resident species to remain.  Salts also
                    contribute to the degradation of
                    drinking water  supplies.
                      Trace elements (e.g., arsenic, copper,
                    selenium, and zinc) may also present
                    ecological risks. Antibiotics, pesticides,
                    and hormones may have low-level, long-
                    term ecosystem effects.

                    2. Drinking Water Impacts
                      Nitrogen in manure is easily
                    transformed into nitrate  form, which
                    can be transported to drinking water
                    sources and present a range of health
                    risks. In 1990, PA found that nitrate is
                    the most widespread agricultural
                    contaminant in drinking water wells,
                    and estimated that 4.5 million people
                    are exposed to elevated nitrate levels
                    from wells. In 1995, several private
 wells in North Carolina were found to
 be contaminated with nitrates at levels
 10 times higher than the State's health.
 standard; this contamination was linked
 with a nearby hog operation. The
 national primary drinking water
 standard (Maximum Contaminant Level,
 or MCL) for nitrogen (nitrate, nitrite) is
 10 milligrams per liter (mg/L). In 1982,
 nitrate levels greater than 10 mg/L were
 found in 32 percent of the wells in
 Sussex County, Delaware; these levels
 were associated with local poultry
 operations. In southeastern Delaware
 and the Eastern Shore of Maryland,
 where poultry production is prominent,
 over 20 percent of wells were found to
 have nitrate levels exceeding 10 mg/L.
 Nitrate is not removed by conventional
 drinking water treatment processes. Its
 removal requires additional, relatively
 expensive treatment units.
   Algae blooms triggered by nutrient
 pollution can affect drinking water by
 clogging treatment plant intakes,
 producing objectionable tastes and
 odors, and increasing production of
 harmful chlorinated byproducts (e.g.,
 trihalomethanes) by reacting with
 chlorine used to disinfect drinking
 water. As aquatic bacteria and other
 microorganisms degrade the organic
 matter in manure, they consume
 dissolved oxygen. This can lead to foul
 odors and reduce the water's value as a
 source of drinking water. Increased
 organic matter in drinking water sources
 can also lead to excessive production of
 harmful chlorinated byproducts,
 resulting in higher drinking water
 treatment costs.
   Pathogens can also threaten drinking
 water sources. Surface waters are
 typically expected to be more prone
 than groundwater to contamination by
 pathogens such as Escherichia coli and
 Cryptosporidium parvum. However,
 groundwater in areas of sandy soils,
 limestone formations, or sinkholes are
 particularly vulnerable. In a 1997 survey
 of drinking water standard violations in
 six states over a four-year period, the
 U.S. General Accounting Office noted in
 its 1997 report Drinking Water:
 Information  on the Quality of Water
 Found at Community Water Systems
 and Private Wells that bacterial standard
 violations occurred in up to  6 percent of
 community water systems each year arid
 in up to 42 percent of private wells.
 (Private wells are more prone than
 public wells to contamination, since
 they tend to be shallower and therefore
 more susceptible to contaminants
 leaching from the surface.) In cow
 pasture areas of Door County,
Wisconsin, where a thin topsoil layer is
underlain by fractured limestone
bedrock, groundwater wells have

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                                                                      2983
commonly been shut down due, to high
bacteria levels.
  Each of these impacts can result in
increased drinking water treatment
costs. For example, California's Chino
Basin estimates a cost of over $1 million
per year to remove the nitrates from
drinking water due to loadings from
local dairies. Salt load into the Chino
Basin from local'dairies is over 1,500
tons per year, and the cost to remove
that salt by the drinking water treatment
system ranges from $320 to $690 for
every ton. In Iowa, Des Moines Water
Works planned to spend approximately
$5 million in the early 1990's to install
a treatment system to remove nitrates
from their main sources of drinking
water, the Raccoon and Des Moines
Rivers. Agriculture was cited as a major
 source of the nitrate contamination,
 although the portion attributable to
 animal waste is unknown. In Wisconsin,
 the City of Oshkosh has spent an extra
 $30,000 per year on copper sulfate to
 kill the algae in the water it draws from
 Lake Winnebago. The thick mats of
 algae in the lake have been attributed to
 excess nutrients from manure,
 commercial  fertilizers, and soil. In
 Tulsa, Oklahoma, excessive algal growth
 in Lake Eucha is associated with poultry
 farming. The city spends $100,000 per
 year to address taste and odor problems
 in the drinking water.
 3. Human Health Impacts
   Human and animal health impacts are
 primarily associated with drinking
 contaminated water, contact with
 contaminated water, and consuming
 contaminated shellfish.   :
   a. Nutrients. The main hazard to
 human health from nutrients is 'elevated
 nitrate levels in drinking water. In
 particular, infants are at risk from
 nitrate poisoning (also referred to as
  methemoglobinemia or "blue baby
  syndrome"), which results in oxygen
  starvation and is potentially fatal.
  Nitrate toxicity is due to its metabolite
.  nitrite, which is formed in the
  environment, in foods, and in the
  human digestive system. In addition to
  blue baby syndrome, low blood oxygen
  due to methemoglobinemia has also
  been linked to birth defects,
  miscarriages, and poor health in
  humans and animals. These effects are
"' exacerbated by concurrent exposure to
  many species of bacteria in water.
    Studies in Australia compiled in a
  1993 review by Bruning-Fann and
  Kaneene showed an increased risk of
  congenital malformations with
  consumption of high-nitrate
  groundwater. Multi-generation animal
  studies have found decreases in birth
  weight and post-natal growth and organ
weights associated with nitrite exposure
among prenatally exposed mammals.
Nitrate-and nitrite-containing
compounds also have the ability to
cause hypotension or circulatory
collapse. Nitrate metabolites such as N-
nitroso compounds (especially
nitrosamines) have been linked to
, severe human health effects such as
gastric cancer.
   Eutrophication can also affect human
health by enhancing growth of harmful
algal blooms that release toxins as they
die. In marine ecosystems, harmful algal
blooms such as red tides can result in
human health impacts via shellfish
poisoning and recreational contact. In
freshwater, blooms of cyanobacteria
 (blue-green algae) may pose a serious
health hazard to humans via water
 consumption. When cyanobacterial
• blooms die or are ingested, they release
 water-soluble compounds that are toxic
 to the nervous system and liver. Algal
 blooms'can also increase production of
 harmful chlorinated byproducts (e.g.,
 trihalomethanes) by reacting with
 chlorine used to disinfect drinking
 water. These substances can result in
 increased health risks.
   b. Pathogens. Livestock manure has
 been identified as a potential source of
 pathogens by public health officials.
 Humans may be exposed to pathogens
 via consumption of contaminated
 drinking water and shellfish, or by
 contact and incidental ingestion during
 recreation in contaminated waters.
 Relatively few microbial agents are
 responsible for the majority of human
 disease outbreaks from water-based
 exposure routes. Intestinal infections are
 the most common type of waterborne
 infection, and affect the most people. A
 May, 2000 outbreak of Escherichia coli
 O157:H7 in Walkerton, Ontario resulted
 in at least seven deaths and 1,000 cases
 of intestinal problems; public health
 officials theorize.that flood waters
 washed manure contaminated with E.
 coli into the town's drinking water well.
    A study for the period 1989 to 1996
 revealed that infections caused by the
 protozoa Giardia sp. and
 Cryptosporidium parvum were the
 leading cause of infectious water-borne
 disease outbreaks in which an agent was
 identified. C. parvum is particularly
  associated with cows, and can produce
  gastrointestinal illness, with symptoms
  such as severe diarrhea. Healthy people
  typically recover relatively quickly from
  gastrointestinal illnesses such as
  cryptosporidiosis, but such diseases can
  be fatal in people with weakened
  immune systems. This subpopulation
  includes children, the elderly, people
  with HIV infection, chemotherapy
  patients, and those taking medications
that suppress the immune system. In
Milwaukee, Wisconsin in 1993-, C.
parvum contamination of a public water
supply caused more than 100 deaths
and an estimated 403,000 illnesses. The
source was not identified, but possible
sources include runoff from cow
manure application sites.
  In 1999, an E. coli outbreak occurred
at the Washington County Fair in New
York State. This outbreak, possibly the
largest waterborne outbreak of E. coli
O157:H7 in U.S. history, took the lives
of two fair attendees and sent 71 others
to the hospital. An investigation
identified 781 persons with confirmed
or suspected illness related to this
outbreak. The outbreak is thought to
have been caused by contamination of
the Fair's Well 6 by either a dormitory
septic system  or manure runoff from the
nearby Youth Cattle Barn.
  Contact with pathogens during
recreational activities in surface water
can also result in infections of the skin,
eye, ear, riose, and throat. In 1989, ear
and skin infections and intestinal
illnesses were reported in swimmers as
a result of discharges from a dairy
 operation in Wisconsin.
   As discussed in the previous section,
 excess nutrients result in
 eutrophication, which is associated with
 the growth of a variety of organisms that
 are toxic to humans either through
 ingestion or contact. This includes the
 estuarine dinoflagellate Pfiesteria
 piscicida.  While Pfiesteria is primarily
 associated with fish kills and fish
 disease events, the organism has also
 been linked with human health impacts
 through dermal exposure. Researchers
 working with dilute toxic cultures of
 Pfiesteria exhibited symptoms such as
 skin sores, severe headaches, blurred
 vision, nausea/vomiting, sustained
 difficulty breathing, kidney and liver
 dysfunction,  acute short-term memory
 loss, and severe  cognitive impairment.
 People with heavy environmental
 exposure have exhibited symptoms as
 well. In a 1998 study, such
 environmental exposure was
 definitively linked with cognitive
 impairment,  and less consistently
 linked with physical symptoms.
   Even with  no  visible signs of the algae
 blooms, shellfish such as oysters, clams
 and mussels  can carry the toxins
 produced by some types of algae in their
 tissue. These can then affect people who
  eat the contaminated shellfish. The 1995
 National Shellfish Register of Classified
  Growing Waters published by the
  National Oceanic and Atmospheric
  Administration  (NOAA) identifies over
  100 shellfish bed impairments (shellfish
  not approved for harvest) due to
  feedlots.

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   c. Trace Elements. Some of the trace
 elements in manure are essential
 nutrients for human physiology;
 however, they can induce toxicity at
 elevated concentrations. These elements
 include the feed additives zinc, arsenic,
 copper, and selenium. Although these
 elements are typically present in
 relatively low concentrations in manure,
 they are of concern because of their
 ability to persist in the environment and
 to bioconcentrate in plant and animal
 tissues. These elements could pose a
 hazard if manure is overapplied to land.
  Trace elements are associated with a
 variety of illnesses. For example, arsenic
 is carcinogenic to humans, based on
 evidence from human studies; some of
 these studies have found increased skin
 cancer and mortality from multiple
 internal organ cancers in populations
 who consumed drinking water with
 high levels of inorganic arsenic. Arsenic
 is also linked with noncancer effects,
 including hyperpigmentation and
 possible vascular complications.
 Selenium is associated with liver
 dysfunction and loss of hair and nails,
 and zinc can result in changes in copper
 and iron balances, particularly copper
 deficiency anemia.
  d. Odors. Odor is a significant
 concern because of its documented
 effect on moods, such as increased
 tension, depression, and fatigue; Odor
 also has the potential for vector
 attraction, and has been associated with
 a negative impact on property values.
 Additionally, many of the odor-causing
 compounds in manure can cause
 physical health impacts. For example,
 hydrogen sulfide is toxic, and ammonia
 gas is a nasal and respiratory irritant.
 4. Recreational Impacts
  As discussed above, CAFO pollutants
 contribute to the increase in turbidity,
 increase in eutrophication and algal
blooms, and reduction of aquatic
populations in rivers, lakes, and
 estuaries. Impaired conditions interfere
                    with recreational activities and aesthetic
                    enjoyment of these water bodies.
                    Recreational activities include fishing,
                    swimming, and boating. Fishing is
                    reduced when fish populations
                    decrease. Swimming is limited by
                    increased risk of infection when
                    pathogens are present. Boating and
                    aesthetic enjoyment decline with the
                    decreased aesthetic appeal caused by
                    loss of water clarity and water surfaces
                    clogged by algae. These impacts are
                    more fully  discussed in Section XI of
                    this preamble.

                    VI. What Are Key Characteristics of the
                    Livestock and Poultry Industries?

                    A. Introduction and Overview

                    1. Total Number and Size of Animal
                    Confinement Operations

                     USDA reports that there were 1.1
                    million livestock and poultry farms in
                    the United  States in 1997. This number
                    includes all operations that raise beef,
                    dairy, pork, broilers, egg layers, and
                    turkeys, and includes both confinement
                    and non-confinement (grazing and
                    rangefed) production. Only operations
                    that raise animals in confinement will
                    be subject to today's proposed .
                    regulations.
                     For many of the animal sectors, it is
                    not possible to precisely determine what
                    proportion of the total livestock
                    operations are confinement operations
                    and what proportion are grazing
                    operations only. Data on the number of
                   beef and hog operations that raise
                    animals in confinement are available
                   from USDA. Since most large dairies
                   have milking parlors, EPA assumes that
                   all dairy operations are potentially
                   confinement operations. In the poultry
                   sectors, there are few small non-
                   confinement operations and EPA
                   assumes that all poultry operations
                   confine animals. EPA's analysis focuses
                   on the largest facilities in these sectors
                   only.
   Using available 1997 data from USDA,
 EPA estimates that there are about
 376,000 AFOs that raise or house
 animals in confinement, as defined by
 the existing regulations (Table 6-1).
 Table 6-1 presents the estimated
 number of AFOs and the corresponding
 animal inventories for 1997 across select
 size groupings. These estimates are
 based on the number of "animal units"
 (AU) as defined in the existing
 regulations at 40 CFR 122, with the
 addition of the revisions that are being
 proposed for immature animals and
 chickens. Data shown in Table 6-1 are
 grouped by operations with more than
 1,000 AU and operations with fewer
 than 300 AU.
   As shown in Table 6-1, there were an
 estimated 12,660 AFOs with more that
 1,000 AU in 1997 that accounted for
 about 3 percent of all confinement
 operation. In most sectors, these larger-
 sized operations account for the
 majority of animal production. For
 example, in the beef, turkey and egg
 laying sectors, operations with more
 than 1,000 AU accounted for more than
 70 percent of all animal inventories in
 1997; operations with more than 1,000
 AU accounted for more than 50 percent
 of all hog, broiler, and heifer operations
 (Table 6-1). In contrast, operations with
 fewer than 300 AU accounted for 90
 percent of all operations, but a relatively
 smaller share of animal production.
  USDA personnel have reviewed the
 data and assumptions used to derive
 EPA's estimates of the number of
 confinement operations. Detailed
 information on how EPA estimated the
 number of AFOs that may be subject to
 today's proposed regulations can be
 found in the Development Document  for
the Proposed Revisions to the National
Pollutant Discharge Elimination System
Regulation and the Effluent Guidelines
for Concentrated Animal Feeding
Operations (referred to as the
"Development Document").
                    TABLE 6-1.—NUMBER OF AFOs AND ANIMAL ON-SITE, BY SIZE GROUP, 1997
Sector/Size category

Cattle 	
Veal 	
Heifers 	
Dairy 	
Hogs: GF* 	 ;.
Hogs: FF* 	 	 	
Broilers 	
Layers: wet3 	
Layers: dry3 	
Turkeys 	

Total
AFOs
>1000 AU
1
<300 AU
(Number of operations)
106,080
850
1,250
116,870
53,620
64,260
34,860
3,110
72,060 '
13,720
2,080
10
300
1,450
1,670
2,420
3,940
50
590
370
102,000
640
200
109,740
48,700
54,810
20,720
2,750
70,370
12,020
Total
>1000AU
<300 AU
(Number of animals, 1000's)
26,840
270
850
9,100
, 18,000
38,740
1,905,070
392,940
392,940
112,800
22,790
10
450
2.050
9,500
21,460
1,143,040
275,060
275,060
95,880
2,420
210
80
5,000
2,700
5,810
476,270
58,940
58,940
2,260

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                                                                      2985
              TABLE 6-1.—NUMBER OF AFOs AND ANIMAL ON-SITE, BY SIZE GROUP, 1997—Continued
Sector/Size category
Total4 	
Total
AFOs
375,700
>1000 AU
1
12,660
<300 AU
336,590
Total
NA
>1000 AU
NA
<300 AU
NA
Source: Derived by USDA from published USDA/NASS data, including 1997 Census of Agriculture. In some cases, available data are used to
interpolate data for some AU size categories (see EPA's Development Document). Data for veal and heifer operations are estimated by USDA.
  1 As defined for the proposed CAFO regulations, one AU is equivalent to: one slaughter or feeder cattle, calf or heifer; 0.7 mature dairy cattle;
2 5 hogs (over 55 pounds) or 5 nursery pigs; 55 turkeys; and 100 chickens regardless of the animal waste system used.
  2 "Hogs: FF" are farrow-finish (includes breeder and nursery pigs); "Hogs: GF" are grower-finish only.
  3 "Layers: wet" are operations with liquid manure systems; "Layers: dry7'are operations with dry systems.
  4 "Total AFOs" eliminates double counting of operations with mixed animal types. Based on survey level Census data for 1992, operations with
mixed animal types account for roughly 25 percent of total AFOs.
2. Total Number of CAFOs" Subject to
the Proposed Regulations

  Table 6-2 presents the estimated
number of operations that would be
denned as a CAFO under each of the
two regulatory alternatives being
proposed. The "two-tier structure"
would define as CAFOs all animal
feeding operations with more than 500
AU. The "three-tier structure" would   •
define as CAFOs all animal feeding
operations with more than 1,000 AU
and any operation with more than 300
AU, if they meet certain "risk-based"
conditions, as defined in Section VII.
Table 6-2 presents the estimated
number of CAFOs in terms of number of
operations with more than 1,000 AU
and operations for each co-proposed
middle category (operations with
between 500 and 1,000 AU and between
300 and 1,000 AU, respectively).
  Based on available USDA data for
1997, EPA estimates that both proposed
alternative structures would regulate
about 12,660 operations with more than
1,000 AU. This estimate adjusts for
operations with more than a single
animal type. The two alternatives differ
in the manner in which operations with
less than 1,000 AU would be defined as
CAFOs and, therefore, subject to
regulation, as described in Section VTI.
As shown in Table 6-2, in addition to
the 12,660 facilities with more than
1,000 AU, the two-tier structure at 500
AU threshold would regulate an
additional 12,880 operations with
between 500 and 1,000 AU.. Including
operations with more than 1,000 AU,
the two-tier structure regulates a total of
25,540 AFOs that would be subject to
the proposed regulations (7 percent of
all AFOs).
  Under the three-tier structure, an
estimated 39,330 operations would be
subject to the proposed regulations (10
percent of all AFOs), estimated as the
total number of animal  confinement
operations with more than 300 AU, See
Table 6-1. Of these, EPA estimates that
a total of 31,930 AFOs would be defined
as CAFOs (9 percent of all AFOs) and
would need to obtain a permit (Table 6-
2), while an estimated 7,400 operations
would certify that they  do not need to
obtain a permit. Among those
operations needing a permit, an
estimated 19,270 operations have
between 300 to 1,000 AU. For more
information, see the Economic Analysis.
               TABLE 6-2. NUMBER OF POTENTIAL CAFOs BY SELECT REGULATORY ALTERNATIVE, 1997
Sector/Size category

Cattle 	
Veal 	 	
Heifers

Hogs' GF1 	 .'. 	
Hogs1 FF1 	 • 	



Turkeys 	 •••
Total 3 	 	 	
"Two-tier"
>300 AU
>500 AU
>750 AU
(#Operations)
4,080
210
1,050
7,140
4,920
9,450
14,140
360
1,690
2,100
39,320
3,080
90
800
3,760
2,690
5,860
9,780
360
1,280
1,280
25,540
2,480
40
420
2,260
2,300
3,460
7,780
210
1,250
740
19,100
>300 AU
>500 AU
(%Total)
4
25
84
6
9
15
41
12
2
15
10.5
3
10
64
3
5
9
28
12
2
9
6.8
>750AU

2
4
34
2
4
'• 5
22
7
2
5
5.1
"Three-
Tier"
>300 AU
(#) (%Total)
• 3,210 3
140, 16
980 78
6,480 6
2,650 5
5,700 9
13,740 39
360 12
1,650 2
2,060 15
31,930 8.5
   Source: See Table 6-1.                                  ,
   1FF=farrow-finish (includes breeder and nursery pigs); GF=grower finish.
   2 "Layers: wet" are operations with liquid manure systems. "Layers: dry" are operations with dry systems.
   3 "Total" eliminates double counting of operations with mixed animal types (see Table 6-1).
   EPA estimated the number of
 operations that may be defined as
 CAFOs under the three-tier structure
 using available information and
 compiled data from USDA, State
 Extension experts, and agricultural
 professionals. These estimates rely on
 information about the percentage of
 operations in each sector that would be
 impacted by the "risk-based" criteria
 described in Section VII. In some cases,
 this information is available on a state
 or regional basis only and is
 extrapolated to all operations
 nationwide. EPA's estimates reflect
 information from a majority of
 professional experts in the field. Greater
 weight is given to information obtained
 by State Extension agents, since they
 have broader knowledge of the industry
 in then- state. More detailed information
 on how EPA estimated the number of
 operations that may be affected by the
 proposed regulations under the three-

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Federal  Register/Vol. 66, No. 9/Friday, January 12, 20QIY Proposed  Rules
 tier structure is available in the
 rulemaking record and in the
 Development Document.
  EPA is also requesting comment on
 two additional options for the scope of
 the rule. One of these is an alternative
 two-tier structure with a threshold of
 750 AU. Under this option, an estimated
 19,100 operations, adjusting for
 operations with more than  a single
 animal type, would be denned as
 CAFOs. This represents about 5 percent
 of all CAFOs, and would affect an
 estimated 2,930 beef, veal,  and heifer
 operations, 2,260 dairies, and 5,750
 swine and 9,980 poultry operations
 (including mixed operations). Under the
 other alternative, a variation of the
 three-tier structure being co-proposed
 today, the same 39,320 operations with
 300 AU or greater would potentially be
 denned as CAFOs. However, the
 certification conditions for being
 defined as a CAFO would be different
 for operations with 300 to 1,000 AU (as
 described later in Section Vn). EPA has
 not estimated how many operations
 would be denned as CAFOs under this
 alternative three-tier approach, although
 EPA expects that it would be fewer than
 the 31,930 estimated for the three-tier
 approach being proposed today. If after
 considering comments, EPA decides to
 further explore this approach, it will
 conduct a full analysis of the number of
 potentially affected operations.
  EPA does not anticipate that many
 AFOs with less than 500 AU (two-tier
 structure)  or 300 AU (three-tier
 structure)  will be subject to the  '
 proposed requirements. In the past 20
years, EPA is aware of very few AFOs
that have been designated as CAFOs.
 Based on available USDA analyses that
measure excessive nutrient application
 on cropland in some production areas
and other farm level  data by sector,
facility size and region, EPA estimates
that designation may bring  an additional
50 operations under the proposed two-
tier structure each year nationwide. EPA
assumed this estimate to be cumulative
such that over a 10-year period
approximately 500 AFOs may become
                    designated as CAFOs and therefore
                    subject to the proposed regulations. EPA
                    expects these operations to consist of
                    beef, dairy, farrow-finish hog, broiler
                    and egg laying operations that are
                    determined to be significant
                    contributors to water quality
                    impairment. Under the three-tier
                    structure, EPA estimates that fewer
                    operations would be designated as
                    CAFOs, with 10 dairy and hog
                    operations may be designated each year,
                    or 100 operations over a 10-year period.
                    Additional information is provided in
                    the Economic Analysis.
                      EPA expects that today's proposed
                    regulations would mainly affect
                    livestock and poultry operations that
                    confine animals. In addition to CAFOs,
                    however, the proposed regulations
                    would also affect businesses that
                    contract out the raising or finishing
                    production phase to a CAFO but
                    exercise "substantial operational
                    control" over the CAFO (as described in
                    Section VII.C.6).
                      EPA expects that affected businesses
                    may include packing plants and
                    slaughtering facilities that enter into  a
                    production contract with a CAFO.
                    Under a production contract, a
                    contractor (such as a processing firm,
                    feed mill, or other animal feeding
                    operation) may either own the animals
                    and/or may maintain control over the
                    type of production practices used by the
                    CAFO. Processor firms that enter into a
                    marketing contract with a CAFO are not
                    expected to be subject to co-permitting
                    requirements since the mechanism for
                    "substantial operational control"
                    generally do not exist. Given the types
                    of contract arrangements that are
                    common in the hog and poultry
                    industries, EPA expects that packers/
                    slaughterers in these sectors may be
                    subject to the proposed co-permitting
                    requirements.
                      As discussed later in Sections VI.D.l
                    and VLE.l, EPA estimates that 94 meat
                    packing plants that slaughter hogs and
                    270 poultry processing facilities may be
                    subject to the proposed co-permitting
                    requirements. Other types of processing
 firms, such as further processors, 'food
 manufacturers, dairy cooperatives, and
 Tenderers, are not expected to be
 affected by the co-permitting
 requirements since these operations are
 further up the marketing chain and do
 not likely contract with CAFOs to raise
 animals. Fully vertically integrated
 companies (e.g., where the packer owns
 the CAFO) are not expected to require
 a co-permit since the firm as the  owner
 of the CAFO would require only a single
 permit. EPA solicits comment on these
 assumptions as part of today's
 rulemaking proposal. EPA also expects
 that non-CAFO, crop farmers who
 receive manure from CAFOs would be
 affected under one of the two co-
 proposed options relating to offsite
 management of manure (see Section
 VII).
  Additional information is provided in
 the Economic Impact Analysis of
 Proposed Effluent Limitations
 Guidelines and National Pollutant
 Discharge Elimination System for
 Concentrated Animal Feeding
 Operations (referred-to as  "Economic
 Impact Analysis").

 3. Manure and Manure Nutrients
 Generated Annually at AFOs

  USDA's National Resources
 Conservation Service (NRCS) estimates
 that 128;2 billion pounds of manure are
 "available for land application from
 confined AU" from the major livestock
 and poultry sectors. EPA believes these
 estimates equate to the amount of
manure that is generated at animal
feeding operations since USDA's
methodology accounts for all manure
generated at confinement facilities.
USDA reports that manure nutrients
available for land application totaled 2.6
billion pounds of nitrogen and 1.4
billion pounds of phosphorus in  1997
(Table 6-3). USDA's estimates do not
include manure generated from other
animal agricultural operations, such as
sheep and lamb, goats, horses, and other
farm animal species.
              TABLE 6-3. MANURE AND MANURE NUTRIENTS "AVAILABLE FOR LAND APPLICATION", 1997
Sector

Cattle' 	
Dairy 	
Hogs 	
All Poultry 	 	 	
USDA estimates: "available for
application" from confined AU"a
Total
manure
(bill. Ibs)
32.9
45.5
16.3
33.5
Total
nitrogen
Total
phos-
phorus
(Million pounds)
521
636
274
1.153
362
244
277
554
EPA estimates: Percentage share by facility
size group b
>1000
AU
>750 AU
>500 AU
>300AU
(Percent of total manure nutrients applied)
83
23
55
4Q
85
31
6'3
fifi
86
37
69
77
go
43
78
on

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001 /Proposed Rules
                                                                                                             2987
         TABLE 6-3. MANURE AND MANURE NUTRIENTS "AVAILABLE FOR LAND APPLICATION", 1997—Continued
Sector
Total 	
USDA estimates: "available for
application" from confined AU" a
Total
manure
128.2
Total
nitrogen
2,583
Total
phos-
phorus
1,437
EPA estimates: Percentage share by facility
size group"
>1000
AU
49
>750 AU
58,
>500 AU
64
>300AU
72
are
  ^Manure and nutrients are from USDA/NRCS using 1997 Census of Agriculture and procedures documented developed by USDA Cumbers
  e "dr} stafe" andreflect the amount of manure nutrient "available for application from confined AU" and are assumed by EPA to co.ncide w.th

                                  iare of animals within each facility size group for each sector (shown in Table 6-1) across three facility
 Si?'Cattle'?'is the sum of USDA's estimate for livestock operations "with fattened cattle" and "with cattle other than fattened cattle and milk
' cows."                           '
   The contribution of manure and
 manure nutrients varies by animal type.
 Table 6-3 shows that the poultry
 industry was the largest producer of
 manure nutrients in 1997, accounting
 for 45 percent (1.2 billion pounds) of all
 nitrogen and 39 percent (0.6 billion
 pounds) of all phosphorus available for
 land application that year. Among the
 poultry sectors, EPA estimates that
 approximately 55 percent of all poultry
 manure was generated by broilers, while
 layers generated 20 percent and turkeys
 generated 25 percent. The dairy
 industry was.the second largest
 producer of manure nutrients,
 generating 25 percent (0.6 billion
 pounds)  of all nitrogen and 17 percent
 (0.2 billion pounds) of all phosphorus
 (Table 6-3). Together, the hog and beef
 sectors accounted for about one-fourth
 of all nitrogen and nearly 40 percent of
 all phosphorus from manure.
    Table 6-3 shows EPA's estimate of the
 relative contribution of manure
 generated by select major facility size
 groupings, including coverage for all
 operations with more than 1,000 AU, all
 operations with more than 750 AU or
  500 AU  (two-tier structure), and all
  operations with more than 300 AU
 ' (three-tier structure). EPA estimated
  these shares based on the share of
  animals within each facility size group
  for each sector, as shown in Table 6—1.
  Given the number of AFOs that may be
  denned as CAFOs and subject to the
  proposed regulations (Table 6—1), EPA
  estimates that the proposed effluent
  guidelines and NPDES regulations will
  regulate 5 to 7 percent (two-tier
  structure) to 10 percent (three-tier
  structure) percent of AFOs nationwide.
  Coverage in terms of manure nutrients
  generated will vary by the proposed
  regulatory approach. As shown in  Table
  6-3, under the 500 AU two-tier
  structure, EPA estimates that the
  proposed requirements will capture 64
  percent.of all CAFO manure; under the
  750 AU two-tier structure, EPA
                                       estimates that the proposed
                                       requirements will capture 58 percent of
                                       all CAFO manure. Under the three-tier
                                       structure, EPA estimates that the
                                       proposed requirements will capture 72
                                      . percent of all CAFO manure generated
                                       annually (Table 6-3). The majority of
                                       this coverage (49 percent) is attributable
                                       to regulation of operations with more
                                       than 1,000 AU.
                                       '  Additional information on the
                                       constituents found in livestock and
                                       poultry manure and wastewater is
                                       described in Section V. Information on
                                       USDA's estimates of nutrients available
                                       for land application and on the relative
                                       consistency of manure for the main
                                       animal types is provided in the
                                       Development Document..
                                       B.BeefSubcategory
                                       \. General Industry Characteristics
                                         Cattle feedlots are identified under
                                       NAICS 112112 (SIC 0211, beef cattle
                                       feedlots) and NAICS 112111, beef cattle
                                       ranching and farming (SIC 0212, beef
                                       cattle, except feedlots). This sector
                                       comprises establishments primarily
                                       engaged in feeding cattle and calves for
                                       fattening, including beef cattle feedlots
                                       and feed yards (except stockyards for
                                       transportation).
                                         " The beef cattle industry can be
                                        divided into four separate producer
                                        segments:  ^
                                          • Feedlot operations fatten or
                                        "finish" feeder cattle prior to slaughter
                                        and constitute the final phase of fed
                                        cattle production. Calves usually begin
                                        the finishing stage after 6 months of age
                                        or after reaching at least 400 pounds.
                                        Cattle are typically held for 150 to 180
                                        days and weigh between 1,150 to 1,250
                                        pounds (for steers) or 1,050 to 1,150
                                        pounds (for heifers) at slaughter.
                                           • Veal operations raise male dairy
                                        calves for slaughter. The majority of
                                        calves are "special fed" or raised on a
                                        low-fiber diet until about 16 to 20 weeks
                                        of age, when they weigh about 450
                                        pounds.
  • Stacker or backgrounding
operations coordinate the flow of
animals from breeding operations to
feedlots by feeding calves after weaning
and before they enter a feedlot. Calves
are kept between 60 days to 6 months
or until they reach a weight of about 400
pounds.
  • Cow-calfproducer^ typically
maintain a herd of manure cows, some
replacement heifers,/and a few bulls,
and breed and raise calves to prepare
them for fattening at a feedlot. Calves
typically reach maturity on pasture and
hay and are usually sold at weaning.
Cow-calf operators may also retain the
calves and continue to raise them on
pasture until they reach 600 to 800
pounds and are ready for the feedlot.
   Animal feeding operations in this
sector that may be affected by today's
proposed regulations include facilities
that confine animals. Information on the
types of facilities in this sector that may
be covered by the proposed regulations
is provided in Section VII.
   USDA reports that there were more
than 106,000 beef feedlots in 1997, with
a total inventory of 26.8 million cattle
 (Table 6.1). Due to ongoing
 consolidation in the beef sector, the
total number of operations has dropped
by more than one-half since 1982, when
there were 240,000 operations raising
 fed cattle. EPA also estimates that there
 were 850 veal operations raising 0.3
 million head and 1,250 stand-alone
 heifer operations raising 0.9 million
 head in 1997. Only a portion of these
 operations would be subject to the
 proposed regulations.
   As shown in Table 6-2, under the
 two-tier structure, EPA estimates that
 there are 3,080 beef feedlots with more
 than 500 head (500 AU of beef cattle).
 EPA also estimates that there are about
 90 veal operations and 800 heifer
 operations that may be subject to the
 proposed regulations. Under the three-
 tier structure, EPA estimates that 3,210
 beef feedlots, 140 veal and 980 heifer

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  operations with more than 300 head
  (300 AU) would meet the "risk-based"
  conditions described in Section VII and
  thus require a permit.
    EPA expects that few operations that
  confine fewer than 500 AU of beef, veal,
  or heifers, would be designated by the
  permit authority. For the purpose of
  estimating costs, EPA assumes that no
  beef, veal, or heifer operations would be
  designated as CAFOs and subject to the
  proposed regulations under the three-
  tier structure. Under the two-tier
  structure, EPA assumes that about four
  beef feedlots located in. the Midwest
  would be designated annually, or 40
  beef feedlots projected over a 10-year
  period.
   The cattle feeding industry is
  concentrated in the Great Flams and
  Midwestern states. The majority of
  feedlots are located in the Midwest.
  However, the majority of large feedlots
  (i.e., operations with more than 1,000
  head) are located in four Great Plains
  states—Texas, Kansas, Nebraska, and
  Colorado—accounting for nearly 80
  percent of annual fed cattle marketings.
 Table 6-1 shows that, although the
 majority of beef feedlots (over 98
 percent) have capacity below 1,000
 head, larger feedlots with more than
  1,000 head accounted for the majority of
 animal production. In 1997, feedlots
 with more than 1,000 head accounted
 for 85 percent of the nation's fed cattle
 inventory and sales. Cattle feeding has
 become increasingly concentrated over
 the last few decades. Feedlots have
 decreased in number, but increased in
 capacity. The decline in the number of
 operations is mostly among feedlots
 with less than 1,000 head.
   The majority of cattle  and calves are
 sold through private arrangements and
 spot market agreements. Production
 contracting is not common in the beef
 sector. Most beef sector contracts are
 marketing based where operations agree
 to sell packers a certain amount of cattle
 on a predetermined schedule.
 Production contracts are uncommon,
 but may be used to specialize in a single
 stage of livestock production. For
 example, custom feeding operations
 provide finish feeding under contract.
 Backgrounding or stacker operations
 raise cattle under contract from the time
 the calves are weaned until they are on
 a finishing ration in a feedlot. As shown
 by 1997 USDA data of animal
 ownership, production contracts
 account for a relatively small share (4
 percent) of beef production. These same
 data show that production contracts are
 used to grow replacement breeding
 stock.
  Despite the limited use of contracts
for the finishing and raising phase of
                    production, EPA expects that no
                    businesses, other than the CAFO where
                    the animals are raised, will be subject to
                    the proposed co-permitting
                    requirements. Reasons for this
                    assumption are based on data from
                    USDA on the use of production
                    contracts and on animal ownership at
                    operations in this sector. Additional
                    information is provided in Section 2 of
                    the Economic Analysis. EPA is seeking
                    comment on this assumption as part of
                    today's notice.

                    2. Farm Production and Waste
                    Management Practices
                      Beef cattle may be kept on unpaved,
                    partly paved, or totally paved lots. The
                    majority of beef feedlots use unpaved
                    open feedlots. In open feedlots,
                    protection from the weather is often
                    limited to a windbreak near the fence in
                    the winter and/or sunshade in the
                    summer; however, treatment facilities
                    for the cattle  and the hospital area are
                    usually covered. Confinement feeding
                    barns with concrete floors are also
                    sometimes used at feedlots in cold or
                    high rainfall areas, but account for only
                    1 to 2 percent of all operations. Smaller
                    beef feedlots with less than 1,000 head,
                    especially in areas with severe winter
                    weather and high rainfall, may use
                    open-front barns, slotted floor housing,
                    or housing with sloped gutters.
                     Wastes produced from beef operations
                    include manure, bedding, and
                    contaminated runoff. Paved lots
                    generally produce more runoff than
                    unpaved lots. Unroofed confinement
                    areas typically have a system for
                    collecting and confining contaminated
                    runoff. Excessively wet lots result in
                    decreased animal mobility and
                    performance.  For this reason, manure is
                    often stacked into mounds for improved
                    drainage and drying, as well as
                   providing dry areas for the animals. If
                   the barn has slotted floors, the manure
                   is collected beneath slotted floors, and
                   is scraped or flushed to the end of the
                   barn where it  flows or is pumped to a
                   storage area for later application via
                   irrigation or transported in a tank
                   wagon. Waste may also be collected
                   using flushing systems.
                     Waste from a beef feedlot may be
                   handled as a solid or liquid. Solid
                   manure storage can range from simply
                   constructed mounds within the pens to
                   large stockpiles. In some areas, beef
                   feedlot operations may use a settling
                   basin to remove  bulk solids from the
                   pen runoff, reducing the volume of
                   solids prior to entering a storage pond,
                   therefore increasing storage capacity. A
                   storage pond is typically designed to
                   hold the volume of manure and
                   wastewater accumulated during the
  storage period, including additional
  storage volume for normal precipitation,
  minus evaporation, and storage volume
  to contain a 25-year, 24-hour storm
  event. An additional safety volume
  termed "freeboard" is also typically
  built into the storage pond design.
   Veal are raised almost exclusively in
  confinement housing, generally using
  individual stalls or pens. Veal calves are
  raised on a liquid diet and their manure
  is highly liquid. Manure is typically
  removed from housing facilities by
  scraping or flushing from collection
  channels and then flushing or pumping
  into liquid waste storage structures,
  ponds, or lagoons.
   Waste collected from the feedlot may
 be transported within the site to storage,
 treatment, and use or disposal areas.
  Solids and semisolids are typically
 transported using mechanical
 conveyance equipment, pushing the
 waste down  alleys,' and transporting lie
 waste in solid manure spreaders. Flail-
 type spreaders, dump trucks, or earth
 movers may also be used to transport
 these wastes. Liquids and slurries are
 transferred through open channels,
 pipes, or in a portable liquid tank. The
 most common form of utilization is land
 application. However, the amount of
 cropland and pastureland that is
 available for manure application varies
 at each operation. Cattle waste may also
 be used as a bedding for livestock,
 marketed as compost, or used as an
 energy source.
   Additional information on the types
 of farm production and waste
 management practices is provided in the
 Development Document.
 C. Dairy Subcategory

 1. General Industry Characteristics
   Operations that produce milk are
 identified under NAICS 11212, dairy
 cattle and milk production (SIC 0241,
 dairy farms).
   A dairy operation may have several
 types of animal groups present,
 including:
   •  Calves (0-5 months);
   •  Heifers (6-24 months);
   •  Lactating dairy cows (i.e., currently
 producing milk); and;
   •  Cows close to calving and dry cows
 (i.e., not currently producing milk); and
   •  Bulls.
  . Animal feeding operations in this
 sector that may be affected by today's
proposed regulations include facilities
that confine animals. Information on the
types of facilities in this sector that may
be covered by the proposed regulations
is provided in Section VII.
  In 1997, there were 116,900  dairy
operations with a year-end inventory of

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                                                                      2989
9.1 million milk cows that produced
156.1 billion pounds of milk (Table 6,1).
Only a portion of these operations
would be subject to the proposed
regulations. As shown in Table 6.2,
under the two-tier structure, EPA
estimates that there are 3,760 dairy
operations that confine more than 350
milk cows  (i.e., 500 AU equivalent).
Under the three-tier structure, EPA
estimates that 6,480 dairy operations
with more  than 200 head (i.e., 300 AU
equivalent) would meet the "risk-based"
conditions described in Section VII and
thus require a permit.
   Table 6-1 shows that dairies with
fewer than 200 head account for the
majority (95 percent) of milking
, operations and account for 55 percent of
the nation's milk cow herd. EPA expects
that under the two-tier structure
 designation of dairies with fewer than
 350 milk cows would be limited to
 about 22 operations annually, or 220
 dairies projected over a 10-year time
 period. Under the three-tier structure,
 EPA expects annual designation of
 dairies with fewer than 200 milk cows
 would be limited to about 5 operations,
 or 50 operations over a 10-year period.
: EPA expects that designated facilities
 will be located in more traditional
 farming regions.              ,
   More than one-half of all milk
 produced nationally is concentrated
 among the top five producing states:
 California, Wisconsin, New York,
 Pennsylvania, and Minnesota. Other
 major producing states include Texas,
 Michigan, Washington, Idaho, and Ohio.
 Combined, these ten states accounted
 for nearly 70 percent of milk production
 in 1997. Milk production has been
 shifting from traditional to
 nontraditional milk producing states.
 Operations in the more traditional milk
 producing regions of the Midwest and
 Mid-Atlantic tend to be smaller and less
 industrialized. Milk production at larger
 operations using newer technologies
 and production methods is emerging in
 California, Texas, Arizona, New Mexico,
 and Idaho. Milk production in these
  states is among the fastest-growing in
  the nation, relying on economies of
  scale and a specialization in milk
  production to lower per-unit production
  costs. (Additional data on these trends
  are provided in Section IV.C).
    Over the past few decades,'the
 .number of dairy operations and milk
  cow inventories has dropped, while
  overall milk production has been
  increasing. USDA reports that while the
  number of dairy operations dropped by
  more than one-half from 277,800 in
  1982 to 116,900 in 1997, the amount of
  milk produced annually at these
  operations rose from 135.5 billion
pounds to 156.1 billion pounds. These,
figures signal trends toward increased
consolidation, large gains in per-cow
output, and increases in average herd
size per facility. From 1982 to 1997, the
average number'of dairy cows per
.facility doubled from 40 cows to.80
cows per facility.
  Although milk and dairy food
production has become increasingly
specialized, it has not experienced
vertical integration in the same way. as
other livestock industries. The use of
production contracts is uncommon in
milk production. In part, this is
attributable to the large role of farmer-
owned, farmer-controlled dairy
cooperatives, which handle about 80
percent of the milk delivered to plants
and dealers. Milk is generally produced
under marketing-type contracts through
verbal agreement with their buyer or
 cooperative.  Data from USDA indicate
that little more than 1 percent of milk
was produced under a production
 contract in 1997. Use of production
 contracts in the  dairy sector is mostly
 limited to contracts between two animal
 feeding operations to raise replacement
 heifers.
   Despite the limited use of contracts
 between operations to raise replacement
 herd, EPA expects that no businesses
 other than the CAFO where the animals
 are raised will be subject to the
 proposed co-permitting requirements.
 Reasons for this assumption are based
 on data from USDA on the use of
 production contracts and on animal
 ownership at operations in this sector.
 Additional information is provided in
 Section 2 of the Economic Analysis..
 EPA is seeking  comment on this
 assumption as part of today's notice of
 the proposed rulemaking.
 2. Farm Production and Waste
' Management Practices
    Animals at dairy operations may be
 confined in free-stalls, drylots, tie-stalls,
 or loose housing. Some may be allowed
 access to exercise yards  or open pasture.
 The holding area confines cows that are
 ready for milking. Usually, this area is
 , enclosed and is part of the milking
  center, which in turn may be connected
 to the barn  or located in the immediate
  vicinity of the cow housing. Milking
  parlors are separate facilities where the
  cows are milked and are typically
  cleaned several times each day to
  remove manure and dirt. Large dairies
  tend to have automatic flush systems,
  while smaller dairies simply hose down
  the area. Larger dairies in the northern
  states, however, may be more likely to
  use continuous mechanical scraping of
  alleys in barns. Cows that are kept in
tie-stalls may be milked directly from
their stalls.
  Waste associated with dairy
production includes manure,
contaminated runoff, milking house
waste, bedding, spilled feed and cooling
water. Dairies may either scrape or flush
manure, depending on the solids
content in manure and wastewater.
Scraping systems utilize manual,
mechanical, or tractor-mounted
equipment to collect and transport
manure from the production area.
Flushing systems use fresh or recycled
lagoon water to move manure. Dairy
manure as excreted has a solids content
of about 12 percent and tends to act as
a slurry; however, it can be handled as
a semisolid or a solid if bedding is
added. Semisolid manure has a solids
content ranging from 10 to 16 percent.
Dilution water may be added to the
manure to create a slurry with a solids
content of 4 to 10 percent. If enough
dilution water is added to the manure
to reduce the solids content below 4
percent, the waste is considered to be a
liquid.
   Manure in a solid or semisolid state
 minimizes the volume of manure that is
 handled. In a dry system, the manure is
 collected on a regular basis and covered
 to prevent exposure to rain and runoff;
 sources of liquid waste, such as milking
 center waste, are typically handled
 separately. In a liquid or slurry system,
 the manure is typically mixed with
 flushing system water from lagoons; the
 milking center effluent is usually mixed
 in with the animal manure in the lagoon
 or in the manure transfer system to ease
  Eumping. Liquid systems are usually
  ivored by large dairies because they
 have lower labor cost and because the
 dairies tend to use automatic flushing
 systems.
   Methods used at dairy operations to
  collect waste include mechanical/tractor
  scraper, flushing systems, gutter
  cleaner/gravity gutters, and slotted
  floors. Manure is typically stored as a
  slurry or liquid in a waste storage pond
  or in structural tanks. Milking house
  waste and contaminated runoff must be
  stored as liquid in a waste storage pond
  or structure. One common practice for
  the treatment of waste at dairies
  includes solids separation. Another
  common practice for the treatment of
  liquid waste at dairies includes
  anaerobic lagoons. The transfer of dairy
  waste depends on its consistency: liquid
  and slurry wastes can be transferred
  through open channels, pumps, pipes,
  or in a portable tank; solid and semi-
  solid waste can be transferred by
  .mechanical conveyance, solid manure
  spreaders, or by being pushed down
  curbed concrete alleys. The majority of

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  dairy operations dispose of their waste
  through land application. The amount
  of crop and pastureland available for
  land application of manure varies by
  operation.
    Additional information on the types
  of farm production and waste
  management practices is provided in the
  Development Document.
  D. Hog Subcategory

  1. General Industry Characteristics
    Hog operations that raise or feed hogs
  and pigs either independently or on a
  contract basis are identified under
  NAICS 11221, hog and pig farming (SIC
  0213, hogs).
    Hog operations may be categorized by
  six facility types based on the life stage
  of the animal in which they specialize:  ,
    • Farrow-to-wean operations that
  breed pigs and ship 10- to 15-pound
  pigs to nursery operations.
    • Farrowing-nursery operations that
  breed pigs and ship 40- to 60-pound
  "feeder" pigs to growing-finishing
  operations.
   • Nursery operations that manage
  weaned pigs (more than 10 to 15
  pounds) and ship  40- to 60-pound
  "feeder" pigs to growing-finishing
  operations.
   • Growing-finishing or feeder-to-
 finish operations that handle 40- to 60-
 pound pigs and "finish" these to market
 weights of about 255 pounds.
   • Farrow-to-finish operations that
 handle all stages of production from
 breeding through finishing.
   • Wean-to-finish operations that
 handle all stages of production, except
 breeding, from weaning (10- to 15-
 pound pigs) through finishing.'
   Animal feeding operations in this
 sector that may be affected by today's
 proposed regulations include facilities
 that confine animals. Information on the
 types of facilities in this sector that may
 be covered by the proposed regulations
 is provided in Section vn.
   In 1997,  USDA reports that there were
 117,880 hog operations with 56.7
 million market and breeding hogs (Table
 6-1). Not all of these operations would
 be subject to the proposed regulations.
 As shown in Table 6-2, under the two-
 tier structure, EPA estimates that there
 are 5,860 farrow-finish feedlots
 (including  breeder and nursery
 operations) and 2,690 grower-finish
 feedlots with more than 1,250 head (i.e.,
 500 All equivalent). Under the three-tier
 structure, EPA estimates that 5,700
 farrow-finish feedlots (including breeder
 and nursery operations) and 2,650
grower-finish feedlots with more than
 750 head (i.e., 300 AU equivalent)
would meet the "risk-based" conditions
                    described in Section VII and thus
                    require a permit.
                      Table 6-1 shows that the majority of
                    hog operations (93 percent) have fewer
                    than 1,250 head, accounting for about
                    one-third of overall inventories. Nearly
                    half the inventories are concentrated
                    among the 3 percent of operations with
                    more than 2,500 head. Under the two-
                    tier structure EPA expects that
                    designation of hog operations with
                    fewer than 1,250 head will be limited to
                    about 20 confinement operations
                    annually, or 200 operations over a 10-
                    year time period. Under the three-tier
                    structure, EPA expects that about 5 hog
                    operations with fewer than 750 head
                    would be designated annually, or 50
                    operations over a 10-year time period.
                    EPA expects that designated facilities
                    will be located in more traditional
                    farming regions.
                      Hog production is concentrated
                    among the top five producing states,
                    including Iowa, North Carolina,
                    Minnesota, Illinois, and Missouri.
                    Together these states supply 60 percent
                    of annual pork supplies. The majority of
                    operations are located in the Midwest;
                    however, the Southeast has seen rapid
                    growth in hog production in the past
                    decade. Recent growth in this region is
                    due to increased vertical integration,
                    proximity to growing consumer markets,
                    and the mild climate, which offers
                    lower energy costs and improved feed
                    efficiency. (Additional  data on these
                    trends are provided in Section IV.C).
                      The hog sector is undergoing rapid
                    consolidation and becoming
                    increasingly specialized. USDA reports
                    that while the number of hog operations
                    dropped by nearly two-thirds between
                    1982 and 1997 (from 329,800 to 109,800
                    operations), the number of feeder pigs
                    sold has risen from 20.0 million to 35.0
                   million marketed head over the same
                   period. As in other livestock sectors,
                   increasing production from fewer
                   operations is attributable to expansion
                   at remaining operations. Data from
                   USDA indicate that the average number
                   of hogs per facility increased from 170
                   pigs in 1982  to 560 pigs in 1997.
                   Increasing production is also .
                   attributable to substantial gains in
                   production efficiency and more rapid
                   turnover, which has allowed hog
                   farmers to produce as much output with
                   fewer animals.
                    The hog sector is rapidly evolving
                   from an industry of small, independent
                   firms linked by spot markets to an
                   industry of larger firms that are
                   specialized and vertically coordinated
                   through production contracting. This is
                   particularly true of large-scale hog
                   production in rapidly growing hog
                   production states such as North
  Carolina. Production contracting is less
  common in the Midwest where
  coordination efforts are more
  diversified.
   Information from USDA on animal
  ownership at U.S. farms provides ari
  indication of the potential degree of
  processor control in this sector. Data
  from USDA indicate the use of
  production contracts accounted for 66
  percent of hog production in the
  Southern and Mid-Atlantic states in
  1997, especially among the larger
  producers. This indicates that a large
  share of hog production may be under
  the ownership or control of processing
  firms that are affiliated with hog
  operations in this region. This compares
  to the Midwest, where production
  contracting accounted for 18 percent of
  hog production. Production contracting
  in the hog sector differs from that in the
  beef and dairy sectors since it is
 becoming increasingly focused on the
  finishing stage of production, with the
  farmer ("grower") entering into an
 agreement with a meat packing or
 processing firm ("integrator").
 Production contracts are also used
 between two independent animal
 feeding operations to raise immature
 hogs.
   Businesses that contract out the
 growing or finishing phase of
 production to an AFO may also be
 affected by the proposed co-permitting
 requirements. Affected businesses may
 include other animal feeding operations
 as well as processing sector firms. By
 NAICS code, meat packing plants are
 classified as NAICS 311611, animal
 slaughtering (SIC 2011, meat packing
 plants). The Department of Commerce
 reports that there were a total of 1,393
 red meat slaughtering facilities that
 slaughter hogs as well as other animals,
 including cattle and calves, sheep, and
 lamb. Of these, Department of
 Commerce's 1997 product class
 specialization identifies 83
 establishments that  process fresh and
 frozen pork and 11 establishments that
 process or cure pork. These data
 generally account for larger processing
 facilities that have more than 20
 employees. EPA believes that processing
 firms that may be affected by the
 proposed co-permitting requirements
 will mostly be larger facilities that have
 the administrative and production
 capacity to take advantage  of various
 contract mechanisms. This assumption
 is supported by information from USEA
 that indicates that production contracts
 in the hog sector are generally
 associated with the largest  producers
and processors. Section 2 of the
Economic Analysis provides additional
information on the basis for EPA's

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                                                                      2991
 estimate of potential co-permittees. EPA
 is seeking comment on this assumption
 as part of today's notice of the proposed
 rulemaking.
   Using these Department of Commerce
 data, EPA estimates that 94 companies
 engaged in pork processing may be
' subject to the proposed co-permitting
 requirements. This estimate does not
 include other processors under NAICS
 311611, including sausage makers and
 facilities that "further process" hog
, hides and other by-products because
 these operations are considered to be
 further up the marketing chain and
 likely do not contract out to CAFOs.

 2. Farm Production and Waste
 Management Practices
   Many operations continue to have the
 traditional full range of pork production
 phases at one facility, known as farrow-
 to-finish operations. More frequently at
 new facilities, operations are specialized
 and linked into a chain of production
 and marketing. The evolution hi farm
 structures has resulted in three distinct
 production system's-to create pork
 products: (1) farrow-to-finish; (2)
 farrowing, nursery, and grow-finish
 operations; and (3) farrow-to-wean and
 wean-finish operations. Most nursery
  and farrowing operations, as well as
  practically all large operations of any
  type, raise pigs in pens or stalls in
  environmentally controlled confinement
 Chousing. These houses commonly use
  slatted floors to separate manure and
  wastes from the animal. Open buildings
  with or without outside access are
  relatively uncommon at large
  operations, but can be used in all phases
  of pork production. Smaller operations,
  particularly in the Midwest, may utilize
  open lots or pasture to raise pigs.
    Hog waste includes manure and
  contaminated runoff. Most confinement
  hog  operations use one of three waste .
  handling systems: flush under slats, pit
  recharge, or deep underhouse pits.
  Flush housing uses fresh water or
  recycled lagoon water to remove manure
  from sloped floor gutters or shallow
  pits. The flushed manure is stored in
   lagoons or tanks along with any
   precipitation or runoff that may come
   into contact with the manure. Flushing
   occurs several times a day. Pit recharge
   systems are shallow pits under slatted
   floors with 6 to 8 inches of pre-charge
   water. The liquid manure is pumped or
'   gravity fed to a lagoon approximately
   once a week. Deep pit systems start with
   several inches of water, and the manure
   is stored under the house until it is
   pumped out for field application on the
   order of twice a year. Most large
   operations have 90 to 365 days storage.
 •  The deep pit system uses less water,
creating a slurry that has higher nutrient
concentrations than the liquid manure
systems. Slurry systems are more
common in the Midwest and the cooler
climates.
  Dry manure handling systems include
those used at open buildings and lots,
scraped lots, hoop houses, deep bedded
systems, andhigh rise hog houses.
These systems produce a more solid
manure material that is readily handled
with a tractor or front end loader. The
solids are stored in stacks or covered
until used as fertilizer. In some cases,
solids are composted.
   Storage lagoons are used to provide
. anaerobic bacterial decomposition of
organic materials. When only the top
liquid is removed for irrigation or some
 other use,  a limited amount of
phosphorus-rich sludge accumulates in
the lagoon, which requires periodic
removal. Vigorous lagoon mixing with
 an agitator or a chopper prior to
 irrigation is sometimes done to
 minimize the sludge accumulation. In
 certain climates, a settling and
 evaporation pond is used to remove
 solids, which are dried in a separate
 storage area. Some lagoons and tanks are
 covered with a synthetic material that
 reduces ammonia volatilization. Covers
 also prevent rainfall from entering the
 system and, ^therefore, reduce disposal
 costs.
   Land application is the most common
 form of utilization. To mitigate odor
 problems and volatization of ammonia,
 liquid waste can be injected below the
 soil surface. Waste may also be
 distributed through an irrigation
 process. Waste management systems for
 hogs often incorporate odor control
 measures, where possible.
    Additional information on the types
 of farm production and waste
 management practices is provided in the
 Development Document.

 E. Poultry Subcategory
  1. General Industry Characteristics
    Poultry operations can be classified
  into three individual sectors based on
  the type of commodity in which they
  specialize. These sectors include
  operations that breed and/or raise:
    • Broilers or young meat chickens
  that are raised to a live weight of 4 to
  4.5 pounds and other meat-type
  chickens, including roasters that are
  raised to 8 to 9 pounds. Classification:
  NAICS 11232, broilers and other meat-
  type chickens (SIC 0251, broiler, fryer
  and roaster chickens).
    • Turkeys and turkey hens, including
  whole turkey hens that range from 8 to
  15 pounds at slaughter, depending on
  market, and also turkey "canners and
cut-ups" that range from 22 to.40
pounds. Classification: NAICS 11233,
turkey production (SIC 0253, turkey and
turkey eggs).
  • Hens that lay shell eggs, including
eggs that are sold for human
consumption and eggs that are produced
for hatching purposes. Classification:
NAICS 11231, Chicken egg production
(SIC 0252, chicken eggs) and NAICS
11234, poultry hatcheries (SIC 0254,
poultry hatcheries).
  Animal feeding operations in this
sector that may be affected by today's
proposed regulations include facilities
that confine animals. Information on the
types of facilities in this.sector that may
be covered by the proposed regulations
is provided in Section VII.
  In 1997, the USDA reports that there
were 34,860 broiler operations that
raised a total of 1.9 billion broilers
during the year. There were also 13,720
turkey operations raising a total 112.8
million turkeys. Operations with egg
layers and pullets totaled 75,170 with
an average annual inventory of 393
million egg layers on-site. (See Table 6—
 1). Not all of these operations would be
subject to the proposed regulations.
   Under the two-tier structure, EPA
 estimates that there are 9,780 broiler
 operations,  1,280 turkey operations  and  .
 1,640 egg laying and pullet operations
 that have more than 500 AU (i.e.,
 operations with more than 50,000
 chickens and more than 27,500 turkeys).
 Under the three-tier structure, EPA
 estimates that 13,740 broiler operations,
 2,060 turkey operations and 2,010 egg
 laying operations with more than 300
 AU (i.e., operations with more than
 30,000 chickens and more than 16,500
 turkeys) would meet the "risk-based"
 conditions  described in Section VII and
 thus require a permit.
    EPA expects few, if any, poultry AFOs
 with fewer than 500 AU will be subject
 to the revised requirements. As shown
 in Table 6-1, most poultry operations
 have fewer than 500 AU. Under the two-
 tier structure, EPA expects that
 designation of broiler operations with
 fewer than 50,000 chickens will be
 limited to two broiler and two egg
 operations being designated annually, or
 a total of 40 poultry operations over a
 10-year period. EPA expects that no
 turkey operations would be designated
 as CAFOs and subject to the proposed
 regulations. EPA expects that no
 confinement poultry operations will be
  designated as CAFOs under the
  proposed requirements under the three-
 tier structure.
    Overall, most poultry production is
  concentrated in the Southeast and  in
  key Midwestern states. As in the pork
  sector, the Southeast offers advantages

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  such as lower labor, land, and energy
  costs; proximity to end markets; and
  milder weather, which contributes to
  greater feed efficiency. Nearly 60
  percent of all broiler production is
  concentrated among the top five
  producing states, including Georgia,
  Arkansas, Alabama, Mississippi, and
  North Carolina. The top five turkey
  producing states also account for about
  60 percent of all turkeys sold
  commercially. These include North
  Carolina, Minnesota, Virginia, Arkansas,
  and California. Missouri and Texas are
  also major broiler and turkey producing
  states. The top five states for egg
  production account for more than 40
  percent of all egg production,  including
  Ohio, California, Pennsylvania, Indiana,
  and Iowa. Other major egg producing
  states include Georgia, Texas,  Arkansas,
  and North Carolina.
   The number of operations in each of
  the poultry sectors has been declining
  while production has continued to rise.
  USDA reports that while the number of
 both turkey and broiler operations
  decreased by about 10,000 operations
 between 1982 and 1997, the number  of
  animals sold for slaughter rose nearly
  twofold: the number of broilers sold
 rose from 3.5 billion to 6.7 billion arid
 the number of turkeys  sold rose from
 167.5 million to 299.5  million. During
 the same period, the number of egg
 operations dropped nearly two-thirds
 (from 215,800 operations in 1982),
 while the number of eggs produced
 annually has increased from 5.8 billion
 dozen to 6.2 billion dozen. Increased
 production from fewer operations is due
 to expanded production from the
 remaining operations. This is
 attributable to increases in the  average
 number of animals raised at these
 operations as well as substantial gains
 in production efficiency and more rapid
 turnover, which has allowed operators
 to produce more with fewer animals.
 Data from USDA indicate that average
 inventory size on poultry operations
 increased twofold on broiler operations
 and rose threefold at layer and  turkey
 operations between 1982 and 1997.
 (Additional data on these trends are
 provided in Section IV.C). As in other
 sectors, larger operations control most
 animal inventories and sales.
  The poultry industry is characterized
 by increasing integration and
 coordination between the animal
 production facility and the processing
 sector. Vertical integration has
 progressed to the point where large
 multifunction producer-packer-
 processor-distributor firms are the
 dominant force in poultry meat and egg
production and marketing. Coordination
through production contracting now
                    dominates the poultry industry. Today's
                    integrators are subsidiaries of feed
                    companies, independent processors, '
                    cooperatives, meat packers, or retailers,
                    or affiliates of conglomerate
                    corporations. These firms may own and/
                    or direct the entire process from the
                    production of hatching eggs to the
                    merchandising of ready-to-eat-sized
                    poultry portions to restaurants.
                      Production contracting in the poultry
                    sector differs from that in the other
                    livestock sectors since it is dominated
                    by near vertical  integration between a
                   ' farmer ("grower") and a processing firm
                    ("integrator"). Information from USDA
                    on animal ownership at U.S. farms
                    provides an indication of the potential
                    degree of processor control in this
                    sector. Data from USDA indicate
                    production contracting accounted for
                    virtually all (98 percent) of U.S. broiler
                    production in 1997. This indicates that
                    nearly all broiler production may be
                    under the ownership or control of
                    processing firms that are affiliated with
                    broiler operations. Production
                    contracting accounts for a relatively
                    smaller share of turkey and egg
                    production, accounting for 70 percent
                    and 37 percent, respectively.
                      Businesses that contract out the
                    growing or finishing phase of
                   production to an AFO may also be
                   affected by the proposed co-permitting
                   requirements. Affected businesses may
                   include other animal feeding operations
                   as well as processing sector firms.
                   Poultry processing facilities are
                   classified under NAICS 311615, poultry
                   processing, and NAICS 311999, all other
                   miscellaneous (SIC 2015, poultry
                   slaughtering facilities). The Department
                   of Commerce reports that there were a
                   total of 558 poultry and egg slaughtering
                   and processing facilities in 1997. Of
                   these, Department of Commerce's 1997
                   product class specialization for poultry
                   identifies 212 establishments that
                   process young chickens, 15 that process
                   hens or fowl, and 39 that process
                   turkeys (rounded to the nearest ten).
                   These data generally account for larger
                   processing facilities that have more than
                   20 employees. EPA believes that
                   processing firms that may be affected by
                   the proposed co-permitting
                   requirements will mostly be larger
                   facilities that have the administrative
                   and production capacity to take
                   advantage of various contract
                   mechanisms. Section 2 of the Economic
                   Analysis provides additional
                   information on the basis for EPA's
                   estimate of potential co-permittees. EPA
                   is seeking comment on this assumption
                   as part of today's  notice of the proposed
                   rulemaking.
    Using these Department of Commerce
  data, EPA estimates that about 270
  companies engaged in poultry
  slaughtering may be subject to the
  proposed co-permitting requirements.
  This estimate does not include egg
  processors under NAICS 311999
  because these operations are considered
  to be further up the marketing chain and
  likely do not contract out to CAFOs.

  2. Farm Production and Waste
  Management Practices
   There are two types of basic poultry
  confinement facilities—those that are
  used to raise turkeys and broilers for
  meat and those that are used to house
  layers. Broilers and young turkeys are
  grown on floors on beds of litter
  shavings, sawdust, or peanut hulls;
  layers are confined to cages. Broilers are
  reared in houses where an absorbent
  bedding'material such as wood shavings
  or peanut hulls are placed on 'the floor
  at a depth of several inches. Breeder
 houses contain additional rows of slate
  for birds to roost. Broilers may also be
 provided supplementary heat during the
  early phases of growth. Turkeys as well
 as some pullets and layers are produced
 in a similar fashion. Pullets or chickens
 that are not yet of egg laying age are
 raised in houses on litter, or in cages.
 Most commercial layer facilities employ
 cages to house the birds, although
 smaller laying facilities and facilities
 dedicated to specialty eggs  such as
 brown eggs or free range eggs may use
 pastures or houses with bedded floors.
 Layer cages are suspended over a  r
 bottom story in a high-rise house, or
 over a belt or scrape gutter.  The gutter
 may be a shallow sloped pit, in which
 case water is used to flush the wastes to
 a lagoon. Flush systems are more likely
 to be found at smaller facilities in the
 South.
   Poultry waste includes manure,
 poultry mortalities, litter, spilt water,
 waste feed, egg wash water, and also
 flush water at operations with liquid
 manure systems. Manure from broiler,
 breeder, some pullet operations, and
 turkey operations is allowed to
 accumulate on the floor where it is
 mixed with the litter. In the chicken
 houses, litter close to drinking water
 access forms a cake that is removed
 between flocks. The rest of the litter
 pack generally has low moisture content
 and is removed every 6 months to 2
 years, or between flocks to prevent
 disease. This whole house clean-out
 may also require storage, depending on
 the time of year it occurs. The litter is
 stored in temporary field stacks, in
 covered piles, or in stacks within  a
roofed facility to help keep it dry.
Commonly, treatment of broiler and

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                                                                      2993
turkey litter includes composting which
stabilizes the litter into a relatively
odorless material and which increases
the market value of the litter. Proper
composting raises the temperature
within the litter such that pathogens are
reduced, allowing reuse of the litter in
the poultry house.
  The majority of egg laying operations
also use dry manure handling. Laying
hens are kept in cages and the manure
drops below the cages in both dry and
liquid manure handling systems. Most
of the dry manure laying operations are
constructed as high rise houses where
the birds are kept on the second floor
and the manure drops to the first floor
sometimes referred to as the pit.
Ventilation flows through the house
from the roof down over the birds and
into the pit over the manure before it is
forced out through the sides of the
house. The ventilation drys the manure
as it piles up into cones. Manure can be
stored in high rise houses for up to a
year before requiring removal. In dry
layer houses with belts, the manure that
drops below the cage collects on belts
and is transported to a separate covered
storage area. Layer houses with liquid
systems use either a shallow pit or
alleyway located beneath the cages for
flushing. Flushed wastes are pumped to
a lagoon.
   Because of the large number of
routine mortalities associated with large
poultry operations, the disposal of dead
birds is occasionally a resource concern.
Poultry facilities must have .adequate
means for disposal of dead birds in a
 sanitary manner. To prevent the spread
 of disease, dead birds are usually
 collected daily. Disposal alternatives
 include incineration, rendering,
 composting, and in-ground burial or
 burial in disposal tanks. Much of the
 waste from poultry facilities is land
 applied.
 •  Additional information on the types
 of farm production and waste
management practices is provided in the
Development Document.

VII. What Changes to the NPDES CAFO
Regulations Are Being Proposed?

A. Summary of Proposed NPDES
Regulations
  EPA is co-proposing, for public
comment, two alternative ways to
structure the NPDES regulation for
defining which AFOs are CAFOs. Both
structures represent significant
improvements to the existing regulation
and offer increased environmental
protection. The first alternative proposal
is a "two-tier structure," and the second
is a "three-tier structure." Owners or
operators of all facilities that are defined
as CAFOs in today's proposal, under .
either alternative, would be required to
apply for an NPDES permit.
   In the first co-proposed alternative,
EPA is proposing to replace the current
three-tier structure.in 40 CFR 122.23
with a two-tier structure. See proposed
§ 122.23(a)(3) for the two-tier structure,
included at the end of this preamble. All
AFOs with 500 or more animal units
would be defined as, CAFOs, and those
with fewer than 500 animal units would '
be CAFOs only if they are designated as
such by EPA or the State NPDES permit
authority.
   In the second co-proposed alternative,
EPA is proposing to retain the current
three-tier structure. All AFOs with 1,000
or more animal units would be defined
as CAFOs, and those with less than 300
animals units would be CAFOs only if
they are designated by EPA or the State
NPDES permit authority. Those with
 300 to 1,000 animal units would be
CAFOs if they meet one or more of
 several specific conditions, and today's
proposal would revise the existing
 conditions. These facilities could also
be designated as CAFOs if they are
 found to be significant contributors of
 pollutants to waters of the United
 States. Further, all AFOs between 300
 and 1,000 animal units would be
required to certify to the permit
authority that they do not meet any of
the conditions. Those facilities unable
to certify would be required to apply for
a permit.
  These regulatory alternatives are two
of six different approaches that the
Agency considered. Two of the
approaches are also being seriously
considered, but are not being proposed
in today's action because they have not
been fully analyzed. However, EPA is
soliciting public comment on these two
alternatives. One of the alternatives is a
two-tier structure, similar to what is
being proposed today, but would
establish a threshold at the equivalent of
750 AU. The other alternative under
consideration is a three-tier structure,
with different certification and
permitting requirements for facilities in
the 300 AU to 1,000 AU tier. These
alternatives are described in more detail
in Section VII.B.5. After reviewing
public comment, EPA may decide to
pursue either of these alternatives.
   In addition, EPA considered two other
alternative approaches that are not being
proposed. One would retain the existing
three-tier structure for determining
which AFOs are CAFOs, and would
retain the existing conditions for
determining which of the middle tier
facilities are CAFOs while incorporating
all other proposed changes to the CAFO
regulations (e.g., the definition of CAFO,
the duty to apply, etc.). The sixth
approach that was not proposed which  .
is similar to today's second alternative
proposal, would retain the three-tiered
 structure and would revise the
 conditions for determining which of the
middle tier facilities are CAFOs in the
 same manner as today's proposal, hi
 contrast with today's proposal, it would
 not require all AFOs in the middle tier
to certify they are not CAFOs.
   EPA is soliciting comment on all six
 scenarios for structuring how to
 determine which facilities are CAFOs.
                   TABLE 7-1 .—PROPOSED REVISION TO THE STRUCTURE OF THE CAFO REGULATION
                                              Proposed revision
                                                                                                            Section
 Historical Record	••	
 Two-Tier Structure	
 Three-Tier Structure	
 Comparative Analysis	
 Alternative Scenarios Considered but not Proposed
                                                                     B.1
                                                                     B.2
                                                                     B.3
                                                                     B.4
                                                                     B.5
   Besides changing the structure of the
 regulation, under both of today's
 proposals, EPA is also proposing
 changes to clarify, simplify, and
 strengthen the NPDES regulation,
 including to: clarify the definition of an
 AFO; discontinue the use of the term
 "animal unit" and eliminate the mixed
 animal type multiplier when calculating
 numbers of animals; eliminate the 25-
 year, 24-hour storm permit exemption;
 and impose a clearer and more broad
 duty to apply for a permit on all
 operations defined or designated as a
 CAFO.
   EPA is also proposing several changes
 that determine whether a facility is an
 AFO or whether it is a CAFO and

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 therefore must apply for an NPDES
 permit on that basis. Specifically, EPA
 is proposing to formally define a CAFO
 to: include both the animal production
 area and the land application area;
 broaden coverage in the poultry sector
 to include all chicken operations, both
 wet and dry; add coverage for stand-
 alone immature  swine and heifer
 operations; lower the NPDES threshold
 that defines which facilities are CAFOs
 for other animal sectors, including
 horses, sheep, lambs and ducks; and
 require facilities that are no longer
 active CAFOs to remain permitted until
 their manure and storage facilities are
                    properly closed and they have no
                    potential to discharge CAFO manure or
                    wastewater. This section also discusses
                    the concept of "direct hydrologic
                    connection" between ground water and
                    surface water and its application to
                    CAFOs. Considerations for providing
                    regulatory relief to small businesses are
                    also discussed.
                      EPA is also proposing changes that
                    clarify the scope of NPDES regulation of
                    CAFO manure and process wastewater.
                    Today's proposal modifies the criteria
                    for designation of AFOs as CAFOs on a
                    case-by-case basis and explicitly
                    describes EPA's authority to designate
                    facilities as CAFOs in States with
 approved NPDES programs. EPA is also
 proposing that the permit authority
 must require entities that have
 "substantial operational control" over a
 CAFO to be co-permitted, and is
 requesting comment on an option for
 States to waive this requirement if they
 provide another means of ensuring that
 excess manure transported from CAFOs
 to off-site recipients is properly land
 applied. EPA also is clarifying Clean
 Water Act requirements  concerning
 point source discharges at non-CAFOs.
  These changes are summarized in
 Table 7-2 and described in the noted
 sections..
                  TABLE 7-2.—PROPOSED REVISIONS FOR DEFINING CAFOs OTHER POINT SOURCES
Proposed revision
Clarify the vegetation language in the definition of an AFO 	 	 	 	
Discontinue use of the term animal unit 	
Eliminate the mixed animal type multiplier 	
Remove the 25-year, 24-hour storm event exemption from the definition of a CAFO
Clarify the duty to apply, that all CAFOs must apply for an NPDES permit ..
Definition of a CAFO includes both production area and land application area 	 	 	
Include dry poultry operations 	
Include stand-alone immature swine and heifer operations 	
Coverage of other sectors besides beef, dairy, swine and poultry 	
Require facilities that are no longer CAFOs to remain permitted until proper closure 	
Applicability of direct hydrologica! connection to surface water 	
Regulatory relief for small businesses 	
Designation criteria 	
Designation of CAFOs by EPA in States with NPDES authorized programs
Co-permitting of entities that exert substantial operational control over a CAFO
Point source discharges at AFOs that are not CAFOs 	
Section
C 1
C2a
C2 b
C2c
C2d
C2e
C2f
C 2 a
C2h
C2i
C2i
C2 k
C 3
C4
C5
C.6
  We also extensively discuss matters
associated with the land application of
CAFO-generated manure and
wastewater, including how the
agricultural storm water exemption
applies to the application of CAFO-
generated manure both on land under
the control of the CAFO operator and
off-site. EPA is proposing to require
CAFO owners or operators to land apply
                    manure in accordance with proper
                    agricultural practices, as defined in
                    today's regulation. EPA is also co-
                    proposing two different means of
                    addressing the off-site transfer of CAFO-
                    generated manure. In one proposal,
                    CAFO owners or operators would be
                    allowed to transfer manure off-site only
                    to recipients who certify to land apply
                    according to proper agricultural
practices; to maintain records of all off-
site transfers; and to provide adequate
information to off-site manure recipients
to facilitate proper application.
Alternately, the certification would not
be required, and CAFOs owners or
operators would simply be required to
maintain records and provide the
required information to recipients. See
Table 7—3 for references.
                 TABLE 7-3.—UNO APPLICATION OF CAFO-GENERATED MANURE AND WASTEWATER
                                             Proposed revision
                                                                                       Section
Why Is EPA Regulating Land Application of CAFO Waste?	
How Is EPA Interpreting the Agricultural Storm Water Exemption with Respect to Land Application of CAFO-generated Manure?
How Is EPA Proposing to Regulate Discharges from Land Application of CAFO-generated Manure by CAFOs? 	
How is EPA Proposing to Regulate Land Application of Manure and Wastewater by non-CAFOs?	
                                                                                       D.1
                                                                                       D.2
                                                                                       D.3
                                                                                       D.3
  EPA is proposing several revisions to
requirements contained in CAFO
permits. The requirement that CAFO
owners or operators develop and
implement a "Permit Nutrient Plan," or
"PNP," is discussed extensively,
including clarifying that a PNP is the
EPA-enforceable subset of a
                   Comprehensive Nutrient Management
                   Plan, or "CNMP."
                     EPA is also proposing to apply
                   revised Effluent Limitation Guidelines
                   and standards (and hereafter referred to
                   as effluent guidelines or ELG) to beef,
                   dairy, swine, poultry and veal
                   operations that are CAFOs by definition
                   in either of the two proposed structures,
or that have 300 AU to 1,000 AU in the
three-tier structure and are designated.
NPDES permits issued to small
operations that are CAFOs by
designation (those with fewer than 500
AU in the two tier structure, and those
with fewer than 300 AU in the three tier
structure) would continue to be based
on Best Professional Judgment (BPJ) of

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                                                                     2D95
the permit authority. Similarly, CAFOs
in other sectors (i.e., horse, sheep,
lambs, and ducks) that have greater than
1,000 AU will continue to be subject to
the existing effluent guidelines and
standards (as they are in the existing
regulation), while those with 1,000 AU
or fewer would be issued permits based
on BPJ, as today's proposed effluent
guidelines does not include revisions to
sectors other than beef, dairy, swine,
poultry and veal.
  Today's NPDES proposal includes
monitoring, reporting and record
keeping requirements that are consistent
with those required by today's proposed
effluent guidelines (discussed in section
VIII). In addition, EPA is proposing to
require all individual permit applicants,
as well as new facilities applying for
coverage under general NPDES permits,
to submit a copy of the cover sheed and
Executive Summary of their draft Permit
Nutrient Plan (PNP) to the permit
authority along with the permit
application or Notice of Intent (NOI).
EPA is proposing to require all CAFOs
to submit a notification to the permit
authority, within three months of
obtaining permit coverage, that their
Permit Nutrient Plans (PNPs) have been
developed, along with a fact sheet
summarizing the PNP. Further, EPA is
proposing to require permittees to
submit a notification to the permit
authority whenever the PNP has been
modified.
  EPA is also proposing to require that
the permit authority include certain
conditions in its general and individual
permits that specify: (1) Requirements
for land application of manure and
wastewater, including methods for
developing the allowable manure
application rate; (2) restrictions on
timing of land application if determined
to be necessary, including restrictions
with regard to frozen, saturated or snow
covered ground; (3) requirements for the
facility to be permitted until manure
storage facilities are properly closed and
therefore the facility has no potential to
discharge; (4) conditions for facilities in
certain types of topographical regions to
prevent discharges to ground water with
a direct hydrological connection to
surface water; and (5) under one co-
proposed option, requirements that the
CAFO owner or operator obtain a signed
certification from off-site recipients of
more than twelve tons annually, that
manure will be land applied according
to proper agricultural practices (co-
proposed with omitting such a
requirement). Comments are also
requested on whether EPA should
include erosion controls in the NPDES
permit, and whether EPA should
establish an additional .design standard
that would address chronic rainfall.
Table 7-4 summarizes the proposed
revisions that address minimum permit
conditions, as well as issues for which
comment are being sought.
                          TABLE 7-4.—PROPOSED REVISIONS FOR PERMIT REQUIREMENTS
Proposed revision

Effluent Limitations 	






Discharge to around water with a direct hydrological connection to surface water 	 	 	 	 	 	
Obtain certification from off-site recipients of manure of appropriate land application 	 	 	 	 	

Solicitation of comment on defining chronic rainfall 	 	 	 	

Section
E.1
E.2
E.3
E.4
E.5
E.5.a
E.S.b
E.S.c
E.S.d
E.S.e
E.5.f
E.S.g

  Finally, EPA is proposing to amend
certain aspects of the general and
individual permit process to improve
public access and public involvement in
permitting CAFOs. While the NPDES
regulations already provide a process for,
public involvement in issuing
individual NPDES permits, today EPA is
proposing to require the permit
authority to issue quarterly public
notices of all Notices of Intent (NOIs)
received for coverage under general
NPDES permits for CAFOs, as well as of
notices from CAFOs that their Permit
Nutrient Plans have been developed or
amended. Today's proposal discusses
public availability of NOIs, Permit
Nutrient Plans and PNP notifications.
EPA is proposing several new criteria
for which CAFOs may be ineligible for
general permits, and would require the
permit authority to conduct a public
process for determining, in light of those
criteria, when individual permits would'
be required.
  Owners or operators of all facilities
that are defined as CAFOs in today's
proposed regulation would be required
to apply for an NPDES permit. However,
EPA also is proposing that they may,
instead, seek to obtain from the permit
authority a determination of "no
potential to discharge" in lieu of
submitting a permit application. (EPA
notes that, because of the stringency of
demonstrating that a facility has no
potential to discharge, EPA expects that
few facilities will receive such
determinations.) Finally, EPA is
proposing to amend the CAFO
individual permit application
requirements and corresponding Form
2B. See Table 7-5.
                              TABLE 7-5.—PROPOSED REVISIONS TO PERMIT PROCESS
                                              Proposed revision
                                                                                                           Section
 General Permit and NOI provisions	...
 Individual permits	
 Requests not to have a permit issued by demonstrating "no potential to discharge"
 Amendments to NPDES Permit Application For CAFOs Form 2B 	
                                                                     F.1
                                                                     F.2
                                                                     F.3
                                                                     F.4

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Federal Register /Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
B. What Size AFOs Would be
Considered CAFOs?

  EPA is proposing two alternative
structures for establishing which AFOs
would be regulated as CAFOs. Each
proposal reflects the Agency's efforts to
balance the goals of ease of
implementation and effectively
addressing the sources of water quality
impairments. The two-tier structure is
designed to give both regulators and
animal feeding facility operators a clear,
straightforward means of determining
whether or not an NPDES permit is
required for a facility. On the other
hand, the three-tier structure, while less
straightforward in determining which
facilities  are required to have NPDES
permits, may allow the permit authority
to focus its permitting resources on
facilities which are more likely to be
significant sources of water quality
impairments. The Agency believes both
the two-tier and three-tier approaches
are reasonable and is requesting
comment on how best to strike a balance
between simplicity and flexibility while
achieving the goals of the Clean Water
Act. EPA may decide to choose either or
both alternatives in the final rule, and
requests comments on both. EPA is also
requesting comment on a variation of
the two-tier structure and a variation of
the three-tier structure and, after
considering public comment, may
decide to pursue either or both of these
variations for the final rule.
  EPA is not proposing to define animal
types on the basis of age, size or species
in order to avoid complicating the
implementation of this proposal.
Throughout today's preamble, each of
the subcategories, under today's
proposed effluent guidelines, is
described as follows:
  • "Cattle, excluding mature dairy or
veal" (referred in today's preamble as
the beef sector) includes any age animal
confined at a beef operation, including
heifers when confined apart from the
dairy. This subcategory also includes
stand-alone heifer operations, also
referred to as heifer operations.
  • "Mature dairy cattle" (referred in
today's preamble as the dairy sector)
indicates that only the mature cows,
whether milking or dry, are counted to
identify whether the dairy is a CAFO.
  • "Veal" is distinguished by the type
of operation. Veal cattle are confined
and manure is managed differently than
beef cattle. EPA is not proposing to
define veal by size or age. Note that the
current regulation includes veal under
the beef subcategory, but hi today's
proposal  a new veal subcategory would
be established.
                      • "Swine weighing over 25 kilograms
                    or 55 pounds" also indicates that only
                   • mature swine are counted to determine
                    whether the facility is a CAFO. Once
                    defined as a CAFQ, all animals in
                    confinement at the facility would be
                    subject to the proposed requirements.
                      • "Immature Swine weighing less
                    than 25 kilograms or 25 pounds"
                    indicates that immature swine are
                    counted only when confined at a stand-
                    alone nursery. Today's preamble uses
                    the terms "swine sector" to indicate
                    both mature and immature swine, but
                    permit provisions are separately applied
                    to them.
                      • "Chicken" and "Turkeys" are listed
                    as separate subcategories and are
                    counted separately in order to
                    determine whether the facility is a
                    CAFO. However, they are subject to the
                    same effluent limitations, and are
                    collectively referred to as the "poultry
                    sector."
                      • "Ducks," "Horses," and "Sheep or
                    Lambs" are separate subcategories
                    under the existing NPDES and effluent
                    limitation regulations. Part 412 effluent
                    limitations are not being revised in
                    today's proposal; however, some of the
                    proposed revisions to the NPDES
                    program will affect these subcategories.

                    1. Historical Record
                      In 1973, when EPA proposed
                    regulations for CAFOs, the Agency
                    determined the thresholds above which
                    AFOs would be subject to NPDES
                    permitting requirements "on the basis of
                    information and statistics received,
                    pollution potential, and administrative
                    manageability." 38 FR 10961,10961
                    (May 3,1973). hi 1975, the Agency, after
                    litigation, again proposed regulations for
                    CAFOs which established a threshold
                    number of animals above which an AFO
                    would be determined to be a CAFO. 40
                    FR 54182 (Nov.  20,1975). The Agency
                    noted that it might be possible to
                    establish a precise regulatory formula to
                    determine which AFOs are CAFO point
                    sources based on factors such as the
                    proximity of the operation to surface
                    waters, the numbers and types of
                    animals confined, the slope  of the land,
                    and other factors relative to the
                    likelihood or frequency of discharge of
                    pollutants into navigable waters. 40 FR
                    at 54183.
                      The Agency decided, however, that
                    even if such a formula could be  • •
                    constructed, it would be so complex
                    that both permitting authorities and
                    feedlot operators would find it difficult
                    to apply. Then, as now, EPA concluded
                    that the clearest and most efficient
                   • means of regulating concentrated animal
                    feeding operations was to establish a
                    definitive threshold number of confined
animals above which a facility is
defined as a CAFO, below which a
permitting authority could designate a
facility as a CAFO, after consideration of
the various relevant factors. The
threshold numbers initially established
by the Agency were based generally on
a statement by Senator Muskie when the
Clean Water Act was enacted. Senator
Muskie, floor manager of the legislation,
stated that: "Guidance with respect to
the identification of 'point sources' and
'nonpoint sources,' especially with
respect to agriculture, will be provided
in regulations and guidelines of the
Administrator." 2 Legislative History of
the Water Pollution Control Act
Amendments of 1972 at 1299, 93d Cong,
1st Sess. (January 1973). Senator Muskie
then identified the existing policy with
respect to identification of agricultural
point sources was generally that "runoff
from confined livestock and poultry
operations are not considered a 'point
source' unless the following
concentrations of animals are exceeded:
1000 beef cattle; 700 dairy cows;
290,000 broiler chickens; 180,000 laying
hens; 55,000 turkeys; 4,500 slaughter
hogs; 35,000 feeder pigs; 12,000 sheep
or lambs; 145,000  ducks." Id. In the
final rule, the Agency and commenters
agreed that while Senator Muskie's
statement provided useful general
guidance, particularly in support of the
idea of defining CAFOs based on
specified numbers of animals present, it
was not a definitive statement of the
criteria for defining a CAFO. 41 FR
11458 (Mar. 18, 1976). The Agency,
thus, looked to data with respect to both
the amount of manure generated by
facilities above the threshold and the
number of facilities captured by the
regulation.
  EPA has again looked to those factors
and, with 25 years of regulatory
experience, focused particularly on the
amount of manure captured by the
threshold, ease of implementation for
both regulators and the regulated
community, as well as on matters of
administrative convenience and
manageability of the permitting
program. Based on these considerations,
EPA is proposing two alternative
structures. EPA notes that the NPDES
threshold is generally synchronized
with the effluent guidelines
applicability threshold, and information
on the cost per pound of pollutants
removed, and affordability of the
various options  is available in Section
X.

2. Two-Tier Structure
  The first alternative that EPA is
proposing is a two-tier structure that
establishes which operations are

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                                                                    2997
-defined as CAFOs based on size alone.
See proposed § 122.23(a)(3). In this
alternative, EPA is proposing that.the
threshold for defining operations as
CAFOs be equivalent to 500 animal
units (AU). All operations .with 500 or
more animal units would be defined as
CAFOs (§ 122.23(a)(3)(i)). Operations
with fewer than 500 animal units would
be CAFOs only if designated by EPA or
the State permit authority
(§ 122.23(a)(3)(ii)}. Table 7-6 describes
the number of animals that are
equivalent to the proposed 500 AU
threshold, as well as three other two-tier
thresholds that are discussed in this
section.
  The proposed two-tier structure
would eliminate the 300 AU to 1,000
AU tier of the existing regulation, under
which facilities were either defined as a
CAFO if they met certain conditions or
were subject to designation on a case-
by-case basis by the permit authority
according to the criteria in the
regulations. EPA is proposing to
eliminate this middle category primarily
because it has resulted in general
confusion about which facilities should
be covered by an NPDES permit, which,
in turn, has led to few facilities being
permitted under the existing regulation.
The two-tier structure offers simplicity
and clarity for the regulated community
and enforcement authorities for
knowing when a facility is a CAFO and
when it is not, thereby improving both
compliance and enforcement.
                TABLE 7-6.—NUMBER OF ANIMALS COVERED BY ALTERNATIVE TWO-TIER APPROACHES
Animal type

Wpol 	







Sheep or Lambs 	 	 	 • 	 • 	 	 •
Number of animals equivalent to:
300 AU
300
300
200
750
3,000
30,000
16,500
1,500
150
3,000
500 AU
500
500
350
1,250
5,000
50,000
27,500
2,500
250
5,000
750 AU
750
750
525
1,875
7,500
75,000
41,250
3,750
375
7,500
1.000AU
1,000
1,000
700
2,500
10,000
100,000
55,000
5,000
500
10,000
   Operations with fewer animals than
 the number listed for the selected
 threshold in Table 7-6 would only
 become CAFOs through case-by-case
 designation.
   In, order to determine the appropriate
 threshold for this two-tier approach,
 EPA analyzed information on numbers
 of operations, including percent of
 manure generated, potential to reduce
 nutrient loadings, and administrative
 burden. EPA cpnsidered current
 industry trends and production
 practices, including the trend toward
 fewer numbers of AFOs, and toward
 larger facilities that tend to be more
 specialized and industrialized in
 practice, as compared to more
 traditional agricultural operations. EPA
 also considered other thresholds,
 including 300 AU, 750 AU, or retaining
 the existing 1,0.00 AU threshold. After
 considering each of these alternatives,
 EPA is proposing 500 AU as the
 appropriate threshold for a two-tier
 structure, but is also requesting
 comment on a threshold of 750 AU.
    EPA is proposing 500 AU as the
 appropriate threshold for a two-tier
 structure because it regulates larger
 operations and exempts more
 traditional—and oftentimes more
 sustainable—farm production systems
 where farm operators grow both
 livestock and crops and land apply
 manure nutrients. Consistent with the
 objectives under the USDA-EPA
 Unified National Strategy for Animal
 Feeding Operations (March 9,1999), the
 proposed regulations cover more of the
 largest operations since these pose the
 greatest potential risk to water quality
 and public health, given the sheer
 volume of manure generated at these
 operations. Larger operations .that
 handle larger herds or flocks often do
 not have an adequate land base for
 manure disposal through land
 application. As a result, large facilities
 need to store large volumes of manure
 and wastewater, which have the
 potential, if not properly handled, to
 cause significant water quality impacts.
 By comparison, smaller farms manage
 fewer animals and tend to concentrate
 less manure nutrients at a single farming
 location. Smaller farms tend to be less
 specialized and are more  diversified,
 engaging in both animal and crop
 production. These farms often have
 sufficient cropland and fertilizer needs
 to appropriately land apply manure
 nutrients generated at a farm's livestock
 or poultry business. More information
 on the characteristics of larger-scale
 animal production practices is provided
 in sections IV and VI of this document,
 as well as noted in the analysis of
 impacts to small businesses (section
   EPA is proposing the 500 AU
 threshold because.operations of this size
 account for the majority of all manure
 and manure nutrients produced
 annually. The proposed two-tier
 structure would cover an estimated
 25,540 animal production operations, or
 approximately seven percent of all
 operations, which account for 64
 percent of all AFO manure generated
 annually. The USDA-EPA Unified
 National Strategy had a goal of
 regulating roughly five percent of all
 operations.
   EPA is specifically seeking comment
 on an alternative threshold of 750 AU,
 which would encompass five percent of
 AFOs. There are an estimated 19,100
 operations with 750 AU or more (13,000
 of which have more than 1,000 AU), and
 account for 58 percent of all manure and
 manure nutrients produced annually by
 AFOs. Regulating five percent of AFOs
 may be viewed by some as being
 consistent with the USDA-EPA Unified
 National Strategy.
   A 750 AU threshold has the benefits
 cited for the 500 AU threshold. The two-
 tier structure is simple and clear, and it
 would focus regulation on even larger
 operations, thereby relieving smaller
 operations from the burden of being
 automatically regulated, and moderating
 the administrative burden to permit
 authorities. Permit authorities could use
 state programs to focus on operations
 below 750 AU, and could use the
 designation process as needed.
   hi some sectors, a 750 AU threshold
 may not be sufficiently protective of the
 environment. For example, in the
 Pacific Northwest, dairies tend to be
 smaller, but also tend to be a significant
 concern. In the mid-Atlantic, where

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Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
 poultry operations have been shown to
 be a source of environmental
 degradation, a 750 AU threshold would
 exempt many broiler operations from
 regulatory requirements. EPA is
 concerned that a 750 AU threshold
 would disable permit authorities from
 effectively addressing regional concerns.
   EPA also considered adopting the
 1,000 AU threshold, which would have
 regulated three percent of all operations
 and 49 percent of all manure generated
 annually. A threshold of 300 AU was
 also considered, which would have
 addressed an additional 8 percent of all
 manure generated annually, but would
 have brought into regulation 50 percent
 more operations than the 500 AU
 threshold (thus regulating a total of 10
 percent of all AFOs which account for
 72 percent of AFO manure).
   Raising the NPDES threshold to 500
 AU, 750 AU or 1,000 AU raises a policy
 question for facilities below the selected
 threshold but with more than 300 AU.
 Facilities with 300 to 1,000 AU are
 currently subject to NPDES regulation
 under some conditions, though in
 practice few operations in this size
 range have actually been permitted to
 date. To rely entirely on designation for
 these operations could be viewed by
 some as deregulatory, because the
 designation process is a time consuming
 and resource intensive process that
 makes it difficult to redress violations.
 It also results in the inability for permit
 authorities to take enforcement actions
 against initial discharges, (unless they
 are^from an independent point source at
the'facility); instead such discharges
 could only result in requiring a permit.
Unless the designation process can be
 streamlined in some way to enable
permit authorities to more efficiently
address those who are significant
 contributors of pollutants, raising the
threshold too high may also not be
sufficiently protective of the
                    environment. Please see Section VII.C.3
                    and VII.C.4 for a discussion of the
                    designation process.
                      More information on how data for
                    these alternatives were estimated is
                    provided in section VI of this preamble.
                      EPA is soliciting comment on the two-
                    tier structure, and what the appropriate
                    threshold should be. In addition, EPA is
                    soliciting comment on other measures
                    this rule, when final, might include to
                    ensure that facilities below the
                    regulatory threshold meet
                    environmental requirements, such as by
                    streamlining the designation process  or
                    some other means.

                    3. Three-Tier Structure
                      The second alternative that EPA is
                    proposing is a three-tier structure that
                    retains the existing tiers but amends the
                    conditions under which AFOs with 300
                    AU to 1,000 AU, or "middle tier"
                    facilities, would be defined as CAFOs.
                    Further, EPA would require all middle
                    tier AFOs to  either apply for an NPDES
                    permit or to certify to the permit
                    authority that they do not meet any of
                    the conditions which would require
                    them to obtain a permit.
                      EPA is proposing this alternative
                    because it presents a "risk based"
                    approach to determining which
                    operations pose the greatest concern and
                    have the greatest potential to discharge.
                    The particular conditions being
                    proposed would have the effect of
                    ensuring that manure at all facilities
                    with 300 AU or more is properly
                    managed, and thus may be more
                    environmentally protective than the
                    two-tier structure. Further, even though
                    this alternative would impose some
                    degree of burden on all AFOs with 300
                    AU or more, it would provide a way for
                    facilities to avoid being permitted, and
                    could reduce the administrative burden
                    associated with permitting.
                     The three-tier alternative would affect
                    ah1 26,665 facilities between 300 AU and
 1,000 AU in addition to the 12,660
 facilities with greater than 1,000 AU,
 and thus would affect 10 percent of all
 AFOs while addressing 72 percent of all
 AFO manure. However, because owners
 or operators of middle tier facilities
 would be able to certify that their
 operations are not CAFOs, EPA
 estimates that between 4,000 to 19,000
 mid-size facilities would need to apply
 for and obtain a permit.
   Of the approximately 26,000 AFOs
 with 300 AU to 1,000 AU, EPA
 estimates that owners or operations of
 approximately 7,000 facilities would
 have to, at a minimum, implement a
 Permit Nutrient Plan (as discussed
 further below) and would be able to
 certify to the permit authority that they
 are not a CAFO based on existing
 practices. Operators of some 19,000
 facilities of these middle tier facilities
 would be required to adopt certain
 practices in addition to implementing a
 PNP, in order to be able to certify they
 are not a CAFO to avoid being
 permitted.
   See the  EPA NPDES CAFO
 Rulemaking Support Document,
 included in the Record, for detailed
 descriptions of the number of facilities
 affected by this and the other alternative
 scenarios considered.
   EPA is also proposing the three-tier
 structure because it provides flexibility
 for State programs. A State with an
 effective non-NPDES program could
 succeed in helping many of their middle
 tier operations avoid permits by
 ensuring they do not meet any of the
 conditions that would define them as
 CAFOs. This important factor would
 enable States to tailor their programs
 while minimizing the changes State
programs might need to make to
accommodate today's proposed
rulemaking.
  The three-tier structure would affect
the facilities shown in Table 7-7.
                          TABLE 7-7.—NUMBER OF ANIMALS IN THE THREE-TIER APPROACH
                                                    [By sector]
Animal Type
Cattle, Excluding Mature Dairy and Veal 	
Veal 	
Mature Dairy Cattle 	
Swine, weighing over 25 kilograms or 55 pounds 	
'Immature Swine, weighing less than 25 kilograms or 55 pounds 	
"Chickens 	
Turkeys 	
Ducks 	
Horses 	 : 	
>1000 AU
equivalent
(Number of
animals)
1 000
1 nnn
700
2 500
10 000
1 00 000
cc nnn
c nnn
500
300-1 OOOAU
equivalent
(Number of
animals)
900—1 nnn

onn_ 7nn
7Rn— ? ^nn
3 000—1 0 000
*3n nnn_inn nnn


150-finn
<300 AU
equivalent
(Number of
animals)
.-.OAfi

<3QO

^q nnn



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                  Federal Register/Vol.  66,  No. 9/Friday, January  12,  2001/Proposed Rules
                                                                      2999
                    TABLE 7-7.—NUMBER OF ANIMALS IN THE THREE-TIER APPROACH—Continued
                                                     [By sector]
Animal Type
Sheep or Lambs 	 	 • 	
>1000AU
equivalent
(Number of
animals)
10,000
300-1 OOOAU
equivalent
(Number of
animals)
3,000-10,000
<300 AU
equivalent
(Number of
animals)
<3,000
  •Immature swine, heifers and dry chicken operations ar.e  not included  in the existing regulation but are included in today's proposed
rulemaking.
  Revised Conditions. EPA examined
the conditions under the existing
regulation and determined that the
conditions needed to be modified in
order to improve its efficacy. Under the
existing regulation, an AFO with 300
AU to 1,000 AU is not defined as a
CAFO unless it meets one of the two
criteria governing the method of
discharge: (1) Pollutants are discharged
through a man-made ditch, flushing
system, or other similar man-made
device; or (2) pollutants are discharged
directly into waters of the United States
that originate outside of the facility and
pass over, across, or through the facility
 or otherwise come into direct contact
with the confined animals. Under the.
two-tier structure, these conditions
 would be eliminated because a facility
 would simply be defined as a CAFO if
 it .had more than 500 AU.  Under the
 three-tier structure, EPA is proposing to
 eliminate the existing conditions and
 add several others designed to identify
' facilities which pose the greatest risk to
 water quality.
   The three-tier proposal  would, for the
 middle tier, eliminate both criteria in
 the existing regulation because these
 conditions have proven to be difficult to
 interpret and implement for AFOs in the
 300 AU to 1,00.0 AU size category, and
 thus have not facilitated compliance or
 enforcement, and the scenario does not
 meet the goal of today's proposal to
 simplify the NPDES regulation for
 CAFOs. The two criteria governing
 method of discharge, e.g., "man-made
 device" and "stream running through
 the CAFO," are subject to interpretation,
 and thus difficult for AFO operators in
 this size range to determine whether or
 not the permit authority would consider
 them to be a CAFO. EPA does not
 believe it is necessary to retain these
 criteria because all discharges of
 pollutants from facilities  of this size
 should be considered point source
 discharges. By replacing these terms
 with a list of conditions, EPA intends to
 clarify that all discharges from CAFOs
 must be covered by an NPDES permit,
 whether or not they are from a
 manmade conveyance. EPA notes that
 under this proposal,  the Agency would
not eliminate the two conditions as
criteria for designation of AFOs with
less than 300 AU as CAFOs. See the
discussion of designation in Section
VII.C.3.
  The revised conditions for the middle
tier would require the owner or operator
to apply for an NPDES permit if the
operation meets any of the following
conditions and is therefore a CAFO: (1)
There is direct contact of animals with
waters of the U.S. at the. facility; (2)
there is  insufficient storage and
cpntainment.at the production area to
prevent discharges from reaching waters
of the U.S.; (3) there is evidence of a
discharge from the production area in
the last five years; (4) the production
area is located within 100 feet of waters
of the U.S.; (5) the operator does not
have, or is not implementing, a Permit
Nutrient Plan that meets EPA's
minimum requirements; or (6) more
than twelve tons of manure is
transported off-site to a single recipient
annually, unless the recipient has
complied with the requirements for off-
site shipment of manure.
  The EPA NPDES CAFO Rulemaking
Support Document, dated September 26,
2000 (available in the rulemaking
Record); describes the assumptions Used
to estimate the number of facilities that
would be affected by each condition,
which EPA developed in consultation
with state regulatory agency personnel,
representatives of livestock trade
associations, and extension specialists.
  Each of these proposed conditions is
 described further below.
  Direct contact of animals with waters
 of the U.S. The condition for "direct
 contact of animals with waters of the
 U.S." covers situations such as dairy or
beef cattle walking or standing in a
 stream or other such water that runs
 through the production area. This
 condition ensures that facilities which
 allow such direct Contact have NPDES
 permits to minimize the water quality
 problems that such contact can cause.
   Insufficient Storage. The condition for
 "insufficient storage and containment at
 the production area to prevent discharge
 to  waters of the U.S." is intended to
 address discharges through any means,
including sheet runoff from the
production area, whereby rain or other
waters might come into contact with
manure and other raw materials or
wastes and then run off to waters of the
U.S. or leach to ground water that has
a direct hydrologic connection to waters.
of the U.S. This is to ensure that all mid-
sized facilities prevent discharges from
inadequate storage and containment of
manure, process wastewater, storm
water, and other water coming in
contact with manure.
 ; Sufficient storage would be defined as
facilities that have been designed and
constructed to standards equivalent to
today's proposed effluent guidelines.
Thus, beef and dairy operations would
be designed and constructed to prevent
discharge in a 25-year, 24-hour storm
event, while swine and poultry would
be required to meet a zero discharge
standard. See Section VIIIC.6.
  Past or Current Discharge. Operations
that meet the condition for "evidence of
discharge from the production areas
within the past five years" would be
considered CAFOs under this proposal.
A discharge would include all
discharges from the production area
including, for example, a discharge from
a facility designed to contain a 25-year,
24-hour storm. Evidence of discharge
would include: citation by the permit
authority; discharge verified by the
permit authority whether cited.or not; or
other verifiable evidence that the permit
authority determines to be adequate to
indicate a discharge has occurred.
   Under this approach, there would be
no allowance in the certification process
for facilities in the beef and dairy
 sectors designed to contain runoff from
 a 25-year, 24-hour storm that had a
 discharge anyway during an extreme
 storm event. Thus, in this respect, the
 requirements for certification would be
 more stringent than those that would
 apply to a permitted facility. EPA is
 thus proposing that a facility that
 chooses not to be covered by an NPDES
 permit would not get the benefits of
 NPDES coverage such as the 25-year, 24-
 hour storm standard for beef and dairy
 operations, and upset and bypass
 defense. Alternatively, EPA is soliciting

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Federal Register/Vol. 66, No.  9/Friday, January  12, 2001/Proposed Rules
 comment on the definition of a "past or
 current discharge," including whether
 to define it as a discharge from a facility
 that has not been designed and
 constructed in accordance with today's
 proposed effluent guidelines. This
 would make the certification
 requirements consistent with those for
 permitted facilities.
   Proximity to Waters of the U.S.
 Operations with production areas that
 are located within 100 feet of waters of
 the U.S. are of particular concern to
 EPA, since their proximity increases the
 chance of discharge to waters and is a
 compelling factor that would indicate
 the potential to discharge.  Research has
 shown that the amount of pollutants in
 runoff over land can he mitigated by
 buffers and setbacks. (See
 Environmental Impact Assessment;
 Development of Pollutant Loading
 Reductions from the Implementation of
 Nutrient Management and Best
 Management Practices; both available in
 the rulemaking Record.) Any operation
 located at a distance less than the
 minimum setback poses a particular risk
 that contaminants will discharge to
 receiving waters. EPA estimates that
 approximately 4,000 operations between
 300 AU and 1,000 AU in size have
 production areas that are within 100 feet
 of waters of the U.S.
   Permit Nutrient Plan for Land
 Application of Manure and Wastewater.
 For facilities that land apply manure,
 another condition indicative of risk to
 water impairment is whether or not the
 facility has developed and is
 implementing a Permit Nutrient Plan for
 manure and/or wastewater that is
 applied to land that is owned or
 controlled by the AFO operator.
 Contamination of water from excessive
 application of manure and wastewater
 to fields and cropland presents a
 substantial risk to the environment and
 public health because nutrients from
 agriculture are one of the leading
 sources of water contamination in the
 United States. While CAFOs are not the
 only source of contamination, they are
 a significant source, and CAFO
 operators should apply manure properly
 to minimize environmental impacts.
 Thus, EPA would require any facility
 with 300 AU to 1,000 AU that does.not
 have a PNP that conforms to today's
 proposed effluent guidelines for land
 application to apply for an NPDES
 permit. (As described in Section VE.E.1,
the PNP is the effluent guideline subset
 of elements in a GNMP. Section VIII.C.6
 of today's proposal describes the
 effluent guideline requirements in a
PNP.)
  Certification for Off-site Transfer of
CAFO-generated Manure. The final
                    condition for avoiding a permit
                    concerns the transfer of CAFO-generated
                    manure and wastewater to off-site
                    recipients. EPA is co-proposing two
                    ways to address manure transferred off-
                    site, which are discussed hi detail in
                    Section VII.D.2, as well as in VII.e.5.e.
                    In this condition, a facility would be
                    considered a CAFO if more than 12 tons
                    of manure is transported off-site to a
                    single recipient annually, unless the
                    AFO owner or operator is complying
                    with the requirements for off-site
                    transfer of manure, or is complying with
                    the requirements  of a State program that
                    are equivalent to the requirements of 40
                    CFR part 412.
                      Under one co-proposed option, the
                    AFO owner or operator would be
                    required to obtain certifications from
                    recipients that the manure will be
                    properly managed; to maintain records
                    of the recipients and the quantities
                    transferred; and to provide information
                    to the recipient on proper manure
                    management and  test results on nutrient
                    content of the manure. Under the
                    alternative option, CAFOs would not be
                    required to obtain certifications, but
                    would still maintain the records of
                    transfers and provide the information to
                    the recipients.
                      Under the first option, the CAFO
                    owner or operator would obtain a
                    certification from recipients (other than
                    waste haulers that do not land apply the
                    waste) that the manure: (1) Will be land
                    applied in accordance with proper
                    agricultural practices as defined in
                    today's proposal;  (2) will be applied in
                    accordance with an NPDES permit; or
                    (3) will be used for alternative uses,
                    such as for pelletizing or distribution to
                    other markets. If transferring manure
                    and wastewater to a waste hauler, the
                    GAFO owner or operator would be
                    required to obtain the name and
                    location of the recipients of the waste,
                    if known, and provide the hauler with
                    an analysis of the  content of the manure
                    and a brochure describing
                    responsibilities for appropriate manure
                    management, which would be provided,
                    in turn, to the recipient. These
                    provisions are discussed in more detail
                    in Sections VII.D.4 and VILE.4.
                      Excess Manure Alternative
                    Considered. As an alternative to the two
                    conditions addressing land application
                    of CAFO-generated.manure, EPA also
                    considered a condition that would
                    simply require the CAFO operator to
                    determine whether it generates more
                    manure than the land under his or her
                    control could accommodate at allowable
                    manure application rates, and if so, it
                    would be a CAFO, required to  land
                    apply according to a PNP. Further, this
                    condition would create a voluntary
 option for off-site transfer of CAFO-
 generated manure whereby, if the
 manure was transferred to someone
 certifying they had a certified CNMP
 and were implementing it, the facility
 would not be a CAFO on the basis of
 haying excess manure.
   EPA considered this criterion to
 identify which CAFOs were likely to
 pose a risk of discharge and impacts to
 human health and the environment
 based on generation of excess manure
 (e.g., more manure than can be properly
 applied to land under his or her
 operational control). Requiring such
 CAFOs to apply for an NPDES permit
 would allow EPA to require these
 operations to maintain records
 documenting the fate of the manure
 (e.g., whether it was land applied.on-
 site or transferred to a third party). EPA
 is interested in monitoring the fate of
 the large quantities of manure generated
 by CAFOs, and in educating recipients
 regarding proper agricultural practices.
 .CAFO operators able to certify there is
 sufficient cropland under their
 operational control to accommodate the
 proper application of manure generated
 at their facility would not be defined as
 CAFOs and thus would not need to
 apply for an NPDES permit on that
 basis.
   To identify facilities that generate
 excess manure, EPA considered a
 screening tool originally developed by
 USDA, known as Manure Master. The
 tool allows AFO operators to compare
 the nutrient content in the'animal
 manure produced by an AFO with the
 quantity of nutrients used and removed
 from the field on which that manure is
 applied. This tool would help assess the
 relative potential for the nutrients
 contained in the animal manure to meet
 or exceed the crop uptake and
 utilization requirements for those crops
 that receive  applications of manure. The
 screening tool calculates a balance
 between the nitrogen, phosphorus, and
 potassium content in the manure and
 the quantity of these nutrients used by
 particular crops. This balance can be
 calculated based upon recommended
 fertilizer application rates, when
 known, or upon estimated plant
 nutrient content, when recommended
 fertilizer application rates are not
 known. For nitrogen, the'balance is
 calculated taking into account expected
 losses from leaching, denitrification,
 and volatilization.
  The manure screening tool would be
 available as either an Internet-based
program or as a computer software
program that allows for direct input of
 data and generation of reports. AFO
operators would enter the average
number of confined animals by animal

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                    Federal Register/Vol. 66, No. 9/Friday, January 12,  2001 /Proposed Rules
                                                                         3001
 type, the number of acres for each crop,
 and the expected yield for each crop for
 which the operator expects to apply
 manure. The operator would also
 specify whether the manure is
 incorporated into the soil or surface
 applied. The software also allows, but
 does not require, entry of soil test or
 other crop nutrient recommendations.
 The screening tool produces a report
, that includes the balance (i.e., pounds
 needed or pounds excess, per acre) for
 nitrogen, phosphorus, and potassium for
 an AFO operator's fields. The balance
 will advise the operator whether the
 quantity of nutrients in his or her
 animal manure exceeds the quantity
 removed in harvested plants or the
 quantity-of nutrients recommended.
   There are many assumptions in this
 screening tool that make it too general
 to use for detailed nutrient management
 planning, although it wouldbe useful as
 a rough means of determining whether
 a facility is generating manure in excess
 of crop needs. The factors used to
 calculate manure nutrient content are
 developed from estimates that account
 for nutrient losses due to collection,
 storage, treatment, and handling. When
 manure is not incorporated, an
 additional nitrogen loss is included for
 volatilization. When the nutrients
 exceed nutrient utilization, there is
 increased potential for nutrients to leach
 or runoff from fields and become
 pollutants of ground or surface water.
 This software is intended to be used as
 a decision support screening tool to
 allow AFO operators to make a quick
; evaluation as to whether the quantity of
 nutrients applied to the land on which
 manure is spread exceeds the quantity
 of nutrients used by crops. EPA believes
 it could be a valuable tool to determine,
 at a screening level, whether available
 nutrients exceed crop needs and, thus,
, whether a facility has a greater
 likelihood for generating the runoff of
 nutrients that could impact water
  quality. EPA is not proposing this
1  option as there are concerns that simply
 having enough land may not provide
  assurance that the manure would be
  applied in ways that avoided impairing
  water quality. However, EPA is
  requesting comment below on an
  alternative three-tier approach that  -
  would include such a screening tool as
  one of the criteria for certifying that an
  AFO in the 300 to 1,000 AU size
  category is not a CAFO.
    Certifying That a Middle Tier AFO is
  not a CAFO. Under the three-tier
  structure, EPA is proposing to allow
  AFOs with between 300 AU and 1,000
  AU to certify to the permit authority
  that they do not meet any of the risk-
  based conditions and thus are not
CAFOs. The certification would be a
check-off form that would also request
some basic information about the
facility, including name and address of
the owner and operators; facility name
and address and contact person;
physical location and longitude and
latitude information for the production
area; type and number of animals at the
AFO; and signature of owner, operator
or authorized representative. The draft
sample certification form is included
here for public comment.

Form for Certifying Out of the Concentrated
Animal Feeding Operation Provisions of the
National Pollutant Discharge-Elimination
System
  This checklist is to assist you in
determining whether your animal feeding
operation (AFO) is, or is not, a concentrated
animal feeding operation (CAFO) subject to
certain regulatory provisions. For
clarification, please See the attached fact
sheet.                        '
Section 1. First Determine Whether or not
Your Facility Is an AFO
  A facility that houses animals is an animal
feeding operation if:
  • Animals (other than aquatic animals)
have been, are, or will be stabled or confined
and fed or maintained for a total of 45 days
or more in any 12-month period.
  • Animals are not considered to be stabled
or confined when they are in areas such as
pastures or rangeland that sustain crops or
forage growth during the entire time that
animals are present.
  Yes, my facility is ah AFO. PROCEED TO
SECTION 2.
  No, my facility is not an AFO. STOP. YOU
DO NOT NEED TO SUBMIT THIS FORM

Section 2. Determine the Size Range of Your
AFO
   If your facility is an AFO, and the number
of animals is in the size range for any animal
type listed below, then you may potentially
be a concentrated animal feeding operation.
 200-700 mature dairy cattle (whether milked
   or dry)
 300-1000 head of cattle other than mature
   dairy cattle
 750-2,500 swine each weighing over 25
   kilograms (55 pounds)
 3,000-10,000 swine each weighing under 25
   kilograms (55 pounds)
 30,000-100,000 chickens
 16,500-55,000 turkeys
 150-500 horses
 3,000-10,000 sheep or lambs
 1,500-5,000 ducks
   My AFO is within this size range.
 PROCEED TO SECTION 3.
   My AFO has fewer than the lower
 threshold number for any animal type so I am
 not a CAFO under this description. STOP.
   My AFO has more than the upper
 threshold number of animals for any animal
 type. STOP. PLEASE CONTACT YOUR
 PERMIT AUTHORITY FOR INFORMATION
 ON HOW TO APPLY FOR AN NPDES
 PERMIT.
Section 3. Minimum Requirements
  Check all boxes mat-apply to your
operation. If all of the following boxes are
checked, PROCEED TO SECTION 4.
  My production area is not located within
100 feet of waters of the U.S.
  There is no direct contact of animals with
waters of the U.S. in the production area.
  I am currently maintaining properly
engineered manure and wastewater storage
and containment structures designed to
prevent discharge in either a 25-year, 24-hour
storm (for beef and dairy facilities) or all
circumstances (for all other facilities), in
accordance with the effluent guidelines (40
CFR Part-412).
  There are no discharges from the
production area and there have been no
discharges in the past 5 years.
  I have not been notified by my State permit
authority or EPA that my facility needs an
NPDES permit
  If any box in this section is not checked,
you may not use this certification and you
must a^ply for an NPDES permit. STOP.
PLEASE CONTACT YOUR PERMIT
AUTHORITY FOR MORE INFORMATION.

Section 4. Land Application
  A. If all of the boxes in Section 3 are
checked, you may be able to certify that you
are not a CAFO on the basis of ensuring
proper agricultural practices for land
application of CAFO manure:
  I either do not land apply manure or, if
land applying manure, I have, and am
implementing, a certified Permit Nutrient
Plan (PNP). I maintain a copy of my PNP at
my facility, including records of
implementation and monitoring; and
   B. Check One:
   My State* has a program for excess manure
in which I participate. OR
   [Alternative 1:1 do not transfer more than
12 tons of manure to any off-site recipients
unless they have signed a certification form
assuring me that they are either 1) applying
manure according to proper agricultural
practices; 2) obtaining an NPDES permit for
discharges; or 3) transferring manure to other
non-land application uses; and] [For
Alternative 2, this box is not needed]
   I maintain records of recipients, receiving
greater than 12 tons of manure annually, and
the quantity and dates transferred, and I
provide recipients an analysis of the content
 of the manure as well as information
 describing the recipients responsibilities for
 appropriate manure management. If I transfer
 manure or wastewater to a manure hauler, I
 also obtain the name and location of the
 recipients of the manure, if known;
   If a box is checked in both subsection A
 and subsection B above, you may certify that
 you are not a CAFO. PROCEED TO SECTION
 5.
   If a box is not checked in both subsection
 A and subsection B above, you may not use
 this certification form. STOP. YOU MUST
 APPLY FOR AN NPDES PERMIT..

 Section 5. Certification
   I certify that I own or operate the animal
 feeding operation described herein, and have
 legal authority to make management
 decisions about said operation. I certify that

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Federal Register/Vol. 66, No. 9/Friday, January 12, 2001 / Proposed Rules
 the information provided is true and correct
 to the best of my knowledge.
   I understand that in the event of a
 discharge to waters of the U.S. from my AFO,
 I must report the discharge to the Permit
 Authority and apply for a permit I will
 report the discharge by phone within 24
 hours, submit a written report within 7
 calendar days, and make arrangements to
 correct the conditions that caused the
 discharge.
   In the event any of these conditions can no
 longer be met, I understand that my facility
 is a CAFO and I must immediately apply for
 a permit. I also  understand that I am liable
 for any unpermitted discharges. This
 certification must be renewed every 5 years.
   I certify under penalty of law that this
 document either was prepared by me or was
 prepared under my direction or supervision.
 Based on my inquiry of the person or persons
 who gathered the information, the
 information provided is, to the best of my
 knowledge and belief, true, accurate and
 complete. I am aware that there are penalties
 for submitting false information, including
 the possibility of fine and imprisonment for
 knowing violations.
 Facility Name naanaponnpannn
 NameofCertifier   nnnDnnnnnDDD
 Signature noanaDDnnnnnnnna
 DateDDaQcnaonD
 Check one: D owner     D operator
 Name & Address of other entity that exercises
 substantial operational control of this CAFO:
 Address of animal feeding operation:
 County:
 State:
 Latitude/Longitude:
 Phone:
 Email:
 Name of Closest Waters of the U.S.:
 Distance to Waters:
 Description  of closest waters: (e.g. intermit-
 tent stream, perennial stream; ground water
 aquifer):  nnDcnnnQnaDnnnQn
 oaDanaoannQDaonnQnanD
  Where an operation in the 300-1000
 AU size range has certified that it meets
 all  of the required conditions to be
 excluded from the CAFO definition, if at
 any future point the operation fails to
 meet one or more of these conditions, it
 would immediately become defined as a
 CAFO. Any discharges from the
 operation at that point would be illegal
 until the operation obtains a permit. For
 example, if an operation has certified
 that it meets all of the conditions for
 being excluded from the CAFO
 definition, but then has an actual
 discharge to the waters (which would be
 inconsistent with the certification that
 there is no "current discharge"), that
 discharge would be considered to be an
 unpermitted discharge from a CAFO.
 Similarly, if an operation at any point
 no longer has sufficient storage and
 containment to prevent discharges, it
would immediately become a CAFO and
be required to apply for a permit
                    (regardless of whether it had any actual
                    discharges).
                      Constructing the regulations in this
                    way would do two things. First, it
                    would make clear that there is no shield
                    from liability for any operation that
                    falsely certified that it met the
                    conditions to be excluded from
                    regulation. Second, it would make clear
                    that even in cases where an operation
                    has certified to all the required
                    conditions in good faith, there is no
                    protection from the regulatory and
                    permitting requirements if at any point
                    the operation no longer meets those
                    conditions. Operations would be on
                    notice that if they had any doubts about
                    their continued ability to meet the
                    conditions for exclusion, they should
                    decline to "certify out" and should
                    apply for a permit.
                      Alternative Three-tier Structure:
                    Simplified Certification. EPA is
                    requesting comment on a variation of
                    the three-tier structure being co-
                    proposed today. Under this alternative,
                    operations with > 1,000 AU would be
                    subject to the same requirements as
                    under both of today's co-proposed
                    options, and operations between 300
                    and 1,000 animal units would be
                    defined as CAFOs, required to obtain an
                    NPDES permit, unless they can certify
                    that they do not meet the conditions for
                    definition as a CAFO. However, the
                    conditions for making this certification
                    would be different than those under the
                    proposed three-tier approach, and the
                    substantive permit requirements for
                    operations between 300 and 1,000 AU
                    that do not certify would also be
                    different.
                      Under this approach, operations
                    between 300 and 1,000 AU, that are not
                    likely to be significant contributors of
                    pollutants, could avoid definition as a
                    CAFO by certifying to a more limited -
                    range of factors. The check list would
                    indicate, for example, adequate facility
                    design to contain manure and runoff in
                    up to a 25-year, 24-hour storm, use of
                    appropriate BMPs, and application of
                    manure at agronomic rates. Under this
                    variation, the check list would be
                    designed to minimize both the required
                    information and the substantive
                    operational requirements for these
                    middle tier facilities on the grounds
                    that, because they are smaller size
                    operations, they are less likely to be the
                    type of concentrated, industrial
                    operations that Congress intended to
                    include as CAFOs. So, for example, the
                    check list could allow several
                    alternatives for appropriate manure
                    storage, including cost-effective BMPs
                    such as stacking manure in certain
                    locations or in certain ways to avoid
                    discharge, in lieu of expanded structural
 storage capacity. Similarly, the
 indication that manure is applied at
 agronomic rates could be based on a
 simple ratio of animals to crop land, or
 on the use of a more sophisticated
 screening tool, such as the USDA
 developed tool described above, but
 would not necessarily require
 preparation of a full CNMP by a
 certified planner. The check list might
 also include an assurance by the
 operator that recipients of off-site
 manure are provided nutrient test
 results and information on appropriate
 manure management.
   AFOs in this size category that are riot
 able to certify, according to the check
 list criteria, that they are not likely to be
 significant contributors of pollutants to
 waters of the US would be defined as
 CAFOs and thus required to obtain an
 NPDES permit. However, the conditions
 in the permit would not necessarily be
 the same as those in permits for
 operations with > 1,000 AU. In
 particular, the effluent guidelines
 described in today's proposal would not
 be applicable to these facilities. Rather,
 CAFOs in this size category would be
 required to operate in accordance with
 BAT, as determined by the best
 professional judgement (BPJ) of the
 permit writer. This is the same as .the
 existing requirement for CAFOs in this
 size category. Or, EPA might promulgate
 an alternate set of national effluent
 guidelines for CAFOs in this
 subcategory. Such effluent guidelines
 might include zero discharge from the
 production area in up to a 25-year, 24-
 hour storm, implementation of a PNP,
 appropriate BMPs, and appropriate
 management of manure shipped off-site.
   Under this approach, all 26,665
 operations between 300 and 1,000 AU
 would be affected by the rule, just as
 under the three-tier approach being
 proposed today. However, EPA expects
 that a larger number of facilities would
 be able to avoid definition as a CAFO
 and the requirement to obtain a permit
 than under today's proposed approach.
 EPA has not estimated the number of
 operations that would be defined as
 CAFOs under this alternative three-tier
 approach, but expects that it would be
 more than 16,420 but fewer than 31,930
 (of which some 13,000 would have over
 1,000 AU). For those facilities that did
receive a permit, compliance would
generally be less expensive. This
approach was presented to small entity
representatives (SERs) during the
SBREFA outreach conducted for this
rule, and discussed in detail by the
Small Business Advocacy Review Panel
that conducted the outreach. While
some concerns were expressed, the
approach was generally received

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                                                                      3003
favorably'by both the SERs and the
Panel. See the Panel Report (2000) for a.
complete discussion of the Panel's
consideration of this option.
,  EPA requests comment on this
alternative three tier approach. In
particular, EPA requests comment on
which items should be included in the
certification check list, and whether
substantive permit requirements for
CAFOs in this size category should be
left completely up to the BPJ of the
permit authority, or based on an
alternate set of effluent guidelines, as
discussed above. After evaluating public
comments, EPA may decide to further
explore this option. At that time, EPA
would develop and make available for
. public comment as appropriate a more
detailed description of the specific
requirements of such an approach, as
well as a full analysis of its costs,
benefits, and economic impacts. In
. particular, EPA would add an analysis
to the public record of why it would be
appropriate to promulgate different
 effluent guideline requirements, or no
 effluent guideline requirements, for
 CAFOs that have between 300 and 1,000
 AU as compared to the effluent
 guidelines for operations with greater
 than 1,000 AU. This would include an
 evaluation of whether the available
! technologies and economic impacts are
. different for the smaller versus the
 larger CAFOs.
 4.  Comparative Analysis
   EPA is proposing both the two- and
 three-tier structures for public comment
 as they both offer desirable qualities. On
 the one hand, the two-tier structure is
' simple and clear, focuses on the larger
 operations, and provides regulatory
 relief to smaller businesses. However, it
requires permits of all facilities meeting
the size threshold. On the other hand,
the three-tier structure offers flexibility
to States for addressing environmental
impacts of AFOs through non-NPDES
programs or non-regulatory programs,
while focusing the regulation on
facilities demonstrating certain risk
characteristics. It imposes, however,
some degree of burden to all facilities
more than 300 AU.
   The costs of each of the six
alternatives considered by EPA are
discussed in Section X of today's
proposal,  and benefits are discussed in
Section XI. Key findings from EPA's
analysis are summarized in Table 7-8
for quick reference. See Sections X and
XI for full discussions and explanations.
   EPA solicits comment on both of
today's alternative proposed structures,
as well as on the two alternatives
discussed above.
   EPA is also soliciting comment on
whether or not to adopt both the two-
tier and the three-tier structures, and to
provide a mechanism to allow States to
select which of the two alternative .
proposed structures to adopt in their
State NPDES program. Under this
option, a State could adopt the structure
that best fits with the administrative
structure  of their program, and that best
serves the character of the industries
located in their State and the associated
environmental problems. This option is
viable only if the Agency is able to
determine that the two structures
provide substantially similar
environmental benefits by regulating
equivalent numbers of facilities and
amounts of manure. Otherwise, States
would be in a position to choose a less
 stringent regulation, contrary to the
requirements of the Clean Water Act.
  EPA's preliminary assessment is that
there appear to be significant differences
in the scope of the structures, such that
the two-tier structure could be
considered less stringent than the three-
tier structure, depending upon which
structures, criteria and thresholds are
selected in the final proposal. As table
7—8 indicates, for example, the co-
proposed two-tier structure with a 500
AU threshold would regulated 25,540
operations, whereas the co-proposed
three-tier structure would regulate up to
39,320 operations. A two-tier structure
with 750 AU would regulate 19,100
operations, whereas the alternative, less
stringent, three-tier structure would
regulate as few as 16,000 and as many
as 32,000. The range of manure covered
under these various alternatives ranges
from as little as 49% to as much as 72%
of all AFO manure. Further, how each
animal sector is affected varies with
each alternative, with some alternatives
being significantly less protective in
certain sectors than other alternatives.
Section VI of today's preamble provides
more information on the affects on each
animal sector of various alternatives.
   EPA is not able to conclude that the
stringency of the two  options is
equivalent, due to the lack of data and
EPA's uncertainty over exactly how
many facilities may be subject to
regulation under each alternative.
Therefore, EPA is not proposing this
option. However, EPA seeks comment
on the option to allow States to select
which of two structures to implement,
 and requests information on
 establishing whether two options
provide equivalent environmental
 protection.
                   TABLE 7-8.—COMPARISON OF REGULATORY ALTERNATIVES FOR SELECT CRITERIA a
Criteria


cotimotckH rvimnNanro r*nQtQ tn nAFO<5 Mimillion/vear ore-tcix) 	 	
Percentage Manure Covered by Proposed Regulations 	
Baseline
>1000
AU
12,660
3
605
49
2-Tier alternatives
>750 AU
19,100
5
721
58
>500 AU
25,540
7
831
64
>300 AU
39,320
11
980
72
3-Tier alternatives
Proposed
1 31 ,930
9
930
72
Alter-
native
2 >1 6,420
10
>680
SND
    1 Three-tier Proposed: Number of affected facilities up to 39,320. Number of permitted facilities between 16,000 and 3z,uuu, <»""?™-     .  ,
    ^Three-tier Alternative: Number of affected facilities and industry costs are expected to.be greater than that estimated for NPDES Scenano 1
  ("Status Quo").
    3 ND = Not Determined.
  5. Additional Scenarios Considered But
  Not Proposed
    EPA also considered two other
  scenarios, which would retain the
  existing three-tier approach.
    a. Scenario 1: Retain Existing
  Structure. One of the alternative
 regulatory scenarios would incorporate
 all of today's proposed revisions except
 those related to the tiered structure for
 defining which AFOs are CAFOs. In
 other words, the existing three-tier
 structure (greater than 1,000 AU; 300
 AU to  1,000 AU; fewer than  300 AU)
 would remain in place, and the
 conditions for defining the middle tier
 operations would not change. Thus, as
 under the existing regulation, mid-sized
 AFOs (300 AU to 1,000 AU) would be
 defined as CAFOs only if, in addition to
 the number of animals confined, they

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 also meet one of the two specific criteria
 governing the method of discharge: (1)
 Pollutants are discharged through a
 man-made ditch, flushing system, or
 other similar man-made device; or (2)
 pollutants are discharged directly into
 waters of the United States that
 originate outside of the facility and pass
 over, across, or through the facility or
 otherwise come into direct contact with
 the confined animals.
   EPA is not proposing this scenario
 because these conditions have proven to
 be difficult to interpret and implement
 for AFOs in the 300 to 1,000 AU size
 category, and thus have not facilitated
 compliance or enforcement, and the
 scenario does not meet the goal of
 today's proposal to simplify the NPDES
 regulation for CAFOs. The two criteria
 governing method of discharge, e.g.,
 "man-made device" and "stream  '
 running through the CAFO," are subject
 to interpretation, and thus difficult for
 AFO operators in this size range to
 determine whether or not the permit
 authority would consider them to be a
 CAFO. EPA does not believe it is
 necessary to retain these criteria because
 all discharges of pollutants from
 facilities of this size should be
 considered point source discharges.
 While the odier proposed changes go a
 long way to improve the effectiveness of
 the NPDES program for CAFOs, EPA
 believes the definition criteria for
 facilities in this size range also need to
 be amended to make the regulation
 effective, simple, and enforceable.
  b. Scenario 2: Revised Conditions
 Without Certification. The second
 scenario EPA considered would also
 retain the existing three-tier structure,
 and would modify the conditions for
 defining the middle tier AFOs as CAFOs
 in the same way that today's proposed
 three-tier structure does. That is, any
 AFO that meets the size condition (300
 AU to 1,000 AU) would be defined as
 a CAFO if it met one or more of the
 following risk-based conditions: (1)
 Direct contact of animals with waters of
 the U.S.; (2) insufficient storage and
 containment at the production area to
 prevent discharge from reaching waters
 of the U.S.; (3) evidence of discharge in
 the last five years; (4) the production
 area is located within 100 feet of waters
 of the U.S.; (5) the operator does not
 have, or is not implementing, a Permit
 Nutrient Plan; and (6) any manure
 transported off-site is transferred to
 recipients of more than twelve tons
 annually without following proper off-
 site manure management, described
above in the discussion of the three-tier
structure (co-proposed with omitting
this requirement).
                      In this scenario, owners or operators
                    of AFOs in the middle tier would not be
                    required to certify to the permit
                    authority that the facility is not a CAFO.
                    However, all facilities that do meet one
                    or more of the conditions would have a
                    duty to apply for an NPDES permit. This
                    scenario is not being proposed because
                    of concerns that there would be no way
                    for the permit authority to know which
                    operations were taking the exemption
                    and which should, in fact, be applying
                    for a permit. The certification scenario
                    provides a measure of assurance to the  .
                    public, the permit authority, and the
                    facilities' owners or operators, that
                    CAFOs and AFOs are implementing
                    necessary practices to protect water
                    quality.

                    C. Changes to the NPDES Regulations
                      hi addition to  changing the threshold
                    for determining which facilities are
                    CAFOs, EPA is proposing a number of
                    other changes that address how the
                    permitting authority determines
                    whether a facility is an AFO or a CAFO
                    that, therefore, must apply for 'an
                    NPDES permit. These proposed
                    revisions are discussed in this section
                    and in section D.

                    1. Change the AFO Definition to Clearly
                    Distinguish Pasture Land
                      EPA is proposing to clarify the
                    regulatory language that defines the
                    term "animal feeding operations,"  or
                    AFO, in order to remove ambiguity. See
                    proposed § 122.23(a)(2). The proposed
                    rule language would clarify that animals
                    are not considered to be "stabled or
                    confined" when  they are in areas such
                    as pastures or rangeland that sustain
                    crops "or forage during the entire time
                    animals are present. Other proposed
                    changes to the definition of AFO are
                    discussed below in section 3.e.
                     To be considered a CAFO, a facility
                    must first meet the AFO definition.
                    AFOs .are enterprises where animals are
                    kept and raised in confined situations.
                    AFOs concentrate animals, feed, manure
                    and urine, dead animals, and
                    production operations on a small land
                    area. Feed is brought to the animals
                    rather than the animals grazing or
                    otherwise seeking feed in pastures,
                    fields, or on rangeland. The current
                    regulation [40 CFR 122.23(b)(l)] defines
                    an AFO as a "lot  or facility where
                    animals have been, are, or will be
                    stabled or confined and fed or
                    maintained for a  total of 45 days or more
                    in any 12 month  period; and where
                    crops, vegetation?,] forage growth, or
                   post-harvest residues are not sustained
                    over any portion  of the lot or facility in
                    the normal growing season" [emphasis
                   added].
   The definition states that animals
 must be kept on the lot or facility for a
 minimum of 45 days, in a 12-month   '.
 period. If an animal is at a facility for
 any portion of a day, it is considered to
 be at the facility for a full day. However,
 this does not mean that the same
 animals must remain on the-lot for 45
 consecutive days or more; only that
 some animals are fed or maintained on
 the lot or at the facility 45 days out of
 any 12-month period. The 45 days do
 not have to be consecutive, and the 12-
 month period does not have to
 correspond to the calendar year. For
 example, June 1 to the following May 31
 would constitute a 12-month period.
   The definition has proven to be
 difficult to implement and has led to  •
 some confusion. Some CAFO operators
 have asserted that they are not AFOs
 under this definition where incidental
 growth occurs on small portions of the
 confinement area. In the case of certain
 wintering operations, animals confined
 during winter months quickly denude
 the feedlot of growth that grew during
 the summer months. The definition was
 not intended to exclude, from the
 definition of an AFO, those confinement
 areas that have growth over only a small
 portion of the facility or that have
 growth  only a portion of the time that
 the animals are present. The definition
 is intended to exclude pastures and
 rangeland that are largely covered with
 vegetation that can absorb nutrients in
 the manure. It is intended to include as
 AFOs areas where animals are confined
 in such a density that significant
 vegetation cannot be sustained over
 most of the confinement area.
  As indicated in the original CAFO
 rulemaking in the 1970s, the reference
 to vegetation in the definition is
 intended to distinguish feedlots
 (whether outdoor confinement areas or
 indoor covered areas with constructed
 floors) from pasture or grazing land. If
 a facility maintains animals in an area
 without vegetation, including dirt lots
 or constructed floors, the facility meets
 this part of the definition. Dirt lots with
 nominal vegetative .growth while
 animals are present are also considered
by EPA to meet the second part of the
AFO definition, even if substantial
growth of vegetation occurs during
months when animals are kept
elsewhere. Thus, in the case of a
wintering operation, EPA considers the
facility an AFO potentially subject to
NPDES regulations as a CAFO. It is not
EPA's intention, however, to include
within the AFO definition pasture or
rangeland that has a small, bare patch, of
land, in  an otherwise vegetated area,
that is caused by animals frequently

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                                                                     3005
congregating if the animals are not
confined to the area.
  The following examples are presented
to further clarify EPA's intent, (1) When
animals are restricted to vegetated areas
as in the case of rotational grazing, they.
would not be considered to be confined
in an AFO if they are rotated out of the
area while the ground is still covered
with vegetation. (2) If a small portion of
a pasture is barren because, e.g., animals
.congregate near the feed trough in that
portion of the pasture, that area is not
considered an AFO because animals are
not confined to the barren area; (3) If an
area has vegetation when animals are
initially confined there, but the animals
remove the vegetation during their
confinement, that area would be
considered an AFO. This may occur, for
instance, at some wintering operations.
  Thus, to address the ambiguities
noted above, EPA is proposing to clarify
the regulatory language that defines the
term "animal feeding operation" as
follows: "An animal feeding operation
or AFO is a facility where animals
(other than aquatic animals) have been,
are, or will be stabled or confined and
fed or maintained for a total of 45 days
 or more in any 12-month period.
Animals are not considered to be
 stabled or confined when they are in
 areas such as pastures or rangeland that
 sustain crops or forage growth during
 the entire time that animals are present.
 Animal feeding operations include both
 the production area and land
 application area as  defined below."*EPA
 is interested in receiving comments
 regarding whether the proposed revision
 to the AFO definition clearly
 distinguishes confinement areas from
 pasture land.
 2. Proposed Changes to the NPDES
 Permitting Regulation for Determining
 Which AFOs are CAFOs
   To improve the effectiveness and
  clarity of the NPDES regulation for
  CAFOs, EPA is proposing to revise the
  regulation as discussed in the following
  sections.
   a. Eliminate the Term "Animal Unit  .
  To remove confusion for the regulated
  community concerning the definition of
 . the term "animal unit" or "AU," EPA is
  proposing to eliminate the use of the
  term in the revised regulation. Instead of
  referring to facilities as having greater or
  fewer than 500 animal units, for
  example, EPA will use the term
  "CAFO" to refer to those facilities that
  are either defined or designated, and all
  others as "AFOs." However, in the text
  of today's preamble, the term AU will be
  used in order to help the reader
  understand the differences between the
  existing regulation and today's proposal.
If this revision is adopted, the term AU
will not be used in the final regulation.
Section VII.B, above, lists the numbers
of animals in each sector that would be
used to define a facility as a CAFO.
  EPA received comment on the
concept of animal units during the AFO
Strategy listening sessions, the small
business outreach process, and on
comments submitted for  the draft CAFO
NPDES Permit Guidance and Example
Permit. EPA's decision to move away
from the concept of "animal units" is
supported by the inconsistent use of this
concept across a number of federal
programs, which has resulted in
confusion in the regulated community.
A common thread across all of the
federal programs is the need to
normalize numbers of animals across
animal types. Animal units have been
established based upon a number of
different values that include live weight,
forage requirements, or nutrient
excretion.
  USDA and EPA have different
"animal unit" values for the livestock
sectors. Animal unit values used by
USDA are live-weight based, and
account for all sizes and breeds of
animals at a given operation. This is
 particularly confusing as USDA's
 animal unit descriptions result in
 different values in each  sector and at
 each operation.
   The United,States Department of
 Interior (Bureau of Land Management
 and National Park Service) also
 references the concept of "animal unit"
 in a number of programs. These
 programs are responsible for the  •
 collection of grazing fees for federal
 lands. The animal unit values used in
 these programs are based upon forage
 requirements. For Federal lands an
 animal unit represents one mature cow,
 bull, steer, heifer, horse, mule, or five
 sheep, or five goats, all  over six months
 of age. An animal unit month is based
 on tib.e amount of forage needed to
 sustain one "animal unit for one month.
 Grazing fees for Federal lands are •
  charged by animal unit months.
   In summary, using the total number of
  head that defines an operation as a
  CAFO will minimize confusion with
  animal unit definitions established by
  other programs.  See tables 7-6 and 7—
  7 above.                        '
    b. How Will Operations With Mixed
  Animal Types be Counted? EPA is
  proposing to eliminate  the existing
  mixed animal provision, which
  currently requires an operator to add the
  number of animal units from all animal
  sectors at the facility when determining
  whether it is a CAFO. (Poultry is
  currently excluded from this mixed
  animal type calculation). While the
mixed calculation would be eliminated,
once the number of animals from one
sector (e.g. beef, dairy, poultry, swine,
veal) of one type cause an operation to
be defined as a CAFO, manure from all
confined animal types at the facility
would be covered by the permit
conditions, hi the event that waste
streams from multiple livestock species
are commingled, and the regulatory
requirements for each species are not
equivalent, the permit must apply the
more stringent requirements.
  In the existing regulation, a facility
with 1,000 animal units or the
cumulative number of mixed animal
types which exceeds 1,000, is defined as
a CAFO. Animal unit means a unit of
measurement for any animal feeding
operation calculated by adding the
following numbers: the number of
slaughter and feeder cattle multiplied by
1.0, plus the number of mature dairy
cattle multiplied by 1.4, plus the
number  of swine weighing over 25
kilograms (approximately 55 pounds)
multiplied by 0.4, plus the number of
sheep multiplied by 0.1, plus the
number  of horses multiplied by 2.0. As
mentioned, poultry operations are
excluded from this mixed unit
calculation as the current regulation
 simply stipulates the number of birds
 that define the operation as a CAFO,
 and assigns no multiplier.
   Because simplicity is one objective of
 these proposed regulatory revisions, the
 Agency believes that either all animal
 types, including poultry, covered by the
 effluent guidelines and NPDES
 regulation should be included in the
 formula for mixed facilities, or EPA
 should eliminate the facility multipliers
 from the revised rule. Today's
 rulemaking proposes changes that
 would have to be factored in to a revised
 mixed animal calculation which would
 make the regulation more complicated
 to implement; For example, EPA is
 proposing to cover additional animal
 types (dry chicken operations, immature
 swine and heifer operations). Thus, EPA
 is proposing to eliminate the mixed
 operation calculation rather than revise
 it and create a more complicated
 regulation to implement that would
 potentially bring smaller farms-into
 regulation.
    EPA believes that the effect of this
 proposed change would be sufficiently
 protective of the environment while
 maintaining a consistently enforceable
 regulation. EPA estimates 25 percent of
  AFOs with less than 1,000 AU have
  multiple animal types present
  simultaneously at one location, and
  only a small fraction of these AFOs
  would  be CAFOs exceeding either 300
  AU or 500 AU when all animal types are

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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
  counted. EPA also believes that few
  large AFOs possess mixed animals due
  to the increasingly specialized nature of
  livestock and poultry production.
  Therefore, EPA believes that a rule
  which required mixed animal types to
  be part of the threshold calculation to
  determine if a facility is a CAFO would
  result in few additional operations
  meeting the definition of a CAFO. In
  addition, most facilities with mixed
  animal types tend to be much smaller,
  and tend to have more traditional,
  oftentimes more sustainable, production
  systems. These farms tend to be less
  specialized, engaging in both animal
  and crop production. They often have
  sufficient cropland and fertilizer needs
  to land apply manure nutrients
  generated at the farm's livestock or
  poultry business. Nevertheless, should
  such an AFO be found to be a
  significant contributor of pollution to
  waters of the U.S., it could be
  designated a CAFO by the permit
  authority.
   EPA is, therefore, proposing to
  eliminate the mixed animal calculation
 in determining which AFOs are CAFOs.
 Once an operation is a CAFO for any
 reason, manure from all confined
 animal types at the facility is subject to
 the permit requirements. EPA is
 requesting comment on the number of
 operations that could potentially have
 the equivalent of 500 AU using the
 mixed calculation that would be
 excluded from regulation under this
 proposal.
   c. Is an AFO Considered a CAFO if it
 Only Discharges During a 25-Year, 24-
 Hour Storm? EPA is proposing to
 eliminate the 25-year, 24-hour storm
 event exemption from the CAFO
 definition (40 CFR 122.23, Appendix B),
 thereby requiring any operation that
 meets the definition of a CAFO either to
 apply for a permit or to establish that it
 has no potential to discharge. Under the
 proposed three-tier structure an
 operation with 300 AU to 1,000 AU may
 certify that it is not a CAFO if it is
 designed, constructed, and maintained
 in accordance with today's effluent
 guidelines and it does not meet any of
 the risk-based conditions. See Section
 Vn.B.2.
  The existing NPDES definition of a
 CAFO provides that "no animal feeding
 operation is a concentrated animal
 feeding operation * * * as defined
 above* * * if such animal feeding
 operation discharges only as the result
 of a 25-year, 24-hour storm event" (40
 CFR § 122.23, Appendix B). This
provision applies to AFOs with 300 AU
or more that are defined as CAFOs
under the existing regulation. (Facilities
of any size that are CAFOs by virtue of
                    designation are hot eligible for this
                    exemption because, by the terms of
                    designation, it does not apply to them.
                    Moreover, they have been determined
                    by the permit authority to be a
                    significant contributor of pollution to
                    waters of the U.S.)
                      The 25-year, 24-hour standard is an
                    engineering standard used for
                    construction of storm water detention
                    structures. The term "25-year, 24-hour
                    storm event" means the maximum 24-
                    hour precipitation event with a probable
                    recurrence of once in 25 years, as
                    defined by the National Weather Service
                    (NWS) in Technical Paper Number 40
                    (TP40), "Rainfall Frequency Atlas of the
                    United States," May 1961, and
                    subsequent amendments, or by
                    equivalent regional or State rainfall
                    probability information developed
                    therefrom. [40 CFR Part 412.11(e)].
                    (Note that the NWS is updating some of
                    the Precipitation Frequency
                    Publications, including part of the TP40.
                    In 1973, the National Atmospheric and
                    Oceanic Administration (NOAA) issued
                    the NOAA Atlas 2, Precipitation
                    Frequency Atlas of the Western United
                    States. The Atlas is published in a
                    separate volume for each of the eleven
                    western states. An update for four of the
                    State volumes is currently being
                    conducted. In addition, the NWS is
                    updating TP40 for the Ohio River Basin
                    which covers a significant portion of the
                    eastern U.S. The updates will reflect
                    more than 30 years of additional data
                    and will benefit from NWS enhanced
                    computer capabilities since the original.
                    documents were generated almost 40
                   years ago.) As discussed further in
                   section VIII, the 25-year, 24-hour storm
                   event also is used as a standard in the
                   effluent limitation guideline.
                     The circularity of the 25-year, 24-hour
                   storm event exemption in the existing
                   CAFO definition has created confusion
                   that has led to difficulties in
                   implementing the NPDES regulation.
                   The effluent guidelines regulation,
                   which is applicable to permitted
                   CAFOs, requires that CAFOs be
                   designed and constructed to contain
                   such an event. However, the NPDES
                   regulations allows facilities that
                   discharge only as a result of such an
                   event to avoid obtaining a permit. This
                   exemption has resulted in very few
                   operations actually obtaining NPDES
                   permits, which has hampered
                   implementation of the NPDES program.
                   While there are an estimated 12,000
                   AFOs likely to meet the current
                   definition of a CAFO, only about 2,500
                   such facilities have obtained an NPDES
                   permit. Many of these unpermitted
                   facilities may incorrectly believe they
                   qualify for the 25-year, 24-hour storm
  permitting exemption. These
  unpermitted facilities operate outside *
  the current NPDES program, and State
  and EPA NPDES permit authorities lack
  the basic information needed to
  determine whether or not the exemption
  has been applied correctly and whether
  or not the CAFO operation is in
  compliance with NPDES program
  requirements.
   EPA does not believe that the
  definition as a CAFO should hinge on
  whether an AFO only discharges
  pollutants due to a 25-year, 24-hour
  storm event. Congress clearly intended
  for concentrated animal feeding
  operations to be subject to NPDES
  permits by explicitly naming CAFOs as
  point sources in the Clean Water Act
  Section 502(14). Further, Section 101(a)
  of the Act specifically states that
  elimination of discharges down to zero
  is to be achieved where possible, and
  EPA does not believe that facilities
  should avoid the regulatory program
 altogether by merely claiming that they
 meet the 25-year, 24-hour criterion. This
 issue is discussed further below in
 section VII.C.2(c).
   The public has expressed widespread
 concern regarding whether some of
 these currently unpermitted facilities
 are, in fact, entitled to this exemption.
 Based on comments EPA has received in
 a variety of forums, including during the
 AFO Strategy listening sessions and on
 the draft CAFO permit guidance, EPA
 believes there is a strong likelihood that
 many of these .facilities are discharging
 pollutants to waters of the U.S. EPA is
 concerned that, in applying the 25-year,
 24-hour storm exemption, operations
 are not now taking into consideration
 runoff from their production areas, or
 are improperly interpreting which
 discharges are the result of 25-year 24-
 hour storms and chronic rainfall which
 may result in breaches and overflows of
 storage systems, all of which cause
 pollution to enter waters of the U.S.
 Additionally, facilities may not be
 considering discharges from improper
 land application of manure and
 wastewater.
   EPA is today proposing to eliminate
 the 25-year, 24-hour storm exemption
 from the CAFO definition (40 CFR
 122.23, Appendix B) in order to: (a)
 Ensure that all CAFOs with a potential
 to discharge are appropriately
 permitted; (b) ensure through permitting
 that facilities are, in fact, properly
 designed, constructed, and maintained
to contain a 25-year, 24-hour storm
 event, or to meet a zero discharge
requirement, as the case may be;  (c)
improve the ability of EPA and State
permit authorities to monitor
compliance; (d) ensure that facilities do

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                                                                     3007
not discharge pollutants from their
production areas or from excessive land
application of manure and wastewater;
(e) make the NPDES permitting
provision consistent with today's
proposal to eliminate the 25-year, 24-
hour storm design standard from the
effluent guidelines for swine, veal and
poultry; and (f) achieve EPA's goals  of
simplifying the regulation, providing
clarity to the regulated community, and
improving the consistency of
implementation.
  Under the proposed two-tier
structure, any facility that is defined as
a CAFO would be a CAFO even if it
: only discharges in the event of a 25-
year, 24-hour storm. Further, the CAFO
operator would be required to apply for
an NPDES permit, as discussed below
regarding the duty to apply for a NPDES
permit. (If the  operator believes the
facility never discharges, the operator
could request a determination of no
potential to discharge, as discussed
below.) Under the three-tier structure a
facility with 300 AU to 1,000 AU would
be required "to either  certify it is not a •
CAFO, to apply for a permit, or
 demonstrate it has no potential to
 discharge.  Today's effluent guidelines
 proposal would retain the design
 specification for beef or dairy facilities,
 which would allow a permitted facility
 to discharge due to a 25-year, 24-hour
 event, as long as the  facility's
 containment system  is designed,
 constructed and operated to handle
 manure and wastewater plus
 precipitation from a  25-year, 24-hour
 storm event (unless a permit writer
 imposed a more stringent, water quality-
 based effluent limitation). However, a
 facility that meets the definition of
 CAFO and discharges during a 25-year,
 24-hour storm event, but has failed to
 apply for an NPDES permit (or to certify
 in the three-tier structure), would be
 subject to  enforcement for violating the
 CWA. Swine, veal and poultry CAFOs
 would be required to achieve a zero
 discharge standard at all times.
   EPA considered limiting this change
 to the very largest CAFOs (e.g.,
 operations with 1,000 or more animal
 units), and retaining the exemption for
 smaller facilities. However, EPA is
 concerned that this  could allow
 significant discharges resulting from
 excessive land application of manure
 and wastewater to remain beyond the
 scope of the NPDES permitting program,
 thereby resulting in ongoing discharge
 of CAFO-generated  pollutants into
 waters of the U.S. Moreover, EPA
 believes that retaining the exemption for
  certain operations adds unnecessary
  complexity to the CAFO definition.
  The Small Business Advocacy Review
Panel also considered the idea of
removing the 25-year, 24-hour
exemption. While the Panel agreed.that
this was generally appropriate for
operations above the 1,000 AU
threshold, it was divided on whether it
would also be appropriate to remove the
exemption for facilities below this
threshold. The Panel noted that for
some such facilities, removing the
exemption would not expand the scope
of the current regulation, but  rather
ensure coverage for facilities that should
already have obtained a permit.
However, the Panel also  recognized that
eliminating the exemption would
require facilities that do  properly
quality for it—e.g., because they do have
sufficient manure management and
containment in place, or for some other
reason, do not discharge except in a 25-
year, 24-hour storm—to'obtain a permit
or certify that none is needed. The Panel
recommended that EPA  carefully weigh
the costs and benefits of removing the
exemption for small entities and that it
fully analyze the incremental costs
associated with permit applications for
those facilities not presently  permitted
that can demonstrate that they do not
discharge in less than a 25-year, 24-hour
storm event, as well as any costs
associated with additional conditions
related to land application, nutrient
management, or adoption of  BMPs that
the permit might contain. The Panel
 further recommended that EPA consider
reduced application requirements for
 small operators affected by the removal
 of the exemption. The Agency requests
 comment on whether to retain this
 exemption for small entities  and at what
 animal unit threshold would be
 appropriate for doing so.
   d. Who Must Apply for and Obtain an
 NPDES Permit? EPA is proposing today
 to adopt regulations that would
 expressly require all CAFO owners or
 operators to apply for an NPDES permit.
 See proposed § 122.23(c). That is,
 owners or operators of all facilities
 'defined or designated as CAFOs would
 be required to apply for an NPDES
 permit. The existing regulations contain
 a general duty to apply  for a permit,
 which EPA believes applies to virtually
 all CAFOs. The majority of CAFO owner
 or operators, however, have not applied
 for an NPDES permit. Today's proposed
 revisions would clarify that all CAFOs
 owners or operators must apply for an
 NPDES permit; however, if he or she
 believes the CAFO does not have a
 potential to discharge pollutants to
 waters of the U.S. from either its
 production area or its land application
 area(s), he or she could make a no
potential discharge demonstration to the
permit authority in lieu of submitting a
full permit application. If the permit
authority agrees that the CAFO does not
have a potential to discharge, the permit
authority would not need to issue a
permit. However, if the unpermitted
CAFO does indeed discharge, it would
be violating the CWA prohibition
against discharging without a permit
and would be subject to civil and
criminal penalties. Thus, an
unpermitted CAFO does not get the
benefit of the 25-year, 24-hour storm
standard established by the effluent
guidelines for beef and dairy, nor does
it have the benefit of the upset and
bypass affirmative defenses.
   The duty to apply for a permit under
existing regulations. EPA believes that
virtually all facilities defined as CAFOs
already have a duty to apply for a    .
permit under the current NPDES
regulations, because of their past or
current discharges or potential for future
discharge. Under NPDES regulations at
40 CFR Part 122.21(a), any person who
discharges or proposes to discharge
pollutants to the waters of the United
States from a point source is required to
apply for an NPDES permit. CAFOs are
point sources by definition, under § 502
of the CWA and 40 CFR 122.2. Thus,
.any CAFO that "discharges or proposes
to discharge" pollutants must apply for
a permit-
   Large CAFOs with greater than 1,000
AU pose a risk of discharge in a number
 of different ways. For example, a
 discharge of pollutants to surface waters
 can occur through a spill from the waste
 handling facilities, from a breach or
 overflow of those facilities, or through
 runoff from the feedlot area, A discharge
 can also occur through runoff of
 pollutants from application of manure
 and associated wastewaters to the land
 or through seepage from the production
 area to ground water where there is a
 direct hydrologic connection between
 ground water and surface water. Given
 the large volume of manure these
 facilities generate and the variety of
 ways they may discharge, and based on
 EPA's and the States' own experience in
 the field, EPA believes that all or
 virtually all large CAFOs have had a
 discharge in the past, have a current
 discharge, or have the potential to
 discharge in the future. A CAFO that
 meets any one of these three criteria
 would be  a facility that "discharges or
 proposes to discharge" pollutants and
 would therefore need to apply for a
 permit under the current regulations.
    Where CAFO has not discharged in
  the past, does not now discharge
  pollutants, and does not expect to
  discharge pollutants in the future, EPA

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 believes that the owner or operator of
 that facility should demonstrate during
 the NPDES permit application process
 that it is, in fact, a "no discharge"
 facility. See proposed § 122.23(e). EPA
 anticipates that very few large CAFOs
 will be able to successfully demonstrate
 that they do not discharge pollutants
 and do not have a reasonable potential
 to discharge in the future, and
 furthermore, that very few large CAFOs
 will wish to forego the protections of an
 NPDES permit. For instance, only those
 beef and dairy CAFOs with an NPDES
 permit will be authorized to discharge
 in a 25-year, 24-hour storm.
   EPA also believes that a CAFO owner
 or operator's current obligation to apply
 for an NPDES permit is based not only
 on discharges from the feedlot area but
 also on discharges from the land
 application areas under the control of
 the CAFO operator. More specifically,
 discharges of CAFO-generated manure
 and/or wastewater from such land
 application areas should be viewed as
 discharges from the CAFO itself for the
 purpose of determining whether it has
 a potential to discharge. EPA recognizes,
 however, that it has not previously
 defined CAFOs to include the land
 application area. EPA is proposing to
 explicitly include the land application
 area in the definition of a CAFO in
 today's action.
   The need for a clarified, broadly
 applicable duty to apply. EPA believes
 that virtually all large CAFOs have had
 a past or current discharge or have the
 potential to discharge in the future, and
 that meeting any one of these criteria
 would trigger a duty to apply for a
 permit. Today, EPA is proposing to
 revise the regulations by finding that, as
 a rebuttable presumption, all CAFOs do
 have a potential to discharge and,
 therefore, are required to apply for and
 to obtain an NPDES permit unless they
 can demonstrate that they will not
 discharge. See proposed § 122.23(c).
 (See section VH(F)3 for a fuller
 discussion on demonstrating "no
 potential to discharge.")
  EPA has not previously sought to
 categorically adopt a duty to apply for
 an NPDES permit for all facilities within
 a particular industrial sector. The
 Agency is proposing today to do so for
 CAFOs for reasons that involve the
 unique characteristics of CAFOs and  the
 zero discharge regulatory approach that
 applies to them.
  First, as noted, since the inception  of
 the NPDES permitting program in the
 1970s, a relatively small number of
 larger CAFOs has actually sought
permits. Information from State permit
authorities and EPA's own regional
offices indicates that, currently,
                    approximately 2,500 CAFOs have
                    NPDES permits out of approximately
                    12,000 CAFOs with greater than 1,000
                    AU.
                      EPA believes there are a number of
                    reasons why so few CAFOs have sought
                    NPDES permits over the years. The
                    primary reason appears to be that the
                    definition of a CAFO in the current
                    regulations (as echoed in the regulations
                    of some State programs) excludes
                    animal feeding operations that do not
                    discharge at all or discharge only in the
                    event of a 25-year, 24-hour storm. [40
                    CFR 122.23, Appendix BJ. Based on the
                    existing regulation, many animal
                    feeding operations that claim to be "zero
                    dischargers" believe that they are not
                    subject to NPDES permitting because
                    they are excluded from the CAFO
                    definition and thus are not CAFO point
                    sources.
                      EPA'believes that many of the
                    facilities that have relied on this
                   • exclusion from the CAFO definition
                    may have misinterpreted this provision.
                    It excludes facilities from the CAFO
                    definition only when they neither
                    discharge pollutants nor have the
                    potential to discharge pollutants in a 25-
                    year, 24-hour storm. In  fact, as
                    explained above, a facility that has at
                    least a potential to discharge pollutants
                    (and otherwise meets the CAFO
                    definition) not only is defined as a
                    CAFO but also has a duty to apply for
                    an NPDES permit, regardless  of whether
                   it actually discharges. (40 CFR
                    122.21(a)). Thus, many  facilities that
                   have at least a potential to discharge
                   manure and wastewaters may have
                   avoided permitting based on an
                   incorrect reliance on this definitional
                   exclusion.
                     To compound the confusion under
                   the current regulations, EPA believes,
                   there has been  misinterpretation
                   surrounding the issue of discharges
                   from a CAFO's land application areas.
                   As EPA has explained in section VII.D
                   of today's notice, runoff from  land
                   application of CAFO manure is viewed
                   as a discharge from the CAFO point
                   source itself. Certain operations may
                   have claimed to be "zero dischargers"
                   when in fact they were not, and are not,
                   zero dischargers when runoff from their
                   land application areas is taken into
                   account.
                     Another category of operations that
                   may have improperly avoided
                   permitting are those that have had a past
                   discharge of pollutants, and are not
                   designed and operated to achieve zero  •
                   discharge except in a 25-year, 24-hour
                   storm event. Many of these facilities
                   may have decided not to seek a permit
                   because they believe they will not have
                   any future discharges. However, as
 explained above, an operation that has"
 had a past discharge of pollutants is
 covered by the NPDES permitting
 regulations in the same way as
 operations that have a "potential" to
 discharge—i.e., it is not only defined as
 a CAFO (where it meets the other
 elements of the definition) but is
 required to apply for a permit [Carr v.
 Alta Verde Industries, Inc., 931 F.2d
 1055 (5th Cir. 1991)]. Facilities that
 have had a past discharge meet the
 criteria of § 122.21(a), in EPA's view,
 both as "dischargers" and as operations
 that have the potential for further
 discharge. Accordingly, they are
 required to apply for an NPDES permit. •
 Misinterpretation regarding the need to
 apply for a permit may also have
 occurred in cases where the past
 discharges were from land application
 runoff, as explained above.
   Finally, the nature of these operations
 is that any discharges from manure
 storage structures to waters of the U.S.
 are usually only intermittent, either due
 to accidental releases from equipment
 failures or storm events or, in some
 cases, deliberate releases such as
 pumping out lagoons or pits. The
 intermittent nature of these discharges,
 combined with the large numbers of
 animal feeding operations nationwide,
 makes it very difficult for EPA and State
 regulatory agencies to know where
 discharges have occurred (or in many
 cases, where animal feeding operations
 are even located), given the limited
 resources for conducting inspections. In
 this sense, CAFOs are distinct from
 typical industrial point sources subject
 to the NPDES program, such as
 manufacturing plants, where a facility's
 existence and location and the fact that
 it is discharging wastewaters at all is
 usually not in question. Accordingly, it
 is much easier for CAFOs to avoid the
 permitting system by not reporting their
 discharges, and there is evidence that
 such avoidances have taken place.
  In sum, EPA believes it is very
 important in these regulatory revisions
 to ensure that all CAFOs have a duty to
 apply for an NPDES permit, including
 those facilities that currently have a
 duty to apply because they meet the
 definition of CAFO under the existing
 regulations and those facilities which
 would meet the proposed revised
 definition of CAFO. Two of the
 revisions that EPA is proposing today to
 other parts of the CAFO regulations
would themselves significantly address
this matter. First, EPA is proposing to
 eliminate the 25-year, 24-hour storm
exemption from the definition of a
CAFO. Operations would no longer be
able to avoid being defined as CAFO
point sources subject to permitting on

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                                                                     3009
the basis that they do not discharge or
discharge only in the event of a 25-year,
24-hour storm. Second, EPA is
proposing to clarify that land
application areas are part of the CAFO
and any associated discharge from these
areas is subject to permitting.
  While these two proposed changes ,
would help address the "duty to apply"
issue, EPA does not believe they would
go far enough. Even with eliminating
the 25-year, 24-hour storm exemption
from the CAFO definition, EPA is
concerned that operations would still
seek to avoid permitting by claiming
they are "zero dischargers."
Specifically, EPA has encountered a
further zero discharge conundrum: A
facility claims that by controlling its
discharge down to zero—the very level
that a permit would require—it has
effectively removed itself from CWA
jurisdiction, because the CWA simply
prohibits discharging without a permit,
so a facility that does not discharge does
not need a permit. EPA believes this
would be an incorrect reading of the
CWA and would not be a basis for
 claiming an exemption from permitting
 (as explained directly below). Therefore,
 it is important to clarify in the
 regulations that even CAFOs that claim
 to be zero dischargers must apply for a
 permit.
   To round out the basis for this
 proposed revision, EPA is proposing a
 regulatory presumption in the
 regulations that all CAFOs have a
 potential to discharge to the waters such
 that they should be required to apply for
 a permit. EPA believes this would be a
 reasonable presumption on two
 grounds. First, the Agency believes this
 is reasonable from a factual standpoint,
 as is fully discussed in section V of
 today's preamble.
   This factual finding would become
 even more compelling under today's
 proposals to eliminate the 25-year, 24-
 hour storm exemption from the CAFO
 definition and to clarify that discharges
 from on-site land application areas, are
 considered CAFO point source
 discharges. If these two proposals were
 put in place, EPA believes, many fewer
 operations would be claiming that they
 do not discharge.
   Second, a presumption that all CAFOs
 have a potential to discharge would be
 reasonable because of the need for
 clarity on the issues described above
 and the historical inability under the
 current regulations to effectuate CAFO •
 permitting. Under today's proposal, the
 duty would be for each CAFO to apply
 for a permit, not necessarily to obtain
• one. A CAFO that believes it does not
 have a potential to discharge could seek
 to demonstrate as much to the
permitting authority in lieu of
submitting a full permit application. (To
avoid submitting a completed permit
application, a facility would need to
receive a "no potential to discharge"
determination from the permit authority
prior to the deadline for applying for a
permit. See section VH.F.3 below.) If the
demonstration were successful, the
permitting authority would not issue a
permit. Therefore, the duty to apply
would be based on a rebuttable
presumption that each facility has a
potential to discharge. Without this
rebuttable presumption, EPA believes it
could not effectuate proper permitting
of CAFOs because of operations that
would claim to be excluded from the
CWA because they do not discharge.
   CWA authority for a duty to apply. In
pre-proposal discussions, some
stakeholders have questioned EPA's
authority under the  Clean Water Act to
impose a duty for all CAFOs to apply for
a permit. EPA believes that the CWA
does provide such authority, for the
following reasons.
   Section 301(a) of the CWA says that
no person may discharge without an
NPDES permit. The Act is silent,
however, on the requirement for permit
applications. It does not explicitly
require anyone to apply for a permit, as
some stakeholders have pointed out. But
neither does the Act expressly prohibit
EPA from requiring certain facilities to
 submit an NPDES permit application or
 from issuing an NPDES permit without
 one. Section 402(a)  of the Act says
 simply that the Agency may issue an
 NPDES permit after an opportunity for
 public hearing.
   Indeed, finding that EPA could not
 require permitting of CAFOs would
 upset the legislative scheme and render
 certain provisions of the Act
 meaningless. Section 301(b)(2)(A),
 which sets BAT requirements for
 existing sources and thus is at the heart
 of the statutory scheme, states that EPA
 shall establish BAT standards that
 "require the elimination of discharges of
 all pollutants if the Administrator finds
  * *  * that such elimination is
 technologically and economically
 achievable.* * *"  In other words,
 Congress contemplated that EPA could
  set effluent standards going down to
  zero discharge where appropriate.
  Section 306, concerning new sources,
  contains similar language indicating
  that zero discharge may be an
  appropriate standard for some new
  sources. Section 402 puts these
  standards into effect by requiring EPA to
  issue NPDES permits that apply these
  standards and ensure compliance with
  them. Thus, the Act contemplates the
  issuance of NPDES permits that require
zero discharge. These provisions are
underscored by Section 101(a) of the
Act, which sets a national goal of not
just reducing but eliminating the
discharge of pollutants to the waters.
  This statutory scheme would be
negated if facilities were allowed to
avoid permitting by claiming that they
already meet a zero discharge standard
that is established in the CAFO
regulations and that a permit would
require. Issuing a zero discharge
standard would be an act of futility
because it could not be implemented
through a permit. Under a contrary
interpretation, a CAFO could repeatedly
discharge and yet avoid permitting by
. claiming that it does not intend to
discharge further. EPA does not believe
that Congress intended to tie the
Agency's hands in this manner. To be
 sure, in no other area of the NPDES
program are industrial operations
 allowed to avoid permitting by claiming
 that they already meet the limits that a
 permit would require. That would be a
 plainly wrong view of the Act; Section
 301(a) states unequivocally that no
 person may discharge at all without a
 permit. The Act does not contemplate a
 different system for facilities that are
 subject to a zero discharge standard, and
 it is the unique nature of the zero
 discharge standard that makes it
 appropriate for EPA to require CAFOs to
 apply for permits.
   EPA also finds authority to require
 NPDES permit applications from CAFOs
 in Section 308 of the Act. Under Section
 308, the Administrator may require
 point sources to provide information
 "whenever required to carry out the
 objective of this chapter," for purposes,
 among other things, of determining ;
 Whether any person is in violation of
 effluent limitations, or to carry out
 Section 402 and other provisions.
 Because EPA proposes a presumption
 that all CAFOs have a potential to
 discharge pollutants, it is important,
 and within EPA's authority, to collect
 information from CAFOs in order to
 determine if they are in violation of the
 Act or otherwise need a permit.
    EPA solicits comment on the
 proposed duty to apply.
    e. The Definitions of AFO and CAFO
  Would Include the Land Areas Under
  the Control of the Operator on Which
  Manure is Applied. In today's proposal,
  EPA defines an AFO to include both the
  animal production areas of the
  operation and the land areas, if any,
  under the control of the owner or
  operator, on which manure and
  associated waste waters are applied. See
  proposed § 122.23(a)(l). The definition
  of a CAFO is based on the AFO
  definition and thus would include the

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 land application areas as well.
 Accordingly, a CAFO's permit would
 include requirements to control not only
 discharges from the production areas
 but also those discharges from the land
 application areas. Under the existing
 regulations, discharges from a CAFO's
 land application areas that result from
 improper agricultural practices are
 already considered to be discharges
 from the CAFO and therefore, are
 subject to the NPDES permitting
 program. However, EPA believes it
 would be helpful to clarify the
 regulations on this point.
   By the term "production area," EPA
 means the animal confinement areas,
 the manure storage areas (e.g. lagoon,
 shed, pile), the feed storage areas (e.g.,
 silo, silage bunker), and the waste
 containment areas (e.g., berms,
 diversions). The land application areas
 include any land to which a CAFO's
 manure and wastewater is applied (e.g.,
 crop fields, fields, pasture) that is under
 the control of the CAFO owner or
 operator, whether through ownership or
 a lease or contract. The land application
 areas do not include areas that are not
 under the CAFO owner's or operator's
 control. For example, where a nearby
 farm is owned and operated by someone
 other than the CAFO owner or operator
 and the nearby farm acquires the
 CAFO's manure or wastewater, by
 contract or otherwise, and applies those
 wastes to its own crop fields, those crop
 fields are not part of the CAFO.
  The definition of an AFO under the
 existing regulations refers to a "lot or
 facility" that meets certain conditions,
 including that "[drops, vegetation[,]
 forage growth, or post-harvest residues
 are not sustained in the normal growing
 season over any portion of the lot or
 facility." 40 CFR 122.23(b)(l). In
 addition, the regulations define
 "discharge of a pollutant" as the
 addition of any pollutant to waters of
 the United States from any point source.
 40 CFR 122.2. EPA interprets the
 current regulations to include
 discharges of CAFO-generated manure
 and wastewaters'from improper land
 application to areas under the control of
 the CAFO as discharges from the CAFO
 itself. Otherwise, a CAFO could simply
 move its wastes outside the area of
 confinement, and over apply or
 otherwise improperly apply those
 wastes, which would render the CWA
 prohibition on unpermitted discharges
 of pollutants from CAFOs meaningless.
Moreover, the pipes and other manure-
spreading equipment that convey CAFO
manure and wastewaters to land
application areas under the control of
the CAFO are an integral part of the
CAFO. Under the existing regulations,
                    this equipment should be considered
                    part of the CAFO, and discharges from
                    this equipment that reach the waters of
                    the United States as a result of improper
                    land application should be considered
                    discharges from the CAFO for this
                    reason as well. In recent litigation
                    brought by citizens against a dairy farm,
                    a federal court reached a similar
                    conclusion. See CARE v. Sid Koopman
                    Dairy, et al., 54 F. Supp. 2d 976 (E.D.
                    Wash., 1999).
                     One of the goals of revising the
                    existing CAFO regulations is to make
                    the regulations clearer and more
                    understandable to the regulated
                    community and easier for  permitting
                    authorities to implement. EPA believes'
                    that amending the definition of an AFO
                    (and,-by extension, CAFO) to expressly
                    include land application areas will help
                    achieve this clarity and will enable
                    permitting authorities to both more
                    effectively implement the proposed
                    effluent guidelines and to more
                    effectively enforce the CWA's
                    prohibition on discharging without a
                    permit. It would be clear under this
                    revision that the term "CAFO" means
                    the entire facility, including land
                    application fields and other areas under
                    the CAFO's control to which it applies
                    its manure and wastewater. By
                    proposing to include land  application
                    areas in the definition of an AFO, and
                   therefore, a CAFO, discharges from
                   those areas would, by definition, be
                    discharges from a point source—i.e., the
                    CAFO. There would not need to be a
                    separate showing of a discernible,
                    confined, and discrete conveyance such
                   as a ditch.
                     While the CWA includes CAFOs
                   within the definition of a point source,
                   it does not elaborate on what the term
                   CAFO means. EPA has broad discretion
                   to define  the term CAFO. Land
                   application areas are integral parts of
                   many or most CAFO operations. Land
                   application is typically the end point in
                   the cycle  of manure management at
                   CAFOs. Significant discharges to the
                   waters in the past have been attributed
                   to the land application of CAFO-
                   generated manure and wastewater. EPA
                   does not believe that Congress could
                   have intended to exclude the discharges
                   from a CAFO's land application areas
                   from coverage as discharges from the
                   CAFO point source. Moreover, defining
                   CAFOs in this way is consistent with
                   EPA's effluent limitations guidelines for
                   other industries, which consider on-site
                   waste treatment systems to be part of the
                   production facilities in that the
                   regulations restrict discharges from the
                   total operation. Thus, it is reasonable for
                   EPA to revise the regulations by
 including land application areas in the
 definition of an AFO and CAFO.
   While the proposal would include tie
 land application areas as part of the
 AFO and CAFO, it would continue to
 count only those animals that are
 confined in the production area when
 determining whether a facility is a
 CAFO.
   EPA is also considering today
 whether it is reasonable to interpret the
 agricultural storm water exemption as
 not applicable to any discharges from
 CAFOs. See section VII.D.2. If EPA were
 to adopt that interpretation, all
 discharges from a CAFO's land
 application  areas would be subject to "
 NPDES requirements, regardless of the
 rate or manner in which the manure has
 been applied to the land.
   Please refer to section VII.D for a full
 discussion of land application,
 including EPA's proposal with regard to
 land application of CAFO manure by
 non-CAFOs.
   EPA is requesting comment on this
 approach.
   f. What Types of Poultry Operations
 are CAFOs? EPA is proposing to revise
 the CAFO regulations to include all
 poultry operations with the potential to
 discharge, and to establish the threshold
 for AFOs to be defined as CAFOs at
 50,000 chickens and 27,500 turkeys. See
 proposed § 122.23(a)(3)(i)(H) and (I).
 The proposed revision would remove
 the limitation on the type of manure
 handling or watering system employed
 at laying hen and broiler operations and
 would, therefore, address all poultry
 operations equally. This approach
 would be consistent with EPA's
 objective of better addressing the issue
 of water quality impacts associated with
 both storage of manure at the
 production area and land application of
 manure while simultaneously
 simplifying the regulation. The
 following discussion focuses on the
 revisions to the threshold for chickens.
 under each of the co-proposed
 regulatory alternatives.
  The existing NPDES CAFO definition
 is written such that the regulations only
 apply to laying hen or broiler operations
 that have continuous overflow watering
 or liquid manure handling systems
 (i.e.,"wet" systems). (40 CFR Part 122,
 Appendix B.) EPA has interpreted this
 language to include poultry operations  .
 in which dry litter is removed from pens
 and stacked in areas exposed to rainfall,
•or piles adjacent to a watercourse. These
 operations may be considered to have
 established a crude liquid manure
 system (see 1995 NPDES Permitting
 Guidance for CAFOs). The existing
 CAFO regulations also specify different
 thresholds for determining which AFOs

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                                                                      3011
are CAFOs depending on which, of these
two types of systems the facility uses
(e.g., 100,000 laying hens or broilers if
the facility has continuous overflow
watering; 30,000 laying hens or boilers
if the facility has a liquid manure  -
system). When the NPDES CAFO
regulations were promulgated, EPA
selected these thresholds because the
Agency believed that most commercial
operations used wet systems (38 FR
18001,1973).
  hi the 25 years since the GAFO
regulations were promulgated, the
poultry industry has changed many of
its production practices. Many changes
to the layer production process have
been instituted  to keep manure as dry as
possible. Consequently, the existing
effluent guidelines do not apply to
many broiler and laying hen operations,
despite the fact that chicken production
poses risks to surface water and ground
water quality from improper storage of
dry manure, and improper land
application. It is EPA's understanding
that continuous overflow watering has
been largely discontinued in lieu of
more efficient watering methods (i.e., on
demand watering), and that liquid
manure handling systems represent
perhaps 15 percent of layer operations
overall, although in the South
approximately 40 percent of operations
still have wet manure systems.
  Despite the CAFO regulations,
nutrients from large poultry operations
continue to contaminate surface water
and ground water due to rainfall coming
in contact with dry manure that is
stacked in exposed areas, accidental
spills, etc. In addition, land application
remains the primary management
method for significant quantities of
poultry litter (including manure
generated from facilities using "dry"
systems). Many poultry operations are
located on smaller parcels of land in
 comparison to other livestock sectors,
 oftentimes owning no significant
. cropland or pasture, placing increased
 importance on the proper management
 of the potentially large amounts of
 manure that they generate. EPA also
believes that all types of livestock
 operations should be treated equitably
 under the revised regulation.
   As documented in the Environmental
 Impact Assessment, available in the
 rulemaking Record, poultry production
 in  concentrated areas such as in the
 Southeast, the Delmarva Peninsula in
 the mid-Atlantic, and in key
 Midwestern States has been shown to
 cause serious water quality
 impairments. For example, the
 Chesapeake Bay watershed's most
 serious water quality problem is caused
 by the overabundance of nutrients (e.g.
 nitrogen and phosphorus). EPA's
 Chesapeake Bay Program Office
 estimates that poultry manure is the
 largest source of excess nitrogen and
 phosphorous reaching the Chesapeake
 Bay from the lower Eastern Shore of
 Maryland and Virginia, sending more
 than four times as much nitrogen into
 the Bay as leaky septic tanks and runoff
 from developed areas, and more than
 three times as much phosphorus as
 sewage treatment plants. These
 discharges of nutrients result from an
 over-abundance of manure relative to
 land available for application, as well as
 the management practices required to
 deal with the excess manure. The State
 of Maryland has identified instances
 where piles of chicken litter have been
 stored near ditches and creeks that feed
 tributaries of the Bay. Soil data also
 suggest that in some Maryland counties
 with poultry production the soils
 already contain 90 percent or more of
- the phosphorus needed by crops. The
 State of Maryland has surveyed the
 Pocomoke, Transquaking, and Manokin
 river systems and has "concluded that
 70-87 percent of all nutrients reaching
 those  waters came from farms (though
 not all from AFOs). Based on EPA data,
 phosphorus concentrations in the
 Pocomoke Sound have increased more
 than 25 percent since 1985, suffocating
 sea grasses that serve as vital habitat for
 fish and crabs. In 1997, poultry
 operations were found to be a
 contributing cause of Pfiesteria
 outbreaks in the Pokomoke River and
 Kings Creek (both in Maryland) and in
 the Chesapeake Bay, in which tens of
 thousands of fish were killed. Other
 examples of impacts from poultry
 manure are discussed in section V of
 today's proposal.
   Dry manure handling is the
 predominant practice in the broiler and
 other meat type chicken industries.
 Birds are housed on dirt or concrete
 floors that have been covered with a
 bedding material such as wood
 shavings. Manure becomes mixed with
 this bedding to fornl a litter, which is
 removed from the house in two ways.
 After each flock of birds is removed
 from the house a portion of litter,
 referred to as cake, is removed. Cake is
 litter that has become clumped, usually
 below the watering system, although it
 can also be formed by a concentration
 of manure. In addition, the operator also
 removes all of the litter from the house
 periodically. The frequency of the
 "whole house" clean-out varies but
 commonly occurs once each year,
 unless a breach of biosecurity is
 suspected.
   Broiler operations generally house
 between five and six flocks of birds each
year, which means there are between
five or six "cake-outs" each year.
Roasters have fewer flocks, and small
fryers have more flocks, but the volume
of "cake-out" removed in a year is
comparable. "Cake-outs" will
sometimes occur during periods when it
is not possible to land apply the litter
(e.g. in the middle of the growing season
or during the winter when field
conditions may not be conducive to
land application).  Consequently, it is
usually necessary to store the dry litter
after removal until it can be land
applied.
  Depending on the time of year it
occurs, "whole house" clean-out may   ,
also require the operator to store the dry
manure until it can be land applied. If
the manure is stored in open stockpiles
over long periods of time, usually
greater than a few weeks, runoff from
the stockpile may contribute pollutants
to surface water and/or ground water
that is hydrologically connected to  .
surface water.
  The majority of egg laying operations
use dry manure handling, although <
there are operations with liquid manure
handling systems. Laying hens are kept
in cages and manure drops below the
cages in both dry and liquid manure
handling systems. Most of the dry
manure operations are constructed as
high rise houses where the birds are
kept on the second floor and the manure
drops to the first floor, which is
sometimes referred to as the pit.
Ventilation flows through the house
from the roof down over the birds and
into the pit over the manure before it is
forced out through the sides of the
house. The ventilation dries the manure
as it piles up into cones. Manure can
usually be stored in high rise houses for
up to a year before requiring removal.
  Problems can occur with dry manure
storage in a high rise house when
drinking water systems are not properly
designed or maintained. 'For example,
improper design or maintenance of the
water system can result in excess water
spilling into the pit below, which raises
the moisture content of the manure,
resulting in the potential for spills and
releases of manure from the building.
  Concerns with inadequate storage or
improper design and maintenance
contribute to concerns over dry manure
systems for laying hens. As with broiler
operations, open stockpiles of litter
stored over long periods of time (e.g.,
greater than a few weeks) may
contribute to pollutant discharge from
contaminated runoff and leachate
leaving the stockpile. Laying hens
operations may also use a liquid manure
handling system.  The system is similar
to the dry manure system except that

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Federal Register/Vol. 66, No.  9/Friday, January  12,  2001/Proposed Rules
the manure drops below the cages into
a channel or shallow pit and water is
used to flush this manure to a lagoon.
  The existing regulation already
applies to laying hen and broiler
operations with 100,000 birds when a
continuous flow watering system is
used, and to 30,000 birds when a liquid
manure handling system is used. In
revising the threshold for poultry
operations, EPA evaluated several
methods for equating poultry to the
existing definition of an animal unit.
EPA considered laying hens, pullets,
broilers, and roasters separately to
reflect the differences in size, age,
production, feeding practices, housing,
waste management, manure generation,
and nutrient content of the manure.
Manure generation and pollutant
parameters considered include:
nitrogen, phosphorus, BODS, volatile
solids, and COD. Analysis of these
parameters consistently results in a
threshold of 70,000 to 140,000 birds as
being equivalent to 1,000 animal units.
EPA also considered a liveweight basis
for defining poultry. The liveweight
definition "of animal unit as used by
USDA defines 455,000 broilers and
pullets and 250,000 layers as being
representative of 1,000 animal units.
EPA data indicates that using a
liveweight basis at 1,000 AU would
exclude virtually all broiler operations
from the regulation.
  Consultations with industry indicated
EPA should evaluate the different sizes
(ages) and purposes (eggs versus meat)
of chickens separately. However, when
evaluating broilers, roasters, and other
meat-type chickens,  EPA concluded that
a given number of birds capacity
represented the same net annual
production of litter and nutrients. For*
example, a farm producing primarily
broilers would raise birds for 6-8 weeks
with a final weight of 3  to 5 pounds, a
farm producing roasters would raise
birds for 9-11 weeks with a final weight
of 6 to 8 pounds, whereas a farm
producing game hens may only keep
birds for 4-6 weeks and at a final weight
of less than 2 pounds. The housing,
production practices, waste
management, and manure nutrients and
process wastes generated in each case is
essentially the same. Layers are
typically fed less*than broilers of
equivalent size, and  are generally
maintained as a smaller chicken.
However, a laying hen is likely to be
kept for a year of egg production. The
layer is then sold or molted for several
weeks, followed by a second period of
egg production. Pullets are housed until
laying age of approximately 18 to 22
weeks. In all cases manure nutrients and
litter generated results in a threshold of
                    80,000 to 130,000 birds as being the
                    equivalent of 1,000 animal units.
                      Today's proposed NPDES and effluent
                    •guidelines requirements for poultry
                    eliminate the distinction between how
                    manure is handled and the type of
                    watering system that is used. EPA is
                    proposing this change because it
                    believes there is a need to control
                    poultry operations regardless of the
                    manure handling or watering system.
                    EPA believes that improper storage as
                    well as land application rates which
                    exceed agricultural use have contributed
                    to water, quality problems, especially in
                    areas with large concentrations of
                    poultry production. Inclusion of poultry
                    operations in the proposed NPDES
                    regulation is intended to be consistent
                    with the proposed effluent guidelines
                    regulation, discussed in section VIII of
                    today's preamble. EPA is proposing that
                    100,000 laying hens or broilers be
                    considered the equivalent of 1,000
                    animal units.
                      Consequently EPA proposes to
                    establish the threshold under the two-
                    tier alternative structure that defines
                    which operations are CAFOs at 500
                    animal units as equivalent to 50,000
                    birds. Facilities that are subject to
                    designation are those with fewer than
                    50,000 birds. This threshold would
                    address approximately 10 percent of all
                    chicken AFOs nationally and more than
                    70 percent of all manure generated by
                    chickens. On a sector specific basis, this
                    threshold would address approximately
                    28 percent of all broiler operations
                    (including'all meat-type chickens) while
                    addressing more than 70 percent of
                    manure generated by broiler operations.
                    For layers (including pullets) the .
                    threshold would address less than 5
                    percent of layer operations while
                    addressing nearly 80 .percent of manure
                    generated by layer operations. EPA
                    believes this threshold is consistent
                    with the threshold established for the
                    other livestock sectors.
                      Under this two-tier structure, today's
                    proposed changes exclude poultry
                    operations with liquid manure handling
                    systems if they have between 30,000
                    and 49,999 birds. EPA estimates this to
                    be few if any operations nationally and
                    believes these are relatively small
                    operations. EPA does not believe these
                    few operations pose a significant threat
                    to water quality even in aggregation.
                    EPA also notes that the trend in laying
                    hen operations (where liquid systems
                    may occur) has been to build new
                    operations to house large numbers of
                    animals (e.g., usually in excess of
                    100,000 birds per house), which
                    frequently employ dry manure handling
                    systems. Given the limited number  of
                    existing operations with liquid manure
handling systems and the continuing
trend toward larger operations, EPA
believes the proposed uniform threshold
of 50,000 birds is appropriate.
  Under the proposed alternative three-
tier structure, any operation with more
than 100,000 chickens is automatically
defined as a CAFO. This upper tier
reflects 4 percent of all chicken
operations. Additionally those poultry
operations with 30,000 to 100,000
chickens are defined as CAFOs-if they
meet the unacceptable conditions
presented in section VII.C. This middle
tier would address an additional 10
percent of poultry facilities. By sector
this middle tier would potentially cover
an additional 45  percent of broiler
manure and 22 percent layer manure. In
aggregate this scenario would address
14 percent of chicken operations and 86
percent of manure. See VI.A.2 for the
additional information regarding scope
of the two proposed regulatory
alternatives.
  EPA acknowledges that this threshold
pulls in a substantial  number of chicken
operations under the  definition of a
CAFO. Geographic regions with high
density of poultry production have
experienced water quality problems
related to an overabundance of
nutrients, to which the poultry industry
has contributed.  For example
northwestern Arkansas and the
Delmarva peninsula in the Mid-Atlantic
tend to have smaller poultry farms as
compared to other regions. The chicken
and turkey sectors also have higher
percentages of operations with
insufficient or no land under the control
of the AFO  on which  to apply manure.
Thus EPA believes this threshold is
appropriate to adequately control the
potential for discharges from poultry
CAFOs.
  g. How Would  Immature Animals in
the Swine and Dairy Sectors be
Counted? EPA is proposing to include
immature swine  and heifer operations
under the CAFO  definition. See
proposed § 122.23(a)(3)(i)(C) and (E). In
the proposed two-tier structure, EPA
would establish the 500 AU threshold
equivalent for defining which
operations are CAFOs as operations
with 5000 or more swine weighing 55
pounds or less, and those with fewer
than 5000 swine  under 55 pounds are
AFOs which may be designated as
CAFOs. Immature dairy cows, or
heifers, would be counted equivalent to
beef cattle; that is, the 500 AU threshold
equivalent for defining CAFOs would be
operations with 500 or more heifers, and
those with fewer than 500 could be
designated as CAFOs.
  In the proposed three-tier structure,
the 300 AU and 1,000 AU equivalents,

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                  Federal Register/Vol.  66,  No. 9/Friday, January 12. 2001/Proposed Rules
                                                                     3013
 respectively for each animal type would
 be: 3,000 head and 10,000 head for
 immature'swine; and 300 head and
 1,000 head for heifers.
   Only swine over 55 pounds and
 mature dairy cows are specifically
 included in the current definition
 (although manure and wastewater
 generated by immature animals
 confined at the same operation with
 mature animals are subject to the
 existing requirements). Immature
 animals were not a concern in the past
 because they were generally part of
 operations that included mature animals
 and, therefore, their manure was
 included in the permit requirements of
 the CAFO. However, in recent years,
 these livestock industries have become
 increasingly specialized with the
 emergence of increasing numbers of
 large stand-alone nurseries. Further,
 manure from immature animals tends to
 have higher concentrations of pathogens
 and hormones and thus poses greater
 risks to the environment and human
 health.
   Since the 1970s, the animal feeding
 industry has become more specialized,
' especially at larger operations. When
 the CAFO regulations were issued, it  -
 Was typical to house swine from birth to
 slaughter together at the same operation
 known as a farrow to finish operation.
 Although more than half of swine
 production continues to occur at farrow-
 to-finish operations, today it is common
 for swine to be raised in phased
 production systems. As described in
 section VI, specialized operations that
 only house sows and piglets until
 weaned represent the first phase, called
 farrowing. The weaned piglets are
 transferred to a nursery, either at a
 separate building or at a location remote
 from the farrowing operation for
 biosecurity concerns. The nursery
 houses the piglets until they reach about
 55 to 60 pounds, at which time they are
 transferred to another site,  the grow-
 finish facility.
    The proposed thresholds for swine are
 established on the basis of the average
 phosphorus excreted from  immature
 swine in comparison to the average
 phosphorus excreted from swine over
 55 pounds. A similar threshold would
 be obtained when evaluating live-weight
 manure generation,  nitrogen, COD and
 volatile solids (VS). See the Technical
 Development Document for more
.  details.
    Barries often remove immature heifers
 to a separate location until they reach
  maturity. These off-site operations may
  confine the heifers in a manner that is
  very similar to a beef feedlot or the
  heifers maybe placed on pasture. The
  existing CAFO definition does not
address operations that only confine
immature heifers. EPA acknowledges
that dairies may keep heifers and calves
and a few bulls on site. EPA data
indicates some of these animals are in
confinement, some are pastured, and
some moved back and forth between
confinement, open lots, and pasture.
The current CAFO definition considers
only the mature milking cows. This has
raised some concerns that many dairies
with significant numbers of immature
animals could be excluded from the
regulatory definition even though they
may generate as much manure as a dairy
with a milking herd large enough to be
a CAFO. The proportion of immature
animals maintained at dairies can vary
significantly with a high being a one to
one ratio. Industry-wide there are 0.6
immature animals for every milking
cow.
  EPA considered options for dairies
that would take into account all animals-
maintained in confinement, including
calves, bulls and heifers when
determining whether a dairy is a CAFO
or not. EPA examined two approaches
for this option, one that Would count all
animals equally and another based on
the proportion of heifers, calves, and
bulls likely to be present at the dairy*
EPA is hot proposing to adopt either of
these options.
  The milking herd is usually a constant
at a dairy, but the proportion of
immature animals can vary substantially
among dairies and even.at a given dairy
over time. Some operations maintain
their immature animals on-site, but keep
them on pasture most of the time. Some
operations keep immature  animals on-
site, and maintain them in confinement
all or most of the time. Some operations
may also have one or two bulls on-site,
which can also be kept either in
confinement or on pasture, while many
keep none on-site. Some operations do
not keep their immature animals on-site
at all, instead they place them offsite,
usually in a stand-alone heifer
operation. Because of the variety of
practices at dairies, it becomes very
difficult to estimate how many
 operations have immature animals on-
 site in confinement. EPA believes that
basing the applicability on the numbers
 of immature animals and bulls would
 make implementing the regulation more
 difficult for the permit authority and the
 CAFO operator. However,  EPA requests
 comment on this as a possible approach.
   EPA also requests comments on using
 only mature milking cows as the means
 for determining applicability of the size
 thresholds. Under the two-tier structure,
 EPA's proposed requirements for dairies
 would apply to 3 percent of the dairies
 nationally and will control 37 percent of
the CAFO manure generated by all
dairies nationally. This is proportionally
lower than other livestock sectors,
largely due to the dominance of very
small farms in the dairy industry. There,
are similar trends in the dairy industry
as in the other livestock sectors,
indicating that the number of large
operations is increasing while the
number of small farms continues to
decline. Under the three-tier structure,
EPA's proposed requirements would
apply to 6 percent of the dairies
nationally, and will control 43 percent
of all manure generated at dairy CAFOs
annually. See Section VI.A.I.
  Inclusion in the proposed NPDES
definition of immature swine and
heifers is intended to be consistent -with '
the proposed effluent guidelines
regulation, described in section VIII of
today's preamble.
  P. What Other Animal Sectors Does
Today's Proposal Affect? EPA is
proposing to lower the threshold for
defining which AFOs are CAFOs to the
equivalent of 500 AU in the horse,
sheep, lamb and duck sectors under the
two-tier structure. See proposed
§ 122.23(a)(3)(i). This action is being
taken to be consistent with the NPDES
proposed revisions for beef, dairy, swine
and poultry. Under the three-tier
structure, the existing thresholds would
remain as they are under the existing
regulation.        ,
   The animal types covered by the
NPDES program are defined in the
current regulation (Part 122 Appendix
B). The beef,  dairy, swine, poultry and
veal sectors are being addressed by both
today's effluent guidelines proposal and
today's NPDES proposal. However,
today's proposal would not revise the
effluent guidelines for any animal sector
other than beef, dairy, swine, poultry
and veal. Therefore, under today's
proposal, any facility in the horse,
sheep, lamb and duck sectors with 500
to 1,000 AU that is defined as a CAFO,
and any facility in any sector below 500
AU that is designated as, a CAFO, will
not be subject to the effluent guidelines,
but will have NPDES permits developed
on a best professional judgment (BPJ)
basis.
   Table 7-6 identifies those meeting the
proposed 500 AU threshold in the two-
tier structure. Table 7—7 identifies the
numbers of animals meeting the 300
AU, 300 AU to 1,000 AU, and the 1,000
AU thresholds in the three-tier
 structure.
   .A facility confining any other animal
 type that is not explicitly mentioned in
 the NPDES and effluent guidelines
 regulations is still subject to NPDES
 permitting requirements if it meets the
' definition of an AFO and if the permit

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 authority designates it as a CAFO on the
 basis that it is a significant contributor
 of pollution to waters of the U.S. Refer
 to VH.C.4 in today's proposal for a
 discussion of designation for AFOs.
   The economic analysis for the NPDES
 rule does not cover animal types other
 than beef, dairy, swine and poultry. EPA
 chose to analyze those animal types that
 produce the greatest amount of manure
 and wastewater in the aggregate while
 in confinement. EPA believes that most
 horses, sheep, and lambs.operations are
 not confined and therefore will not be
 subject to permitting, thus, the Agency
 expects the impacts in these sectors to
 be minimal. However, most duck
 operations probably are confined. EPA  .
 requests comments on the effect of this
  Sroposal on the horse, sheep, lamb  and
  uck sectors.
   i. How Does EPA Propose to Control
 Manure at Operations that Cease to be
 CAFOs? EPA is proposing to require
 operators of permitted CAFOs that cease
 operations to retain NPDES permits
 until the facilities are properly closed,
 i.e., no longer have the potential to
 discharge. See § 122.23(i)(3). Similarly,
 today's proposal would clarify that, if a
 facility ceases to be an active CAFO
 (e.g., it decreases the number of animals
>below the threshold-that defined it as a
 CAFO, or ceases to operate), the CAFO
 must remain permitted until all wastes
 at the facility that were generated while
 the facility was a CAFO no longer have
 the potential to reach waters of the
 United States.
   These requirements mean that if a
 permit is about to expire and the
 manure storage facility has not yet been
 properly closed, the facility would be
 required to apply for a permit renewal
 because the facility has the potential to
 discharge to waters of the U.S. until it
 is properly closed. Proper facility
 closure includes removal of water from
 lagoons and stockpiles, and proper
 disposal of wastes, which may include
 land application of manure and
 wastewater in accordance with NPDES
 permit requirements, to prevent or
 minimize discharge of pollutants to
 receiving waters.
  The existing regulations do not
 explicitly address whether a permit •
 should be allowed to expire when an
 owner or operator ceases operations.
 However, the public has expressed
 concerns about facilities that go out of
 business leaving behind lagoons,
 stockpiles and other contaminants
 unattended and unmanaged. Moreover,
 there are a number of documented
 instances of spills and breaches at
 CAFOs that have ceased operations,
 leaving behind environmental problems
 that became a public burden to resolve
                    (see, for example, report of the North
                    Carolina DENR, 1999).
                      EPA considered five options for
                    NPDES permit requirements to ensure
                    that CAFO operators provide assurances
                    for. proper closure of their facilities
                    (especially manure management
                    systems such as lagoons) in the event of
                    financial failure or other business
                    curtailment. EPA examined the costs to
                    the industry and the complexity of
                    administering such a program for all
                    options. The analyses of these options
                    are detailed in the EPA NPDES CAFO
                    Rulemaking Support Document,
                    September 26, 2000.
                      Closure Option 1 would require a
                    closure plan. The CAFO operator would
                    be required to have a written closure
                    plan detailing how the facility plans to
                    dispose of animal waste from manure
                    management facilities. The plan would
                    be submitted with the permit
                    application and be approved with the
                    permit application. The plan would
                    identify the steps necessary to perform
                    final closure of the facility, including at
                    least:
                      • A description of how each major
                    component of the manure management
                    facility (e.g., lagoons, settlement basins,
                    storage sheds) will be closed;
                      • An estimate of the maximum'
                    inventory of animal waste ever on-site,
                    accompanied with a description of how
                    the waste will be removed, transported,
                    land  applied or otherwise disposed; and
                      », A closure schedule for each
                    component of the facility along with a
                    description of other activities necessary
                    during closure (e.g., control run-off/run-
                    on, ground water monitoring if
                    necessary).
                      EPA also investigated several options
                    that would provide financial assurances
                    in the event the CAFO went out of
                    business, such as contribution to a
                    sinking fund, commercial insurance,
                    surety bond, and other common
                    commercial mechanisms. Under Closure
                    Option 2, permittees would have to
                    contribute to a sinking fund to cover
                    closure costs of facilities which abandon
                    their manure management systems. The
                    contribution could be on a per-head
                    basis, and could be levied on the
                    permitting cycle (every five years), or
                    annually. The sinking fund would be   •
                    available to cleanup any abandoned
                    facility (including those which are not
                    permitted). Data on lagoon closures in
                    North Carolina (Harrison, 1999) indicate
                    that the average cost of lagoon closure
                    for which data are available is
                    approximately $42,000. Assuming a
                    levy of $0.10 per animal, the sinking
                    fund would cover the cost of
                    approximately 50 abandonments
                    nationally per year, not accounting for
 any administrative costs associated with
 operating the funding program.
   Closure Option 3 would require
 permittees to provide financial
 assurance by one of several generally
 accepted mechanisms. Financial
 assurance options could include the
 following common mechanisms: a)
 Commercial insurance; (b) Financial
 test; (c) Guarantee; (d) Certificate of
 Deposit or designated savings account;
 (e) Letter of credit; or (f) Surety bond.
 The actual cost to the permittee would
 depend upon which financial assurance
 option was available  and implemented.
 The financial test would likely be the
 least expensive for some operations,'
 entailing documentation that the net
 worth of the CAFO operator is sufficient
 such that  it is unlikely that the facility
 will be  abandoned for financial reasons.
 The guarantee would also be
 inexpensive, consisting of a legal
 guarantee from a parent corporation or
 other party (integrator) that has
 sufficient  levels of net worth. The surety
 bond would likely be the most
 expensive, typically requiring an annual
 premium  of 0.5 to 3.0 percent of the
 value of the bond; this mechanism
 would likely be a last resort for facilities
 that could not meet the requirement of
 the other mechanisms.
  Option 4 is a combination of Options
 2 and 3. Permittees would have to
 provide financial assurance by one of
 several  generally accepted mechanisms,
 or by participating in a sinking fund.
 CAFO operators could meet closure
 requirements through the most
 economical means available for their
 operation.
  Option 5, the preferred option in
 today's  proposal, simply requires
 CAFOs  to  maintain NPDES permit
 coverage until proper closure. Under
 this option, facilities  would be required
 to maintain their NPDES permits, even
 upon curtailment of the animal feeding
 operation, for as long as the facility has
 the potential to discharge. The costs for
 this option would be  those costs
 associated with maintaining a permit.
  Today, EPA is proposing to require
 NPDES  permits to include a condition
 that imposes a duty to reapply for a
 permit unless an owner or operator has
 closed the facility such that there is no
 potential for discharges. The NPDES
 program offers legal and financial
 sanctions that are sufficient, in EPA's
 view, to ensure that operators comply
with this requirement. EPA believes that
this option would accomplish its
 objectives  and would be generally easy
and effective to implement. However,
there are concerns that it would not be  .
 effective for abandoned facilities
because, unlike some of the other

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                                                                      3015
options, no financial assurance
mechanism would be in place. EPA is
requesting comment on the practical
means of addressing the problem of
unmanaged waste from closed or
abandoned CAFOs, and what authorities
EPA could use under the CWA or other
statutes to address this problem.
  See Section VII.E.S.c of today's
proposal, which further discusses the
requirement for permit authorities to
include facility closure hi NPDES
permit special conditions.
  While EPA is today proposing to only
require ongoing permit coverage of the
former CAFO, permit authorities are
encouraged to consider including other
conditions such as those discussed
above.
  j. Applicability of the Regulations to
Operations That. Have a Direct
Hydrologic Connection to Ground
Water. Because of its relevance to
today's proposal, EPA is restating that
the Agency interprets the Clean Water
Act to apply to discharges of pollutants
from a point source via ground water
that has a direct hydrologic connection
to surface water. See proposed
§ 122.23(e). Specifically, the Agency is
proposing that all CAFOs, including
those that discharge or have the
potential to discharge CAFO wastes to
navigable waters via ground water with
a direct hydrologic connection must
apply for an NPDES permit. In addition,
the proposed effluent guidelines will
require some CAFOs to achieve zero
discharge from their production areas
including via ground water which has a
direct hydrologic connection to surface
water. Further, for CAFOs not subject to
such an effluent guideline, permit
writers would in some circumstances be
required to establish special conditions
to address such discharges. In all cases,
a permittee would have the opportunity
to provide a hydrologist's report to  rebut
the presumption that there is likely to
be a discharge from the production area
to surface waters via ground water with
a direct hydrologic  connection.
   For CAFOs that would be subject to
an effluent guideline that includes
requirements for zero discharge from the
production area to surface water via
ground water (all existing and new beef
and dairy operations, and new swine
and poultry operations, see proposed
§412.33(a), 412.35(a), and 412.45(a)),
the proposed regulations would
presume that there  is a direct hydrologic
connection to surface water. The
permittee would be required to either
achieve zero discharge from the
production area via ground water and
perform the required ground water
monitoring or provide a hydrologist's
 statement that there is no direct
connection of ground water to surface
water at the facility. See 40 CFR
412.33(a)(3), 412.35(a)(3), and
412.45(a)(3).
  For CAFOs that would be subject to
the proposed effluent guideline at
412.43 (existing swine, poultry and veal
facilities) which does not include
ground water requirements, if the
permit writer determines that the
facility is in an area with topographical
characteristics that indicate the
presence of ground water that is likely
to have a. direct hydrologic connection
to surface water and if the permit writer
determines that pollutants may be
discharged at a level which may cause
or contribute to an excursion above any
State water quality standard, the permit
writer would be required to include
special conditions to address potential
discharges via ground water. EPA is
proposing that the permittee must either
comply with those conditions or,
provide a hydrologist's statement that
the facility does not have a direct
hydrologic connection to surface water.
40 CFR 122.23(j)(6)  and (k)(5).
  If a CAFO is not subject to the Part
412 Subparts C or D effluent guideline
(e.g., because it has been  designated  as
a CAFO and is below the threshold for
applicability of those subparts; or is  a
CAFO in a sector other than beef, dairy,
swine, poultry or veal and thus is
subject to subparts A or B), then the
permit writer would be required to
decide on a case-by-case basis whether
effluent limitations (technology-based
and  water quality-based, as necessary)
should be established to address
potential discharges to surface water via
hydrologically connected ground water.
Again, the permittee could avoid or
satisfy such requirements by providing
a hydrologist's statement that there is no
direct hydrologic connection 40 CFR
122.23(k)(5).
  Legal Basis. The Clean Water Act does
not directly answer the question of
whether a discharge to surface waters
via hydrologically connected ground
water is unlawful. However, given the
broad construction  of the terms of the
CWA by the federal courts and the goals
and purposes  of the Act, the Agency
believes that while  Congress has not
spoken directly to the issue, the Act is
best interpreted to cover such
discharges. The statutory terms certainly
do not prohibit the Agency's
determination that  a discharge to
surface waters via hydrologically-
connected ground waters can be
governed by the Act, while the terms do
clearly indicate Congress' broad concern
for the integrity of the Nation's waters.
Section 301(a) of the CWA provides that
"the discharge of any pollutant [from a
point source] by any person shall be
unlawful" without an NPDES permit.
The term "discharge of a pollutant", is
defined as "any addition of a pollutant
to navigable waters from any point
source." 33 U.S.C. § 1362(12). In turn,
"navigable waters" are defined as "the
waters of the United States, including
the territorial seas." 33 U.S.C. § 1362(7).
None of these terms specifically
includes or excludes regulation of a
discharge to surface waters via
hydrologically connected ground
waters. Thus, EPA interprets the
relevant terms and definitions in the
Clean Water Act to subject the addition
of manure to nearby surface waters from
a CAFO via hydrologically connected
ground waters to regulation.
   Some sections of the CWA do directly
apply to ground water. Section 102 of
the CWA, for example, requires the
Administrator to "develop
 comprehensive programs for preventing,
reducing, or eliminating the pollution of
. the navigable waters and ground waters
 and improving the sanitary conditions
 of surface and underground waters." 33
 U.S.C. § 1252. Such references,
 however, are not significant to the
 analysis of whether Congress has
 spoken directly on the issue of
 regulating discharges via ground water
 which directly affect surface waters.
 Specific references to ground water in
 other sections of the Act may shed light
 on the question of whether Congress
 intended the NPDES program to regulate
 ground water quality. That question,
 however, is riot the same question as
 whether Congress intended to protect
 surface water from discharges which
 occur via ground water. Thus, the
 language of the CWA is ambiguous with
 respect to the specific question, but does
 not bar such regulation. Moreover, the
 Supreme Court has recognized
 Congress' intent to protect aquatic
 ecosystems through the-broad federal
 authority to control pollution embodied
 in the Federal Water Pollution Control
 Act Amendments of 1972. Section 101
 of the Act clearly states the purpose of
 the Act "to restore and maintain the
 chemical, physical, and biological
 integrity of the Nations' waters." 33
 U.S.C. § 1251(a)(l). The Supreme Court
 found that "[t]his objective incorporated
 a broad, systemic view of the goal of
 maintaining and improving water
 quality: as the House Report oh the
 legislation put it, "the word "integrity"
 * * * refers to a condition in which the
 natural structure and function of aquatic
 ecosystems [are] maintained." United
 States v. Riverside Bayview Homes, 474
 U.S. 121,132 (1985). An interpretation
 of the CWA which excludes regulation

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 of point source discharges to the waters
 of the U.S. which occur via ground
 water would, therefore, be inconsistent
 with the overall Congressional goals
 expressed in the statute.
  Federal courts have construed the
 terms of the GWA broadly (Sierra Club
 v. Colorado Refining Co., 838 F. Supp.
 1428,1431 (D.Colo. 1993) (citing
 Quivera Mining Co. v. EPA, 765 F.2d
 126,129 (10th Cir. 1985)), but have
 found the language ambiguous with
 regard to ground water and generally
 examine the legislative history of the
 Act. See e.g., Exxon v. Train, 554 F.2d
 1310,1326-1329 (reviewing legislative
 history). However, a review of the
 legislative history also is inconclusive.
 Thus, courts addressing the issue have
 reached conflicting conclusions.
  Since the language of the CWA itself
 does not directly address the issue of
 discharges to ground water which affect
 surface  water, it is proper to examine
 the statute's legislative history. Faced
 with the problem of defining the bounds
 of its regulatory authority, "an agency
 may appropriately look to the  legislative
 history  and underlying policies of its
 statutory grants of authority."  Riverside
 Bayview Homes, 474 U.S. at 132.
 However, the legislative history also
 does not address this specific issue. See
 Colorado Refining Co., 838 F. Supp. at
 1434 n.4 (noting legislative history
 inconclusive).
  In the House, Representative Les
 Aspin proposed an amendment with
 explicit ground water protections by
 adding to the definition of "discharge of
 a pollutant" the phrase "any pollutant
 to ground waters from any point
 source." Legislative History of the Water
 Pollution Control Act Amendments of
 1972,93d Cong., 1st. Sess. at 589 (1972)
 (hereinafter "Legislative History").
 While the Aspin amendment was
 defeated, that rejection does not
necessarily signal an explicit decision
by Congress to exclude even ground
water per se from the scope of the
permit program. Commentators have
suggested that provisions in the
amendment which would have deleted
 exemptions for oil and gas well
injections were the more likely cause of
the amendment's defeat. Mary Christina
Wood, Regulating Discharges into
 Groundwater: The Crucial Link in
Pollution Control Under the Clean
 Water Act, 12 Harv. Envtl. L. Rev. 569,
614 (1988); see also Legislative History
at 590-597 (during debate on the
amendment, members in support and
members in opposition focused on the
repeal of the exemption for oil and gas
injection wells).
  At the least, there is no evidence that
in rejecting the explicit extension of the
                    NPDES program to all ground water
                    Congress intended to create a ground
                    water loophole through which the
                    discharges of pollutants could flow,
                    unregulated, to surface water. Instead,
                    Congress expressed an understanding of
                    the hydrologic cycle and an intent to
                    place liability on those responsible for
                    discharges which entered the "navigable
                    waters." The Senate Report stated that
                    "[w]ater moves in hydrologic cycles and
                    it is essential that discharge of
                    pollutants be controlled at the source."
                    Legislative History at 1495. The Agency
                    has determined that discharges via
                    hydrologically connected ground water
                    impact sin-face waters and, therefore,
                    should be controlled at the source.
                      Most of the courts which have
                    addressed the question of whether the
                    CWA subjects discharges to surface
                    waters via hydrologically connected
                    ground waters to regulation have found
                    file statute ambiguous on this specific
                    question. They have then looked to the
                    legislative history for guidance.
                    McClellan Ecological Seepage Situation
                    v. Weinberger, 707 F. Supp. 1182,1194
                    (E.D. Cal. 1988), vacated (on other
                    grounds), 47 F.3d 325 (9th Cir. 1995),
                    cert,  denied, 116 S.Ct. 51 (1995); Kelley
                    v. United States, 618 F.Supp. 1103,
                    1105-06 (D.C.Mich.  1985). Even those
                    courts which have not found
                    jurisdiction have acknowledged that it
                    is a close question. Village of
                    Oconomowoc Lake v. Dayton Hudson
                    Corp., 24 F.3d 962, 966 (7th Cir. 1994),
                    cert,  denied, 513 U.S. 930 (1994). As
                    one court noted, "the inclusion of
                    groundwater with a hydrological
                    connection to surface waters has
                    troubled courts and generated a torrent
                    of conflicting commentary."  Potter v.
                    ASARCO, Civ. No. S:56CV555, slip op.
                    at 19 (D.Neb. Mar. 3,1998). The fact that
                    courts have reached  differing
                    conclusions when examining whether
                    the CWA regulates such discharges is
                    itself evidence that the statute is
                    ambiguous.
                      EPA does, not argue that the CWA
                    directly regulates ground water quality.
                    In the Agency's view, however, the
                    CWA does regulate discharges to surface
                    water which occur via ground water
                    because of a direct hydrologic
                    connection between the contaminated
                    ground water and nearby surface water.
                    EPA repeatedly has taken the position
                    that the CWA can regulate discharges to
                    surface water via ground water that is
                    hydrologically connected to surface
                    waters.
                     For example, in issuing the general
                    NPDES permit for concentrated animal
                    feeding operations ("CAFOs") in Idaho,
                    EPA stated:
   "EPA agrees that groundwater
 contamination is a concern around
 CAFO facilities. However, the Clean
 Water Act does not give EPA the
 authority to regulate groundwater
 quality through NPDES permits.
   "The only situation in which
 groundwater may be affected by the
 NPDES program is when a discharge of
 pollutants to surface waters can he
 proven to be via groundwater." 62 FR
 20177, 20178 (April 25,1997). In
 response to a comment 'that the CAFO
 general permit should not cover ground
 water, the Agency stated:
   "EPA agrees that the Clean Water Act
 .does not give EPA the authority to
 regulate groundwater quality through
 NPDES permits. However, the permit
 requirements *  * * are not intended to
 regulate groundwater. Rather, they are
 intended to protect surface waters
 which are contaminated via a
 groundwater (subsurface) connection."
 Id.
   EPA has made consistent statements
 on at least five other occasions. In the
 Preamble to the final NPDES Permit
 Application Regulations for Storm
 Water Discharges, the Agency stated:
 "this rulemaking only addresses
 discharges to waters of the United
'States, consequently discharges to
 ground waters are not covered by this
 rulemaking (unless there is. a
 hydrological connection between the
 ground water and a nearby surface
 water body."] 55 FR 47990, 47997 (Nov.
 16,1990)(emphasis added)). See also 60
 FR 44489, 44493 (August 28,1995) (in
.promulgating proposed draft CAFO
 permit, EPA stated: ''[Discharges that
 enter surface waters indirectly through
 groundwater are prohibited"); EPA,
 "Guide Manual On NPDES Regulations
 For Concentrated Animal Feeding
 Operations" at 3 (December 1995)
 ("Many discharges of pollutants from a
 point source to surface water through
 groundwater (that constitutes a direct
 hydrologic connection) also may be a
 point source discharge to waters of the
 United States.").
   In promulgating regulations
 authorizing the development of water
 quality standards under the CWA by
 Indian Tribes for their Reservations,
 EPA stated: •
   Notwithstanding the strong language
 in the legislative history of the Clean
 Water Act to the effect that the Act does
 not grant EPA authority to regulate
 pollution of ground waters, EPA and
 most courts addressing the issue have
 recognized that * * * the Act requires
 NPDES permits for discharges to
 groundwater where there is a direct
 hydrological connection between
 groundwater and surface waters. In

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                                                                           3017
 these situations, the affected ground
 waters are not considered "waters of the
 United States" but discharges to them
 are regulated because such discharges
 are effectively discharges to the directly
 connected surface waters. Amendments
 to the Water Quality Standards
 Regulations that Pertain to Standards on
 Indian Reservations, Final Rule, 56 FR
 64876, 64892 (Dec. 12,1991)(emphasis
 added).
   While some courts have not been
' persuaded that the Agency's
 pronouncements on the regulation of
 discharges to surface water via ground
 water represent a consistent Agency
 position, others have found EPA's
'. position to be clear. The Hecla Mining
 court noted that "The court in
 Oconomowoc Lake  dismissed the EPA
 statements as a collateral reference to a
: problem. It appears to this court,
 however, that the preamble explains
 EPA's policy to require NPDES permits
 for discharges which may enter surface
 water via groundwater,  as well as those
 that enter directly." Washington
 Wilderness Coalition v. Hecla Mining
 Co., 870 F.  Supp. 983, 990-91 (E.D.
 Wash. 1994), dismissed on other
 grounds, (lack of standing) per
 unpublished decision (E.D. Wash. May
 7,1997) (citing Preamble, NPDES Permit
 Regulations for Storm Water Discharges,
 55 FR 47990, 47997 (Nov. 16,1990)).
    As a legal and factual matter, EPA has
 made a determination that, in general,
 collected or channeled pollutants
 conveyed to surface waters via ground
 water can constitute a discharge subject
 to the Clean Water  Act. The
  determination of whether a particular
  discharge to surface waters via ground
 water which has a direct hydrologic
  connection is a discharge which is
  prohibited without an NPDES permit is
  a factual inquiry, like all point source
 . determinations. The time and distance
  by which a point source discharge is
  connected to surface waters via
  hydrologically connected surface waters
  will be affected by many site specific
  factors, such as geology, flow, and slope.
  Therefore, EPA is not proposing to
  establish any specific criteria beyond
  confining the scope of the regulation to
  discharges to surface water; via a
  "direct" hydrologic connection. Thus,
  EPA is proposing to make clear that a
  general hydrologic connection between
   all waters  is not sufficient to subject the
   owner or operator  of a point source to
   liability under the Clean Water Act.
   Instead, consistent with the case law,
   there must be information indicating
   that there  is a "direct" hydrologic
   connection to the surface water at issue.
   Hecla Mining, 870 F.Supp. at 990
   ("Plaintiffs must still demonstrate that
pollutants from a point source affect
surface waters of the United States. It is
not sufficient to allege groundwater
pollution, and then to assert a general
hydrological connection between all
waters. Rather, pollutants must be
traced from their source to surface
waters, in order to come within the
purview of the CWA.")
  The reasonableness of the Agency's
interpretation is supported by the fact
that the majority of courts have
determined that CWA jurisdiction may
extend to surface water discharges via
hydrologic connections.1 As the court in
  1 See e.g., Williams Pipeline Co. v. Bayer Corp.,
964 F.Supp. 1300,1319-20 (SJD.Iowa 1997)
("Because the CWA's goal is to protect the quality
of surface waters, the NPDES permit system
regulates any pollutants that enter such waters
either directly or through groundwater.");
Washington Wilderness Coalition v. Hecla Mining
Co., 870 F. Supp. 983,989-90 (E.D. Wash. 1994),
dismissed on other grounds, (lack of standing) per
unpublished decision (E.D. Wash. May 7,1997)
(finding CWA jurisdiction where pollution
discharged from mamnade ponds via seeps into soil
and ground water and, thereafter, surface waters;
and holding that, although CWA does not regulate
isolated ground water, CWA does regulate
pollutants entering navigable waters via tributary
ground waters); Friends of the Coast Forkv. Co. of
Lane, OR, Civ. No. 95-6105-TC (D. OR. January 31,
 1997) (reaching same conclusion as court in
 Washington Wilderness Coalition v. Hecla Mining
 Co., and finding hydrologically-connected ground
 waters are covered by the CWA); McCIellan
 Ecological Seepage Situation, 763 F. Supp. 431,438
 (E.D. Cal. 1989), cacated (on other grounds), 47 F.3d
 325 (9th Cir. 1995), cert, denied, 116 S.CL 51 (1995)
 (allowing plaintiff to attempt to prove at trial that
 pollutants discharged to ground water are
 subsequently discharged to surface water); and
 McCIellan Ecological Seepage Situation v.
 Weinberger, 707 F. Supp. 1182,1195-96 (E.D. Cal.
 1988), vacated (on other'grounds), 47 F.3d 325 (9th
 Cir. 1995), cert, denied, 116 S.Ct.51 (1995)
 (although NPDES permit not required for discharges
 to isolated ground water, Congress' intent to protect
 surface water may require NPDES permits for
 discharges to ground water with direct hydrological
 connection to surface waters); Friends ofSanteFe
 Co. v. LAC Minerals, Inc., 892 F. Supp. 1333,1357-
 58 (D.N.M. 1995) (although CWA does not cover
 discharges to isolated, nontributary groundwater,
 Quivira and decisions within Tenth Circuit
 demonstrating expansive construction of CWA's
 jurisdictional reach foreclose arguments that CWA
 does not regulate discharges to hydrologically-
 connected groundwater); Sierra club v. Colorado
 Refining Co., 838 F. Supp. at 1434 ("navigable
 waters" encompasses tributary groundwater and,
 therefore, allegations that defendant violated CWA
 by discharging pollutants into soils and
 groundwater, and that pollutants infiltrated creek
 via groundwater and seeps in creek bank, stated
 cause of action); and Quiviia Mining Co. v. United
 States EPA, 765 F.2d 126,130 (10th Cir. 1985), cert.
 denied, 474 U.S. 1055 (1986) (affirming EPA's
 determination that CWA permit required for
 discharges of pollutants into surface arroyos that,
 during storms, channeled rainwater both directly to
 streams and into underground aquifers that
 connected with such streams); Martin v. Kansas
 Board of Regents, 1991 U.S.Dist. LEXIS 2779
  (D.Kan. 1991) ("Groundwater. . . that is naturally
  connected to surface waters constitute 'navigable
 waters' under the Act."); see also Inland Steel Co.
  v. EPA, 901 F.2d 1419,1422-23 (7th Cir. 1990)
  ("the legal concept of navigable waters might
  include ground waters connected to surface
Potter v. ASARCO, Inc. declared, "in
light of judicial precedent, Congress"
remedial purpose, the absence of any
specific legislative intent pertaining to
hydrologically connected ground water
and the informal pronouncements of
EPA, any pollutants that enter navigable
waters, whether directly or indirectly
through a specific hydrological   .
connection, are subject to regulation by
the CWA." Slip op. at 26.
  The decisions which did not find
authority to regulate such discharges
under the CWA may, for the most part,
be distinguished. In Village of
Oconomowoc Lake v. Dayton Hudson
Corp., the Seventh Circuit held that the
CWA does not regulate ground water
per se. 24 F.3d 962 (7th Cir. 1994), cert.
denied, 513 U.S. 930 (1994). In
Oconomowoc, however, the plaintiff
only alluded to a "possibility" of a
hydrologic connection. 24 F.3d at 965.
In Kelleyv. United States, the district
court held that enforcement authority
under the CWA did not include ground
water contamination. 618 F. Supp. 1103
(W.D. Mich. 1985). The decision is not
well-reasoned, as the Kelley court
merely states—without further
elaboration—that the opinion in Exxon
v. Train, which specifically "expressed
no opinion"  on whether the CWA
regulated hydrologically connected
 ground waters, and the legislative
history "demonstrate that Congress did
 not intend the Clean Water Act to
 extend federal regulatory enforcement
 authority over groundwater
 contamination." Kelley, 618 F. Supp. at
 1107 (emphasis added). In  Umatilla, the
 court concluded that the NPDES
 program did not apply to even
 hydrologically connected ground water.
 962 F.Supp. at 1318. The court reviewed
 the legislative history and existing
 precedent on the issue, but failed to
 distinguish between the regulation of
 ground water per se and the regulation
 of discharges into waters of the United
 States which happen to occur via
 ground water. Moreover, the court failed
 to give deference to the Agency's
 interpretation of the CWA. Id. at 1319
 (finding that the Agency interpretations
 cited by the plaintiffs failed to articulate
 clear regulatory boundaries and were
 not sufficiently "comprehensive,
 definitive or formal" to deserve
 deference, but acknowledging that
 "neither the statute nor the legislative
 history absolutely prohibits an
 interpretation that the NPDES
 requirement applies to discharges of
  waters—though whether it does or not is an
  unresolved question. * * * [A] well that ended in
  such connected ground waters might be within the
  scope of the [CWA]").

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  pollutants to hydrologically-connected
  groundwater"). Today's proposal should
  provide the type of formal Agency
  interpretation that court sought. Two
  other decisions have simply adopted the
  reasoning of the Umatilla court. United
  States v. ConAgra, Inc., Case No. CV 96-
  0134-S-LMB (D. Idaho 1997); Allegheny
  Environmental Action Coalition v.
  Westinghouse, 1998 U.S. Dist. LEXIS
  1838 (W.D.Pa. 1998).
   The Agency has utilized its expertise
  in environmental science and policy to
  determine the proper scope of the CWA.
  The determination of whether the CWA
  regulates discharges to ground waters
  connected to surface waters, like the
  determination of wetlands jurisdiction,
  "ultimately involves an ecological
 between surface waters and ground
 waters, it should be left in the first
 instance to the discretion of the EPA
 and the Corps." Town of Norfolk v. U.S.
 Army Corps of Engineers, 968 F.2d
 1438,1451 (1st Cir. 1992) (citing United
 States v. Riverside BayviewHomes, Inc.,
 474 U.S. at 134). The Supreme Court,
 too, has acknowledged the difficulty of
 determining precisely where Clean
 Water Act jurisdiction lies and has held
 that an agency's scientific judgment can
 support a legal jurisdictional judgment.
 United States v. Riverside Bayview
 Homes, Inc., 474 U.S. 121,134 (1985)
 ("In view of the breadth of federal
 regulatory authority contemplated by
 the [Clean Water] Act itself and the
 inherent difficulties of defining precise
 bounds to regulable waters, the Corps'
 ecological judgment about the
 relationship between waters and their
 adjacent wetlands provides an adequate
 basis for a legal judgment that adjacent
 wetlands may be defined as waters
 under the Act.").
   The Agency has made clear the
 rationale for its construction: "the Act
 requires NPDES permits for discharges
 to groundwater where there is a direct
 hydrological connection between
 groundwater and surface waters. In
 these situations, the affected ground
 waters are not considered 'waters of the
 United States' but discharges to them
 are regulated because such discharges
 are effectively discharges to the directly
 connected surface waters."
 Amendments to the Water Quality
 Standards Regulations that Pertain to
 Standards on Indian Reservations, Final
 Rule, 56 FR 64,876, 64892 (Dec. 12,
 1991) (emphasis added). The Agency
 has taken this position because ground
 water and surface water are highly
 interdependent components of the
hydrologic cycle. The hydrologic cycle
refers to "the circulation of water among
soil, ground water, surface water, and
                    the atmosphere." U.S. Environmental
                    Protection Agency, "A Review of
                    Methods for Assessing Nonpoint Source
                    Contaminated Ground-Water Discharge
                    to Surface Water" at 3 (April 1991).
                    Thus, a hydrologic connection has been
                    defined as "the interflow and exchange
                    between surface impoundments and
                    surface water through an underground
                    corridor or groundwater." NPDES
                    General Permit and Reporting
                    Requirements for Discharges from
                    Concentrated Animal Feeding
                    Operations, EPA Region 6 Public Notice
                    of Final Permitting Decision, 58 FR
                    7610, 7635-36 (Feb. 8,1993). The
                    determination of whether a discharge to
                    ground water in a specific case
                    constitutes an illegal discharge to waters
                    of the U.S. if unpermitted is a fact
                    specific one. The general jurisdictional
                    determination by EPA that such
                    discharges can be subject to regulation
                    under the CWA is a determination that
                    involves an ecological judgment about
                    the relationship between surface waters
                    and ground waters.
                      Finally, the Supreme Court has
                    explicitly acknowledged that resolution
                    of ambiguities in agency-administered
                    statutes involves policymaking: "As
                    Chevron itself illustrates the resolution
                    of ambiguity in a statutory text is often
                    more a question of policy than of law.
                    *  *  * When Congress, through express
                    delegation or the introduction of an
                    interpretive gap in the statutory
                    structure, has  delegated policymaking to
                    an administrative agency, the extent of
                    judicial review of the agency's policy
                    determinations is limited." Paulyv.
                    Bethenergy Mines, Inc., 116 S.Ct. 2524,
                    2534 (1991). Congress established a goal
                    for the CWA "to restore and maintain
                   the chemical, physical and biological
                   integrity of the nation's waters and to
                   eliminate the discharge of pollutants
                   into the navigable waters." 33 U.S.C.
                   § 1251(a)(l). Congress also established
                   some parameters for reaching that goal,
                   but left gaps in the statutory structure.
                   One of those gaps is the issue of
                   discharges of pollutants from point
                   sources which harm navigable waters
                   but which happen to occur via ground
                   water. The Agency has chosen to fill
                   that gap by construing the statute to
                   regulate such discharges as point source
                   discharges. Given the Agency's
                   knowledge of the hydrologic cycle and
                   aquatic ecosystems, the Agency has
                   determined that when it is reasonably
                   likely that such discharges will reach
                   surface waters, the goals of the CWA can
                   only be fulfilled if those discharges are
                   regulated.
                    Determining Direct Hydrologic
                   Connection. In  recent rulemakings, EPA
                   has used various lithologic settings to
  describe areas of vulnerability to
  contamination of ground water. This
  information can serve as a guide for
  permit writers to make the initial
  determination whether or not it is
  necessary to establish special conditions
  in a CAFO permit to prevent the
  discharge of CAFO waste to surface
  water via ground water with a direct
  hydrologic connection to surface water.
   During the rulemaking processes for
  the development of the Ground Water
  Rule and the Underground Injection
  Control Class V under the Safe Drinking
  Water Act, significant stakeholder and
  Federal Advisory Committee Act
  (FACA), input was used to define
  lithologic settings that are likely to
  indicate ground water areas  sensitive to
  contamination. Areas likely to have
  such a connection are those  that have
  ground water sensitive to contamination
  and that have a likely connection to
  surface water. The Ground Water
 Proposed Rule includes language that
  describes certain types of lithologic
 settings (karst, fractured bedrock, and
 gravel) as sensitive to contamination
 and, therefore, subject to requirements
 under the rule to mitigate threats to
 human health from microbial
 pathogens. [See National Primary
 Drinking Water Regulations: Ground
 Water Rule, 65 FR 30193 (2000) (to be
 codified at 40 CFR Parts 141 and 142),
 (proposed May 10, 2000). See also
 Underground Injection Control
 Regulations for Class V Injection Wells,
 Revision; Final Rule, 64 FR 68546 (Dec.
 7,1999) (to be codified at 40 CFR Parts
 9, 144, 145, and 146). See also Executive
 Summary, NDWAC UlC/Source Water
 Program Integration Working Group
 Meeting (March 25-26, 1999). All are
 available in the rulemaking Record.]
  Under the Class V rule, a facility must
 comply with the mandates of the
 regulation if the facility has a motor
 vehicle waste disposal well (a type of
 Class V well) that is in an area that has
 been determined to be sensitive. (See
 Technical Assistance Document (TAD)
 for Delineating "Other Sensitive Ground
 Water Areas", EPA #816-R-00-016—to
 be published.) States that are
 responsible for implementing the Class
 V Rule, or in the case of Direct
 Implementation Programs, the EPA
 Regional Office, are given flexibility to
 make determinations of ground water
 sensitivity within certain guidelines.
  40 CFR 145.23(f)(12) provides items
that States are expected to consider in
 developing their other sensitive ground
water area plan, including:
  • Geologic and hydrogeologic
settings,
  • Ground water flow and occurrence,

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                  Federal  Register/Vol. 66, No. 9/Friday,  January 12, 2001 /Proposed Rules
                                                                      3019
 . • Topographic and geographic
features,
  • Depth to ground water,
  • * Significance as a drinking water
source,
  • *Prevailing land use practices, and
  • *Any other existing information
relating to the susceptibility of ground
water to contamination from Class V
injection wells.
  *The last three factors are not relevant to
this rulemaking but are specific to mandates
under the Safe Drinking Water Act to protect
current and future sources of drinking water.
  Geologic and hydrogeologic settings
considered sensitive under the Class V
Rule include areas such as karst,
fractured bedrock or other shallow/
unconsolidated aquifers. The Class V
Rule lists karst, fractured volcanics  and
unconsolidated sedimentary aquifers,
such as glacial outwash deposits and
eolian sands, as examples of aquifer
types. Under the Class V Rule, EPA
urges States to consider all aquifer types
that, based on their inherent
characteristics, are likely to be
moderately to highly sensitive. Such
 Aquifer types are those that potentially-
have high permeability, such as: all
 fractured aquifers; all porous media
 aquifers with a grain size of sand or
 larger, including not only
 unconsolidated aquifers, but sandstone
 as well; and karst aquifers.
   For more information at the regional
 level, information can be found in the
 document "Regional Assessment of
 Aquifer Vulnerability and Sensitivity in
 the Coterminous United States" [EPA/
 600/2-91/043] for state maps showing
 aquifers and portions of aquifers whose
 transmissivity makes them sensitive/
 'vulnerable. This document may be
 helpful in identifying areas where
 existing contaminants are most likely to
 spread laterally. State and federal
 'geological surveys have numerous
 geological maps and technical reports
 that can be helpful in the identification
 of areas of sensitive aquifers.  University
 geology and earth science departments
 and consulting company reports may
 also have helpful information.
   Data sources to assist permit writers
 in making sensitivity determinations
 can be acquired through many sources
 as listed above and include federal,
 state, and local data. For example,  USGS
 maps and databases such as the
 principal aquifers map, state maps,
 other programs where such assessments
 may have been completed, such as State
 Source Water Assessment Programs
 (SWAP), state Class V, or Ground Water
 Rule sensitivity determinations.
   Another potential approach to
 defining areas of ground water
sensitivity would be to define a set of
characteristics which a facility could
determine whether it met by using a set
of national, regional and/or local maps.
For instance, overburden, that is, soil
depth and type, along with depth to
water table, hydrogeologic
characteristics of the surficial aquifer,
and proximity to surface water could be
factors used to define sensitive areas for
likely ground water/surface water
connections. For example, while there is
no consistent definition or agreement as
to what could be considered "shallow,"
a depth to the water table less than, say,
six feet with sandy soils  or other
permeable soil type might indicate
ground water vulnerability. Data of this <
nature could be obtained from USDA's
Natural Resource Conservation Service
(NRCS) national soils maps, available
from the NRCS web site
(www.nhq.nrcs.usda.gov/land/index/
soils.html) or from the EPA web site
(www.epa.gov/ostwater/BASINS/
metadata/statsgo.htm\.
  Once it is determined  that the CAFO
is in a ground water sensitive area,
proximity to a surface water would
indicate a potential for the CAFO to  .
discharge to surface water via a direct
hydrological connection with ground
water. Proximity to surface water would
be  considered when there is a short
distance from the boundary of the CAFO
to the closest downstream surface water
body. Again, information of this type
could be obtained from USGS
topographic maps or state maps.
   USGS Hydrologic Landscape Regions.
Another approach for determining
whether CAFOs in a region are generally
located in areas where surface water is
likely to have hydrological connections
with ground water is by using a set of
maps under development by the U.S.
 Geological Survey (USGS). USGS is
 developing a national map of
 Hydrologic Landscape Regions that
 describe watersheds based on their
 physical characteristics, such as
 topography and lithology. These maps
 will, among other things, help to
 identify physical features in the
 landscape that are important to water
 quality such as areas across the country
 where the geohydrology is favorable for
 ground water interactions with surface
 water.
   The regions in this map will be
 delineated based on hydrologic unit
 codes (HUCs) nationwide and do not
 provide information at local scales;
 however, the maps can  provide
 supplemental information that describes
 physical features within watersheds
 where interactions between ground
 water and surface water are found.
 These areas are the most likely places
where ground water underlying CAFO's
could be discharged to nearby surface
water bodies. While EPA has not fully
assessed how this tool might be used to
determine a CAFO's potential to
discharge an excerpt of the pre-print
report is provided here for purposes of
discussion. The report describing this
tool is anticipated to be published in
Spring 2001 (Wolock, Winter, and
McMahon, in review).
  The concept of hydrologic landscapes
is based on the idea that a single, simple
physical feature is the basic building
block of all landscapes. This feature is
termed a fundamental landscape unit
and is defined as an upland adjacent to
a lowland separated by an intervening
steeper slope. Some examples of
hydrologic landscapes are as follows:
  • A landscape consisting of narrow
lowlands and uplands separated by high
and steep valley sides, characteristic of
mountainous terrain;
  • A landscape consisting of very wide
lowlands separated from  much narrower
uplands by steep valley sides,
characteristic of basiri and range
physiography and basins of interior
drainage;  or
  • A landscape consisting of narrow
lowlands separated from very broad
uplands by valley sides of various
slopes and heights, characteristic of
plateaus and-high plains.
  The hydrologic system of a
fundamental landscape unit consists of
the movement of surface water, ground
water, and atmospheric-water exchange.
 Surface water movement is controlled
by land-surface slope and surficial
 permeability; ground-water flow is a
 function of gravitational  gradients and
the hydraulic characteristics of the
 geologic framework; and atmospheric-
 water exchange primarily is determined
by climate (Winter, in review). The
 same physical and climate
 characteristics control the movement of
 water over the surface and through the
 subsurface regardless of the geographic
 location of the landscapes. For example,
 if a landscape has gentle slopes and
 low-permeability soils, then surface
 runoff will be slow and recharge to
 ground water will be limited. In
 contrast, if the .soils are permeable in a
 region of gentle slopes, then surface
 runoff may be limited but ground-water
 recharge will be high.
   The critical features used to describe
 hydrologic landscapes are land-surface
 form, geologic texture, and climate.
 Land-surface form can be used to
 quantify land-surface slopes and relief.
 Geologic texture provides estimates of
 surficial and deep subsurface
  permeability which control infiltration,
 the production of overland flow, and

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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
 ground-water flow rates. Climate
 characteristics can be used to
 approximate available water to surface
 and ground-water systems. The
 variables used to identify hydrologic
 settings were averaged within each of
 the 2,244 hydrologic cataloging units
 defined by the USGS. This degree of
 spatial averaging was coarse enough to
 smooth the underlying data but fine
 enough to separate regions from each
 other.
   For example, two Hydrological
 Landscape Regions (HLR) that are likely
 to have characteristics of ground water
 and surface water interactions with
 direct relevance to this proposed
 rulemaking would be "HLRl" and
 "HLR9". HLRl areas are characterized
 by variably wet plains having highly
 permeable surface and highly permeable
 subsurface. This landscape is 92 percent
 flat land, with 56 percent of the flat land
 in the lowlands and 37 percent in the
 uplands. Land surface and bedrock are
 highly permeable. Because of the flat
 sandy land surface, this geologic
 framework should result in little surface
 runoff, and recharge to both local and
 regional ground-water flow systems
 should be high. Therefore, ground water
 is likely to be the dominant component
 of the hydrologic system in this
 landscape. The water table is likely to
 be shallow in the lowlands, resulting in
 extensive wetlands in this part of the
 landscape.
   Major water issues in this hydrologic
 setting probably would be related to
 contamination of ground water. In the
 uplands, the contamination could affect
 regional ground-water flow systems. In
 the lowlands, the thin  unsaturated zone
' and the close interaction of ground
 water and surface water could result in
 contamination of surface water.
 Flooding probably would not be a
 problem in the uplands, but it could be
 a serious problem in the lowlands
 because of the flat landscape and
 shallow water table.
   HLR9 areas are characterized by wet
 plateaus having poorly permeable
 surface and hignly permeable
 subsurface. This landscape is 42 percent
 flat land, with 24 percent in lowlands
 and 17 percent in uplands. Land surface
 is poorly permeable and bedrock is
 highly permeable. Because of the flat
 poorly permeable land surface, this
 geologic framework should result in
 considerable surface runoff and limited
 recharge to ground water. However, the
 bedrock is largely karstic carbonate
 rock, which probably would result in a
 considerable amount of surface runoff
 entering the deep aquifer through
 sinkholes. This water could readily
 move through regional ground-water
                    flow systems. Surface runoff and
                    recharge through sinkholes are likely to
                    be the dominant component of the
                    hydrologic system in this landscape.
                    The water table is likely to be shallow
                    in the lowlands, resulting in extensive
                    wetlands in this part of the landscape.
                    Major water issues in this hydrologic
                    setting probably would be related to
                    contamination of surface water from
                    direct surface runoff, and extensive
                    contamination of ground water (and
                    ultimately surface water) because of the
                    ease of movement through the bedrock.
                    The capacity of these carbonate rocks to
                    mediate contaminants is limited.
                    Flooding could be a problem in the
                    lowlands.
                      EPA is requesting comment on how a
                    permit writer might identify CAFOs at
                    risk of discharging to surface water via
                    ground water. EPA is also requesting
                    comment on its cost estimates for the
                    permittee to have a hydrologist make
                    such a determination. EPA estimates
                    that for a typical CAFO, the full cost of
                    determining whether ground water
                    beneath the facility has a direct
                    hydrologic connection to surface water
                    would be approximately $3,000. See
                    Section X for more information on cost
                    estimates.
                      Permit requirements for facilities with
                    groundwater that has a direct hydrologic
                    connection with surface water are
                    discussed in Section VII.E.S.d below.
                      k. What Regulatory Relief is Provided
                    by Today's Proposed Rulemaking? Two-
                    tier vs. Three-tier Structure. Each of
                    EPA's proposals effect small livestock
                    and poultry businesses in different
                    ways, posing important trade-offs when
                    selecting ways to mitigate economic
                    impacts. First, by proposing to establish
                    a two-tier structure with a 500 AU
                   .threshold, EPA is proposing not to
                    automatically impose the effluent
                    guidelines requirements on operations
                    with 300 to 500 AU. By eliminating this
                    size category,  EPA estimates that about
                    10,000 smaller AFOs are relieved from
                    being defined as CAFOs, and instead
                    would only be subject to permitting if
                    designated by the permit authority due
                    to being a significant contributor of
                    pollutants.
                     A three-tier structure, by contrast,
                    only automatically defines all
                    operations over 1,000 AU as CAFOs,
                    instead of 500 AU. However, while all
                    of the 26,000 AFOs between 300 and
                    1,000 AU wouldn't be required to apply
                    for an NPDES  permit, all those
                    operations would be required to either
                    apply for a permit or to certify to the
                    permit authority that they do not meet
                    any of the conditions for being a CAFO.
                    EPA estimates that approximately
                    19,000 of these operations would have
 to change some aspect of their operaticta
 in order to avoid being permitted, and
 all 26,000 would be required to develop
 and implement a PNP. Thus, while in
 theory fewer operations could be
 permitted, in fact more small enterprises
 would incur costs under a three-tier
 scenario. Section X.J.4 provides a  -
 summary of the difference in costs
 associated with these two options; more
 detailed information is provided in
 Section 9 of the Economic Analysis.
  The three-tier structure allows States
 more flexibility to develop more
 effective non-NPDES programs to assist
 middle tier operations. The two-tier
 structure with a 500 AU threshold might
 limit access to federal funds, such as
 Section 319 nonpoint source program
 funds, for operations in the 500 to 1,000
 AU range. The detailed conditions in
 the three-tier structure, however, dp not
 meet the goal of today's proposal to
 simplify the NPDES regulation for
 CAFOs because it leaves in place the
 need for the regulated community and
 enforcement authorities to interpret a
 complicated set of conditions.
  Chicken Threshold. During
 deliberations to select a threshold for
 dry chicken operations, EPA considered
 various options for relieving small
 business impacts. Under the two-tier
 structure, EPA examined a 100,000 bird
 threshold as well as a 50,000 bird
 threshold. Although the 50,000 bird
 threshold effects many more small
 chicken operations, analysis showed
 that setting the threshold at 100,000
 birds would not be sufficiently
 environmentally protective in parts of
 the country that have experienced water
 quality degradation from the chicken
 industry. Section VII.C.2.f describes the
 relative benefits of each of these
 options. Nonetheless, because wet layer
 operations are currently regulated at
 30,000 birds, raising the threshold to
 50,000 birds will relieve some small
 businesses in this sector.
  Elimination of the mixed animal
 calculation. EPA's is further proposing
 to mitigate the effects of today's
 proposal on small businesses by
 eliminating the mixed animal
 calculation for determining which AFOs
 are CAFOs. Thus, operations with
 mixed animal types that do not meet the
 size threshold for any single livestock
 category would not be defined as a
 CAFO. EPA expects that there are few
AFOs with more than a single animal
type that would be defined as CAFOs,
since most mixed operations tend to be
smaller in size. The Agency determined
that the inclusion of mixed operations
would disproportionately burden small
businesses while resulting in little
additional environmental benefit. Since

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                                                                      3021
most mixed operations tend to be
smaller in size, this exclusion represents
important accommodations for small
business. EPA's decision not to include
smaller mixed operations is consistent
with its objective to focus on the largest
operations since these pose the greatest
potential risk to water quality and
public health given the sheer volume of
manure generated at these operations.
  Operations that handle larger herds or
flocks take on the characteristics of
being more industrial in nature, rather
than having the characteristics typically
associated with farming. These facilities
typically specialize in a particular
animal sector rather than having mixed
animal types, and often do not have an
adequate land base for agricultural use
of manure. As a result, large facilities
need to dispose of significant volumes
of manure and wastewater which have
the potential, if not properly handled, to
cause significant water quality impacts.
By comparison, smaller farms manage
fewer, animals and tend to concentrate
less manure nutrients at a single farming
location. Smaller farms tend to be less
specialized and are more diversified,
engaging in both animal and crop
production. These farms often have
sufficient cropland and fertilizer needs
to land apply manure nutrients
generated at a farm's livestock or
; poultry business for agricultural
purposes.
  For operations not defined as a CAFO,
the Permit Authority would designate
any facility  determined to be a
significant contributor of pollution to
waters of the U.S. as a CAFO, and
would consequently develop a permit
based on best professional judgement
 (BPJ).
   The estimated cost savings from
 eliminating the mixed animal
 calculation  is indeterminate due to
 limited information about operations of
 this size and also varying cost
 requirements. EPA's decision is also
 expected to simplify compliance and be
 more administratively efficient, since
 the mixed operation multiplier was
 confusing to the regulated community
 and to enforcement personnel, and did
 not cover all animal types (because
 poultry did not have an AU equivalent).
   Site-specific PNPs Rather than
 Mandated BMPs. In addition, while
 facilities that are defined or designated
 as.CAFOs would be subject to specific
 performance standards contained with
 the permit conditions, EPA's proposed
 revisions also provide flexibility to
 small businesses. In particular, the
 revised effluent guidelines and NPDES
 standards and conditions are not
 specific requirements for design,
 equipment, or work practices, but rather
allow the CAFO operator to write site-
specific Permit Nutrient Plans that
implement the permit requirements in a
manner appropriate and manageable for
that business. This will reduce impacts
to all facilities, regardless of size, by
allowing operators to choose the least
costly mix of process changes and new
control equipment that would meet the
limitations.
  Demonstration of No Potential to
Discharge. Finally, in both proposals,
operations that must apply for a permit
would have the additional opportunity
to demonstrate to the permit authority
that pollutants have not been discharged
and have no potential to discharge into
waters of the U.S. These operations
would not be issued a permit if they can
successfully demonstrate no potential to
discharge. See section VILD.3 for a
discussion of demonstrating "no
potential to discharge."
  Measures Not Being Proposed. During
the development of the CAFO
rulemaking, EPA considered regulatory
relief measures under the NPDES permit
program that are not being proposed,
including: (1) A "Good Faith Incentive,"
and (2) an-"Early Exit" provision. These
options are summarized below. More
detail is provided in the SBREFA Panel
Report (2000).
  Under'the "Good Faith Incentive,"
EPA considered incorporating an
incentive for small CAFO businesses .
(i.e., AFOs with a number of animals
below the regulatory threshold) to take
early voluntary actions in good faith to
manage manure and wastewater in
accordance with the requirements of a
nutrient management plan. In the event
that such smaller AFOs have a discharge
that would otherwise cause them to be
 designated as CAFOs, the CAFO
regulations would provide an
 opportunity for these smaller AFOs to
 address the cause of the one-time
 discharge and avoid being designated as
 CAFOs.
   Under the "Early Exit" provision,
. EPA considered a regulatory provision
 that would explicitly allow CAFOs with
 fewer animals than the regulatory
 threshold for large CAFOs to exit the
 regulatory program after five years of
 good performance. The regulations
 could allow such a smaller CAFO to exit
 the regulatory program if it
 demonstrates that it had successfully
 addressed the conditions that caused it
 to either be defined or designated as a
 CAFO.
   EPA decided not to include either of
 these provisions in the proposed
 regulations following the SBAR Panel
 consultation process. Neither small
 businesses, SBA, OMB, nor EPA
 enforcement personnel expressed
support for either of these provisions.
Also, the Early Exit provision was not
deemed to provide additional regulatory
relief over the current program, since an
operation that has been defined or
designated as a CAFO can already make
changes at the operation whereby, after
complying with the permit for the
permit's five year term, the operation
would no longer meet the definition of
a CAFO and therefore would.no longer
be required to be permitted.
  Both the regulatory relief measures "
selected and those considered but not
selected are discussed in detail in.
Chapter 9 of the Economic Analysis,
included in the Record for today's
proposed rulemaking. EPA requests
comment on the regulatory relief
measures considered but not included
in today's proposal.
3. How Does the Proposed Rule Change
the Existing Designation Criteria and
Procedure?
   In the existing regulation, an
operation in the middle tier, those with
300 AU to 1,000 AU, may either be
defined as a CAFO or designated by the
permit authority; those in the smallest
category, with fewer than 300 AU, may-
only be designated a CAFO if the facility
discharges: (1) into waters of the United
States through a man-made ditch,
flushing system, or other similar man-
made device; or (2) directly into waters
of the United States that originate
outside of the facility and pass over,
across, or through the facility or
otherwise come into direct contact with
the confined animals. The permit
authority must conduct an on-site
inspection to determine whether the
AFO is a significant  contributor of
pollutants. The two discharge criteria
have proved difficult to interpret and
 enforce, making it difficult to take
 enforcement action against dischargers.
Very few facilities have been designated
 in the past 25 years despite
 environmental concerns.
   EPA's proposals on how, and
 whether, to amend these  criteria vary
 with the alternative  structure. Under a
 two-tier structure, EPA is proposing to
 eliminate these two  criteria; under a
 three-tier structure, EPA is proposing to
 retain these two criteria.
   Under the proposed two-tier structure
 with a 500 AU threshold, or under any
 other alternative two-tier structure such
 as with a 750 AU threshold, EPA is
 proposing to eliminate the two'
 discharge criteria. Raising the NPDES
 threshold to 500 AU, 750 AU or 1,000
 AU raises a policy question for facilities
 below the selected threshold but with
 more than 300 AU. Facilities with 300
 to 1,000 AU are currently subject to

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Federal  Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
 NPDES regulation (if certain criteria are
 met). To rely entirely on designation for
 these operations could be viewed by
 some as deregulatory, because the
 designation process is a time consuming
 and resource intensive process that
 makes it difficult to redress violations.
 It could also result in the inability of
 permit authorities to take enforcement
 actions against initial discharges unless
 they are from an independent point
 source at the facility. Otherwise, the
 initial discharge can only result in
 initiation of the designation process
 itself; enforcement could only take place
 upon a subsequent discharge. Unless the
 designation process can be streamlined
 in some way to enable permit
 authorities to more efficiently address
 those who are significant contributors of
 pollutants, raising the threshold too
 high may also not be sufficiently
 protective of the environment. While
 EPA could have proposed to retain the
 two criteria for those with fewer than
 300 AU, and eliminate it only for those
 •with greater than 300 AU but below the
 regulatory threshold, EPA believes that
 this would introduce unnecessary
 complexity into this regulation.
   While eliminating the two discharge
 criteria, this proposal would retain the
 provision in the existing regulation that
 any AFO may be designated as a CAFO
 on a caserby-case basis if the NPDES
 permit authority determines that the
 facility is a significant contributor of
 pollutants to waters of the U.S. Today's
 proposal would not change the factors
 that the regulation lists as relevant to
 whether a facility is a significant
 contributor—see proposed § 122.23(b)(l)
 (listing factors such as: the size of the
 operation; the amount of wastewater
 discharged; the location of any potential
 receiving waters; means of conveyance
 of animal manure and process
 wastewater into waters of the U.S.;
 slope, vegetation, rainfall and other
 factors affecting the likelihood or
 frequency of discharge to receiving
 waters).
  This proposal also retains the existing
 requirement that the permit authority
 conduct an on-site  inspection before
 making a designation. No inspection
 would be required, however, to
 designate a facility that was  previously
 defined or designated as a CAFO,
 although the permit authority may
 chose to do one.
  Under a three-tier structure, EPA is
 proposing to retain the two discharge
 criteria used to designate an AFO with
 fewer than 300 AU as a CAFO. In this
 approach, facilities in the 300 AU to
 1,000 AU size range must meet certain
conditions for being considered a  •
CAFO, and EPA considers this to be
                    sufficiently protective of the
                    environment.
                      EPA is requesting comment on these
                    two proposals, and also requests
                    comment on three other alternatives.
                    EPA could: (1) retain the two criteria
                    even under a two-tier structure for all
                    operations below the regulatory
                    threshold; (2) retain the two criteria
                    under a two-tier structure for only for
                    those with fewer than 300 AU and
                    eliminate the two criteria for those
                    below the regulatory threshold but with
                    greater than 300 AU; or (3) eliminate the
                    criteria in the three-tier structure for
                    those with fewer than 300 AU.
                      Significant concern was raised over
                    the issue of designation during the
                    SBREFA Panel process. At the time of
                    the Panel, EPA was not considering
                    eliminating these two criteria, and SERs
                    and Panel members strongly endorsed
                    this position. At that time, EPA's was
                    focusing on a three-tier structure with
                    revised conditions as the preferred
                    option, and retaining the criteria was
                    consistent with the revisions being
                    considered. Since then, however, EPA's
                    analysis has resulted in a strong option
                    for a two-tier approach that would be
                    simpler to implement and would focus
                    on the largest operations. Once this
                    scenario became a strong candidate,
                    reconsideration of the two designation
                    criteria was introduced. EPA realizes
                    that this proposal has raised some
                    concern in the small business
                    community. However, EPA does not
                    believe that eliminating these criteria
                    will result in significantly more  small
                    operations being designated. Rather, it
                    will enable the permit authority to
                    ensure that the most egregious
                    discharges of significant quantities of
                    pollutants are addressed.
                      It is likely that few AFOs with less
                    than 300 AU are significant Contributors
                    of pollutants, and permit authorities
                    may be appropriately focusing scarce
                    resources on larger facilities. Further,
                    some also believe that it may be
                    appropriate under a two-tier structure to
                    retain the two criteria as well as  the on-
                    site inspection criterion to AFOs under
                    the regulatory threshold, e.g. with fewer
                    than 500 AU or 750 AU. SERs during
                    the SBREFA process indicated that
                    family farmers operating AFOs with
                    fewer than 1,000 AU tend to have a
                    direct interest in environmental
                    stewardship, since their livelihood (e.g.,
                    soil quality and drinking water) often
                    depends on it. They also argued that
                    EPA should not divert resources away
                    from AFOs with the greatest potential to
                    discharge—those with 1,000 AU or
                    more. EPA is soliciting comment on
                    whether to retain the designation
                    criteria for all AFOs below the
 regulatory threshold in a two-tier
 structure, and whether this option will
 be protective of the environment.
   While permit authorities have
 indicated that the requirement for an
 on-site inspection makes the
 designation process resource intensive,
 recommendations resulting from the
 SBREFA sinall business consultation
 process encouraged EPA not to remove
 the on-site inspection requirement.
 Some were concerned that EPA might
 do widespread blanket designations of
 large numbers of operations, especially
 in watersheds that have been listed
 under the CWA 303(d), Total Maximum
 Daily Load (TMDL) process. Thus, EPA
 is soliciting comment on whether to
 eliminate the requirement that the
 inspection be "on-site," perhaps by
 allowing, in lieu of on-site inspections,
 other forms of site-specific information
 gathering, such as use of monitoring
 data, fly-overs, satellite imagery, etc.
 Other parts of the NPDES program allow
 such information gathering and do not
 require inspections to be "on-site."
   If the on-site requirement were
 eliminated, the permit authority would
 still need to make a determination that
 the facility is a significant contributor of
 pollution, which might necessitate an
 on-site inspection in many cases. On the
 other hand, in watersheds that are not
 meeting water quality standards for
 nutrients, the permit authority could
 designate all AFOs as CAFOs without
 conducting individual on-site
 inspections. Even in 303(d) listed
 watersheds, however, an operator of an
 individual facility might be able to
 demonstrate in the NPDES permit
 application that it has no potential to
 discharge, and request that it be
 exempted from NPDES requirements.
   Due to the significant concerns of the
 small business community, EPA is not
 proposing at this time to eliminate the
 on-site inspection requirements, but,
 rather, EPA is soliciting comment on
 whether or not to eliminate this
 provision or to revise it to allow other
 forms of site-specific data gathering.
   Finally, EPA is proposing a technical
 correction to the designation regulatory
 language. The existing CAFO NPDES
 regulations provide for designation of an
 AFO as a CAFO upon determining that
 it is a significant contributor of
 "pollution" to the waters of the U.S. 40
 CFR 122.23(c). EPA is today proposing
 to  change the term to "pollutants."
 Elsewhere in the NPDES-regulations,
EPA uses the phrase "significant
 contributor of pollutants" for
 designation purposes. 40 CFR
 122.26(a)(l)(v). EPA is not aware of einy
reason the Agency would have used
 different terms for similar designation

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                  Federal Register/VoL  66,  No. 9/Friday, January 12, 2001/Proposed Rules
                                                                     3023
 standards, and is seeking consistency in
 this proposal. The Agency believes the
 term "pollutant" is the correct term. The
 Clean Water Act provides definitions for
 both "pollutant and "pollution" in
 Section 502, but the NPDES program of
 Section 402 focuses specifically on
 permits "for the discharge of any
 pollutant, or combination of
 pollutants." Therefore, EPA believes it
 is appropriate to establish a designation
 standard for purposes of permitting
 CAFOs based on whether a facility is a
 significant contributor of "pollutants."
 4. Designation of CAFOs by EPA in
 Approved States
   Today's proposal would explicitly
 allow the EPA Regional Administrator
 to designate an AFO as a CAFO if it
 meets the designation criteria in the
 regulations, even in States with
 approved NPDES programs. See
 proposed § 122.23(b). As described in
 the preceding section, VII.C.4, AFOs
 that have not been defined as CAFOs
 may be designated as CAFOs on a case-
 by-case basis upon determination that
 such sources are significant contributors
 of pollution to waters of the United
 States. EPA's authority to designate
 AFOs as CAFOs would be subject to the
 same criteria and limitations to which
 State designation authority is subject.
   The existing regulatory language is
 not explicit as to whether EPA has the
 authority to designate AFOs as CAFOs
 in States with approved NPDES
 programs. The current regulations state
 that "the Director" may designate AFOs
 as CAFOs. 40 CFR 122.23(c)(l). The
• existing definition of "Director" states:
 "When there is an approved State
 program, 'Director' normally means the
 State Director. In some circumstances,
 however, EPA retains the authority to
 take certain actions even where there is
 an approved State program." 40 CFR
 122.2. Today's proposal would give EPA
 the explicit authority to designate an
 AFO as a CAFO in States with approved
 programs.
   EPA does not propose to assume
 authority or jurisdiction to issue permits
; to the CAFOs that the Agency
 designates in approved NPDES States.
 That authority would remain with the
 approved State.
   EPA believes that CWA Section 501(a)
 provides the Agency with the authority
 to designate point sources subject to
' regulation under the NPDES program,
 even in States approved to administer
, the NPDES permit program. This
 interpretive authority to define point
 sources and nonpoint sources was
 recognized by the D.C. Circuit in NRDC
 v. Costle, 568 F.2d 1369,1377 (D.C. Cir.
 1977). The interpretive  authority arises
from CWA Section 501(a) when EPA
interprets the term "point source" at
CWA Section 502(14). EPA's proposal
would ensure that EPA has the same
authority to designate AFOs as CAFOs
that need a permit as the Agency has to
designate other storm water point
sources as needing a permit. See 40 CFR
122.26(a)(2)(v).
 1 EPA recognizes that many State
agencies have limited resources to
implement their NPDES programs.
States may be hesitant to designate
CAFOs because of concerns that
regulating the CAFOs will require
additional resources that could be used
for competing priorities. In light of the
increased reliance and success in
control of point sources under general
permits, however, the Agency believes
that there will be only an incremental
increase in regulatory burden due to the
designated sources.
  On August 23,1999, the Agency
proposed to provide explicit authority
for EPA to designate CAFOs in
approved States, but would have limited
such authority to the designation of
AFOs where pollutants are discharged
into  waters for which EPA establishes a
total maximum daily load or "TMDL"
and designation is necessary to .ensure
that the TMDL is achieved. 64 FR
46058, 46088 (August 23,1999). EPA
received comments both supporting and
opposing the proposal. In promulgating
the final TMDL rule, however, the
Agency did not take final action on the
proposed changes applicable to CAFOs,
65 FR 43586, 43648 (July 13, 2000),
deciding instead to take action in this
proposed rulemaking.
  Today's proposal is intended to help
ensure nationally consistent application
of the provisions for designating CAFOs
and  is not focusing specifically at AFOs
in impaired watersheds.
Implementation of the current rule in
States with NPDES authorized programs
has varied greatly from State to State,
with several States choosing to  .
implement non-NPDES State programs
rather than a federally enforceable
NPDES program. Public concerns have
also been raised about lack of access to
State non-NPDES CAFO programs.
While several  of today's proposed
revisions would help to correct these.
 disparities, EPA is concerned that there
may be instances of significant
 discharges from AFOs that may not be
addressed by State programs, and that
are not being required to comply with
the same standards and requirements
 expected of all AFOs. As part of their
 approved programs, States should
 designate AFOs that are significant
 sources of pollutants. EPA would have
the authority to designate AFOs as
CAFOs, should that be necessary.
  The Agency invites comment on this
proposal.
5. Co-permitting Entities That Exert
Substantial Operational Control Over a
CAFO
  EPA is proposing that permit
authorities co-permit entities that
exercise substantial operational control
over CAFOs along with the owner/
operator of the facility. See proposed
§ 122.23(a)(5) and (i)(4). While the
permit authority currently may deem
such entities to be "operators" under
the Clean Water Act and require them
to be permitted under existing legal
requirements, today's proposal includes
changes to the regulations to identify
the circumstances under which co-
permitting is required and how permit
authorities are expected to implement
the requirements. Because the existing
definition of "operator" in 122.2
generally already encompasses
operators who exercise substantial
operational control, the Agency is
seeking comment on whether this
additional definition [or provision] is
necessary.
  For other categories of discharges,
EPA's regulations states that
contributors to a discharge "may" be co-
permittees. See 40 CFR § 122.44(m).
§ 122.44(m) addresses the situation in
which the co-permittees operate distinct
sources and a privately owned treatment
works  is the owner of the ultimate point
source discharge.  In that context, EPA
deemed it appropriate to give the permit
writer the discretion to permit only the
privately owned treatment works or the
distinct sources, or both, depending on
the level of control each exercises over
the pollutants. In the context of CAFOs,
however,  the co-permittees both control
some aspects of operations at the point
source. Therefore, EPA is proposing that
they must either be co-permittees or
each must hold a separate permit.
  Processor/Producer Relationship. As
discussed below, proposed
§ 122.23(a)(5) is intended, at a
minimum, to require permit authorities
to hold certain entities that exercise
substantial operational control over
other entities jointly responsible for the
proper disposition of manure generated
at the CAFO. While under today's
proposal a permit authority could
require an entity that has substantial
operational control over a CAFO to be
jointly responsible for all of the CAFO's
NPDES permit requirements, the
proposal would allow the permit
authority to allocate individual
responsibility for various activities to
any of the co-permittees. The proposed

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rule would specify, however, that the
proper disposition of manure must
remain the joint responsibility of all the
entities covered by the permit.
  As discussed in more detail in section
IV.C. of this preamble, among the major
trends in livestock and poultry
production are closer linkages between
animal feeding operations and
processing firms. Increasingly,
businesses such as slaughtering
facilities and meat packing plants and
some integrated food manufacturing
facilities are contracting out the raising
or finishing production phase to a
CAFO. Oftentimes, production contracts
are used in which a contractor (such as
a processing firm, feed mill, or other
animal feeding operation) retains
ownership of the animals and/or
exercises substantial operational control
over the type of production practices
used at the CAFO. More information on
the trends in animal agriculture and the
evolving contractual relationships
between producer and processors is
presented in section IV.C of this
preamble.
  Use of production contracts varies by
sector. Production contracting
dominates U.S. broiler and turkey
production, accounting for 98 percent of
annual broiler production and 70
percent of turkey production. About 40
percent of all eggs produced annually
are under a production contract
arrangement. Production contracting in
the hog sector still accounts for a
relatively small share of production
(about 30 percent of hog production in
1997), but use is rising, especially in
some regions. Production contracts are
uncommon at beef and dairy operations,
although they are used by some
operations to raise replacement herd or
to finish animals prior to slaughter.
Additional detail on the use of
production contracts in these sectors is
provided in section VI.
  Although farmers and ranchers have
long used contracts to market
agricultural commodities, increased use
of production contracts is changing the
organizational structure of agriculture
and is raising policy concerns regarding
who is responsible for ensuring that
manure and wastewater is contained on-
site and who should pay for
environmental improvements at a
production facility. As a practical
matter, however, regulatory authorities
have limited ability to influence who
pays for environmental compliance,
since the division of costs and
operational responsibilities is
determined by private contracts, not
regulation.
  In addition, there is also evidence that
the role of the producer-processor
                    relationship may influence where
                    animal production facilities become
                    concentrated, since animal feeding
                    operations tend to locate in close
                    proximity to feed and meat packing
                    plants. This trend niay be increasing the
                    potential that excess manure nutrients
                    beyond the need  for crop fertilizer are
                    becoming concentrated in particular
                    geographic areas, thus raising the
                    potential for increased environmental
                    pressure in those areas. To  further
                    examine this possibility, EPA conducted
                    an analysis of the correlation between
                    areas of the country where there is a
                    concentration of excess manure
                    generated by animal production
                    operations and a  concentration of meat
                    packing and poultry slaughtering
                    facilities. This analysis concludes that
                    in some areas of the country there is a
                    strong correlation between  areas of
                    excess manure concentrations and areas
                    where there is a large number of
                    processing plants. More information on
                    this analysis is provided in section
                    IV.C.4 of this preamble.
                      Substantial Operational Control as
                    Basis for Co-Permitting. Today's
                    proposal would clarify that all entities
                    that exercise substantial operational
                    control over a CAFO are subject to
                    NPDES permitting requirements as an
                    "operator" of the facility. EPA's
                    regulations define an owner or operator
                    as "the owner or  operator of any 'facility
                    or activity' subject to regulation under
                    the NPDES program." 40 CFR §  122.2.
                    This definition does not provide further
                    detail to interpret the term, and  the
                    Agency looks for  guidance in the
                    definitions of the term in other sections
                    of the statute: "The  term 'owner or
                    operator' means any person who owns,
                    leases, operates, controls, or supervises
                    a source." CWA § 306(a)(4)  (emphasis
                    added).
                      Case law defining the term "operator"
                    is sparse, but courts generally have
                    concluded that through the inclusion of
                    the terms owner and operator: "Liability
                    under the CWA is predicated on either
                    (1) performance of the work, or (2)
                    responsibility for or control over the
                    work." U.S. v. Sargent County Water
                    Resources Dist, 876 F.Supp 1081,1088
                    (N.D. 1992). See also, U.S. v. Lambert,
                    915 F.Supp. 797,  802 (S.D.WVa. 1996)
                    ("The.Clean Water Act imposes  liability
                    both on the party who actually
                    performed the work and on the party
                    with responsibility for or control over
                    performance of the work."); U.S. v.
                    Board of Trustees ofFla. Keys
                    Community College, 531 F.Supp. 267,
                    274 (S.D.Fla. 1981). Thus, under the
                    existing regulation and existing  case
                    law, integrators which are responsible
                    for or control the  performance of the
work at individual CAFOs may be
subject to the CWA as an operator of the
CAFO. With today's proposal, EPA is
identifying some factors which the
Agen.cy believes indicate that the
integrator has sufficient operational
control over the CAFO to be considered
an "operator" for purposes of the CWA.
  Whether an entity exercises
substantial operational control over the
facility woulji depend on the
circumstances in each case. The
proposed regulation lists factors
relevant to  "substantial operational
control," which would include (but riot
be limited to) whether the entity: (1)
Directs the  activity of persons working
at the CAFO either through a contract or
direct supervision of, or on-site
participation in, activities at the facility;
(2) owns the animals; or (3) specifies
how the animals are grown, fed, or
medicated. EPA is aware that many
integrator contracts may not provide for
direct integrator responsibility for
manure management and disposal. EPA
believes, however, that the proposed
factors will identify integrators who
exercise such pervasive control over a
facility that they are, for CWA purposes,
co-operators of the CAFO.
  This is a representative list of factors
that should be considered in
determining whether a co-permit is
appropriate, but States should develop
additional factors as needed to address
their specific needs and circumstances.
The greater the degree to which one or
more of these or other factors is present,
the more likely that the entity is     ,
exercising substantial operational
control and, thus, the more important it
becomes to co-permit the entity. For
example, the fact that a processor
required its contract grower to purchase
and feed its animals feed from a specific
source could be relevant for evaluating
operational control. EPA will be
available to assist NPDES permit
authorities in making case-specific
determinations of whether an entity is
exerting control such that it should be
co-permitted. EPA is also taking
comment on whether there are
additional factors which should be
included in the regulation. EPA also
requests comment on whether degree of
participation in decisions affecting
manure management and disposal is
one of the factors which should be
considered.
  EPA is soliciting comment on .
whether, alternatively, the fact .that an
entity owns the animals that are being
raised in a CAFO should be sufficient to
require the  entity to be a joint permittee
as a owner. EPA believes that ownership
of the animals establishes an ownership
interest in the pollutant generating

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                                                                      3025
activity at the CAFO that is sufficient to
hold the owner of the animals
responsible for the discharge of
pollutants from the CAFO.
  In non-CAFO parts of the.NPDES
regulations, the operator rather than the
owner is generally the NPDES permit
holder. One reason an owner is not
required to get a permit is illustrated.by
an owner who has leased a factory.
When an owner leases a factory to the
lessee-operator, the owner gives up its
control over the pollution-producing
activities. The owner of animals at a
feedlot, on the other hand, maintains all
current interests in the animal and is
merely paying the contract grower to
raise the animals for the owner. It is the
owner's animals that generate most of
the manure and wastewater that is
created at a CAFO. Therefore, EPA
believes that ownership of the animals
may be sufficient to create responsibility
for ensuring that their wastes are
properly disposed of. This may be
particularly true where manure must be
sent off-site from the CAFO in order to
be properly disposed of.
  EPA has previously identified
situations where the owner should be
the NPDES permittee rather than, or in
addition to, the contract operator. In the
context of municipal wastewater
treatment plants, EPA has recognized
that the municipal owner rather than
the contract operator may be the proper
NPDES permittee where the owner
maintains some control over the plant.
  If EPA selects this option, it might
also clarify that ownership could be
determined by factors other than
outright title to the animals. This would
prevent integrators from modifying their
contracts so that they do not own the
animals outright. EPA could develop
factors for determining ownership such
as the existence of an agreement to
purchase the animals at a fixed price
together with the integrator accepting
the risk of loss of the animals prior to
 sale. EPA solicits comments on whether
 such criteria are necessary and, if so,
what appropriate criteria would be.
   Implementation of Co-Permitting. All
 permittees would be held jointly
 responsible for ensuring that manure
 production in excess of what can be
 properly managed on-site is handled in
 an environmentally appropriate manner.
 The effluent guidelines proposes to
 require a number of land application
 practices that will limit the amount of
 CAFO manure that can be applied to a
 CAFO's land application areas. If the
 CAFO has generated manure in excess
 of the amount which can be applied
 consistent with its NPDES permit, the
 proposed NPDES regulations impose a
 number of requirements on co-
permittees, described in VII.D.4. See
proposed § 122.23(j)(4). The co-
permittees could also transfer their
excess manure to a facility to package it
is as commercial fertilizer, to an
incinerator or other centralized
treatment, to be transformed into a
value-added product, or to any other
operation that would not land apply the
manure. EPA is proposing that manure
that must leave the CAFO in order to be
properly managed not be considered .
within the unique control of any of the
entities with substantial operational
control over the CAFO. In fact, an
integrator that owns the animals at a
number of CAFOs in an area which are
producing manure in such volumes that
it cannot be properly land applied may
be in a unique position to be able to
develop innovative means of
compliance with the permit limits.
Today's proposal would specify that the
disposition of excess manure would
remain the joint responsibility of all
permit holders. See proposed
§ 122.23(i)(9). Integrators would thereby
be encouraged to ensure compliance
with NPDES permits in a number of
ways, including: (a) establishing a
corporate environmental program that
ensures that contracts have sound
environmental requirements for the
CAFOs; (b) ensuring that contractors
have the necessary infrastructure in
place to properly manage manure; and
 (c) developing and implementing a
program that ensures proper.
management and/or disposal of excess
manure. The proposed requirement will
 give integrators a strong incentive to
. ensure that their contract producers
 comply with permit requirements and
 subject them to potential liability if they
 do not. Integrators could also establish
 facilities to which GAFOs in the area
 could transfer their excess manure. EPA
 is further proposing to require co-
 permitted entities to assume
 responsibility for manure generated at
 their contract operations when the
 manure is transferred off-site.
   EPA believes that integrators will
 want to make good faith efforts to take
 appropriate steps to address the adverse
 environmental impacts associated with
 their business. EPA is soliciting
 comments on how to structure the co-
 permitting provisions of this rulemaking
 to achieve the intended environmental
 outcome without causing negative
 impacts on growers.
   EPA also believes the proposal
 contains sufficient flexibility for permit
 authorities to develop  creative, and
 streamlined, approaches to co-
 permitting. For example, a State might
 want to develop an NPDES general
 permit in collaboration with a single
integrator or, alternatively, with all
integrators in a geographic region (e.g.,
statewide, watershed, etc.). Such a
general permit might require integrators
to assume responsibility for ensuring
that their contractors engage in proper
management practices for excess
manure. As a condition of the NPDES
general permit, the integrator could be
obligated to fulfill its commitment or to
assume responsibility for violations by
its growers.
  The proposed regulations would
provide that a person is an "operator"
when "the Director determines" that the
person exercises substantial operational
control over the CAFO. EPA also
considered whether to delete the  •
reference to a determination by the
Director, so that any person who
exercised such control over a CAFO
would be an operator without the need
for a determination by the Director. If
EPA were to eliminate the need for a
determination before such a person may
be an "operator," persons who may
meet this definition would be less
certain in some cases as to whether they
do  in fact meet it. On the other hand,
if EPA retains the need for a
determination by the Director, then
because of resource shortages or for
other reasons, EPA or the State might
not be able to make these
determinations in a timely way, or
might not make them at all in some
cases. These persons would therefore
inappropriately be able to avoid liability
even though they are exercising
substantial operational control of a
CAFO. Accordingly, EPA requests
comments on whether the final rule
should retain the need for a
determination by the Director of
substantial operational control. Finally,
EPA solicits comment on whether to
provide that, in authorized States, either
the Director or EPA may make the
determination of substantial operational
control.                    '    .  '    .
  Additional Issues Associated With Co-
Permitting. The option of co-permitting
integrators was discussed extensively by
small entity representatives (SERs) and
by the Small Business Advocacy Review
Panel during the SBREFA outreach
process. The SERs included both
 independent and contract producers. A
 majority of SERs expressed opposition
 to  such an approach. They  were
 concerned that co-permitting could
 decrease the operator's leverage in
 contract negotiations with the corporate
 entity, increase corporate pressure on
 operators to indemnify corporate
 entities against potential liability for
 non-compliance on the part of the
 operator, encourage corporate entities  to
 interfere in the operational management

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 of the feedlot in order to protect against
 such liability, provide an additional
 pretext for corporate entities to
 terminate a contract when it was to their
 financial advantage to do so, restrict the
 freedom of operators to change
 integrators, and generally decrease the
 profits of the operator. These SERs were
 not convinced that co-permitting would
 result in any benefit to the environment,
 given that the operator generally
 controls those aspects of a feedlot's
 operations related to discharge, nor
 were they convinced that such an
 approach would result in additional
 corporate resources being directed
 toward environmental compliance,
 given the integrator's ability to pass on
 any additional costs it might incur as a
 result of co-permitting to the operator. A
 few SERs, who were not themselves
 involved in a contractual relationship
 with a larger corporate entity, favored
 co-permitting as a way of either leveling
 the playing field between contact and
 independent operators, or extracting
 additional compliance resources from
 corporate entities. Despite general
 concern over co-permitting due to the
 economic implications for the
 contractor, several SERs voiced their
 support for placing shared
 responsibility for  the manure on the
 integrators, especially in the swine
 sector.
  The Panel did not reach consensus on
 the issue of co-permitting. On the one
 hand, the Panel shared the SER's
 concern that co-permitting not serve as
 a vehicle through which the bargaining
 power and profits of small contract
 growers are further constrained with
 little environmental benefit. On the
 other, the Panel believed that there is a
 potential for environmental benefits
 from co-permitting. For example, the
 Panel noted (as discussed above), that
 co-permitted integrators may be able to
 coordinate manure management for
 growers in a given geographic area by
 providing centralized treatment, storage,
 and distribution facilities, though the
 Panel also pointed out that this could
 happen anyway through market
 mechanisms without co-permitting if it
 resulted in overall cost savings. In fact,
 the Agency is aware of situations where
 integrators do currently provide such '
 services through their production
 contracts. The Panel also noted that co-
 permitting could motivate corporate
 entities to oversee environmental
 compliance of their contract growers, in
 order to protect themselves from
potential liability, thus providing an
 additional layer of environmental
oversight.
  The Panel also expressed concern that
any co-permitting requirements may
                    entail additional costs, and that co-
                    permitting can not prevent these costs
                    from being passed on to small operators,
                    to the extent that corporate entities
                    enjoy a bargaining advantage during
                    contract negotiations. The Panel thus
                    recommended that EPA carefully
                    consider whether the potential benefits
                    from co-permitting warrant the costs,
                    particularly in light of the potential
                    shifting of these costs from corporate
                    entities to contract growers. The Panel
                    further recommended that if EPA does
                    propose any form of co-permitting, it
                    address in the preamble both the
                    environmental benefits and any
                    economic impacts on small entities that
                    may result and request comment on its
                    approach.
                      As discussed in Section VI, EPA
                    estimates that 94 meat packing plants
                    that slaughter hogs and 270 poultry
                    processing facilities may be subject to
                    the proposed co-permitting
                    requirements. EPA expects that no meat
                    packing or processing facilities in the
                    cattle and dairy sectors will be subject
                    to the proposed co-permitting
                    requirements. Reasons for this
                    assumption are summarized in Section
                    VI of this preamble. Additional
                    information is provided in Section 2 of
                    the Economic Analysis. EPA is seeking
                    comment on this assumption as part of
                    today's notice. •
                      EPA did not precisely estimate the
                    costs and impacts that would accrue to
                    individual co-permittees. Information
                    on contractual relationships between
                    contract growers and processing firms is
                    proprietary and EPA does not have the
                    necessary market information and data
                    to conduct such an analysis. Market
                    information is not available on the
                    number and location of firms that
                    contract out the raising of animals to
                    CAFOs and the number and location of
                    contract growers, and the share of
                    production, that raise animals under a
                    production contract. EPA also does not
                    have data on the exact terms of the
                    contractual agreements between
                    processors and CAFOs to assess when a
                    processor would be subject to the
                    proposed co-permitting requirements,
                    •nor does EPA have financial data for
                    processing firms or contract growers
                    that utilize production contracts.
                      EPA, however, believes that the
                    framework used to estimate costs to
                    CAFO does provide a means to evaluate
                    the possible upper bound of costs that
                    could accrue to processing facilities in
                    those industries where production
                    contracts are more widely utilized and
                    where EPA believes the proposed co-
                    permitting requirements may affect
                    processors. The details of this analysis
                    are provided in Section X..F.2. Based on
the results of this analysis, EPA
estimates that the range of potential
annual costs to hog processors is $135
million to $306 million ($1999, pre-tax).
EPA estimates that the range of potential
annual costs to broiler processors as $34
million to $117 million. EPA is
soliciting comment on this approach.
  This approach does not assume any
addition to the total costs of the rule as
a result of co-permitting, yet it does not
assume that there will be a cost savings
to contract growers as result of a
contractual arrangement with a
processing firm. This approach merely
attempts to quantify the potential
magnitude of costs that could accrue to
processors that may be affected by the
co-permitting requirements. Due to lack
of information and data, EPA has not
analyzed the effect of relative market
power between the contract grower and
the integrator on the distribution of
costs, nor the potential for additional
costs to be imposed by the integrator's
need to take steps to protect itself
against liability and perhaps to
indemnify itself against such liability
through its production contracts. EPA
has also not specifically analyzed the
environmental effects of co-permitting.
  EPA recognizes that some industry
representatives do not support
assumptions of cost passttirough from
contract producers to integrators, as also
noted by many small entity
representatives during the SBREFA
outreach process as well as by members
of the SBAR Panel. These commenters
have, noted that integrators have a
bargaining advantage in negotiating
contracts, which may ultimately allow
them to force producers to incur all
compliance costs as well as allow them
to pass any additional costs down to
growers that may be incurred by the,
processing, firm. EPA has conducted an
extensive review of the agricultural
literature on market power in each of
the livestock and poultry sectors and
concluded that there is little evidence to
suggest that increased production costs
would be prevented from being passed
on through the market levels. This
information is provided in the docket.
  EPA requests comments on its cost
passthrough assumptions in general and
as they relate to the analysis of
processor level impacts under the
proposed co-permitting requirements.
EPA will give full consideration to all
comments as it decides whether to
include the proposed requirement for
co-permitting of integrators in the final
rule, or alternately whether to continue
to allow this decision to be made on a
case-by-case basis by local permit
writers. Several other alternatives to co-
permitting are discussed below. EPA

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                                                                     3027
 also requests comment on how to
 structure the co-permitting provisions of
 the rule making to achieve the intended
 environmental outcome without causing
 negative Impacts on growers, should it
 decide to finalize them.
   Alternatives to Co-Permitting. EPA
 also considered alternative approaches
 under which EPA would waive the co-
: permitting requirement for States and
, processors that implement effective
 programs for managing excess manure
 and nutrients. One such approach
 would require the disposition of manure
 that is transported off-site to remain the
 joint responsibility of the processor and
 other permit holders, unless an
 enforceable state program controls.the
 off-site land application of manure. For
 example, if the State program addressed
 the off-site land application of manure
 with PNP development and
 implementation requirements that are
 equivalent to the requirements in 40
 CFR412.13(b)(b) and 122.23(j)(2), it
 would not be necessary to permit the
 processor in order to ensure the
 implementation of those requirements.
   Another approach would be based on
 whether the processor has developed an
 approved Environmental Management
 System (EMS) that is implemented by
 all of its contract producers and
• regularly audited by an independent
 third party. EPA anticipates that the
 alternative program would be designed
• to achieve superior environmental and
 public health outcomes by addressing
 factors beyond those required in this
 proposed regulation, such as odor,
 pests, etc. The following section
 describes the principles of such a
 system.
   Environmental Management System
 as Alternative to  Co-Permitting. An
 increasing number of organizations, in
 both the private and public sector, are
 using environmental management
 systems (EMS) as a tool to help them not
 only comply with environmental legal
 requirements, but also address a full
 range of significant environmental
 impacts, many of which are not
 regulated. Environmental management
 systems include a series of formal
, procedures, practices, and policies that
 allow an organization to continually
 assess its impacts on the environment
 and take steps to reduce these impacts
 over time, providing an opportunity and
 mechanism for continuous
! improvement. EMSs do not replace the
 need for regulatory requirements, but
: can complement them and-help
 organizations improve their overall
 environmental performance. EPA
 supports the adoption of EMSs that can
 help organizations improve their
 compliance and overall performance
 and is working with a number of
 industries to help them adopt industry-
 wide EMS programs.
   Under this alternative, EPA would not
 require a processor to be co-permitted
 with their producers if the processor has
 developed, in conjunction with its
 contract producers, an EMS program
 that is approved by the permit authority
 and EPA, including opportunities for
 review and comment by EPA and the
 public. The EMS would identify the
 environmental planning and oversight
 systems, and critical management
 practices expected to be implemented
 by all of the processors' contract
 growers. Independent third-party
. auditors annually would verify effective
 implementation of the EMS to the
 permit authority and integrator. If a
 processor agreed to implement such a
 program, and then one or more of its
 contract producers failed to meet these  ,
 requirements, the processor would
 remove animals from the contract
 producers farm, in a time and manner
 as defined in the approved EMS, and
 not supply additional animals until the
 contract producer is  certified as being in
 compliance with the EMS by the third
 party auditor. Once the animals have
 been removed, processors would not
 continue contractual relationships with
 producers not capable or willing to meet
 the minimum requirements of the EMS.
 Processors who  fail the independent
 audit would be required to apply for an
 NPDES permit or be  included as a co-
 permittee on contract producers'
 permits.
   Each permitted facility's EMS would
 also require that programs be in place to
 ensure that it remained in compliance
 with its NPDES  permit (if a permitted
 facility). For all contractors, the EMS
 would address all activities that could
 have a significant impact on the
 environment, including activities not
 subject to this proposed regulations.
 These best management practices could
 be adapted to meet the particular needs
 of individual States, as appropriate.
   To ensure consistency, contract
 growers and the processor would be
 required to be annually audited by an
 independent third party. The permit
 authority would be expected to develop
 criteria for the audit, including what
 constitutes acceptable implementation
 of the EMS by both contract producers
 and the processor. Such an EMS would
 require contract producers to comply
 with their NPDES permit (if a permitted
 facility) and to implement the terms of
. the EMS that address manure
 management as well as other
 unregulated impacts like odor, pests,
 etc. Contract producers would need to
 employ specific Best Management
Practices (BMPs) when addressing
unregulated impacts and maintain
specific records on their use. BMPs
could be adapted to meet the needs of
a particular state or region.
  The EMS would be required to be
consistent with guidance developed by
the processor and approved by the
permit authority and EPA. Processors
would assume responsibility for
developing, in conjunction with
contract producers, the proposed EMS
as well as the proposed third party
auditing guidance, which would be
subject to approval by the permit
authority and EPA. Further, the
processors would facilitate
implementation by their producers
through training and technical
assistance.
  Each facility's EMS would be required
to successfully complete an audit
conducted by an independent third
party organization approved by the
permit authority. Facilities would also
be subject to annual follow up audits
designed to determine if the EMS was
in place and being adequately
implemented.  Contractors would not
continue contractual relationships with
producers that did not remain in
compliance and did not continue to
adequately implement their EMSs, as
determined by annual third party
follow-up audits.
  Each processor would be required to
seek input from local stakeholders as it
developed and implemented its EMS.
Further, information about EMS
implementation, including audit results,
would be publicly available. _
   Because geographic areas tend to be
dominated by few processors, contract
growers tend to have limited choice in.
selecting with whom to have a
production contract. Thus, EPA expects
that processors would provide economic
and technical  assistance to help contract
producers implement the EMS.
   EPA sees potential benefits to this
type of approach. Besides giving
processors an  incentive to develop
regional approaches to managing excess
manure nutrients from CAFO generated
manure, it would involve the processors
in ensuring that permittees meet their
permit requirements, thus relieving
burden on the resources of permit
authorities and EPA. Further, an EMS
goes beyond what NPDES requires, in
that it addresses issues beyond the
scope of this rulemaking, such as odor,
pests, etc., and, most important, it will
address manure generated by all CAFOs
as well as all AFOs under contract with
the processors. Finally, this approach
will provide local stakeholders with
important information about the
operations of producers and give these

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stakeholders meaningful opportunities
to provide input to the facility on its
operations throughout the permitting
and EMS development process.
  On the other hand, an EMS approach
could be more difficult to administer
and enforce. Some also question
whether it would be appropriate to
impose the requirements of an EMS on
independent growers or AFO operators
who trade with the processors, but who
are not subject to this regulation.
Further, it could be a concern that a
producer might, seemingly arbitrarily,
refuse resources to assist with
implementing the EMS, and then
subsequently withholding animals from
the grower and effectively terminating
the contract.
  EPA solicits comment on whether
EPA should provide an option for States
to develop an alternative program for
addressing excess manure in lieu of
requiring co-permitting. EPA also
requests comment on the EMS concept
described in detail in this proposal.
6. How Does EPA Propose To Regulate
Point Source Discharges at AFOs That
AreNotCAFOs?
  EPA is proposing to clarify in today's
proposed rulemaking that all point
source discharges from AFOs are
covered by the NPDES regulations even
if the facility is not a CAFO (except for
certain discharges composed entirely of
storm water, as discussed below). See
proposed § 122.23(g).
  The definition ofpoint source in the
CWA and regulations lists both discrete
conveyances (such as pipes and ditches)
and CAPOs. CWA § 502(14); 40 CFR
122.2. EPA wants to confirm as
explicitly as possible that the NPDES
regulatory program applies to both types
of discharges. Thus, where an AFO is
not a CAFO (either because it has not
met the definition criteria or has not
been designated) discharges from the
AFO are still regulated as point source
discharges under the NPDES program if
the discharge is through a discrete
conveyance that would qualify itself as
a point source. An AFO is not excluded
from the NPDES regulatory program
altogether simply because it is not a
CAFO. That is, if an AFO has a point
source discharge through a pipe, ditch,
or any other type of discernible,
confined and discrete conveyance, it is
subject to NPDES requirements just the
same as any other facility that has a
similar point source discharge and that
is not an AFO.
  Today's proposal would clarify that,
even though an AFO is not a CAFO, an
AFO may nevertheless require an
NPDES permit due to discharges from a
point source at the facility. See
                    proposed § 122.23(g). More specifically,
                    under existing regulation and today's
                    proposal, an AFO may be subject to
                    regulation under the Clean Water Act in
                    any of the following ways:
                      (1) Non-storm water discharges. A
                    non-storm water discharge of pollutants
                    from a point source, such as a ditch, at
                    the production area or land application
                    area of an AFO, into waters of the U.S.
                    is a violation of the CWA unless the
                    owner or operator of the facility has an
                    NPDES permit for the discharge from
                    that point source (as discussed further
                    below); or
                      (2) Storm water discharges. A
                    discharge from a point source, such as
                    a ditch, at the land application area of
                    an AFO that does not qualify for the
                    agricultural storm water discharge
                    exemption may be designated as a
                    regulated storm water point source
                    under § 122.26(a)(l)(v), and, therefore,
                    require an NPDES permit. The
                    agricultural storm water exemption is
                    discussed further in the following
                    section D; or
                      (3) Discharge as a CAFO. An AFO
                    may be designated as a 'CAFO and,
                    therefore, require an NPDES permit on
                    that basis (as discussed in the section on
                    designation).
                      In addition to listing "physical"
                    conveyances (such as pipes and
                    ditches), the definition ofpoint source
                    in the CWA and EPA's regulations
                    identifies CAFOs as a point source.
                    CWA § 502(14); 40 CFR 122.2. Because
                    all CAFOs are point sources, even
                    surface run off from a CAFO that is not
                    channelized in a discrete conveyance is
                    considered a point source discharge that
                    is subject to NPDES permit
                    requirements. AFOs, on the other hand,
                    are not defined as point sources.
                    Because of that, under today's proposal,
                    AFOs will be subject to NPDES
                    permitting requirements if they have a
                    point source discharge including under
                    the circumstances described above.
                      First, today's proposal states clearly
                    that an AFO which has a discharge of
                    pollutants through a point source, such
                    as a pipe or ditch, at either the
                    production area or the land application
                    area, to the waters of the United States
                    which is not the direct result of
                    precipitation is in violation of the Clean
                    Water Act. See proposed § 122.23(g).
                   , The existing regulations are silent and
                    some AFO operators have argued that
                    none of their discharges can be
                    considered point source discharges
                    unless their AFO is defined or
                    designated as a CAFO under 40 GFR
                    122.23. Today's proposal would make it
                    clear that certain discharges at AFOs are
                    subject to NPDES requirements and no
                    designation by the permitting authority
is required. For example, if the operator
of an AFO with less than 500 animal
units (in the two-tier structure) or less
than 300 animal units (in the three-tier
structure) empties its lagoon via a pipe
directly into a stream without an NPDES
permit, that would be a violation of the
Clean Water Act.
  Second, today's proposal clarifies that
a storm water discharge composed
entirely of storm water from a point
source at the land application area of an
AFO into waters of the U.S. requires an
NPDES permit if:  (1) the discharge does
not quality for the agricultural storm
water discharge exemption, discussed
below; and (2) it is designated as a
regulated storm water point source.
Generally, all point source discharges
are prohibited unless authorized by an
NPDES permit. Section 402(p) of the
Clean Water Act exempts certain storm
water discharges from that general
prohibition. Section 402(p)(2)(E) and the
EPA regulations that implement Section
402(p)(6) provide  for regulation of
unregulated point sources on a case by
case basis upon designation by EPA or
the State permitting authority (40 CFR
122.26(a)(l)(v)).
  EPA considered proposing that only
40 CFR 122.23 may be used to designate
an AFO based on  discharges from its
land application area. Designation as a
CAFO, however, could unnecessarily
subject the AFO's production area to
NPDES permit requirements. Also,
because the land application area of
third party applicators of manure may
be designated using 122.26(a)(l)(v), EPA
is proposing that AFO controlled land
application areas could also be
designated under  that section, even if
the AFO has not been designated as a
CAFO. AFOs may be required to get a
permit based on storm water discharges
from their production areas only if they
have been designated as a CAFO under
§122.23.
  An AFO operator is not required to
obtain a permit for a point source
discharge at the land application area
which consists entirely of storm water,
and which does not qualify for the
agricultural storm water discharge
exemption, unless the point source has
been designated under 40 CFR  '
122.26(a)(l)(v). A  discharge consists
entirely of storm water if it is due
entirely to precipitation. It may include
incidental pollutants that the storm
water picks up while crossing the
facility. The discharge would not
consist entirely of storm water if, for
example, a non-storm water (e.g.,
process waste water) discharge occurs
during the storm and is mixed with the.
storm water. Once a permit authority
has determined that a.point source

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                                                                      3020
 discharge from the land application area
 of an AFO is not composed entirely of
 storm water and does not qualify for the
 agricultural storm water discharge
 exemption, the permit authority may
- designate that point source as a
 regulated storm water point source if the
 permit authority further determines
 under 40 CFR 122;26(a)(l)(vj that the
 discharge contributes to a violation of a
 water quality standard or is a significant
 contributor of pollutants to waters of the
 U.S.
   Designation under § 122.26 is separate
 from the designation of an operation as
 a CAFO. The criteria for designation as
 a CAFO based on discharges from either
 the land application or the production
 area are discussed above in C.4.
 D. Land Application of CAFO-generated
 Manure
 1. Why Is EPA Regulating Land
 Application of CAFO-generated
 Manure?
    As discussed in Section IV.B of this
 preamble, agricultural operations,
• including animal production .facilities,
 are considered a significant source of
 water pollution in,the United States.
 The recently released National Water
 Quality Inventory indicates that
 agriculture is the leading contributor of
 identified water quality impairments in
 the nation's rivers and streams, as well
 as in lakes, ponds, and reservoirs.
• Agriculture is also identified as a major
 contributor to identified water quality
 impairments in the nation's estuaries.
    Pollutant discharges from CAFOs
  arise from two principal routes. The first
  route of discharges from CAFOs is from
  manure storage or treatment structures,
  especially catastrophic failures, which
  cause significant volumes of often
  untreated manure and wastewater to
  enter waters of the U.S. resulting in fish
  kills. The second route of pollutant
  discharges is from .the application of
  manure to land, usually for its fertilizer
  value or as a means of disposal.
  Additional information on how
  pollutants from CAFOs reach surface
  waters is provided in Section V.B of this
  document and in the rulemaking record.
    The proposed regulation seeks to
  improve control of discharges that occur
  from land applied manure and
  wastewater. Analysis conducted by
  USDA indicates that, in some regions,
  the amount of nutrients present in land
   applied manure has the potential to
   exceed the nutrient needs of the crops
   grown in those regions. Actual soil
   sample information compiled by
   researchers at various land grant
   universities provides an indication of
   areas where there is widespread
phosphorus saturation. Other research
by USDA documents the runoff
potential of land applied manure under
normal and peak precipitation.
Furthermore, research from a variety of
sources indicates that there is a high
correlation between areas with impaired
lakes, streams and rivers due to nutrient
enrichment and areas where there is
dense livestock and poultry production.
This information is documented in the
Technical Development Document.
Additional information is available in
the Environmental Assessment of the
Proposed Effluent Limitations
Guidelines for Concentrated Animal
Feeding Operations and other
documents that support today's
rulemaking.
2. How Is EPA Interpreting the
Agricultural Storm Water Exemption
With Respect to Land Application of
CAFO-generated Manure?
   Today, EPA is proposing to define the
term "agricultural stormwater
discharge" with respect to land
application of,manure and wastewater
from animal feeding operations. Section
502(14) of the Clean Water Act excludes
"agricultural stormwater discharges"
from the definition of the term point
source. The Clean Water Act does not
 further define the term, and the Agency
has not formally .interpreted it. Under
today's proposal, an "agricultural
 stormwater discharge" would be ,
 denned as "a discharge composed
 entirely of storm water, as defined in 40
 CFR 122.26(a)(13),  from a land area
 upon  which manure and/or wastewater
 from an animal feeding operation or
 concentrated animal feeding operation
 has been applied in accordance with
 proper agricultural practices, including
 land application of manure or
 wastewater in accordance with either  a
 nitrogen-based or, as required, a
 phosphorus-based  manure application
 rate." § 122.23(a)(l).
   The CWA defines a point source as:
 "any  discernible, confined and discrete
 conveyance, including but not limited
 to any pipe, ditch,  channel, tunnel,
 conduit, well, discrete fissure,
 container, rolling stock, concentrated  .
 animal feeding operation, or vessel or
 other floating craft, from which
 pollutants are or may be discharged.
 The term does not include agricultural
 stormwater discharges and return flows
 from irrigated agriculture." 33 U.S.C.
 §1362(14).
    Congress added the exemption from
 the definition of point source for
 "agricultural stormwater discharges" in
 the Water Quality  Act of 198 7. There  is
 limited legislative history for this
 provision; Congress simply stated that
the "provision expands the existing
exemption for return flows from
irrigated agriculture to include
agricultural stormwater discharges."
Legislative History of the Water Quality
Act of 1987,100th Cong., 2d. Sess. at
538 (1988).
  The courts have found that the EPA
Administrator has the discretion to
define point and nonpoint sources.
NRDCv. Costle, 568 F.2d 1369,1382
(D.C. Cir. 1977). EPA is proposing to
exercise that discretion by defining the
exemption for "agricultural stormwater
discharges" to include only those
discharges that (1) are composed
entirely of storm water; and, (2) occur
only after the implementation of proper
agricultural practices.
   EPA believes the  first component is
clear on the face'of the statute. Only
discharges that result from precipitation
can qualify for an agricultural storm
water discharge exemption. Therefore,
the addition of pollutants as a result of
a discharge from  a point source to
waters of the United States that is not
due to precipitation is a violation of the
Clean Water Act (except in compliance
with an NPDES permit). For example,
the application of CAFO manure onto a
field in quantities that are so  great that
gravity conveys the manure through a
 ditch even in dry weather into a nearby
 river would not be  eligible for the
 exemption for agricultural storm water
 discharges. Furthermore, it is possible
 for a discharge to occur during a
 precipitation event yet not be
 considered to be "composed  entirely of
 stormwater." As the Second Circuit
 found, a discharge  during a storm could
 be "primarily caused by the over-
 saturation of the fields rather than the
 rain and *  *  * sufficient quantities of
 manure were present so that the run-off
 could not be classified as "stormwater'."
 CABEv. SouthviewFarms, 34 f. 3d  .
 114,121 (Sept. 2, 1994).
   Second, EPA is proposing  that to be
 eligible for the exemption for
 agricultural storm water, any addition of
 manure and/or wastewater to navigable
 waters must occur despite the use of
 proper agricultural practices. EPA
 interprets the statute to reflect Congress'
 intent not to regulate additions of
 manure or wastewater that are truly
 agricultural because they occur despite
 the use of proper agricultural practices.
 Application of manure or wastewater
 that is not consistent with proper rates
  and practices such that there are adverse
  impacts on water quality would be
  considered waste disposal rather than
  agricultural usage. In today's action,
  EPA is proposing to interpret the term
  "proper agricultural practices" to
  incorporate the  concept of protecting

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  water quality. This is consistent with
  USDA's Technical Guidance for
  Developing Comprehensive Nutrient
  Management Plans, which states that:
  "tt]he objective of a CNMP is to provide
  AFO owners/operators with a plan to
  manage generated nutrients and by-
  products by combining conservation
  practices and management activities
  into a system that, when implemented,
  will protect or improve water quality."
  EPA believes that proper agricultural
  practices do encompass the need to
  protect water quality. While EPA
  recognizes that there may be legitimate
  agricultural needs that conflict with
  protecting water quality in some
  instances, EPA believes that its
  proposed definition of proper
  agricultural practices strikes the proper
  balance between these objectives. Since
  one focus of agricultural management
  practices, whether through guidance or
  regulation, at the state or federal level,
  is the minimization of water quality
  impacts, and since this is of particular
  concern to EPA, tie Agency is
  proposing a definition of "agriculture"
  for Clean Water Act purposes which
  would be flexible enough so that an
  assessment of the actual impacts of a
  discharge of animal waste on a specific
 waterbody could be factored in. Today's
 proposal identifies the proper
 agricultural practices which land
 appliers seeking to qualify for the
 agricultural storm water discharge
 exemption would need to implement. In
 addition, if a permit authority
 determined that despite the
 implementation of the practices
 identified in today's proposal,
 discharges from the land application
 area of a CAPO were having an impact
 on water quality, the permit writer
 would need to impose additional
                                 :es
 that occur despite the implementation
 of all these proper agricultural practices
 would be considered "agricultural
 stonnwater discharges" and be eligible
 for the exemption. EPA requests
 comment on this interpretation of the
 agricultural storm water exemption and
 on the proposal to define proper
 agricultural practice.
   For CAFOs which land apply their
 manure, the Agency is proposing to
 require that owners or operators
 implement specific agricultural
 practices, including land application of
 manure and wastewater at a specified
 rate, development and implementation
 of a Permit Nutrient Plan, a prohibition
 on the application of CAFO manure or
wastewater within 100 feerof surface
water, and, as determined to be
                    necessary by the permit authority,
                    restrictions on application of manure to
                    frozen, snow covered or saturated
                    ground. See proposed §§412.31(b) and
                    412.37; § 122.21(j). The Agency is
                    proposing to require these specific
                    agricultural practices under its CWA
                    authority both to define the scope of the
                    agricultural storm water discharge
                    exemption and to establish the best
                    available-technology for specific
                    industrial sectors. Given the history of
                    improper disposal of CAFO waste and
                    Congress' identification of CAFO's as
                    point sources, the Agency believes it
                    should clearly define the agricultural
                    practices which must be implemented at
                    CAFOs.
                     EPA considered limiting the scope of
                    the proper agricultural practices
                    necessary to qualify for the agricultural
                    storm water discharge exemption to
                    those specified in the effluent guideline
                    and NPDES regulations with no
                    flexibility for the permit authority to
                    consider additional measures necessary
                    to mitigate water quality impacts. EPA
                    chose not to propose this option because
                    EPA was concerned that permit
                    authorities would then be unable to
                    include any additional permit
                    conditions necessary to implement
                    folal Maximum Daily Loads in
                    impaired watersheds. EPA seeks
                    comment on this option and other ways
                    to address this concern.
                     The Agency is proposing to allow
                   AFO owners- or operators who land
                    apply manure (either from their own
                    operations or obtained from CAFOs) and
                   more traditional, row crop farmers who
                   land apply manure obtained from
                   CAFOs to qualify.for the agricultural
                   storm water exemption as long as they
                   are applying manure and wastewater at
                   proper rates. As discussed in VII.B,
                   under one of today's co-proposed
                   options, CAFOs that transfer manure to
                   such recipients would be required to
                   obtain a letter of certification from the
                   recipient land applier that the recipient
                   intends to  determine the nutrient needs
                   of its crops based on realistic crop
                   yields for its area, sample its soil at least
                   once every three years to determine
                   existing nutrient content, and not apply
                   the manure in quantities that exceed the
                   land application rates calculated using
                   either the Phosphorus Index,
                   Phosphorus Threshold, or Soil Test
                   Phosphorus method as specified in 40
                   CFR412.13(b)(l)(iv). For purposes of
                   the CAFO's permit, recipient land
                   appliers need not implement all of the
                   proper agricultural practices identified.
                   above which CAFOs would be required
                   to implement at their own land
                   application areas. EPA believes that this
                   proposal enables the Agency to
  implement Congress' intent to both
  exclude truly agricultural discharges
  due to storm water and regulate the
  disposition of the vast quantities of
  manure and wastewater generated by
  CAFOs.
   EPA considered defining the
  agricultural storm water discharge
  exemption for non-CAFO land appliers
  to apply only to those discharges which
  occurred despite the implementation of
  all the practices required by today's
  proposal at CAFO land application
  areas. EPA could require a more
  comprehensive set of practices for land
  appliers of CAFO manure and
  wastewater to qualify for the
  agricultural storm water discharge
  exemption. Under any definition of
  proper agricultural practices, a recipient
  who failed to implement the required
  practices and had a discharge through a
  point source into waters of the U.S.
  could be designated as a regulated storm
  water point source.. However, that
 recipient would not be vulnerable to
  enforcement under the Glean Water Act
 for discharges prior to designation, and
 could only be designated as a point
 source if the permitting authority (or
 EPA in authorized States) found that the
 conditions of 40 CFR 122.26(a)(l)(v)
 were met.  See discussion below. EPA is
 requesting comment on this option.
   Whether a discharger (who would
 otherwise be ineligible for the
 agricultural storm water discharge
 exemption) is subject to the Clean Water
 Act permitting requirements varies,
 because of the complex interaction
 among the agricultural storm water
 discharge exemption, the definition of
 "point source," and other storm water
 discharge provisions. The next sections
 clarify EPA's intentions with regard to
 such regulation.

 3. How is EPA Proposing To Regulate
 Discharges From Land Application of
 CAFO-generated Manure by CAFOs?
   In today's action, EPA is proposing
 that the entire CAFO operation (e.g. the
 feedlot/production area and the land
 application areas under the operational
 control of a CAFO owner or operator) is
 subject to the revised effluent
 limitations guideline and the revised
 NPDES permitting regulation. See
 proposed § 122.23(a)(2). Also, as
 discussed above, EPA is proposing to
 interpret the CWA to allow CAFO land
 application areas to be eligible for the
 agricultural storm water discharge
 exemption. However, unless the CAFO
 could demonstrate that it has  absolutely
no potential to discharge from the
production area and the land
application area, the facility would be
required to apply for an NPDES permit.

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                                                                      3031
 See proposed § 122.23(e). While EPA is
 proposing to interpret the terms of the
 statute such that CAFOs may qualify for
 the agricultural storm water exemption,
 EPA is also proposing that such CAFOs
 must apply for a permit even if the
 CAFO's only discharges may potentially
 qualify for the agricultural storm water
 discharge exemption. EPA is proposing
 such a requirement because it has the
 authority to regulate point source
 discharges and any discharge from the
 land application area of a CAFO which
 is not agricultural storm water is subject
 to the Clean Water Act. EPA believes
 that the only way to ensure that all
 nonagricultural, and therefore point
 source, discharges from CAFOs are
 permitted is to require that CAFOs
 apply for NPDES permits which will
 establish effluent limitations based on
 proper agricultural practices.
   As noted above, the CWA explicitly
 defines the term "point source" to
 include CAFOs, and explicitly excludes
 agricultural storm water discharges. In
 today's action, EPA is attempting to
 interpret both provisions in a way that
 establishes meaningful controls over a
 significant source of pollution in our
 Nation's waters. EPA is proposing to
 interpret the definition of "point
 source" such that the exclusion of
 . "agricultural stormwater discharges"
 may be an exclusion from any and all .
 of the conveyances listed in the
i definition of "point source," including
 "concentrated animal feeding
 operations." The production area of the
 CAFO would continue to be ineligible
 for the agricultural storm water
  discharge exemption because it involves
 the type of industrial activity that
  originally led Congress to single out
 . concentrated animal feeding operations
  as point sources. However, the land
  application areas under the operational
  control of the CAFO, where CAFO
  manure or wastewater is appropriately
  used as a fertilizer for crop production,
  appear to have the kind of agricultural
  activity that Congress intended to
  exempt. Consequently, EPA proposes to
  interpret the CWA so that its authority
  to regulate discharges of CAFO manure
  due to precipitation from land
  application areas is used in a way that
  ensures that any discharge is the result
  of agricultural practices. Any such
  discharges would be from the CAFO
  and, therefore, no separate, confined
1  and discrete conveyance need be
  present.
     Under today's proposal,  permit
  writers would establish effluent limits
  for land application areas in the form of
  rates and practices that constitute
  proper agricultural practices to the
  extent necessary to fulfill the
requirements of the effluent guidelines
or based on BPJ, as well as to the extent
necessary to ensure that a CAFO's
practices are agricultural in that they
minimize the operation's impact on
water quality.
  As noted above, EPA believes the
statute does not directly address the
interaction between the specific listing
of "concentrated animal feeding
operations" and the specific exemption
of "agricultural stormwater discharges"
in the definition of "point source."
While EPA is proposing to interpret the
Act to allow the land application areas
of CAFOs to be eligible for the
•agricultural storm water discharge
exemption, EPA is considering an
interpretation of the Act under which
all  additions of pollutants associated
with CAFOs could be regulated as
"point source" discharges, and, thus,
the agricultural storm water exemption
would never apply to discharges from a
CAFO. By singling out "concentrated
animal feeding operations," a far more
specific conveyance reference compared
to the other, more general, terms in the
.definition of "point source" (such as
"ditch," "channel," and "conduit"),
Congress may have intended the
addition of pollutants to waters of the
United States from these facilities to be
considered "industrial" and not
"agricultural" discharges. As such, the
tremendous amount of manure and
wastewater generated by CAFOs could
be considered industrial waste. Thus,
any discharge, even if caused by storm
water after land application of the
manure could be considered a discharge
 "associated with industrial activity"
under the statute's storm water
 discharge provisions.
   EPA is soliciting comments on four
 additional approaches under which the
' agricultural storm water exemption
 would not apply to CAFOs. Each of
 these approaches would require that all
 CAFO permits restrict discharges from
 land application sites to the extent
 necessary to prevent them from causing
 or contributing to a water quality
 impairment.
    First, EPA is soliciting comment on an
 alternate approach that would regulate
 CAFO waste as "process waste" that is
 not eligible for the agricultural storm
 water exemption, when it is applied on
! land that is owned or controlled by the
 CAFO owner or operator, because it is
 industrial process waste and therefore
 not agricultural. Any storm water
 associated discharges would be
 regulated under the existing storm water
 statutory provisions and EPA's
 implementing regulations. Under that
 approach, in addition to the
 requirements in the proposed effluent
limitation guideline, the NPDES permit
issued to the CAFO operator would
include any additional limitations
necessary to protect water quality.
  Second, EPA solicits comment on
classifying discharges from land
application sites as discharges regulated
under "Phase I" of the NPDES storm
water program (CWA Section
402(p)(2)(B)). EPA's existing storm
water regulations already identify
discharges from land application sites
that receive industrial wastes as a
"storm water discharge associated with
industrial activity." 40 CFR
122.26[b)(14)(v). Under the storm water
regulation, EPA does not currently
interpret that category (i.e., storm water
discharge associated with industrial
activity) to include land application of
CAFO manure because the Agency did
not assess the cost of such regulation
when it promulgated the rule. With
today's proposal, however, EPA has
calculated the cost of proper land
application of CAFO-generated manure
and wastewater and could clarify that
precipitation-induced discharges from
land application areas are subject to the
storm water discharge regulations. If
EPA finalizes a definition of CAFO
which includes the land application
area, then EPA could also regulate any
storm water discharges from CAFOs
under its existing regulations as a storm
water discharge associated with
industrial activity because facilities
subject to storm water effluent
guideline's are considered to be engaging
in "industrial activity." 40 CFR 122.26
 (b)(14)(i). EPA would have to conclude
that no discharges from CAFO land
 application areas qualify for the
 agricultural storm water discharge
 exemption, even discharges which
 occur despite implementation of proper
 agricultural practices.
   Third, EPA could consider discharges
 from the CAFO's land application area
 to be discharges of "process
 wastewater," and, therefore, not
 "composed entirely  of stormwater,"
 rendering the statutory storm water
 provisions entirely inapplicable. Under
 this alternate interpretation of the
 statutory terms, NPDES permit
 provisions for the CAFO, including both
 the production area and the land
 application area, could include both
 technology-based limits and any
 necessary water quality-based effluent
 limits.
    Fourth, EPA could clarify that once a
 facility is required to be permitted
 because it is a CAFO, the agricultural
 storm water discharge exemption no
. longer applies to the land application
 area subject to the permit. Thus, all
 permit conditions, including a water

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Federal  Register/Vol. 66, No.  9/Friday, January 12,  2001 / Proposed Rules
 quality-based effluent limitation, could
 be required on both the production area
 and the land application area.
   •EPA is also requesting comment on
 whether the land application practices
 established under the effluent
 guidelines will be sufficient to ensure
 that there will be little or no discharge
 due to precipitation from CAFO land
 application areas. If there were no such
 discharges, then EPA wouldn't need to
 adopt any of the four alternative
 approaches described above, because
 tfie effluent guidelines requirements
 would protect water quality. If there
 would be significant run-off even when
 manure is applied in accordance with
 agricultural practices, EPA is requesting
 comment on the extent and the potential
 adverse water quality impacts from that
 increment.
 4. How is EPA Proposing to Regulate
 Land Application of Manure and
 Wastewater by non-CAFOs?
   In some instances, CAFO owners or
 operators transport their manure and/or
 wastewater off-site.  If off-site recipients
 land apply the CAFO-generated manure,
 they may be subject to regulation under
 the Clean Water Act. In addition, AFOs
 may land apply their own manure and
 wastewater, and they too may be subject
 to regulation under the Clean Water Act.
 A land applier could be subject to
 regulation if: (1) its field has a point
 source, as defined under the Act,
 through which (2) a discharge occurs
 that is not eligible for the agricultural
 storm water exemption, and (3) the land
 applier is designated on a case-by-case
 basis as a regulated point source of
 storm water. 40 CFR § I22.26(a)(l)(v).
 EPA notes that under the three-tier
 structure, an AFO with between 300 AU*-
 and 1,000 AU which has submitted a
 certification that it does not meet any of
 the conditions for being CAFO, and
 therefore does not receive an NPDES
 permit, would be immediately subject to
 enforcement and regulation under the
 Clean Water Act if it has a discharge
 which is not subject to the agricultural
 storm water discharge exemption; EPA
 and the State do not need to designate
 such a facility as either a CAFO or as a
 regulated storm water point source.
  With this proposal, EPA intends to
 give effect to both the agricultural storm
 water discharge exemption and the
 other storm water provisions of the
 Clean Water Act by subjecting to
 regulation a non-CAFO land applier of
 AFO and/or CAFO-generated manure
 and wastewater only if: (1) the discharge
 is not eligible for the agricultural storm
 water discharge exemption (which, as
 discussed above, for AFOs and other
non-CAFO land appliers primarily
                    consists of applying the manure in
                    accordance with proper agricultural
                    practice, including soil test, P threshold,
                    or Phosphorus Index methods); and (2)
                    a conveyance at the land applier's
                    operation has been designated as a
                    regulated storm water point source. EPA
                    emphasizes again that this regulatory
                    approach is relevant only to discharges
                    which are composed entirely of storm
                    water. If it is not due to precipitation,
                    a discharge of manure or wastewater
                    through a point source, such as a ditch,
                    into the waters of the U.S. need not be
                    designated to be subject to enforcement
                    and regulation under the Clean Water
                    Act, as discussed in Section VII.C.6 of
                    today's proposal.
                      In addition, the Director (or Regional
                    Administrator) could exercise his or her
                    authority to designate such dischargers
                    within a geographic area as significant
                    contributors of pollution to waters of the
                    United States. 40 CFR 122.26(a)(9)(i)(D).
                    The geographic area of concern could be
                    a watershed which is impaired for the
                    pollutants of concern in CAFO waste.
                    To do so, the Director (or Regional
                    Administrator) would need to identify
                    the point source at each land
                    application area or provide a record for
                    presuming that the land application
                    areas in that watershed have point
                    sources, and the designation would only
                    apply to those that do.
                      As noted above, case-by-case
                    designation of point sources at land
                    application areas which are not under
                    the control of a CAFO owner or operator
                    can already occur under existing
                    regulations. Under section
                    122.26(a)(l)(v), either the permitting
                    authority or EPA may designate a
                    discharge which he or she determines
                    contributes to a violation of a water
                    quality standard or is a significant
                    contributor of pollutants to waters of the
                    U.S. EPA is soliciting comment on
                    whether to clarify the term "significant
                    contributor of pollutants" for lie
                    purposes of designating a discharge of
                    manure and/or wastewater. If a land
                    applier is applying manure and/or
                    wastewater such that he or she is not
                    eligible  for the agricultural storm water
                    discharge exemption and if the ,
                    receiving waterbody (into which there
                    are storm water discharges associated
                   with manure and/or wastewater) is not
                   meeting water quality standards for a
                   pollutant in the waste (such as
                   phosphorus, nitrogen, dissolved oxygen
                   or fecal coliform), then EPA  could
                   propose that, by regulation, such a
                   discharge constitutes a "significant
                   contributor of pollutants." For example,
                   if a land applier is applying manure
                   and/or wastewater at a rate above the
                   rate which qualifies the recipient for the
 agricultural storm water discharge
 exemption, and if, due to precipitation,
 waste runs off the land application area
 through a ditch into a navigable water
 that is impaired due to nutrients, then
 the permit authority may designate that
 point source as a regulated storm water
 point source. The designee would then
 need to apply for an NPDES permit or
 risk being subject to enforcement for
 unpermitted discharges.
   EPA solicits comment on the
 proposed means of ensuring that
 manure and wastewater from AFOs and
 CAFOs is used in an environmentally
 appropriate manner, whether on-site at
 the CAFO or AFO or off-site outside of
 the control of the CAFO operator.

 E. What are the Terms of an NPDES
 Permit?
   EPA is proposing to include several
 new requirements in the NPDES permit
 for CAFOs. See proposed § 122.23(i). As
 discussed in  section VIII on the
 proposed effluent guidelines, EPA is
 proposing to  require all CAFO operators
 to develop and implement a Permit
 Nutrient Plan, which is a site-specific
 plan for complying with the effluent
 limitations requirements contained in
 the NPDES permit. EPA is proposing to
 require permit authorities to develop
 special conditions for  each individual or
 general NPDES permit that address: (1)
 development of the allowable manure
 application rate; and (2) timing and
 method for land applying manure.
 Permits would also include a special
 condition that clarifies the duty to
 maintain permit coverage until the
 facility is properly closed.
  NPDES permits are comprised of
 seven sections: cover page; effluent
 limitations; monitoring and reporting
 requirements; record keeping
 requirements; special conditions; and
 standard conditions, discussed below.

 1. What is a Permit Nutrient Plan (PNP)
 and What is the difference between
 USDA's CNMP and EPA's PNP?
  EPA is proposing to  require all CAFO
 operators to develop and implement a
 Permit.Nutrient Plan, or PNP. See
 proposed § 412.31(b)(l)(i)(iv) and
 § 122.23(k)(4). The PNP is a site-specific
 plan that describes how the operator
 intends to meet the effluent discharge
 limitations and other requirements of
 the NPDES permit, Because it is the
primary planning  document for
 determining appropriate practices at the
CAFO, EPA is also proposing to require
that it be developed, or reviewed and
modified, by a certified planner. The
PNP must be developed within three
months of submitting either a notice of
intent for coverage under an NPDES

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                 Federal Register/Vol. 66, No.  9/Friday, January  12, 2001/Proposed Rules
                                                                    3033
general permit, or an application for an
NPDES individual permit.
•  EPA is proposing to include a permit
requirement for the CAFO to develop
and implement a PNP and modify it
when necessary. EPA believes this
approach will maintain flexibility for
modifications as the agricultural
practices of the CAFO change. PNPs are
intended to be living documents that are
updated as circumstances change.
Formal permit modification procedures
would not have to be followed every
time the PNP was modified.
  As described in  section VIII of today's
proposed revisions to the effluent
guidelines, CAFO  operators would be
required to prepare a PNP •that
establishes the allowable manure
application rate for land applying
manure and wastewater,  and that
documents how the rate was derived.
The plan would also address other site-
specific conditions that could affect
manure and wastewater application. It
would also describe sampling
techniques to be used in  sampling
manure and soils, as well as the
calibration of manure application
equipment, and would describe
operational procedures for equipment at
the production area.
  EPA is proposing to use the term
"Permit Nutrient Plan" in today's
proposed regulation in order to have a
separate and distinct term that applies
solely to the subset of activities in a
CNMP that are directly connected with
the effluent guideline and NPDES
permit requirements, which are related
to the best available technology
currently available. EPA expects that
many CAFOs will satisfy the
requirement to develop a PNP by
 developing a Comprehensive Nutrient
Management Plan (CNMP). EPA
recognizes that creating a new term has
 the potential to create some initial
 confusion, and cause concern about
 overlapping or duplicative
 requirements. However, EPA believes
 the term PNP more clearly articulates to
 the regulated community the important
 distinctions.between the broad
 requirements of a CNMP and the more
 specific effluent guideline requirements
 for a PNP.
   EPA invites comment on today's
 proposal to define PNPs as the subset of
 elements in the CNMP that are written
 to meet the effluent guideline
 requirements. EPA is especially
 interested in knowing whether PNP is
 the best term to use to refer to the
 regulatory components of the CNMP,
. and whether EPA's explanation of both
 the differences and relationship
 between these two terms (PNP and
 CNMP) is clear and unambiguous.
  hi the Unified National Strategy for
Animal Feeding Operations, EPA and
USDA agreed that the development and
implementation of CNMPs was the best
way to  minimize water quality
impairment from confinement facilities
and land application of manure and
wastewater. The Strategy also
articulated the expectation that all AFOs
would  develop and implement CNMPs,
although certain facilities (CAFOs)
would  be required to do so while others
(AFOs) would do so on a voluntary
basis.
  hi December 2000, USDA published
its Comprehensive Nutrient
Management Planning Technical
Guidance  (referred to here as the
"CNMP Guidance"). Federal Register:
December 8, 2000 (Volume 65, Number
237) Page  76984-76985. The CNMP
Guidance  is intended for use by NRCS,
consultants, landowners/operators, and
others  that will either be developing or
assisting in the development of CNMPs.
USDA published the CNMP Guidance to
serve only as a technical guidance
document, and it does not establish
regulatory requirements for local, tribal,
State, or Federal programs. Rather, it is • -
intended as a tool to support the
conservation planning process, as
contained in the NRCS National
Planning Procedures Handbook. The
objective of the CNMP technical
guidance is to identify management
activities  and conservation practices
that will minimize the adverse impacts
of animal feeding operations on water
quality. The CNMP Guidance provides a
list of  elements that USDA believes
should be considered when developing
a CNMP. The strength of the CNMP
Guidance is the breadth of conservation
practices  and management activities
that it recommends AFQ operators
 should consider.
   Initially, it was EPA's expectation to
 simply adopt USDA's voluntary
 program into its NPDES permitting
 program.  However, by intentionally
 avoiding  establishing regulatory
 requirements and limiting its role to that
 of technical guidance only, USDA's
 CNMP Guidance lacks many of the
 details EPA believes are necessary to
 ensure discharges of manure and other
 process wastewater are adequately
 controlled and nutrients applied to
 agricultural land in an acceptable
 manner. In addition, the CNMP
 Guidance addresses certain elements
 that address aspects  of CAFO operations
 that EPA will not include as a part of
 the effluent guidelines and standards.
    Nonetheless, it is important to ensure
 that the regulatory program that would
 be established by the effluent guidelines
 and standards and NPDES permit
regulations proposed today is
complementary to and leverages the
technical expertise of USDA with its
CNMP Guidance, rather than present
CAFO operators with programs that they
might perceive as contradictory. EPA
believes this goal will be accomplished
by the requirements being proposed
today. EPA is proposing that CAFOs,
covered by the effluent guideline,
develop and implement a PNP that is
narrower in scope than USDA's CNMP
Guidance, but.that establishes specific
actions and regulatory requirements.
  One of the key differences between
the effluent guideline PNP and USDA's
CNMP is the scope of elements included
in each plan. USDA's CNMP includes
certain aspects that EPA does not
require CAFO operators to address
within the regulatory program. For
example, element 4.2.2.1 of USDA's
CNMP Guidance ("Animal Outputs—
Manure and Wastewater Collection,
Handling, Storage, Treatment, and
Transfer") tells operators that the CNMP
should include insect control activities,
disposal of animal medical wastes, and
visual improvement considerations.
Additionally, Element 4.2.2.1 of the
CNMP Guidance ("Evaluation and
Treatment of Sites Proposed for Land
Application") states the CNMP should
identify conservation practices and
management activities needed for
erosion control and water management.
The regulations (and PNP) being
proposed today include no such
requirement. EPA is not including
conservation practices which control
erosion as part of a PNP because erosion
control is not needed on all CAFO
operations and because the costs
associated with controlling erosion
would add $150 million dollars to the
cost of this proposal. These elements of
a CNMP are, however, key components
to protect water quality from excessive
nutrients and sediments. EPA solicits
 comment and data on the costs and
benefits of controlling erosion and
 whether erosion control should be a
 required component of PNPs.
   There are a number of elements that
 are addressed by both the CNMP and
 PNP. Examples of common elements
 include soil and manure analyses to
 determine'nutrient content; calibration
 of application equipment; developing
 nutrient budgets; and records of Plan
 implementation. However, USDA's
 CNMP  Guidance is indeed presented
 only as technical guidance. The CNMP
 Guidance identifies a number of
 elements that AFOs should consider,
 but there is no avenue for ensuring that
 AFOs implement any management
 practices or achieve a particular
 performance standard. In contrast,

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Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
 EPA's proposed PNP would establish
 requirements for CAFOs that are
 consistent with the technical guidance
 published by USDA experts, but that go
 beyond that guidance-by identifying
 specific management practices that must
 be implemented.
   For example, EPA is proposing the
 effluent guidelines to require CAFOs to
 analyze soil samples at least once every
 three years, and manure and lagoon
 samples at least annually. 40 CFR
 412.37(a)(4)(ii). The CNMP Guidance
 addresses such analyses, but imposes no
 mandatory duty to perform such
 analyses, nor to conform to a particular
 monitoring frequency. Given the degree
 to which  overflows and catastrophic
 failures of lagoons have been due to
 poor operation or maintenance of
 manure storage structures, EPA is   '
 proposing to establish specific
 requirements under Sections 308 and
 402 that would: (1) More precisely
 monitor lagoon levels to prevent
 overflows that could be reasonably
 avoided; (2) require operators to
 periodically inspect the structural
 integrity of manure handling and
 storage structures, and expeditiously
 take corrective action when warranted;
 and (3) maintain records to ensure the
 proper operation and maintenance of
 manure handling and storage structures.
 USDA's CNMP Guidance establishes no
 such requirements.
   The regulations proposed today
 would also require permit authorities to
 establish more specific requirements for
 application of manure and wastewater
 to land, where appropriate, including:
 how the CAFO operator is to calculate
 the allowable manure application rate;
 when it is appropriate to apply manure
 to frozen,  snow covered or saturated
 land; and  facility closure.
   a. How are PNPs Developed and What
 is the Role of Certified Specialists?
 Under today's proposed rule, CAFO
 owners and operators would be required
 to seek qualified technical assistance for
 developing PNPs to meet then: effluent
 guidelines and NPDES permit
 requirements. EPA is proposing that
 PNPs be developed, or reviewed and
 modified,  by certified planners. See
 proposed §412.31(b)(l)(ii).
  Since PNPs are a defined subset of
 activities covered in CNMPs, as
 described  above, owners and operators
 are expected to take advantage of the
 same technical assistance that is
 available for CNMP development,
 including  appropriate Federal agencies,
 such as the NRCS, State and Tribal
 agricultural and conservation agency
staff, Cooperative Extension Service
agents and specialists, Soil and Water
Conservation Districts, and Land Grant
                    Universities. In addition, there are a
                    growing number of non-governmental
                    sources of qualified technical assistance,
                    including integrators, industry
                    associations, and private consultants
                    who are certified to develop CNMPs, as
                    well as the defined subset of activities
                    covered in PNPs. In addition to the help
                    of these experts, a growing number of
                    computer-based tools are either
                    available or under development to
                    facilitate development and
                    implementation of CNMPs, and should
                    be equally useful for PNPs.
                      Although CAFO  owners and operators
                    are ultimately responsible for
                    developing and implementing effective
                    PNPs, EPA is today proposing that PNPs
                    be developed and/or reviewed and
                    approved by a certified specialist. A
                    certified PNP specialist is a person who
                    has a demonstrated capability to
                    develop CNMPs in accordance with
                    applicable USDA and State standards,
                    as well as PNPs that meet the EPA
                    effluent guideline, and is certified by
                    USDA or a USDA-sanctioned
                    organization. Certified specialists
                    include qualified persons who have
                    received certifications through a State or
                    local agency, personnel from NRCS,
                    certification programs recognized as
                    third party vendors of technical
                    assistance, or other programs recognized
                    by States. In addition, USDA is now
                    developing agreements with third-party
                    vendors similar to the 1998 agreement
                    with the Certified Crop Advisors (CCAs)
                    and consistent with NRCS standards
                    and specifications (or State  standards if
                    more restrictive). CCAs are expected to
                   be available to provide technical
                   assistance to producers in nutrient
                   management, pest management, and
                   residue management.
                     The purpose of using certified
                   specialists is to ensure that effective
                   PNPs are developed and/or  reviewed
                   and modified by persons who have the
                   requisite knowledge and expertise to
                   ensure that plans fully and effectively
                   address the need for PNPs that meet the
                   minimum effluent guideline
                   requirements hi the NPDES  permit, and
                   that plans are appropriately tailored to
                   the site-specific needs and conditions at
                   each CAFO.
                     EPA recognizes that some States
                   already have certification programs in
                   place for nutrient management
                   planning, and expects that the USDA
                   and-EPA guidance for AFOs and CAFOs
                   will provide additional impetus for new
                   and improved State certification
                   programs. These programs provide an
                   excellent foundation for producing
                   qualified certified specialists for
                   CNMPs, and can be modified relatively
                   easily to include a special module on
 how to develop an effective PNP as a
 defined subset of activities in the
 CNMP. EPA expects that, as a result of
 experience gained in the initial round of
 CAFO permitting under the existing
 regulations (2000—2005), certification
 programs will be well equipped to deal
 with both CNMPs and PNPs by the time
 today's regulations go into effect and
 States begin issuing the next round of
 CAFO permits that reflect these
 regulations. Thus, PNPs won't be
 expected to be developed before 2005.
   The issue of CNMP preparer
 requirements was also discussed by lie
 SERs and SBAR Panel during the
 SBREFA outreach process. (Note that at
 that time, EPA was still using the term
 CNMP to apply to regulatory as well as
 voluntary nutrient management plans.)
 Several SERs were concerned that
 requiring the use of a certified planner
 could significantly increase the cost of
 plan development, as well as limit the
 operator's influence over the final
 product. These SERs felt that, with
 adequate financial and technical
 assistance, they could write their own
 plans and suggested that EPA work to
 facilitate such an option through
 expanded training and certification of
 farmers and provision of a user-friendly
 computer program to aid in plan
 development.        • ,  .
   The Panel recognized the need for
 plan preparers to have adequate training
 to write environmentally sound plans,
 particularly for large operations.
 However, the Panel also recognized the
 potential burden on small entities of
 having to use certified planners,
 especially considering the large number
 of AFOs and the limited number of
 certified planners currently available.
 The Panel recommended that EPA work
 with USDA to explore ways for  small
 entities to minimize costs when
 developing CNMPs, and indicated that
 EPA should continue to coordinate with
 other Federal, State and local agencies
 in the provision of low-cost CNMP
 development services and should
 facilitate operator preparation of plans
 by providing training, guidance and
 tools (e.g., computer programs). EPA
 indicated in the Panel Report that it
 expected that many operations could
 become certified through USDA or land
 grant universities to prepare their own
 CNMPs.
  EPA is requesting comment on the
 proposal to require that PNPs be
 developed, or reviewed and modified,
by certified planners, and on ways to
 structure this requirement in order to
minimize costs to small operators.
  b. Submittal of Permit Nutrient Plan
 to the Permit Authority.—EPA is
proposing to require that applicants for

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                                                                     3035
individual permits and operators of new
facilities submitting notices of intent for
coverage under a general permit submit
a copy of the cover sheed and executive
summary of their draft PNP to the
permit authority at the time of
application or NOI submittal.
§ 122.21(i)(l)(iv) and 122.28(b)(2)(ii).
Operators of existing facilities seeking
coverage under a general permit must
submit a notice of final PNP
development within 90 days of seeking
coverage, but are not required to provide
a copy of the PNP to the Permit
Authority unless requested. The  -
reporting requirements, including the
notice of PNP development and notice
of PNP amendment, are discussed in
more detail in section VII.E.3 below.
  Initial installation of manure control
technologies are significantly less costly
compared to retrofitting existing
facilities, and early development  of a
PNP will help to ensure that, when a
new facility is being designed, the
operator is considering optimal control
technologies. In addition, in situations
where individual permits are warranted,
the public interest demands early
review  of the PNP, rather than waiting
for its availability after the permit has
been in effect for some time.
   EPA is requesting comment on the
proposal to require new facilities
 seeking coverage under a general
 permit, as well as applicants for
 individual permits, to submit a copy of
 the cover sheet and executive summary
 of their PNP to the permit authority
 along with the NOI or permit
 application. EPA is further requesting
 comment on whether the entire draft
 PNP should be submitted  along with the
 NOI or permit application.
   EPA is further requesting comment on
 whether, for individual permits,  the
 PNP, in part or in its entirety, should be
 part of the public notice and comment
 process along with the permit.
   c.  Availability of the Permit Nutrient
 Plan Information to the Public.—EPA is
 proposing to require the operator of a
 permitted CAFO to make  a copy of the
 PNP cover sheet and executive summary
 available to the public for review. The
  CAFO operator could choose to make
 this information directly available to the
  public in any of several ways, such as:
  (1) maintaining a copy of these
  documents at the facility  and making
  them available to the permit authority as
  publicly viewable documents upon
  request; (2) maintaining a copy of these
  documents at the facility  and making
  them available directly to the requestor;
  (3) placing a copy of them at a publicly
  accessible site, such as at a public
  library; or (4) submitting  a copy of them
  to the permit authority. EPA is
proposing that, if the operator has not
made the information available by other
means, the permit authority would be
required, upon request from the public,
to obtain a copy of the PNP cover sheet
and executive summary and make them
available. It is important to ensure that
the public has access to this
information, which is needed to
determine whether a CAFO is
complying with its permit, including
the land application provisions.
  EPA is also considering adding a
provision in the final rule that would
state that all information in the PNP, not
just the cover sheet and executive
summary, must he publicly available
and  cannot be claimed as confidential
business information. Some
stakeholders have claimed that all or a
portion of the PNPs should be entitled
to protection as confidential business
information (CBI). EPA does  not believe
that the PNP cover sheet or executive
summary would ever contain
confidential business information. The
information in these two sections of the
plan is simply too general ever to be
considered as CBI. However, EPA is
sensitive to the concerns of CAFOs that
there may be information in the
remaining, more detailed portions of the
PNP that is legitimately proprietary to
the CAFOs' businesses and that the
permit authorities should therefore
protect. We therefore request comments
 on whether the final rule should require
 the  entire PNP to be publicly available,
 or alternatively, whether the CAFO
 should be able to make a confidentiality
 claim as to the remaining information in
 the  PNP. Any such claim of
 confidentiality would be governed by
 EPA's regulations at 40 CFR, Part 2 and
 relevant statutes.
   There would be two bases on which
 EPA could base a determination that'no
 portion of the Permit Nutrient Plans
 would be entitled to CBI status. First,
 CWA Section 402(j) states that "[a] copy
 of each permit application and each
 permit issued under this section shall be
 available to the public." It may be that
 the PNPs that would be required by
 today's proposal are properly viewed as
 a part of the CAFO's NPDES permit. The
 permits would require each CAFO to
  develop and carry out a PNP, as
  specified in the proposed Part 122
 regulations. In addition, today's
  proposed effluent limitations guidelines
  would specify detailed requirements
  that PNPs must meet. Failure to develop
  and properly carry out a PNP would be
  enforceable under  each permit as a
  permit violation. Therefore, for
  purposes of Section 402(j), EPA may
  conclude that PNPs are properly viewed
  as a part of the permit or permit
application and, accordingly, must be
available to the public.
  EPA issued a "Class Determination"
in 1978 that addresses this issue. See
"Class Determination 1-78" (March 22,
1978) (a copy of which is in the public
record for today's proposal). This Class
Determination addressed how to
reconcile Section 402 (j) of the Clean
Water Act with Section 308 of the Act.
Section 308, which authorizes EPA to
collect information, states that
information obtained under that section
shall be available to the public, except
upon a showing satisfactory to the
Administrator that the information, if
made public, would divulge methods or
processes entitled to protection as trade
 secrets. Upon such a showing, the
Administrator shall protect that
 information as confidential. Section 308
 makes an exception for "effluent data,"
 which is not entitled to such protection.
   This Class Determination concludes
 that information contained in NPDES
 permits and permit applications is not
 entitled to confidential treatment
 because Section 402(j) mandates
 disclosure of this information to the
 public, notwithstanding the fact that it
 might be trade secrets or commercial or
 financial information. Referring to the
 legislative history of the CWA, the Class
 Determination notes that Congress
 sought to treat the information in
 permits and permit applications
 differently from information obtained
 under Section 308. It concludes that
 Congress intended Section 402(j) to be
 a disclosure mandate in contrast to the
 basic approach of Section 308, which
 provides protection for trade secret
 information. (Class Determination at pp.
 2-4.) Therefore, consistent with the
 Class Determination, if EPA were to
 conclude that the PNPs are a part of the
 permit, the entire PNP would be a
 public document that would not be
 entitled to confidentiality protection.
    A second basis for finding that PNPs
. must be available to the public would be
 that, even apart from Section 402(j), the
 information in PNPs may be "effluent
  data" and if so, also would not be
  entitled to protection under Section 308.
  EPA's regulations define the term
  "effluent data," among other things, as
  "[i]nformation necessary to determine
  the identity, amount, frequency, _,
  concentration, temperature, or other
  characteristics (to the extent related to
  water quality) of any pollutant which
          L discharged by the source (or
                                  of
has been	a- —_,
any pollutant resulting from any
discharge from the source), or any
combination of the foregoing." 40 CFR
2;302(a)(2)(i). There is a limited
exception for information that is related
to research and development activities.

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Federal Register/Vol. 66, No. 9/Friday, January  12, 2001/Proposed Rules
  EPA believes that the information in
  PNPs may fit this definition of "effluent
  data." The information in PNPs has
  direct bearing on the amount of
  pollutants that may be discharged by a
  CAFO and on characteristics of the
  pollutants that may be discharged (such
  as the identity and presence of
  nutrients) that would be related to water
  quality.
    On the other hand, the Agency could
  conclude that the information in the
  PNP is not part of the CAFO's permit.
  Each permit would indeed require the
  CAFO to develop and carry out a PNP
  that is approved by a certified specialist.
  Nevertheless, the CAFO will be
  developing the terms of the final PNP,
  as well as periodic modifications to the
  PNP, outside of the permitting process.
  It may be appropriate not to consider
  the PNP to be part of the permit for
  purposes of section 402(j). If 402(j)—
  which states that all information in the
  permit must be publicly available—is
  therefore not a relevant provision, then
  whether PNPs could be protected as  ,,
  confidential would be determined under
  section 308.
    Section 308, as noted above, allows
  information to be protected as GBI
  where the submitter can demonstrate
  the trade secret nature of the
  information to the satisfaction of the
  Administrator, except that "effluent
  data" is never confidential. EPA could
  find that the information in PNPs is not
  "effluent data." That is, EPA could
  conclude that the information in PNPs
  primarily concerns operational practices
  at the facility and does not have enough
  of a bearing on the characteristics of
  pollutants in the effluent to be
  considered "effluent data." Because it
  would not be "effluent data," the PNP
  information would not be categorically
  excluded from being treated as
,  confidential. EPA's regulations at 40
  CFR Part 2 specify the procedures for
  parties to make case-specific claims that
  information they submit to EPA is
  confidential and for EPA to evaluate
  those claims. Consistent with these
  regulations, each CAFO could claim that
  the information in its PNP is
  confidential (except for the cover sheet
  and executive summary). EPA would
  evaluate these claims and determine in
  each case whether the  CAFO's CBI
  claim should be approved or denied. In
  sum, EPA could adopt final regulations
  that would require a CAFO's CBI claims
  for the more detailed information in the
 remaining parts of the PNP to be
  decided in each case.
   The Agency notes that EPA itself
 would, of course, always be able to
 request and review the CAFO's full
 PNP. The issues raised in this
                    discussion concern only the availability
                    of these plans to outside parties.
                      EPA requests comments on all aspects
                    of this proposal, including whether it
                    would be proper to determine that the
                    full PNP must be publicly available
                    under CWA Section 402(j) and under
                    CWA Section 308 as "effluent data."
                    EPA also requests comments on whether
                    the cover sheet and executive summary
                    should always be made available to the
                    public, as proposed, or whether there
                    are elements of the cover sheet or
                    executive summary that might
                    appropriately be claimed as CBI, and
                    not considered to be either part of the
                    permit or "effluent data."
                      The PNP would be narrower than the
                    CNMP and would contain only
                    requirements that are necessary for
                    purposes of the effluent guideline. A
                    CNMP may contain other elements that
                    go beyond the effluent guideline. EPA is
                    not proposing any separate
                    requirements for CNMPs themselves to
                    be made publicly available and is not
                    proposing any findings as to whether
                    information in a  CNMP may be
                    confidential.

                    2. What are the Effluent Limitations in
                    the Permit?
                      The effluent limitations section in the
                    permit serves as the primary mechanism
                    for controlling discharges of pollutants
                    to receiving waters. This section
                    describes the specific narrative or
                    numeric limitations that apply to the
                    facility and to land application. It can
                    contain either technology-based effluent
                    limits or water quality-based effluent
                    limits, or both, and can contain
                    additional best management practices,
                    as needed.
                     a. What Technology Based Effluent
                    Limitations Would be in the Permit?
                    Under the two-tier structure, for CAFOs
                    with 500 AU  or more, the effluent
                    guidelines and standards regulations [40
                    CFR 412] would establish the
                    technology-based effluent limitations to
                   be applied in NPDES permits. Under the
                    three-tier structure, any operation
                    defined as a CAFO would be subject to
                    the revised effluent guidelines. The
                    proposal to revise the effluent
                   guidelines and standards regulation is
                    described in section VIII of today's
                   proposed rule.
                     Operations  with fewer than 500 AU
                   under the two-tier structure, or fewer
                   than 300 AU under the three-tier
                   structure, which have been designated
                   as CAFOs by the permit authority would
                   not be subject to the  effluent guidelines
                   and standards. For these CAFOs, the
                   permit writer  would use "Best
                   Professional Judgement," or BPJ, to
                   establish, on a case-by-case basis, the
 appropriate technology-based
 requirements. Often, permit writers
 adopt requirements similar to, or the
 same as tie effluent guidelines
 requirements.
   b. What Water Quality-based Effluent
 Limitations Would be in the Permit?
 Section 301(b)(i)(C) of the Clean Water
 Act requires there to be achieved "any
 more stringent limitation, including
 those necessary to meet water quality
 standards." Therefore, where
 technology-based effluent limitations
 are not sufficient to meet water quality
 standards, the permit writer must
 develop more stringent water quality-
 based effluent limits. Under today's
 proposal, the permit writer must
 include any more stringent effluent
 limitations for the waste stream from the
 production area as necessary to meet
 water quality standards. If necessary to
 meet water quality standards, permit
 writers may consider requiring more
 stringent BMPs (e.g., liners for lagoons
 to address a direct hydrologic
 connection to surface waters; covers for
 lagoons to prevent rainwater from ,
 causing overflows; allowing discharges
 only from catastrophic storms and not
 from chronic storms; pollutant limits in
 the overflow; particular treatments, such
 as grassed waterways for the overflows
 discharged; etc.).
  If EPA chose to promulgate one of the
 options discussed in section VII.D.'2
 above under which the agricultural
 storm water discharge exemption did
 not apply to land application areas
 under the operational control of a
 permitted CAFO, then the permit writer
 would be required to establish water
 quality-based effluent limits where
 necessary to meet water quality
 standards. If EPA chose to promulgate
 the option described in section VE.D.2
 above, under which the appropriate
 rates and practices identified in the
 effluent guidelines and the NPDES.
 regulations established the scope of the
 term "agriculture" without additional
 consideration of water quality imparts
 or water quality standards, only the
 limitations and practices required by the
 effluent guidelines and the NPDES
 regulations could be required by the
 permit authority for land application
 discharges.
  c. What Additional Best Management
 Practices Would be in the Permit?
 Under § 122.44(k)(4) of the existing
NPDES regulations, permit writers may
include  in permits best management
practices "that are reasonably necessary
to achieve effluent limitations and
standards or to carry out the purposes
and intent of the CWA." Under today's
proposal, the permit writer may include
BMPs for land, application areas in

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                  Federal Register/Vol.  66, No. 9/Friday, January 12, 2001/Proposed Rules
                                                                     3037
addition to those required by the
effluent guidelines, as necessary to
prevent adverse impacts on water
quality. As discussed in section VII.D.2
above, EPA is today defining proper
agricultural practices required to qualify
for the agricultural storm water
discharge exemption to include
practices necessary to minimize adverse
water quality impacts. Therefore, if a
permit writer determines that despite
the implementation of the BMPs
required by the effluent guidelines
discharges from a CAFO will have
adverse water quality impacts, the
permit writer should impose additional
BMPS designed to minimize such
impacts.
   3. What Monitoring and Reporting
Requirements are Included in the
Permit?
   The section of the NPDES permit on
monitoring and reporting requirements
identifies the specific conditions related
to the types of monitoring to be
 performed, the frequencies for collecting
 samples or data, and how to record,
 maintain, and transmit the data and
 information to the permit authority.
 This information allows the NPDES
. permit authority to determine
 compliance with the permit
 requirements.                      •
   As described in section VIII, today s
 proposed revisions to the effluent
 guidelines would require the operator to
 conduct periodic visual inspection and
 to maintain all manure storage and
 handling equipment and structures as
 well as all runoff management devices.
 See proposed § 412.33(c). The NPDES
 permit would also require the permittee
 to: (1) test and calibrate all manure
 application equipment annually to
 ensure that manure is land applied in
 accordance with the proper application
 rates established in the NPDES permit;
  (2) sample manure for nutrient content
  at least once annually, and up to twice
  annually if manure is applied more than
  once or removed to be sent off-site more
  than once per year; and (3) sample soils
 , for phosphorus once every three years.
  Today's proposed effluent guidelines
  would also require the operator to
  review the PNP annually and amend it
  if practices change either at the
  production area or at the land
  application area, and submit
  notification to the permit authority.
  Examples of changes in practice
  necessitating a PNP amendment
   include: a substantial increase in animal
   numbers (e.g., more than 20 percent)
   which would significantly increase the
•   volume of manure and nutrients
   produced on the CAFO; a change in the
   cropping program which would
   significantly alter land application of
animal manure and wastewater;
elimination or addition of fields
receiving animal waste application; or
changes in animal waste collection,
storage facilities, treatment, or land
application method.
  As discussed in section VILE.l.c
above, CAFO operators would be
required to submit their PNPs, as well
as any information necessary to
determine compliance with their PNPs
and other permit requirements, to the
permit authority upon request. The
CAFO operator could make a copy of
the cover sheet and executive summary
of the PNP available to the public in any
of several ways. Operators of new
facilities seeking coverage under a
general permit and applicants for
individual permits would be required to
submit a copy of their draft PNP to the
permit authority at the time of NOI
submittal or application.
   EPA is also proposing to require
 operators to submit a written
 notification to the permit authority,
 signed by the certified planner, that the
 PNP has been developed or amended,
 and is being implemented, accompanied
 by a fact sheet summarizing certain
 elements of the PNP. See
 § 412.31(b)(l)(ii). This written notice of
 PNP availability would serve an
 important role in verifying that the
 permittee is complying with one of the
 requirements of the NPDES permit. EPA
 is proposing that the PNP notification
 and fact sheet contain the following
 information:
 • The number and type of animals
   covered by the plan
 • The number of acres to which manure
   and wastewaters will-be applied
 • The phosphorus conditions for those
    fields receiving the manure
 • Nutrient content of the manure
 • Application schedule and rate
  • The quantity to be transferred off-site
  • Date PNP completed or amended
  !» Key implementation milestones

  4. What are the Record Keeping
  Requirements?
    The record keeping requirements
  section of the permit specifies the types
  of records to be kept on-site at the
  permitted facility.
    Operation and Maintenance of the
   CAFO. As described in section VIII of
   today's proposal, EPA is proposing to
   require operators to maintain records at
  :the facility that document: (1) the visual
   inspections, findings, and preventive
   maintenance; (2) the date, rate, location
   and methods used to apply manure and
   wastewater to land under the control of
   the CAFO operators; (3) the transfer of
   the CAFO-generated manure off-site; (4)
   the results of annual manure and
wastewater sampling and analyses to
determine the nutrient content; and (5)
the results of representative soil
sampling and analyses conducted at
least every three years to determine
nutrient content.
  Transfer to Off-site Recipients of
CAFO Manure. As described in Chapter
IV.B and V.B, inappropriate land
application of CAFO-generated manure
poses a significant risk to water quality.
Further, EPA estimates that the majority
of CAFO-generated manure is in excess
of CAFO's crop needs, and will very
likely be transferred off-site. The
ultimate success of the CAFO program
depends on whether recipients handle
manure appropriately, and in a manner
that prevents discharge ,to waters. As
 discussed fully in section VII.D.4,  EPA
is not proposing to regulate off-site
recipients through CAFO permit
 requirements, however, EPA believes
 that the certification and record-keeping
 requirements described here will help to
 ensure responsible handling of manure.
 Thus, EPA is co-proposing additional
 record keeping requirements under the
 NPDES program.
   Under one co-proposed option,  EPA
 would require that  owners or operators
 of CAFOs obtain from off-site land
 appliers a certification that, if land
 applying CAFO-generated manure, they
 are doing so at proper agricultural rates.
 In addition, the CAFO owner or
 operator would be required to maintain
 records of transfer, including the name
 of the recipient and quantity transferred,
 and would be required to provide the
 recipient with an analysis of the
 contents of the manure and  a brochure
 describing the recipient's
 responsibilities for proper management
 of the manure.. Under another co-
 proposed option, EPA would not require
 the certification, but would require the
 CAFO owner or operator to  keep  records
  and provide information.
    Certification Option. Under one
  option, EPA is proposing that CAFOs
  obtain a certification and that recipients
  of CAFO-generated manure so certify,
  pursuant to § 308 of the CWA. Under
  § 308, EPA has the authority to require
  the owner or operator of a point source
  to establish and maintain records and
  provide any information the Agency
  reasonably requires. The Agency has
  documented historic problems
  associated with over application of
  CAFO manure and wastewater by both
  CAFO operators and recipients of CAFO
  manure and wastewater. Today's
  proposal would establish effluent
  limitations designed to prevent
   discharges due to over application. In
   order to determine whether or not
   CAFOs are meeting the effluent

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Federal  Register /Vol. 66, No. 9/Friday, January  12, 2001 / Proposed Rules
   limitations which would be established
   under today's proposals, EPA believes it
   is necessary for the Agency to have
   access to information concerning where
   a CAFO's excess manure is sent.
   Furthermore, in order to determine
   whether or not the recipients of CAFO
   manure should be permitted (which
   may be required if they do not land
   apply the CAFO manure in accordance
  with proper agricultural practices and
  they discharge from a point source, see
  section Vn.D.2), EPA has determined
  that it will be necessary for such
  recipients to provide information about
  their land application methods.
  Recipients who certify that they are
  applying manure in accordance with
  proper agricultural practices as detailed
  in section VII.D.2 are responding to a
  request under Section 308 of the CWA.
  Therefore, a recipient who falsely
  certifies  is subject to all applicable civil
  and criminal penalties under Section
  309 of the CWA.
    In some cases, CAFOs give or sell
  manure to many different recipients,
  including those taking small quantities,
  and this  requirement could result in an
  unreasonable burden. EPA is primarily
  concerned with recipients who receive
  and dispose of large quantities,
  presuming that recipients of small
  quantities pose less risk of inappropriate
  disposal  or over-application. To relieve
  the paperwork burden, EPA is
  proposing that CAFOs not be required to
  obtain certifications from recipients that
  receive less than twelve tons of manure
  per year from the CAFO. The CAFO
  would, however, be required to keep
  records of transfers to such recipients,
  as described below.
   The Agency believes that it would be
 reasonable to exempt from the PNP
 certification requirements recipients
 who receive small amounts of manure
 from CAFOs. EPA considered
 exempting amounts such as a single a
 truckfoad per day or a single truckload
 per year. EPA decided that an
 appropriate exemption would be based
 on an amount that would be typically
 used for personal, rather than
 commercial, use. The exemption in
 today's proposal regulation is based on
 the amount of manure that would be
 appropriately applied to five acres of
 land, since five acres is at the low end
 of the amount of land that can be
 profitably fanned. See, e.g., "The New
 Organic Grower," Eliott Coleman (1995).
   To  determine the maximum amount
 of manure that could be appropriately
 applied to five acres of land, an average
 nutrient requirement per acre of
 cropland and pasture land was
 computed. Based on typical crops and
national average yields, 160 pounds of
                    nitrogen and 14.8 pounds of
                    phosphorous are required annually per
                    acre. See "Manure Nutrient Relative to
                    the Capacity of Cropland and
                    Pastureland to Assimilate Nutrients,"
                    Kellogg et al (USDA, July, 25, 2000). The
                    nutrient content of manure was based
                    on USDA's online software, Manure
                    Master, available on the world wide web
                    at http://www2.ftw.nrcs.usda.gov/
                    ManureMaster/MM21.html.
                     The nitrogen content of manure at the
                    time of land application ranges from
                    1.82 pounds per ton for heifers and
                    dairy calves to 18.46 pounds per ton for
                    hens and pullets. Using the low end rate
                    of 1.82 pounds of nitrogen per ton, 87.4
                    tons of manure, would be needed for a
                    typical acre or 439 tons of manure for
                    five acres in order to achieve the 160
                    pounds per acre rate. Using the high end
                    rate of 18.46 pounds of nitrogen per ton,
                    8.66 tons of manure would be needed
                    for a typical acre or 43.3 tons of manure
                    for five acres in .order to achieve the 160
                    pounds per acre rate. Thus, the quantity
                    of manure needed to meet the nitrogen
                   requirements of a five acre plot would
                   range from 43.3 tons to 439 tons,
                   depending on the animal type.
                     The phosphate content ofmanure at
                   the time of land application ranges from
                   1.10 pounds per ton for heifers and
                   dairy calves to 11.23 pounds per ton for
                   turkeys for breeding. Using the high end
                   11.23 pound per ton rate for
                   phosphorous, only about 1.3 tons would
                  - be needed for an average acre, or 6.5
                   tons for five acres in order to meet the
                   14.8 pounds of phosphorous required
                   annually for a typical acre of crops.
                   Using the low end i.l pound per ton
                   rate for phosphorous, about 13.2 tons
                   would be needed for an average acre, or
                   66 tons for five acres. Using the
                   phosphate content for broilers of 6.61
                   pounds per ton. is more typical of the
                   phosphate content ofmanure and would
                   result in 2.23 tons per acre being needed
                   for an average acre, or 11.2 tons for five
                   acres.
                    Clearly, exempting the high end
                   amount of manure based on nitrogen
                   content could lead to excess application
                  of phosphorous. Regulating based on the
                  most restrictive phosphate requirement
                  could lead to manure not being
                  available for personal use.
                    The exemption is only an exemption
                  from the requirement that the CAFO
                  obtain a certification. The recipient
                  would remain subject to any
                  requirements of State or federal law to
                  prevent discharge of pollution to waters
                  of the U.S.
                    EPA is proposing to set the threshold
                  at 12 tons per recipient per year. This
                  is rounding the amount based on typical
                  phosphate content. It also allows one
  one-ton pick up load per month, which
  is consistent with one of the alternative
  approaches EPA considered. Recipients
  that receive more than 12 tons would
  have to certify that it will be properly
  managed. EPA is interested in
  comments on alternative thresholds for
  exempting small quantity transfers by ,
  the CAFO from the requirement that
  CAFOs receive certifications from the
  recipients.
    For CAFO owners or operators who
  transfer CAFO-generated manure and
  wastewater to manure haulers who do
  not land apply the waste, EPA is
  proposing that the CAFO owner or
  operator must: (1) obtain the name and
  address of the recipients, if known; (2)
  provide the manure hauler with an
  analysis of the nutrient content of the
  manure, to be provided to the
  recipients; and (3) provide the manure
  hauler with a brochure to be given to the
  recipients describing the recipient's
  responsibility to properly manage the
  land application of the manure to
  prevent discharge of pollutants to
  waters of the U.S. The certification form
  would include the statement,
  "I understand that the information is being
   collected on behalf of the  U.S.
   Environmental Protection Agency or State
   and that there are penalties for falsely •
   certifying. The permittee is not liable if the
   recipient violates its certification."
   Concern has been expressed that
 many potential recipients of CAFO
 manure will choose to forego CAFO
 manure, and buy commercial fertilizers
 instead, in order to avoid signing such
 a certification and being brought under
 EPA regulation. The result could be that
 CAFO owners and operators might be
 unable to find a market for proper
 disposal, thereby turning the manure
 into a waste rather than a valuable
 commodity. EPA requests comment on
 this concern.
  This alternative is potentially
 protective of the environment because
 non-CAFO land appliers would be liable
 for being designated as a point source in
 the event that there is a discharge from
 improper land application. EPA's
 proposed requirements for what
 constitutes proper agricultural practices,
 described in VII.D.2 above, would
 ensure that CAFO-generated manure is
 properly managed.
  No Certification Option. In the second
 alternative proposal for ensuring proper
 management of manure that is
 transferred off-site, EPA is not
 proposing to require CAFO owners or
 operators to obtain the certification
 described above. Rather, CAFO owners
 or operators would be required to
maintain records of transfer, described
in the following section.

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                                                                     3039
  Concern has been expressed that
many potential recipients of CAFO
manure will choose to forego CAFO
manure, and huy commercial fertilizers
instead, in order to avoid signing such
a certification and being brought under
EPA regulation. The result could be that
CAFO owners and operators might be
unable to find a market for proper
disposal, thereby turning the manure
into a waste rather than a valuable
commodity.
  This alternative is potentially        • •
protective of the environment because
non-CAFO land appliers would be liable
for being designated as a point source in
the event that there is a discharge from
improper land application. EPA's
proposed requirements for what
constitutes proper agricultural practices,
described in VII.D.2 above, would
ensure that CAFO-generated manure is
properly managed.
  Records of Transfer of Manure Off-
site. In both alternative proposals for
whether or not to require CAEO owners
or operators to obtain certifications from-
off-site recipients, EPA is proposing to
require CAFO operators to maintain
records of the off-site transfer of the
GAFO-generated manure and
wastewater, e.g., when manure is sold or
given away for land application on land
not under their operational control, to
ensure the environmentally acceptable
use of the CAFO-generated manure. See
 § 122.23(i)(5). When  CAFO-generated
 manure is sold or given away to be used
 for land application, the specific
 manner of land application does not
 need to be addressed in the CAFO's
 PNP. However, to help ensure the
 environmentally acceptable use of the
 CAFO-generated manure, the CAFO
 operator would be required to do the
 following: See § 122.23(j)(4) and (5).
   • Maintain records showing the '
 amount of manure and/or wastewater
 that leaves the operation;
   • Record the name and. address of the
 recipient(s), including the intended
 recipient(s) of manure and/or
 wastewater transferred to contract
 haulers, if known;
   • Provide the recipient(s) with
 representative information on the
 nutrient content of the manure to be
 used in determining the appropriate
 .land application rates; and
   • Provide the recipient with
 information provided by the permit
 authority of his/her  responsibility to
 properly manage the land application of
 , the manure to prevent discharge of
 pollutants to waters of the U.S.
   • [Under one co-proposed option,
  obtain and retain on-site a certification
 , from each recipient of the CAFO-
  generated manure and wastewater that
they will do one of the following: (a)
land apply in accordance proper
agricultural practices as defined in
today's proposal; (b) obtain an NPDES
permit for discharges resulting from
non-agricultural spreading; (c) or utilize
it for other than land application
purposes.]
  EPA proposes to require these records
to be retained on-site at the CAFO, and
to be submitted to the permit authority
upon request.
5. What are the Special Conditions and
Standard Conditions in an NPDES
Permit?.
  Standard conditions in an NPDES
permit list pre-established conditions
that apply to  all NPDES permits, as
specified in 40 CFR 122.41.
  The special conditions in an NPDES
permit are used primarily to supplement
effluent limitations and ensure
compliance with the CWA. EPA is
proposing at  40 CFR 122.23 (i) to (k) to
require permit authorities to develop
special conditions that: (a) specify how
the permittee is to calculate the
allowable manure application rate; (b)
specify timing restrictions, if necessary,
on land application of manure and
wastewater to frozen, snow covered or
saturated ground; (c) establish
requirements for facility closure; (d)
specifying conditions for groundwater
with a direct hydrological connection to
surface water; (e) require certification
for off-site transfer of manure and
wastewater (co-proposed with omitting
this requirement). Finally, EPA is
 soliciting comment on whether a special
 condition should be included regarding
 erosion control.
   a. Determining Allowable Manure
 Application  Rate. EPA is proposing that
 the permit authority be required to
 include a term in the NPDES permit that
 establishes the method to be used for
 determining the allowable manure
 application rate for applying manure to
 land under the control of the CAFO
 operator. See proposed § 122.23(})(1).
   •As described in detail in section VIII,
 three methods are available which may
 be used to determine the allowable
 manure application rate for a CAFO.
 These three  methods are: (1) the
 Phosphorus Index; (2) the Soil
 Phosphorus Threshold Level; and (3)
 the Soil Test Phosphorus Level.
    EPA is proposing to adopt these three
 methods from USDA Natural Resource
 Conservation Service's (NRCS) nutrient
 management standard (Standard 590).
 State Departments of Agriculture are
 developing  State nutrient standards
 Which incorporate one of these three
 methods. EPA is proposing to require
 that each authorized permit authority
 adopt one or more of these three
 methods as part of the State NPDES
 program, in consultation with the State
 Conservationist. The permit would
 require the permittee to develop the
 appropriate land application rates in the
 site-specific PNP based upon the State's
 adopted method. EPA solicits comment
 on whether the special conditions in an
 NPDES permit should require permit
 authorities to adopt the USDA Natural
 Resource Conservation Service's (NRCS)
 Nutrient Management Standard
 (Standard 590) in its entirety rather than
 just the portion that applies to
 determining the allowable manure
 application rate.
   b. Would Timing Restrictions on Land
 Application of CAFO-generated Manure
 be Required? EPA is proposing to
 require that the permit writer include in
 the CAFO's NPDES permit regionally
 appropriate prohibitions or restrictions
 on the timing and methods of land
 application of manure where necessary.
 See proposed § 122.23(i)(3). The permit
 writer would develop the restrictions  .
 based on a consideration of local crop
 needs, climate, soil types, slope and
 other factors.
   The permit would prohibit practices
 that would not serve an agricultural
 purpose and would have the potential to
 result in pollutant discharges to waters
 of the United States. A practice would
 be considered not to be agricultural if
 significant quantities of the nutrients in
 the manure would be unavailable to
 crops because they would leach, run off
 or be lost due to erosion before they can
 be taken up by plants.
    EPA considered establishing a
 national prohibition on applying CAFO-
 generated manure to frozen, snow
 covered or saturated ground in today's
 proposed effluent guidelines. Disposal
 of manure or wastewater to frozen, snow
 covered or saturated ground is generally
 not a beneficial use for agricultural
 pin-poses. While such conditions can
 occur anywhere in the United States,
 pollutant runoff associated with such
 practice is a site specific consideration
 and is dependent on a number of
 variables, including climate and
 topographic variability, distance to
  surface water, and slope of the land.
  Such variability makes it difficult to
  develop a national technology-based
  standard that is consistently reasonable,
  and does not impose unnecessary cost
  on CAFO operators.
    While EPA believes that many permit
  writers will find a prohibition on
  applying CAFO-generated manure to
  frozen, snow covered or saturated
'  ground to be reasonably necessary to
  achieve the effluent limitations and to
  carry out the purposes and intent of the

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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001 / Proposed Rules
 CWA, EPA is aware that there are areas
 where these practices might be allowed
 provided they are restricted.
 Application on frozen ground, for
 example, may be appropriate in some
 areas provided there are restrictions on
 the slope of the ground and proximity
 to surface water. Many States have
 already developed such restrictions.
   While the proposed regulations would
 not establish a national technology-
 based limitation or BMP, EPA is
 proposing at § 122.23(j)(2) that permit
 writers consider the need for these
 limits. Permit authorities would be
 expected to develop restrictions on
 timing and method of application that
 reflect regional considerations, which
 restrict applications that are not an
 appropriate agricultural practice and
 have the potential to result in pollutant
 discharges to waters of the United
 States. It is likely that the operators
 would need to consider means of
 ensuring adequate storage to hold
 manure and wastewater for the period
 which manure may.not be applied. EPA
 estimates that storage periods might
 range from 45 to 270 days, depending
 on the region and the proximity to
 surface water, and to ground water with
 a direct hydrological connection to
 surface water. Permit authorities are
 expected to work with State agricultural
 departments, USDA's Natural Resource
 Conservation Service, the EPA Regional
 office, and other local interests to
 determine the appropriate standard, and
 include the standard consistently in all
 NPDES permits for CAFOs.
  EPA's estimate that storage periods
 would range from 45 days to 270 days
 is derived using'published freeze/frost
 data from the National Oceanic and
 Atmospheric Administration, National
 Center for Disease Control. For the
 purpose of estimating storage
 requirements to prevent application to
 frozen ground, EPA assumed CAFOs
 could only apply manure between the
 last spring frost and the first fall frost,
 called the "freeze free period". With a
 90 percent probability, EPA could also
 use a 28 degree temperature threshold to
 determine the storage time required,
 rounded to the nearest 45 day
 increment. This calculation results in 45
 days of storage in the South; 225 days
 in parts of the Midwest and the Mid-
 Atlantic; and as high as 270 days storage
 in the Central region.
  EPA is soliciting comment on
 alternate approaches of prohibiting land
 application at certain times or using
 certain methods. For example, EPA
 might develop a nationally applicable
prohibition against applying manure on
frozen land that is greater than a certain
slope such as 15 percent. EPA is also
                    interested in whether to prohibit
                    application to saturated soils.
                      c. Closure. EPA is proposing to
                    require permit authorities to require the
                    CAFO operator to maintain permit
                    coverage (e.g., after the facility ceases
                    operation as a CAFO or drops below the
                    size for being denned as'a CAFO) until
                    all CAFO-generated manure and
                    wastewater is properly disposed and,
                    therefore, the facility no longer has the
                    potential to discharge. See proposed
                    § 122.23(i)(3). Specifically, the permit
                    writer would need to impose a permit
                    condition requiring the owner or
                    operator to reapply for a permit unless
                    and until the owner or operator can
                    demonstrate that the facility has no
                    potential to discharge wastes generated
                    by the CAFO. This requirement would
                    be included as a special condition in the
                    NPDES permits.
                      EPA considered several options for
                    ensuring that manure and wastewater
                    from CAFOs is properly disposed after
                    the operation terminates or ceases being
                    a CAFO. Section VII.C.2.g above
                    discusses the options in detail. In this
                    proposal, EPA is also proposing to
                    ensure that permits explicitly address
                    closure requirements/While EPA is
                    today proposing to only require ongoing
                    permit coverage of the former CAFO,
                    permit authorities are encouraged to
                    consider including other conditions
                    such as those discussed in Se'ction
                    VH.C.2.g above.
                     EPA is soliciting comment on these
                    proposed provisions.
                     d. Discharge to Surface Water via a
                    Direct Hydrological Connection with
                    Ground Water. EPA is proposing
                    requirements to address the serious
                    environmental harms caused by
                    discharges from CAFOs to surface
                    waters via direct hydrologic connection
                    with ground water. As described in
                    section V.B.2.a, studies in Iowa, the
                    Carolinas, and the Delmarva Peninsula
                    have shown that CAFO lagoons do  leak,
                    and that leaks from lagoons contaminate
                    ground water and the surface water to
                    which that ground water is
                    hydrologically connected, often
                    severely. EPA believes that it is
                    reasonable to include a requirement to
                    ensure that discharges to surface water
                    via a direct hydrologic connection with
                   ground water do not occur from CAFOs,
                    either by requiring the permit applicant
                   to implement appropriate controls or to
                   provide evidence that no such
                   connection exists at the facility.
                     Section VII.C.2.J of today's preamble
                   discusses the legal and technical basis
                   for the proposed ground water controls,
                   and provides information on tools and
                   resources available-to permit writers to
                   make determinations as to whether the
 production area of a CAFO may
 potentially discharge to surface waters
 via direct hydrologic connection with
 ground water.
   EPA requests comment on the
 following proposals.
   CAFOs Subject to Effluent Guideline
 Requirements for Ground water. EPA is
 proposing that, for all CAFOs that are
 subject to an effluent guideline that
 includes requirements for zero
 discharge from the production area to
 surface water via direct hydrologic
 connection to ground water (all beef and
 dairy operations, as well as new swine,
 poultry and veal operations), the permit
 would require the appropriate controls
 and monitoring. See proposed 40 CFR
 412.33(a)(3), 412.35(a)(3) and
 412.45(a)(3). The permittee would be
 able to avoid the requirements by
 submitting a hydrologist's report
 demonstrating, to the satisfaction of the
 permit authority, that the ground water
 beneath the production area is not
 connected to surface water through a
 direct hydrologic connection.
   EPA is also requesting comment on
 other options for determining which
 CAFOs must implement appropriate
 monitoring and controls to prevent
 discharges from the production area to
 hydrologically connected groundwater.
 One option would be for EPA to narrow
 the rebuttable presumption to areas with
 topographical characteristics that
 indicate the presence of ground water
 that is likely to have a direct hydrologic
 connection to surface water. For
 example, the final rule  could specify
 that only CAFOs located in  certain
 areas, such as an area with certain types
 of lithologic settings (e.g., karst,
 fractured bedrock, or gravel); or an area
 defined by the USGS as a HLRl or
 HLR9; or an area with a shallow water
 table; would need to either comply with
 the groundwater monitoring
 requirements and appropriate controls
 in the effluent guideline or provide a
 hydrologist's statement demonstrating
 that there is no direct hydrologic
 connection to surface waters. Another
 option would be to require States,
 through a public process, to identify the
 areas  of the State in which there is the
 potential for such discharges. In those
 areas, CAFOs subject to an effluent
 guideline that includes  requirements to
 prevent discharges to surface water via
hydrologically connected ground water
would again need to either comply with
the monitoring requirements and
appropriate controls in the guideline or
provide a hydrologist's statement
 demonstrating that there is no
hydrologic connection to surface waters.
  Requirements for CAFOs Not Subject
 to Effluent Guidelines Ground Water

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                  Federal Register /Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
                                                                      3043
Provisions. Certain facilities are not
'subject to today's revised effluent
guideline (412 Subpart C and D) that
includes requirements to prevent
discharges to surface water via
hydrologically connected ground water.
Such CAFOs include: (1) Facilities
below the effluent guideline
applicability threshold that are
designated as CAFOs; (2) existing swine,
poultry and veal operations; and (3)
CAFOs  in sectors other than beef, dairy,
poultry, swine and veal. For such
CAFOs  not subject to an effluent
guideline that includes ground water
requirements, EPA is proposing that the
permit writer must assess whether the
facility  is in an area with topographical
characteristics that indicate the
presence of ground water that is likely
to have a direct hydrologic connection
to surface water. For instance, if the
facility  is in an area with topographical
characteristics that indicate the
presence of ground water that is likely
to have a hydrologic connection to-
• surface water, as discussed above, the
permit writer is likely to determine that
there is the potential for a discharge to
surface water via ground water with a
direct hydrologic connection.
   For existing swine, poultry, and veal
operations, if the permit writer
determines that pollutants may be
discharged at a level which may cause
or contribute to an excursion above any
State water quality standard, the permit
writer would be required to decide on
a case-by-case basis whether effluent
limitations (technology-based and water
quality-based, as necessary) should be
 established to address potential
 discharges to surface water via
hydrologically connected ground  water.
 EPA is  proposing that a permittee for
 whom the permit authority has made
 the above determinations  would be
 required to comply with those
 conditions, or could avoid having those
 conditions imposed by providing a
 hydrologist's statement that the facility
 does not have a direct hydrologic
 connection to surface water. 40 CFR
 122.23(j)(6) and (k)(5).
   For CAFOs not subject to today's
 revised effluent guidelines, if the  permit
 writer  determines that there is likely to
 be a discharge from the CAFO to surface
 waters via a direct hydrologic
 connection, the permit writer must
 impose technology-based or water
 quality-based, or both, effluent
 limitations, as necessary.  Again,-EPA is
 proposing that a permittee for whom the
 permit authority has made the above
 determinations would be required to
 comply with those conditions, or could
 avoid having those conditions imposed
 by providing a hydrologist's statement
that the facility does not have a direct
hydrologic connection to surface water.
40 CFR 122.23(j)(6) and (k)(5).
  EPA is soliciting comments on the
alternative provisions discussed here.
EPA is also requesting comment on the
proposal to place the burden on the
permittee to establish to the satisfaction
of the permitting authority that the
ground water beneath the production
area is not connected to surface waters
through a  direct  hydrologic connection.
  e. Certification JOT Off-site Recipients
of CAFO Manure. EPA is co-proposing
either to include the  following
requirement or to omit it. In the
inclusionary proposal, EPA would
require permit writers to include a
special condition in each permit that
requires CAFO owners or operators to
transfer manure  off-site only to
recipients who can certify that they will
either: (1) Land apply manure according
to proper agricultural practices, as
defined for off-site land appliers in
today's proposed rule; (2) obtain an
NPDES permit for potential discharges;
or (3) use the manure for purposes other
than land application. EPA proposes to
define the term "proper agriculture
practice" to mean that the recipient
shall determine  the nutrient needs of its
crops based on realistic crop yields for
its area, sample  its soil at least once
every three years to determine existing
nutrient content, and not apply the
manure in quantities that exceed the
land application rates calculated using
either the Phosphorus Index,
Phosphorus Threshold, or Soil Test
-Phosphorus method as specified in 40
CFR412.13(b)(l)(iv).
   EPA is also proposing to allow States
to waive this requirement if the
recipient is complying with the
requirements of a State program that are
 equivalent to proposed 40 CFR
 412.13(b).   '.
   f. Erosion Control. EPA is not
proposing to specify erosion controls as
 a necessary element of the PNP, but
 permit writers should consider whether
. to add special conditions on a case-by-
 case basis as appropriate.
   As described  in previous sections,
 EPA recognizes  that sediment eroding
 from cropland can have a significant
 negative impact on surface waters.
 While EPA realizes that it is not
 possible to completely prevent all
 erosion, erosion can be reduced to
 tolerable  rates. In general terms,
 tolerable  soil loss is the maximum rate
 of soil erosion that will permit
 indefinite maintenance of soil
 productivity, i.e., erosion less than or
 equal to the rate of soil development.
 The USDA-NRCS uses five levels of
 erosion tolerance ("T") based on factors
such as soil depth and texture, parent
material, productivity, and previous
erosion rates. These T levels are
equivalent to annual losses of about 1—
5 tons/acre/year (2-11 mt/ha/year), with
minimum rates for shallow soils with
unfavorable subsoils and maximum
rates for deep, well-drained productive
soils (from Ag Management Measures).
  Options for controlling erosion are: (1)
Implementation of one of the three
NRCS Conservation Practices  Standards
for Residue Management: No-Till and
Strip Till (329A), Mulch Till (329B), or
Ridge Till (329C) in the state Field
Office Technical Guide; (2) requiring a
minimum 30 percent residue cover; (3)
achieving soil loss tolerance or "T"; or
(4) following the Erosion and  Sediment
Control Management Measure as found
in EPA's draft National Management
Measures to Control Nonpoint Source
Pollution from Agriculture which is
substantially the same as EPA's 1993
Guidance Specifying Management
Measure for Sources of Nonpoint
Pollution in Coastal Waters.
  EPA is requesting public comment on
the suitability of requiring erosion
control as a special condition of an
NPDES permit to protect water quality
from sediment eroding from fields
where CAFO manure is applied to
crops. If erosion control is desirable,
EPA is soh'citing comment as to which
method would be the most cost-
efficient.
   g. Design Standards for Chronic
Rainfall. In this section, EPA  is
soliciting comments on whether
additional regulatory language is needed
to clarify when a discharge is
considered to be caused by "chronic
rainfall." EPA also solicits comment on
whether design standards to prevent
discharges due to chronic rainfall
should be specified in the effluent
limitations or as a special condition in
the NPDES permit.
   CAFOs in the beef and dairy sub-
category [412-subpart C] are prohibited
from discharging except during a "25-
year, 24-hour rainfall event or chronic
rainfall" and then only if they meet the
criteria in § 412.13(a)(2). Section
,412.13(a)(2)(i) allows a discharge caused
by such rainfall events only if "(i) The
production area is designed and
constructed to contain all process
wastewaters including the runoff from a
 25-year, 24-hour rainfall event; and (ii)
the production area is operated in
 accordance with the requirements of
 §412.37(a)."
   The term "25-year, 24-hour, rainfall
 event" is clearly defined in 40 CFR _
 412.01(b). In addition, proposed
 §412.37(c)(l)(iv) would require all
 surface impoundments to have a depth

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Federal Register/Vol. 66, No.  9/Friday, January  12,  2001/Proposed Rules
 marker which indicates the design
 volume and clearly indicates the
 minimum freeboard necessary to allow
 for the 25-year, 24-hour rainfall event. A
 discharge may he caused by a 25-year,
 24-hour storm when it occurs despite
 the fact that the CAFO operator
 maintained adequate freeboard.
   The term "chronic rainfall" has not
 been specifically defined. Generally, a
 chronic rainfall event is one that lasts
 longer than 24 hours and causes a
 discharge from a system that has been
 designed, constructed, maintained and
 operated to contain all process
 wastewaters plus the runoff from a 25-
 year, 24-hour rainfall event. Persistent
 rainfall over a period longer than 24
 hours may overwhelm a system
 designed for the 25-year, 24-hour
 rainfall event even though such
 persistent rainfalls may be expected to
 occur more frequently than every 25
 years.
   In order for a discharge to be
 "caused" by chronic rainfall, it would
 need to be contemporaneous with the
 rainfall. The discharge could not
 continue after the event any longer than
 is necessary. For example, once a
 flooded lagoon has been drawn down to
 the level necessary to protect the
 integrity of the lagoon (which in no case
 should be below the level of the
 freeboard necessary for a 25/24-hour
 storm), the discharge should cease. If
 the lagoon could not then accept
 additional waste from the CAFO, no
 animals that would contribute waste to
 the lagoon should be brought to the
 facility until additional capacity can be
 generated by properly land applying the
 waste or shipping the waste off-site.
   A discharge also would not be
 considered to be "caused" by the
 chronic storm if the operator should
 have foreseen the event in time to
 properly land apply the waste and
 thereby have avoided an overflow or the
 need to apply wastes to saturated
 grounds. Similarly, a discharge is not
 considered to be caused by the chronic
 storm if the operator should have
 foreseen the event and maintained
 adequate facilities for managing the
 waste. Although (in the absence of more
 specific regulatory requirements)
 operators would be responsible for
 foreseeing and planning for chronic
 rainfall events, they would be liable for
 discharges during chronic events only
 where they were not reasonable in their
 decision regarding what would be
 adequate capacity.
  An approach that would provide more
 certainty to the operator, but place a
greater burden on permitting authorities
would be for EPA to require permit
authorities to specify regionally-specific
                    minimum free board requirements
                    necessary to contain runoff from
                    foreseeable chronic events. For example,
                    it may be known that, in a given area,
                    the free board necessary to contain the
                    runoff from.a 25-year, 24-hour storm
                    will not be sufficient to contain the run
                    off that typically accumulates during the
                    region's rainy season, especially when it
                    would not be appropriate to draw down
                    the lagoon by land applying wastes
                    during that time. La that case, it may be
                    necessary for the permit writer to
                    specify a greater freeboard requirement
                    that would apply to the CAFO at the
                    beginning of that season. For example,
                    Nebraska requires CAFOs to be able to
                    capture the average rainfall for the three
                    summer months. EPA notes that such
                    additional permit conditions are already
                    required where they are necessary to
                    eliminate potential discharges that
                    would cause or contribute to violations
                    of state water quality standards.
                      Another approach would be to require
                    the operator to notify the permitting '
                    authority as soon as it knows that a
                    discharge will occur or is occurring and
                    to come to an agreement on how long
                    the discharge will occur. This approach
                    has several disadvantages. Because
                    many facilities located in the same area
                    may be experiencing the same problem,
                    permitting authorities may not have the
                    resources to address several
                    simultaneous requests. It is not clear
                    how a disagreement between the
                    operator and permit authority would be
                    resolved. Perhaps most importantly, this
                    approach also does not address the need
                    to foresee and prepare for such events
                    in advance of the event.
                     EPA solicits comment on all of these
                    approaches for clarifying when a
                    discharge is considered to be caused by
                    "chronic rainfall," and whether
                    technology guidelines are necessary in
                    either section 412 or 122 to address
                    discharges due to chronic rainfall.
                    F. What Type of NPDES Permit is
                    Appropriate for CAFOs?
                     NPDES permit authorities can
                    exercise one of two NPDES permitting
                    options for CAFOs: general permits or
                    individual permits. A general NPDES
                    permit is written to cover a category of .
                    point sources with similar
                    characteristics for a defined geographic
                    area.
                    1. What Changes Are Being Made to the
                    General Permit and NOI Provisions?
                     The majority of GAFOs may
                    appropriately be covered under an
                    NPDES general permit because CAFOs
                    generally involve similar types of
                    operations, require the same kinds of
                    effluent limitations and permit
 conditions, and discharge the same
 types of pollutants.' In the past, about 70
 percent of permitted CAFOs have been
 permitted under an NPDES general
 permit, and EPA expects this trend to
 continue. General permits offer a cost-
 effective approach for NPDES permit
 authorities because they can cover a
 large number of facilities under a single
 permit. The geographic scope of a
 general permit is flexible and can
 correspond to political or other
 boundaries, such as watersheds. At the
 same time; the general permit can also
 provide the flexibility for the permittee
 to develop and implement.pollution
 control measures that are tailored to the
 site-specific circumstances of the
 permittee. The public has an
 opportunity for input during key steps
 in the permit development and
 implementation process.
  EPA is proposing to clarify that
 CAFOs may obtain permit coverage
 under a general permit. See proposed
 § 122.28(a)(2)(iii). Although section
 122.28 currently authorizes CAFOs to be
 regulated using a general permit, some
 stakeholders have questioned whether
 CAFOs fall within the current language
 of that section. Today's proposal would
 clarify that permit writers may use a
 general permit to regulate a category of
 CAFOs that are appropriately regulated
 under the terms of the general permit.
  A complete  and timely NOI indicates
 the operator's  intent to abide by all the
 conditions of the permit, and the NOI
 fulfills the requirements for an NPDES
 permit application. The contents of the
 NOI are specified in the general permit.
  The current regulation requires NOIs
 to include legal name and address of 'the
 owner and operator; facility name and
 address; type of facility or discharges;
 and the receiving stream(s). EPA is
 proposing to amend § 122.28(b)(2)(ii) to
 require, in addition:
  • Type and  number of animals at the
 CAFO
  • Physical location, including
 latitude and longitude of the production
 area                 '
  • Acreage available  for agricultural
 use of manure and wastewater;
  • Estimated amount of manure and
 wastewater to be transferred off-site
  • Name and address of any other
 entity with substantial operational
 control of facility
  • If a new facility, provide a copy of
.the draft PNP
  • If an existing facility, the status of
 the development of the PNP
  • If an area is determined to have
 vulnerable ground water (karst, sandy
 soil, shallow water table, or in a
 hydrological landscape region 1 (HLRl),
 submit a hydrologist's  statement that the

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                                                                      3043
ground water under the production area
of the facility is not hydrologically
connected to surface water, if the
applicant asserts as such
  • Provide a topographic map as
described in 40 CFR 122.21(f)(7),
showing any ground water aquifers and
depth to ground water that may be
hydrologically connected to surface
water
•  § 122.21(f) requires the applicant to
submit a topographic map extending
one mile beyond the facility's boundary
that shows potential discharge points
and surface water bodies in the area.
EPA is proposing to include a
requirement that the operator also
identify on. the topographic map any
ground water aquifers that may be
hydrologically connected to surface
water, as well as the depth to ground
water.
  EPA is proposing to require permit
authorities to make the NOT and the
notification of PNP development or
amendment available to the public and
other interested parties in a timely
'manner, updated on a quarterly basis.
See proposed § 122.23(j)(2). EPA
encourages States to develop and use
Internet-based sites as a supplemental
means to provide ready public access to
CAFO NPDES general permits, facility
NOIs, and other information.
  EPA will explore ways to adapt the
Permit Compliance System, EPA's
national wastewater database, so that
permit authorities may use it to track
CAFO compliance information. This
information might include: NPDES
permit number; facility name; facility
location; latitude and longitude of the
production of area; animal type(s);
number of animals; the name and
address of the contract holder (for
contract operations); PNP date of
adoption or, where a PNP has not yet
been developed, the schedule for
developing and implementing the PNP,
including interim milestones.
  EPA is proposing to clarify that
CAFOs may obtain permit coverage
under a general permit. See proposed
§ 122.28(a)(2)(iii), which would
expressly add "concentrated animal
feeding operations" to the list of sources
that are eligible for general permits. In
fact, CAFOs are already eligible for
general permits under the existing
regulations at § 122.28(a)(2), both
because they are storm water point
sources (see subsection (a)(2)(i)) and
because they are a category of point
sources that involve the same or
substantially similar types of operations,
may be more appropriately controlled
under a general permit than under
individual permits, and otherwise meet
the criteria of subsection (a)(2)(ii). Some
stakeholders, however, have questioned
whether CAFOs meet these existing
criteria for general permit eligibility.
Therefore, to remove any such questions
among stakeholders, EPA is proposing
to expressly add CAFOs to the list of
sources that are eligible for general
permits. In sum, this proposed change
would be for purposes of clarity only; it
'would effect no substantive change to
the regulations.
2. Which CAFOs May Be Subject to
Individual Permits?
   Although EPA is not proposing to
require NPDES individual permits in
particular circumstances, the Agency is
proposing additional criteria for when
general permits may be inappropriate
for CAFOs. See proposed
§ 122.28(b)(3)(i)(G). Under the existing
regulation, the public may petition the
permit authority when it believes that,
based on the criteria in section
122.28(b)(3)(i), that coverage under a
general permit is inappropriate. Finally,
EPA is proposing to require the permit
authority to conduct a public process for
determining which criteria, if any,
would require a CAFO.owner or
operator to apply for an individual
permit. See proposed
§ 122.28(b)(3)(i)(G). Permit authorities
would be required to conduct this
public process and set forth its policy
prior to issuing any general permit for
CAFOs. Permit authorities would have
flexibility as to how to conduct this
public process.
   Besides requiring a public process to
develop criteria for requiring individual
permits, the proposed regulation would
also add the following CAFO-specific
 criteria for when the Director may
require an individual permit: (1)  CAFOs
 located in an environmentally or
 ecologically sensitive area;  (2) CAFOs
 with a history of operational or
 compliance problems; (3) CAFOs that
 are exceptionally large operations as
 determined by the permit authority; and
(4) significantly expanding CAFOs. See
proposed § 122.28(b)(3)(i)(G)(i)-(iv).
Any interested member of the public
may petition the Director to require an
individual permit for a facility covered
by a general permit. Section
122.28(b)(3).
  EPA believes these criteria on the
availability of general permits for
CAFOs are desirable because of keen
public interest in participating in the
process of issuing permits to CAFOs.
The public may participate in notice
and comment during the development
of general permits, but once issued,
public participation regarding facilities
submitting notices of intent is limited.
On the other hand, the public does have
access to notice and comment
participation with regard to individual
permits.
  EPA considered requiring all CAFOs,
or all new CAFOs, to obtain an
individual permit, but considered this
potentially burdensome to permit
authorities. Using general permits to
cover classes of facilities by type of
operation, by jurisdiction,  or by
geographic boundary such as a
watershed, offers  positive
environmental as well as administrative
benefits.
  EPA also considered identifying a
threshold to establish when
exceptionally large facilities would be
required to apply for an individual
permit, such as 5,000 AU or 10,000 AU,
or by defining such a threshold as the
largest ten percent or 25 percent of
CAFOs within each sector. EPA did not
propose this  approach because, as
shown in table 7-9, it was difficult to
establish a consistent basis across
sectors for making this determination.
While EPA's cost models assume that
30%  of operations might obtain
•individual permits, and thus such
thresholds are taken into account in the
cost analyses for this proposed
regulation, EPA did not believe
particular thresholds would be
appropriate across all sectors or all
states. EPA is interested in comments on
whether it should establish a size
threshold above which individual
permits would be required,
recommendations of what the threshold
should be, and data to support such
recommendations.
                      TABLE 7-9. POTENTIAL DEFINITION OF "EXCEPTIONALLY LARGE" FACILITIES
Animal sector
Beef/Heifer 	 	 	
5,000 AU
Head
equivalent
5,000
10,000 AU
Head
equivalent
10,000
Top 10% (Est.)
Head
11,000
AU
11,000
Top 25% (Est.)
Head
3,500
AU
3,500

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Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                TABLE 7-9. POTENTIAL DEFINITION OF "EXCEPTIONALLY LARGE" FACILITIES—Continued

Animal sector
Dairv 	
Veal 	
Swine 	 ; 	
Broiler 	
Layer 	
Turkey 	 	

5,000 AU
Head
equivalent
3500
5000
12,500
' 500 000
500 000
275 000

1 0,000 AU
Head
equivalent
7000
10000
25000
1 000 000
1 000 000
550 000

Top 10'
Head
3 800
1 500
9000
150 000
500000
100000

Xo(Est)
AU
5440
1 500
3600
1 500
5000
1 820

Top 25
• Head
2 170
950
5000
110000
1 80 000
55000

% (Est.)
AU
3 100
950
2 000
1 100
1 800
1 000

  Note: Except for beef, these values are interpolations based on best professional judgement.
  EPA also considered whether
operations that significantly expand
should be required to reapply for a
permit. Public concern has been
expressed as to whether operations that
significantly expand should be required
to undergo a public process to
determine whether new limits are
necessitated by the expansion. EPA
believes, however, that if the general
permit covers operations similar to the
newly expanded operation, there would
be no basis for requiring an individual
permit. In section VIII above, EPA also
has explained why it would not be
appropriate to  classify facilities that
expand their production capacities as
new sources. If a member of the public
believes that the requirements of a
proposed general permit are not
adequate for CAFOs above a certain
size, it should raise that issue when the
permit authority proposes the general
permit and request that it be limited to
certain size operations. As is discussed
above, the public could also petition the
permit authority if it believes that a
specific facility should be covered by an
individual permit.
  Under existing regulations the permit
authority may modify a permit if there
are material and substantial alterations
to the permitted facility or activity that
occur after the  permit is issued and
justify different permit conditions. 40
CFR 122.62(a)(l). The public would be
able to participate in the permit
modification process to incorporate the
new standards. 40 CFR 123.5(c).
  EPA is interested in  comment on
whether the above procedures are
adequate to ensure public participation
or whether individual  permits should be
required for any of the categories'of
facilities discussed above. Specifically,
EPA is interested in comments on
whether individual permits should be
required for (a) facilities over a certain
size threshold, (b) new facilities; (c)
facilities that are significantly
expanding; (d)  facilities that have
historical compliance problems;  or (e)
operations that are located in areas with
significant environmental concerns.
                    3. Demonstrating No Potential to
                    Discharge
                    '  As described in section VII.C.2.d
                    above, today's proposal would require
                    all CAFO owners or operators to apply
                    for an NPDES permit, based on a
                    presumption that all CAFOs have a
                    potential to discharge pollutants to
                    waters of the U.S. There would,
                    however, be one exception to this
                    requirement: A CAFO owner or operator
                    would not need to apply for a permit if
                    it received a determination by the
                    permit authority that the CAFO does not
                    have a potential to discharge. It would
                    be the CAFO owner's or operator's
                    burden to ask for a "no potential to
                    discharge" determination and to
                    support the request with appropriate
                    data and information. See proposed
                    § 122.23(c) and (e).
                      The term "no potential to discharge"
                    means that there is no potential for any
                    CAFO manure or wastewaters to be
                    added to waters of the United States
                    from the operation's production or land
                    application areas, without qualification.
                    For example, if a CAFO land applies its
                    manure according to a permit nutrient
                    plan, it may not claim "no potential to
                    discharge" status on the basis that it
                    would have runoff, but any runoff
                    would be exempt as agricultural storm
                    water. CAFOs owners or  operators
                    should not be able to avoid permitting
                    by claiming that they already meet the
                    land application requirements that
                    would be in a permit—in this case, the
                    requirement of zero discharge from land
                    application areas except for runoff from
                    properly applied manure and
                    wastewater (see today's proposed
                    effluent limitation guidelines).
                    Moreover, today's proposed effluent
                    limitation guidelines would include not
                    only restrictions on the rate of land
                    application but also a set of best
                    management practices to further protect
                    against inadvertent discharges from land
                    applied manure  and wastewater (for
                    example, the requirement for 100 foot
                    setbacks, consideration of timing of
                    application, etc.). EPA's intention
would be to require a permit that
imposes both types of requirements
unless an operation has clearly
established the absence of a potential to
discharge. A CAFO's claim that it
already meets the restrictions on the rate
of land application would not ensure, as
a permit would, that the CAFO has
employed and is continuing to employ
these additional management practices.
  Instead, EPA proposes to allow "no
potential to discharge" status in order to
provide relief where there truly is no    '
potential for a CAFO's wastes to reach
the waters. This would include, for
example, CAFOs that are far from any
water body, or those that have closed
cycle systems for managing their wastes
and that do not land apply their wastes.
In particular, EPA believes that the act
of land applying its manure and
wastewater would, in many cases, be
enough by itself to indicate that a CAFO
does have a potential to discharge. It
would be very difficult, in general, for
CAFOs that land apply their wastes to
demonstrate that they have no potential
to discharge (although conceivably such
a showing could be made  if the physical
features of the site, including lack of
proximity to the waters, slope, etc.
warrant it).
  It is only where there is no potential
for a CAFO's wastes to reach the waters
that EPA believes it is appropriate not
to require a permit. Indeed, where a
CAFO has demonstrated that it has no
potential to discharge, it no longer
qualifies as a point source under the Act
(see Section 502(14), which defines
"point source" to include conveyances
such as CAFOs from which pollutants
"are or may be" discharged).
  Under today's proposal, the burden of
proof to show that there is no potential
to discharge would be with the CAFO
owner or operator, not the permitting
authority. There would be a
presumption that the CAFO does have
the  potential to discharge unless the
CAFO owner or operator has rebutted
this presumption by showing, to the
satisfaction of the permit authority, that
it does not.

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                  Federal Register/Vol.  66,  No. 9/Friday, January 12, 2001/Proposed Rules
                                                                      3045
  It is not EPA's intention to allow a
broad interpretation of this provision
but, rather, to establish that "no
potential to discharge" is to be narrowly
interpreted and applied by permit
authorities. This provision is intended
to be a high bar that provides an
; exemption only to those facilities that
can demonstrate to a degree of certainty
that they have no potential to discharge
to the waters of the U.S.
•  Today's proposal would specify that
an operation that has had a discharge
within the past five years cannot receive
a determination that it has no potential
to discharge. The Agency is not
proposing to specify further the exact
conditions that would indicate that a
facility has no potential to discharge.
1 However, any such demonstration
would need to account for all manure
generated at the facility, specifying how
' the design of the animal confinement
 areas, storage areas, manure and  •
 wastewater containment areas, and land
 application areas eliminates any
 possibility of discharge  to surface waters
 or to groundwater with  a direct
 hydrological connection to surface
 water. Further, the CAFO operator must
 be able to provide assurance that all
 CAFO-generated manure and
 wastewater that is transported off-site
 are transferred to a recipient that
 provides for environmentally
 appropriate handling, such as by: (1)
 land applying according to proper
 agricultural practices as defined in .this
 regulation; (2) obtaining an NPDES
 permit for discharges resulting from
 land application; or (3)  having other
• non-land application uses.
    If an owner or operator is able to
 •demonstrate no potential to discharge at
 the production area, but cannot
 demonstrate an assurance that manure
 transported off-site is being
 appropriately disposed of, the facility
 would be required to apply for a zero
  discharge permit that includes the
: record keeping requirements described
 in section VILE, of today's proposal.
    EPA requests comment on whether it
  should include additional specific
  criteria for determining whether a CAFO
  has "no potential to discharge," and
  what those criteria should be. The
  Agency is concerned that without more
  specific criteria, this provision could be
  subject to abuse. Therefore, EPA is
  seeking comment on whether safeguards
  are necessary to ensure that only those
  CAFOs which truly pose no risk to the
  environment are able to avoid
  permitting requirements.
    The fact that a CAFO owner or
  operator submits a request for a
  determination that the facility has no
  potential to discharge would not change
the deadline to apply for a permit. The
CAFO owner or operator would need to
apply for a permit according to the date
specified in § 122.23(f) unless it receives
a no potential to discharge
determination before that date. It would
be inappropriate, in EPA's view, to
allow otherwise—i.e., to postpone the
deadline to apply for a permit if the
CAFO has not yet received a
determination on its "no potential to
discharge" request. Under that
approach, even CAFOs owners or
operators who could not make a serious
claim of "no potential to discharge"
could apply for such a determination
simply as a way of delaying the
permitting process, and the process
could in fact be delayed if permitting
authorities are faced with large numbers
of such requests. We recognize, that
under the approach we are proposing,
some CAFOs who really do have no
potential to discharge will be forced to
file a complete permit application if
their permitting authority has not ruled
on their request prior to the deadline for
the permit application. However, EPA
expects there to be few such cases, since
we expect relatively few CAFOs to be
able to demonstrate no potential to
discharge; and in light of the problems
of the alternative approach, EPA's
proposed approach seems preferable.
   It is important to recognize that if a
 CAFO receives a "no potential to
 discharge" determination but
 subsequently does have a discharge, that
 operation would be in violation of the
 Clean Water Act for discharging without
 a permit. The "no potential to .
 discharge" determination would not
 identify an operation as forever a non-
 point source. To the contrary, there
 would be no basis for excluding an
 operation from the requirements for
 point sources if it meets the criteria for
 being a CAFO and has an actual
 discharge of pollutants to the waters.
 The operation, upon discharging, would
 immediately revert to status as a point
 source.
   EPA is requesting comment on
 whether the Director's "no potential to
 discharge" determination should be
 subject to the same types of
 administrative procedures that are
 required for the Director's decision to
 issue or deny a permit. That is, EPA is
 considering a requirement that, before
 EPA or the State could issue a final
  determination that there is no potential
 to discharge, the public would have the
 formal right to comment on, and EPA
 would have the opportunity to object to
  (in authorized States), the Director's
  draft determination. These procedures
  may be appropriate, for example, in
  light of anticipated public interest in the
Director's determination. Alternatively,
EPA requests comment on not requiring
the Director to follow these procedures
for public and EPA input into the
Director's decision. EPA could conclude
that the types of procedures that apply
to permitting decisions are not
appropriate here (since the "no
potential to discharge" determination is
neither the issuance nor denial of a
permit), but that the environment is
sufficiently protected by the fact that
any actual discharge from either the
production or land application areas
would be a violation of the Clean Water
Act. Under this latter interpretation,
EPA would not itself follow the types of
procedures that apply to permit
decisions (such as providing the public
with the formal opportunity to submit
public comments on the Director's draft
 decision) and would not require States
to follow those procedures; however,
 States could make those procedures
available if they chose, since they would
be more stringent than the procedures
 required by EPA. EPA requests
 comment on which of these two
 alternative approaches to adopt in the
 final rule.
   It should be noted that under the
 three-tier proposal, in some cases
 owners of operations in the middle tier
 (300 AU to 1,000 AU) would not need
 to demonstrate "no potential to
 discharge" to avoid a permit because
 they would not be defined as CAFOs in
 the first instance. That is, if they do not
 meet any of the conditions under that
 regulatory option for being defined as a
 CAFO (insufficient storage and
. containment to prevent'discharge,
 production area located within 100 feet
 of waters, evidence of discharge in the
 last five years, land applying without a
 PNP, or transporting manure to an off-
 site recipient without appropriate
 certification) then they would not be
 subject to permitting as CAFOs. (They
 could, however, still be subject to
 NPDES permitting as other, non-CAFO
 types of point sources, as discussed
 elsewhere in this preamble.)
 4. NPDES Permit Application Form 2B
   EPA is proposing to amend the
 NPDES permit application form 2B for
 CAFOs and Aquatic Animal Production
• Facilities in order to reflect the revisions
 included in today's proposed
 rulemaking, and in order to facilitate
 consideration of the permit application.
 EPA is proposing to require applicants
 for individual CAFO permits to submit
 the following information:
    • acreage available for agricultural
 use of manure and wastewater;
    • estimated amount of manure and
 wastewater to be transferred off-site.

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3046
Federal Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
  • name and address of any person or
entity that owns animals to be raised at
the facility, directs the activity of
persons working at the CAFO, specifies
how the animals are grown, fed, or
medicated; or otherwise exercises
control over the operations of the
facility, in other words, that may
exercise substantial operational control.
  • provide a copy of the draft PNP.
  • whether buffers, setbacks or
conservation tillage are implemented to
protect water quality.
  • On the topographic map required
by Form 1, identify latitude and
longitude of the production area, and
                    identify depth to ground water that may
                    be hydrologically connected to surface
                    water, if any.
                      See,proposed §122.21(i)(l).
                      The existing Form 2B currently only
                    requires: whether the application is for
                    a proposed or existing facility; type and
                    number of animals in confinement
                    (open confinement or housed under
                    roof); number of acres for confinement
                    feeding; if there is open confinement,
                    whether a runoff diversion and control
                    system has been constructed and, if so,
                    indicate whether the design basis is for
                    a 10-year, 24-hour storm, a 25-year, 24-
hour storm, or other, including inches;
number of acres contributing to
drainage; design safety factor; name and
official title, phone number, and
signature. In addition, § 122.21(f) of the
current NPDES regulation requires
applicants to submit a topographic map
extending one mile beyond the facility's
boundary that shows discharge points
and surface water bodies in the area.
  EPA is proposing to update form 2B
and requests comment on what
information should be required of
applicants for individual permits.
BILLING CODE 6560-50-P

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              Federal Register/Vol. 66,  No.  9/Friday, January 12,  2001 /Proposed Rules
                                                                                                                              3047
See the Instructions on the reverse.
                                                EPA I.D. NUMBER (copy front Hem 1 of Form 1}
                                                                                                   DRAFT-11/00
D 1. Concentrated Animal Feeding Operation
      (complete Hems B, C, D, and section II)
D 2. Concentrated Aquatic Animal Production
      Facility (complete items B, C, and section III)
D. FACILITY OWNERSHIP
   1. Does an entity ottterlhan the applicant direct the activity of persons working at the facility identified in Form 1     O No
      andl.B.?
   2. Does an entity other than the applicant own the animals at the facility identified in Form 1 and I.B.?            D No        P  Yes
   3 Does an entity other than the applicant specify how the animals at the facility identified in I.B. are grown, fed or
      medicated?                                                        .               _        D No
   4. If yes was the answer for questions D1, D2, or D3, what is the name and address of the responsible entity?
      Responsible                                                   Responsible    	
   .   Entity Name:  	'.	L_	:	      Entity Address:, 	:	,	
  FORM
  2B
  NPOE8
       EPA
                    US. ENVIRONMENTAL PROTECTION AGENCY
               APPLICATION FOR PERMIT TO DISCHARGE WASTEWATER
CONCENTRATED ANIMAL FEEDING OPERATIONS AND AQUATIC ANIMAL PRODUCTION FACILITIES
                           Consolidated PemitsF
  GENERAL INFORMATION |

            A. TYPE OF BUSINESS
                                                  B. LEGAL DESCRIPTION OF FACILITY LOCATION
                                                                      C. FACILITY OPERATION
                                                                             STATUS
                                                                                                       D 1. Existing Facility

                                                                                                       O 2. Proposed Facility
                                                                                                       D Yes
                                                                                                       D Yes
 L CONCENTRATED ANIMAL FEEDING/OPERATION CHARACTERISTICS
 A. TYPE AND NUMBER OF ANIMALS
          1. TYPE
                                               2. ANIMALS'
                             NO. IN OPEN
                            CONFINEMENT
                    NO. HOUSED
                    UNDER ROOF
 C. TOTAL NUMBER OF ANIMALS CONFINED AT THE FACILITY
 D. NUMBER OF ACRES FOR CONFINEMENT FEEDING .
                                                                         B. LAND APPLICATION
1.'  How much manure is generated annually by the facility?
    	tons
2.   Is manure generated by the CAFO land applied?
    aYes  D  No
    If Yes, how many acres of land under the control of the
    applicant are available for applying the CAFOs
    manure/wastewater?	acres
3.  Is manure generated by the CAFO transferred to off-sjte
    recipients?   o Yes  o No.. If yes. what is the estimated
    quantity transferred annually?	tons
 E. IF THERE IS OPEN CONFINEMENT. HAS A RUNOFF DIVERSION AND CONTROL SYSTEM BEEN CONSTRUCTED?

    n Yes (complete Items 1,2, & 3 below) n No (go to section IV.)

    1. What is the design basis for the control system?   n a. 10 year, 24-Hour Storm (specify inches	)  n b. 25 year, 24-Hour Storm (specify inches _—)
                                              DC. Other (specify inches and type	:	_	—	)
    2. Report the number of acres of contributing drainage.  	acres.
    3. Report the design safely fgetof-                	..	'.		_	:	
 F. PERMIT NUTRIENT PLAN (PNP)

    Has a certified PNP been developed and Is being implemented for the facility? D Yes a No

    If yes. the applicant is to include a copy of the PNP with the application.

    If No when will the certified PNP be developed and implemented.  Date:	. A draft PNP must be submitted with this application that, at a
                                   squate land available to the C/"
            an alternative to land application that Is being implemented.
minimum,
describes
 G. CONSERVATION PRACTICES

      Please check any of the following conservation practices that are being implemented at the facility to control runoff and protect water quality.

      a Buffers  a Setbacks a Conservation Tillage	.	

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Federal Register/Vol. 66, No. 9/Friday, January 12,  2001/Proposed  Rules
             It CONCENTRATED AQUATIC ANIMAL PRODUCTION FACI1TVCHABACTERISTICS
             A. For each outfall give the maximum daily flow, maximum 30-daylkw, and the
               long-term average flow.
                                                  B. Indicate the total number of ponds, raceways, and similar structures In your
                                                  facility.
             1. Outfall No.
                                       2. ftoti fusions per di
                         a. Maximum Daily
                   b. Maximum 30
                       Day
                                                                          1. Ponds
c. Long Term
  Average
                                                                                              2. Raceways
                                                                                          3. Other
                                                                          C. Provide the name of the receiving water and the source of water used by your
                                                                          facility.
                                                                          1. Receiving Water
                                                                                2. Water Source
            D. LWtt»^ec^dn>h«aquatksanlnialsheIdaixlfedatyourfacilily. For each species, tfve the total weight produced by your facility per year in pounds^
               harvestablawalghtand also we the maximum weight present at any onetime	
                                  1. ColdWalerSpecies
                                                                                                , Warm Water Spedi
                        a. Species
                                               b. HarvestabteWeiomtawKfe)
                                              (1) Total Yearly   (2) Maximum
                                                                                                            b. HaiveslatJeVVeiqhlfcoi/mfe)
                                                                                                          (DTolal Yearly    (2) Maximum
            =. Reportthetolalpoundsoffoodfedduririgthecalendafmonth of maximum
            a«ding.
                                                  1. Month
                                                                                  2. Pounds of Food

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                       Federal  Register/Vol.  66,  No.  9/Friday, January  12,  2001 /Proposed Rules
                                                                        3049
                                                                       INSTRUCTIONS
             Seneral
            Thl» torn must be completed by all applicants who cheek "yes" to Hem II-B
             nForml. Notallantoialfeedingoperafionsarli^ifarmsararoquiredtooblaln
             JPDES permits. Exduslons are based on size and occurrence of discharge. See
             he description of these statutory and regulatory exclusions in the General
             nstructtons that accompany Form 1.
            species are warm water or cold water, on the production weight per year in
             larvestabte pounds, and on the amount of feeding in pounds of food (for cold
            water specfes). Also, facilities which discharge less than 30 days peryear, orooty
            permit.
            Refer to the Form 1 instructions to determine where to file this form.
            ton I-A
            See the note above and the General Instructions which accompany Form 1 to be
            sure that your facility is a 'fconcentrated animal feeding operation" (CAFO).
            Item 1-8
            Use this space to give a complete legal description of your facilities location
            Iteml-C
            Check •proposed • if your facility is not now In operation or does not currently meet
            the definition of a CAFO in accordance with Ihe.infonnation found in the General
            Instructions that accompany Form 1.
            Item 1-0
            The appScant must answer questions I.D. 1-3 to provide information concerning
            whether an entity other than the applicant exercises substantial operational control
            over the facility. If the answer is yes to any of the questions contained in Item I.D.
            the name and address of the entity are to be provided by the applicant.

            Itsmll
            Supply all information in item II if you checked (1) in Hem I-A.

            rtemll-A
            Give the maximum number of each type of animal In open confinement or housed
            under roof (either partially or totally) which are held at your facility for a total of 45
            days or more In any 12 month period.
             Use the following categories for types of anmal:
                Mature Dairy Cattle; Veal; Cattle (other than mature dairy or veal);
                Swine (over 25 kilograms); Swine (less than 25 kilograms); Horses;
                Sheep or Lambs; Turkeys;  Chickens (Laying Hens/Broilers); Ducks.

             Hem II-B
             Identify if manure generated by the facility Is to be land applied and the
             number of acres, under the controliof the CAFO operator, suitable for
             application.
             transfer off-site.

             ttemll-C
             Provide the total number of animals confined at the facility.

             Kemll-D
                                                                   . Do not
             include any area used for growing or operating feed.

             HtffllME
             Check "yes" if any system for collection of runoff has been constructed. Supply the
             information under(1), (2), and (3) to the best of your knowledge.

             ttomll-F
             Provide Information concerning the status of the development of a certified PNP for
             the facility. (Note: for new faculties the certified PNP must be included with Form
             28.) In ttKJsecaswwtere the certified PNP has not been completed, provide a
             draft PNP and an estimated completion date. The draft plan must, at a minimum,
              the land appfcation provisions of 40 CFR Part 412 or describe an alternative to
              land appfcation that the operator intends to implement.       ;	
                                                                                Hem IMS
Item III
Supply all information n Item III if you checked (2) in Hem I-A.

Hemlll-A
Outfalls should be numbered to correspond with the map submitted in Item XI of
Form 1. Values given for flow should be representative of your normal operation.
The maximum dairy flow is the maximum measured flow occurring over a calendar
day. The maximum 30-day flow Is the average of measured daily flows over the
calendarmonthofhlghestflow. The long-term average flow is the average of
me
rtemlll-B
Grvethetotalnumberofdrscretepondsorracewaysinyoufacility. Under-other,"
which results in discharge to waters of the United States.

Itemlll-C
Use names for the receiving water and source of water which correspond to the
map submitted in Item XI of Form 1.

Item III-D
The names of fish species should be proper, common, or scientific names as given
in special Publication No. 6 of the American Fisheries Society. 'A List of Common
and Scientific Names of Fishes from the United States and Canada.* The values
given for total weight produced by your facility per year and the maximum weight
present at any one time should be representative of your normal operation.

llemlll-E
The value given for maximum monthly pounds of food should be representative of
your normal operation.

KerntV
The Clean Water Act provides for severe penalties for submitting false information
on this application form.
Section 3098(2) of the Clean Water Act provides that "Any person who knowingly
makes any false statement, representation, or certification In any
application,.. .shall upon conviction, be punished by a fine of no more than
$10.000 or by Imprisonment for not more than six months, or both."


Federal regulations require the certification to be signed as follows:


   A. Forwrporatfen.byaprinc^alexecutrveoflicerofatleastthelevelof
   vice president;
   B. ftrapartnershiporsoleproprietorsh^byageneralpartierorthe
   proprietor, respectively; or
 •  C. ForamunidpaBty.State.Fedefal.orotherpublicfaciiy.byeithera
   Paper Reduction Act Notice


   Tl» Public reporting burden forth!* collection of Information
   ee«matedtoaveMge4hwr*perre*ponse. This estimate Includes
   time for reviewing Inttructtoni, searching existing data sources,
   gathering and maintaining the needed data, and completing and
   reviewing the collection of Information. Send comment* regarding
   the burden estimate or any other a*pect of thla collection of
   Information to the chief, Information Policy Branch (PM-223), U.S.
   Environmental Protection Agency, 1200 Pennsylvania Ave, NW,
   Washington, DC 20460, and the Office of Information and Regulatory
   ARab*, Office of Management and Budget, Washington, DC 20503,
   marked Attention: Desk Officer for EPA.

                              •""DRAFT-11/00""
BILUNQ CODE ssetMKKC                               Some of these operations represent a        activities, base don the risk to water
   It is anticipated that as a result of the     greater risk to water quality than others,    quality, Section G is being proposed to
requirement that all CAFOs have a duty    fa orier for the permit writer to              add to Form 2B as a screening
to apply, there will be a large number       prioritize NPDES permit writing             mechanism. Those facilities without
of CAFOs applying for NPDES permits.

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  3050
Federal Register/Vol. 66. No.  9/Friday, January 12,  2001 / Proposed Rules
  buffers, setbacks, or conservation tillage
  potentially pose a greater risk to water
  quality; therefore the permit writer
  could use this information to develop
  and issue NPDES permits to these
  facilities on an expedited basis.
     . What Changes to the Feedlot
 Effluent Limitations Guidelines Are
 Being Proposed?
 A. Expedited Guidelines Approach
   EPA has developed today's proposed
 regulation using an expedited
 rulemaking process which relies on
 communication between EPA, the
 regulated community, and other
 stakeholders, rather than formal data
 and information gathering mechanisms.
 At various stages of information
 gathering, USDA personnel,
 representatives of industry and the
 national trade associations, university
 researchers, Agricultural Extension
 agencies, States, and various EPA offices
 and other stakeholders have presented
 their ideas, identified advantages and
 disadvantages to various approaches,
 and discussed their preferred options.
   EPA encourages full public
 participation in commenting on these
 proposals.
 B. Changes to Effluent Guidelines
 Applicability

 1. Who is Regulated by the Effluent
 Guidelines?
   The existing effluent guidelines
 regulations for feedlots apply to
 operations with 1,000 AU and greater.
 EPA is proposing to establish effluent
 guidelines requirements for the beef,
 dairy, swine, chicken and turkey
 subcategories that would apply to any
 operations in these subcategories that
 are defined as a CAFO under either the
 two-tier or three-tier structure. Also as,
 discussed in detail in Section V1I.B.3,
 EPA is also requesting comment on an
 option under which the effluent
 guidelines proposed today would not be
 applicable to facilities under 1,000 AU.
 Under this approach, AFOs below this
 threshold would be permitted based on
 an alternate set of effluent guidelines, or
 the best professional judgment of the
 permit writer. After evaluating public •
 comments EPA may decide to consider
 this option. At that time EPA would
 develop and make available for
 comment an analysis of why it is
 appropriate to promulgate different .
 effluent guidelines requirements or no
 effluent guidelines for CAFOs that have
between 300 and 1,000 AU as compared
to the effluent guidelines for operations
with greater than 1,000 AU.
  EPA also proposes to establish a new
subcategory that applies to the
                    production of veal cattle. Veal
                    production is included in the beef
                    subcategory in the existing regulation.
                    However, veal production practices and
                    wastewater and manure handling are
                    very different from the practices used at
                    beef feedlots; therefore, EPA proposes to
                    establish a separate subcategory for veal.
                      Under the three-tier structure the
                    proposed effluent guidelines
                    requirements for the beef, dairy, swine,
                    veal and poultry subcategories will
                    apply to all operations defined as
                    CAFOs by today's proposal having at
                    least as many animals as listed below.
                    200 mature dairy cattle (whether milked
                      or dry);
                    300 veal;
                    300 cattle other than mature dairy cattle
                      or veal;
                    750 swine weighing over 55 pounds;
                    3,000 swine weighing 55 pounds or less;
                    16,500 turkeys; or
                    30,000 chickens.
                      Under the two-tier structure, the
                    proposed requirements for the beef,
                    dairy, swine, veal and poultry
                    subcategories will apply to all
                    operations defined as CAFOs by today's
                    proposal having at least as many
                    animals as listed below.
                    350 mature dairy cattle (whether milked
                      or dry);
                    500 veal;
                    500 cattle other than mature dairy cattle
                      or veal;
                    1,250 swine weighing over 55 pounds;
                    5,000 swine weighing 55 pounds or less;
                    27,500 turkeys;,or
                    50,000 chickens.
                     EPA is proposing to apply the Effluent
                   guidelines requirements for the beef,
                   dairy, veal, swine, chicken and turkey
                   subcategories, to all operations in these
                   subcategories that are defined as CAFOs
                   under either of today's proposed
                   permitting scenarios. Operations
                   designated as CAFOs are not subject to
                   the proposed effluent guidelines.
                     EPA is proposing to rename the
                   Effluent Guidelines Regulations, which
                   is entitled Feedlots Point Source
                   Category. Today's proposal changes the
                   name to the Effluent Guidelines
                   Regulation for the CAFOs Point Source
                   Category. EPA is proposing this change
                   for consistency and to avoid confusion
                   between who is defined as a CAFO
                   under Part 122 and whether the Effluent
                   guidelines apply to the operation.
                     EPA is not proposing to revise the
                   Effluent guidelines requirements or the
                   applicability for the horses, sheep and
                   lambs and ducks subcategories even
                   though the definition of CAFO for these
                   subcategories is changing as described
                   previously in Section VII. These sectors
                   have not undergone the same level of
 growth and consolidation that the odaer
 livestock sectors have experienced in
 the past 25 years, hi 1992, an estimated
 260 farms in these sectors were
 potentially CAFOs based on size, and
 relatively few of these operations were
 expected to maintain horses or sheep in •
 confinement. Finally, the CAFOs in
 these sectors have not been identified as
 significant contributors of wastewater
 pollutants that result in water quality
 impairment.
   EPA has evaluated the technology
 options described in this section and
 evaluated the economic achievability for
 these technologies for all operations
 with at least as many animals listed
 above for both the two-tier and three-tier
 NPDES structures. The technology
 requirements for operations defined as
 CAFOs under the two-tier structure are
 the same requirements for operations
 defined as CAFOs under the three-tier
 structure. Therefore for the purpose of
 simplifying this discussion and
 emphasizing the differences in
 technology requirements for the various
 technology options, the following
 discussion will not distinguish between
 the two CAFO definition scenarios. For
 more discussion of the costs and
 differences in costs between the
 different CAFO definition scenarios,
 refer to Section X of this preamble or the
 EA. For discussion of the benefits
 achieved for the different technology
 options and scenarios, refer to Section
 XI of this preamble.
   EPA proposes to make the Effluent
 guidelines  and standards applicable to
 those operations that are defined as
• CAFOs as described previously under
 Section VII. EPA is not proposing to
 apply the Effluent guidelines to those
 operations  that fall below the proposed
 thresholds  but are still designated as
 CAFOs. As described in Section VII,
 EPA anticipates that few AFOs will be
 designated as CAFOs and that these
 operations will generally be designated
.due to site-specific conditions.
 Examples of these conditions could
 include, not capturing barnyard runoff
 which runs directly into the stream, or
 siting open stockpiles of mam ire
 inappropriately.  EPA believes that
 establishing national technology based
requirements for designated CAFOs is
not efficient or appropriate because
historically a small number of facilities
has oeen designated and facilities which
are designated in the future will be
designated for a wide variety of reasons.
EPA believes that a permit will best
control pollutant discharges from those
operations if it is based on the permit
writer's best professiqnarjudgment and
is tailored to address the specific

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                                                                     3051
problems which caused the facility to be
designated.
  EPA is proposing to make substantial
changes to the applicability for
chickens, mixed animal operations and
immature animals as described below.
  Chickens. The current regulations
apply to chicken operations with liquid
manure handling systems or continuous
flow watering systems. Unlimited
continuous flow watering systems have
been replaced by more efficient systems
for providing drinking water to the
birds. Consequently, many state
permitting authorities and members of
the regulated community contend that
the existing effluent 'guidelines do not
apply to most broiler and laying hen
operations, despite the fact that chicken
production poses risks to surface water
and groundwater quality from improper
storage of dry manure, and improper
land application. EPA is proposing to
clarify the effluent guidelines to ensure
coverage of broiler and laying hen
operations with dry manure handling.
The proposed applicability is identical
to the definition of chicken CAFOs
 described in Section VII.C.2.f. EPA is
 thus proposing to establish effluent
 guidelines for chicken operations that
 use dry manure handling systems
 regardless of the type of watering system
 or manure handling system used. EPA is
 using the term chicken in the regulation
 to include laying hens, pullets, broilers
 and other meat type chickens. See
 Section VII for more details on the
 proposed applicability threshold for
 chickens.
   Mixed Animal Types. Consistent with
 the proposed changes to the definition
 of CAFO as described in Section
 VII.C.2.b, EPA is proposing to eliminate
 the calculation in the existing regulation
 that apply to mixed animals operations.
   Immature Animals. EPA is proposing
 to apply technology based standards to
 swine nurseries and to operations that
 confine immature dairy cows or heifers
 apart from the dairy. EPA currently
 applies technology based standards to
 operations based on numbers of swine
 each weighing over 55 pounds. Modern
 swine production has a phase of
 production called a nursery that only
 • confines swine weighing under 55
 pounds. These types of operations are
  currently excluded from the technology
 based standards, but are increasing in
  both number and size. Therefore, EPA
  proposes to establish technology based
  standards to operations confining
  immature pigs. Under the two-tier
  structure EPA proposes to establish a
  threshold of 5,000 immature pigs or pigs
  weighing 55 pounds or less. Under the
  proposed three-tier structure operations
  that confine between 3,000 and 10,000
immature pigs could be defined as
CAFOs and all operations with more
than 10,000 immature pigs would be
CAFOs. EPA also proposes to establish
requirements for immature heifers when
they are confined apart from the dairy,
at either stand alone heifer operations
similar in management to beef feedlots,
or at cattle feedlots. Therefore EPA
proposes to include heifer confinement
off-site from the dairy under the beef
feedlot subcategory, and today's
proposed technology standards for beef.
feedlots would  apply to those stand
alone heifer operations defined as
CAFOs. Also any feedlot that confines
heifers along with cattle for slaughter is
subject to the beef feedlot requirements.
  EPA is proposing to establish a new
subcategory for the effluent guidelines
regulations which applies to veal
operations. The existing regulation
includes veal production in the beef
cattle subcategory. EPA is proposing to
create a distinct subcategory for veal
operations because these operations use
different production practices than
other operations in the beef subcategory
however, we are proposing to retain the
 sized threshold that pertained to veal
 while included in the beef subcategory.
 Veal operations maintain their animals
 in confinement housing as opposed to
 open outdoor lots  as most beef feedlots
 operate. They also manage their manure
 very differently than typical operations
 in the beef cattle subcategory. Due in
 large part to the diet the animals are fed,
 the manure has a lower solids content
 and is handled through liquid manure
 handling systems, such as lagoons,
 whereas beef feedlots use dry manure
 handling systems and only collect
 storrnwater runoff in retention ponds.
 EPA is proposing to define a veal CAFO
 as any veal operation which confines
 300 veal calves or greater under the
 three-tier structure, or 500 veal calves or
 greater under two-tier structure.
  C. Changes to Effluent Limitations and
  Standards
   EPA is today proposing to revise BAT
  and new source performance standards
  for the beef, .dairy, veal, swine and
  poultry subcategories. EPA is proposing
  to establish technology-based
  limitations on land application of
  manure to lands owned or operated by
  the CAFO, maintain the zero discharge
  standard and establish management
  practices at the production area..
  1. Current Requirements
    The existing regulations, which apply
  to operations with 1,000 AU or greater,
  require  zero .discharge of wastewater
  pollutants from the production area
  except when rainfall  events, either
chronic or catastrophic cause an
overflow of process wastewater from a
facility designed, constructed and
operated to contain all process
generated wastewaters plus runoff from
a 10-year, 24-hour event under the BPT
requirements and a 25-year, 24-hour
event under the BAT and NSPS
requirements. In other words,
wastewater and wastewater pollutants
are allowed to be discharged as the
result of a chronic or catastrophic
rainfall event so long as the operation
has designed, constructed and operated
a manure storage and/or runoff
collection system to contain all process
generated wastewater, including the
runoff from a specific rainfall event. The
effluent guidelines do not set discharge
limitations on the pollutants in the
overflow.
2. Authority to Establish Requirements
Based on Best Management Practices

   The regulations proposed today
establish a zero discharge limitation and
include provisions requiring CAFOs to
implement best management practices
 (BMPs) to prevent or otherwise contain
CAFO waste to meet that limitation at
the production area. The regulations -
 also establish non-numeric effluent
 limitations in the form of other BMPs
 when CAFO waste is applied to land
 under the control of the CAFO owner or
 operator. For toxic pollutants of concern
 in CAFO waste, specifically cadmium,
 copper, lead, nickel, zinc and arsenic,
 EPA is authorized to establish BMPs for
 those pollutants under CWA section
 304(e). EPA also expects reductions in
 conventional and nonconventional
 water pollutants as a result of BMPs. To
 the extent these pollutants are in the
 waste streams subject to 304(e), EPA has
 authority under that section to regulate
 them. EPA also has independent
 authority under CWA sections 402(a)
 and 501{a) and 40 CFR 122.44(k) to
 require CAFOs to implement BMPs for
 pollutants not subject to section 304(e).
  In addition, EPA has authority to
  establish non-numeric effluent
  limitations guidelines, such as the BMPs
  proposed today, when it is infeasible to
  establish numeric effluent limits.
  Finally, EPA is authorized to impose the
  BMP monitoring requirements under
  section 308(a).
    Production Area. EPA has determined
  that the BMPs for the production area
  are necessary because the requirement
  of zero discharge has historically not
  been attained. As described in Section
  V, of this preamble, there are numerous
  reports of discharges from CAFOs that
  are unrelated to storm events which
  would be less likely to occur if the

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  3052
Federal  Register/Vol. 66, No. 9/Friday, January 12, 2001 / Proposed Rules
  proposed BMPs described below were
  required.
    Section 304(e) provides that "[t]he
  Administrator, after consultation with
  appropriate Federal and State agencies
  and other interested persons, may
  publish, regulations, supplemental to
  any effluent limitations specified under
  (b) and (c) of this section for a class or
  category of point sources, for any
  specific pollutant which the
  Administrator is charged with a duty to
  regulate as a toxic or hazardous
  pollutant under section 1317(a)(l) or
  1321 of this title, to control plant site
  runoff, spillage or leaks, sludge or waste
  disposal, and drainage from raw
  material storage which the
  Administrator determines are associated
  with or ancillary to industrial
  manufacturing or treatment process
  within such class or category of point
  sources and may contribute significant
  amounts of such pollutants to navigable
 waters." §304(e). There are studies
 showing the presence of a number of
 listed metals in animal manure.
 Numerous sources such as the American
  Society of Agricultural Engineers, and
 Universities such as North Carolina
 State University have acknowledged the
 presence of metals in manure. Metals
 are present in the manure because they
 are added or present in the animal feed.
 EPA has estimated metal loadings being
 applied to land before and after this
 regulation would take effect. Although
 the concentration of metals present in
 untreated manure are less than the
 limits for metals established in EPA's
 biosolids regulations (40 CFRPart 503),
 EPA still anticipates that there would be
 a substantial reduction in pollutant
 loadings reaching the edge of the field
 through use of the land application
 practices included in today's proposal.
 See the Development Document for
 more discussion.
  EPA's authority to require these BMPs
 does not require a determination that
 the toxics present in CAFO waste  are
 significant. The federal courts have held
 that EPA has extensive authority to
 carry out its duties under the Clean
 Water Act:
  EPA is not limited by statute to the   •
 task of establishing effluent standards
 and issuing permits, but is  empowered
 by section 501(a) of the Act to prescribe
 regulations necessary to carry out its
 functions under the Act. 33 U.S.C.
 § 1361(a). It is also clear that permissible
 conditions set forth in NPDES permits
 are not'limited to establishing limits on
 effluent discharge. To the contrary,
 Congress has seen fit to empower EPA
to prescribe as wide a range of permit
conditions as the agency deems
appropriate in order to assure
                    compliance with applicable effluent
                    limits. 33 U.S.C. § 1342(a)(2); see also
                    id. § 1314(e). NRDCv. EPA, 822 F.2d
                    104,122 (D.C. Cir. 1987).
                      This authority operates independent
                    of section 304(e). EPA's authority under
                    section 402(a)(2) to establish NPDES
                    permit conditions, including BMPs, for
                    any pollutant when such conditions are
                    necessary to carry out the provisions of
                    the statute has been further
                    implemented through regulations at 40
                    CFR 122.44(k). Although a requirement
                    to establish and implement BMPs of the
                    type proposed in this regulation could
                    be imposed on a case-by-case basis, EPA
                    has decided to promulgate this
                    requirement on a categorical basis for  '
                    those facilities which are CAFOs by  .
                    definition. In light of the more than
                    twenty years of experience with the
                    regulation of CAFOs and their failure to
                    achieve the zero discharge limit
                    originally promulgated, EPA has
                    determined that certain management
                    practices are necessary to ensure that
                    the zero discharge limit is actually met.
                    The stated goal of the Clean Water Act
                    is to eliminate the discharge of
                    pollutants into the Nation's waters.
                    CWA section 101(a)(l). EPA has
                    determined that these BMPs, by
                    Ereventing or controlling overflows,
                    saks or intentional diversions, are an
                    important step toward that goal.
                     Finally, EPA has authority to impose
                    monitoring and recordkeeping
                    requirements under section 308 of the
                   Act. As described below EPA is
                    proposing to require that CAFOs
                   periodically sample their manure and
                    soils to analyze for nutrient content.
                   This is necessary to both determine
                   what is the appropriate rate to land
                   apply manure and to ensure that the
                   application rate is appropriate. The
                   proposed rule would also require
                   CAFOs to conduct routine inspections
                   around the production area to ensure
                   that automated watering lines are
                   functioning properly, and to ensure that
                   the manure level for liquid systems is
                   not threatening a potential discharge.
                   The CAFO would also maintain records
                   that document manure application,
                   including equipment calibration,
                   volume or amount of manure applied,
                   acreage receiving manure, application
                   rate, weather conditions and timing of
                   manure application, application
                   method, crops grown and crop yields.
                   These records will provide
                   documentation that the manure was
                   applied in accordance with the PNP and
                   has riot resulted in a discharge of
                   pollutants in excess of the agricultural
                   use. EPA has  determined that these
                   practices are necessary in order to
                   determine whether an owner or operator
  of a CAFO is complying with the
  effluent limitation. Establishment and
  maintenance of records, reporting, and
  the installation, use and maintenance of
  monitoring equipment are all
  requirements EPA has the authority to
  impose. 33 U.S.C. § 1318(a).
   Land Application Areas. For the land
  application areas of'a CAFO, EPA is
  proposing a nonnumeric effluent
  limitation consisting of best
  management practices. The D.C. Circuit
  has concluded that "[w]hen numerical
  effluent limitations are infeasible, EPA
  may issue permits with conditions
  designed to reduce the level of effluent
  discharges to acceptable levels." NRDC
 v. Costle, 568 F.2d 1369,1380 (D.C. Cir.
  1977); 40 CFR 122.44(k)(3). EPA has
  determined that it is infeasible to
 establish a numeric effluent limitation
 for discharges of land applied CAFO
 waste and has also determined that the
 proposed BMPs are the appropriate ones
 to reduce the level of discharge from
 land application areas.
   The proposed BMPs constitute the
 effluent limitation for one wastestream
 from CAFOs. The statutory and
 regulatory definition of "effluent
 limitation" is very broad—"any
 restriction" imposed by the permitting
 authority on quantities, discharge rates
 and concentrations of a pollutant
 discharged into a water of the United
 States. Clean-Water Act § 502(11), 40
 CFR 122.2. Neither definition requires   .
 an effluent limitation to be expressed as
 a numeric limit. Moreover, nowhere in
 the CWA does the term "numeric
 effluent limitation" even appear and the
 courts have upheld non-numeric
 restrictions promulgated by EPA as
 effluent limitations. See NBDCv. EPA,
 656 F.2d 768, 776 (D.C. Cir. 1981)
 (holding that a regulation which allows
 municipalities to apply for a variance
 from the normal requirements of
 secondary sewage treatment is an
 "effluent limitation" for purposes of
 review under § 509(b): "[W]hile the
 regulations do not contain specific
 number limitations in all cases, their
 purpose is to prescribe in technical
 terms what the Agency will  require of
 section 1311(h) permit applicants.").
 Thus, the statutory definition of
 "effluent limitation" is not limited to a
 single type of restriction, but rather
 contemplates' a range of restrictions that
 may be used as appropriate.  Likewise,
 the legislative history does not indicate
that Congress envisioned a single
 specific type of effluent limitation to be
applied in all circumstances. Therefore,
EPA has a large degree of discretion in
interpreting the term "effluent
limitation," and determining'whether
an effluent limitation must be expressed

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                  Federal Register/Vol.  66, No. 9/Friday,  January 12, 2001/Proposed Rules
                                                                     3053
as a numeric standard. EPA has defined
BMPs as "schedules of activities,
prohibitions of practices, maintenance
procedures, and other management
practices to prevent or reduce the
pollution of waters of the United
States.""40 CFR 122.2. A BMP may take
any number of forms, depending upon
the problem to be addressed. Because a
BMP must, by definition, "prevent or
reduce the pollution of waters of the
United States," the practices and
prohibitions a BMP embodies represent
restrictions consistent with the
definition of an effluent limitation set
out in CWA§ 502(11).
  Effluent limitations in the form of.
BMPs are particularly suited to the
regulation of CAFOs. The regulation of
CAFOs often consists of the regulation
of discharges associated with storm
water. Storm water discharges can be
highly intermittent, are usually
characterized by very high flows
occurring over relatively short time
intervals, and carry a variety of
pollutants whose nature and extent
varies according to geography and local
land use. Water quality impacts, in turn,
 also depend on a wide  range of factors,
 including the magnitude and duration
 of rainfall events, the time period
 between events, soil conditions, the
 fraction of land that  is impervious to
 rainfall, other land use activities, and
 the ratio of storm water discharge to
 receiving water flow. CAFOs would be
 required to apply their manure and
 wastewater to land in a manner and rate
 that represents agricultural use. The
 manure provides nutrients, organic
 matter and micronutrients which are
 very beneficial to  crop production when
 applied appropriately. The amount or
 rate at which manure can be applied to
 provide the nutrient benefits without
  causing excessive pollutant discharge
 will vary based on site specific factors
  at the CAFO. These  factors include the
  crop being grown, the  expected crop
  yield, the soil types, and soil
  concentration of nutrients (especially
  phosphorus), and the amount of other
  nutrient sources to be  applied. For these
  reasons, EPA has determined that
  establishing a numeric effluent
  limitation guideline is infeasible.
    EPA has determined that the various
  BMPs specified in today's proposed
'• regulation represent the minimum
  elements of an effective BMP program.
  By codifying them into a regulation of
  general applicability,  EPA intends to
  promote expeditious implementation of
  a BMP program and to ensure uniform
  and fair application of the baseline
  requirements. EPA  is  proposing only
  those BMPs which  are appropriate on a
  nationwide basis, while giving both .
States and permittees the flexibility to
determine the appropriate practices at a
local level to achieve the effluent
limitations. The BMP's (described
below) that are included in the
proposed technology options are
necessary to ensure that manure and -.
wastewater are utilized for their nutrient
content in accordance with agricultural
requirements for producing crops or
pastures. EPA also believes that the
proposed regulations represent an
appropriate and efficient use of its
technical expertise arid resources that,
when exercised at the national level,
relieves state permit writers of the
burden of implementing this aspect of
the Clean Water Act on a case-by-case
basis.
3. Best Practicable Control Technology
Limitations Currently Available (BPTJ

   EPA is proposing to establish BPT
limitations for the beef, dairy, swine,
veal chicken and turkey subcategories.
There are BPT limitations in the existing
regulations which apply to CAFOs with
 1,000 AU or more in the beef, dairy
 swine and turkey subcategories. BPT
 requires that these operations achieve
 zero discharge of process wastewater
 from the production area excepHn the
 event of a 10-year, 24-hour storm'event.
 EPA is proposing to revise this BPT
 requirement and to expand the
 applicability of BPT to all operations
 defined as CAFOs in these subcategories
 including CAFOs with fewer than 1,000
 AU.
   The Clean Water Act requires that
 BPT limitations reflect the consideration
 of the total cost of application of
 technology in relation to the effluent
 reduction benefits to be achieved from
 such applications.  EPA considered two
 options as the basis for BPT limitations.
    Option 1. This option would require
 zero' discharge from a facility designed,
 maintained and operated to hold the
 waste and wastewater, including storm
 water, from runoff plus the 25-year 24-
 hour storm event. Both this option and
 Option 2 would add record keeping
 requirements and practices that ensure
 this zero discharge standard is met. As
  described in Section V there are
  numerous reports  of operations
  discharging pollutants from the.
  production area during dry weather.
  The reason for these  discharges varies
  from intentional discharge to poor
  maintenance of the manure storage area
  or confinement area. EPA's cost models
  reflect the different precipitation and
  climatic factors that affect an operations
  ability to meet this requirement; see
  Section X and the Development
  Document for further details.
  Option 1 would require weekly
inspection to ensure that any storm
water diversions at the animal
confinement and manure storage areas
are free from debris, and daily
inspections of the automated systems
providing water to the animals to ensure-
they are not leaking or spilling. The
manure storage or treatment facility
would have to be inspected weekly to
ensure structural integrity. For liquid
impoundments, the berms would need
to be inspected for leaking, seepage,
erosion and other signs of structural
weakness. The proposal requires that
records of these inspections would be
maintained on-site, as well as records
documenting any problems noted and
corrective actions taken. EPA believes
these inspections are necessary to
ensure proper maintenance  of the
production area and prevent discharges
apart from those associated with a storm
event from a catastrophic or chronic
storm.
   Liquid impoundments (e.g., lagoons,
ponds and tanks) that are open and
capture precipitation would be required
to have depth markers installed. The
 depth marker indicates the maximum
 volume that should be maintained
 under normal operating conditions
 allowing for the volume necessary to
 contain the 25-year, 24-hour storm
 event. The depth of the impoundment
 would have to be noted during each
 week's inspection and when the depth
 of manure and wastewater in the
 impoundment exceeds this maximum
 depth, the operation would be required
 to notify the Permit Authority and
 inform him or her of the action will be
 taken to address this exceedance. Closed
 or covered liquid impoundments must
 also have depth markers installed, with
 the depth of the impoundment noted
 during each week's inspection. In all
 cases, this liquid may be land applied
 only if done in accordance with the
 permit nutrient plan (PNP) described
 below. Without such a depth marker, a
 CAFO operator may fill the lagoons
 such that even a storm less than a 25-
 year, 24-hour storm causes the lagoon to
  overflow, contrary to the discharge limit
 proposed by the BPT requirements.
    An alternative technology for
  monitoring lagoon and impound meat
  levels is remote sensors which monitor
  liquid levels in lagoons or
  impoundments. This, sensor technology
  can be used to monitor changes in
  liquid levels, either rising  or dropping
  levels, when the level is changing
  rapidly can trigger an alarm. These
  sensors can also trigger an alarm when
  the liquid level has reached a critical
  level. The alarm can transmit to a
  wireless receiver to alert the CAFO

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  owner or operator and can also alert the
  permit authority. The advantages of this
  type of system is the real time warning
  it can provide the CAFO owner or
  operator that his lagoon or
  impoundment is in danger of
  overflowing. It can provide the CAFO
  operator an opportunity to better
  manage their operations and prevent
  catastrophic failures. These sensors are
  more expensive than depth markers;
  however, the added assurance they
  provide in preventing catastrophic
  failures may make them attractive to
  some operations.
    Option 1 would require operations to
  handle dead animals in ways that
  prevent contributing pollutants to
  waters of the U.S. EPA proposes to
  prohibit any disposal of dead animals in
  any liquid impoundments or lagoons.
  The majority of operations have
  mortality handling practices that
  prevent contamination of surface water.
  These practices include transferring
  mortality to a rendering facility, burial
  in properly sited lined pits, and
  composting.
   Option 1 also would establish
  requirements to ensure the proper land
  application of manure and other process
  wastes and wastewaters. Under Option
  1 land application of manure and
  wastewater to land owned or operated
 by the CAFO would have to be
 performed in accordance with a PNP
 that establishes application rates for
 manure and wastewater based on the
 nitrogen requirements for the crop. EPA
 believes that application of manure and
 wastewater in excess of the crop's
 nitrogen requirements would increase
 the pollutant runoff from fields, because
 the crop would not need this nitrogen,
 increasing the likelihood of it being
 released to the environment.
   In addition, Option 1 includes a
 requirement that manure be sampled at
 least once per year and analyzed for its
 nutrient content including nitrogen,
 phosphorus and potassium. EPA
 Believes that annual sampling of manure
 is the minimum frequency to provide
 the necessary nutrient content on which
 to establish the appropriate rate. If the
 CAFO applies its manure more
 frequently than once per year, it may
 choose to sample the manure more
 frequently, Sampling the manure as
 close to the time of application as
 practical provides the CAFO with a
 better measure of the nitrogen content of
 the manure. Generally, nitrogen content
 decreases through volatilization during
 manure storage when the manure is
 exjposed to air.
  The manure application rate
established in the PNP would have to be
based on the following factors: (1) the
                    nitrogen requirement of the crop to be
                    grown based on the agricultural
                    extension or land grant university
                    recoimnendation for the operation's soil
                    type and crop; and (2) realistic crop
                    yields that reflect the yields obtained for
                    the given field in prior years or, if not
                    available, from yields obtained for same
                    crop at nearby farms or county records.
                    Once the nitrogen requirement for the
                    crop is established the manure
                    application rate would be determined
                    by subtracting any other sources of
                    nitrogen available to the crop from the
                    crop's nitrogen requirement. These
                    other sources of nitrogen can include
                    residual nitrogen in the soil from
                    previous applications of organic
                    nitrogen, nitrogen credits from previous
                    crops of legumes, and crop residues, or
                    applications of commercial fertilizer,
                    irrigation water and biosolids.
                    Application rates would be based on the
                    nitrogen content in the manure and
                    should also account for application
                    methods, such as incorporation, and
                    other site specific practices.
                     The  CAFO woum have to maintain
                    the PNP on-site, along with records of
                    the application of manure and
                    wastewater including: (1) the amount of
                    manure applied to each field; (2) the
                    nutrient content of manure; (3) the
                    amount and type of commercial
                    fertilizer and other nutrient sources
                    applied; and (4) crop yields obtained.
                    Records must also indicate when
                    manure was applied, application
                    method and weather conditions at the
                    time of application.
                     While Option 1 would require manure
                   to be sampled annually, it would not
                   require soil sampling and analysis for
                   the nitrogen content in the soil.
                   Nitrogen is present in the soil in
                   different forms and depending on the
                   form.the nitrogen will have different
                   potential to move from the field.
                   Nitrogen is present in an organic form
                   from to the decay of proteins and urea,
                   or from other organic compounds that
                   result from decaying plant material or
                   organic fertilizers such as manure or
                   biosolids. These organic compounds are
                   broken  down by soil bacteria to
                   inorganic forms of nitrogen such as
                   nitrate and ammonia. Inorganic nitrogen
                   or urea  may be applied to crop or
                   pasture land as commercial fertilizer.
                   Inorganic nitrogen is the form taken up
                   by the plant. It is also more soluble and
                   readily  volatile, and can leave the field
                   through runoff or emissions. Nitrogen
                   can also be added to the soil primarily
                   through cultivation of legumes which
                   will "fix" nitrogen in the soil. At all
                   times nitrogen is cycling through the
                   soil, water, and air, and does not
                   become adsorbed or built up in the soil
  in the way that phosphorus does, as
  discussed under Option 2. Thus, EPA is
  not proposing to require soil sampling
  for nitrogen. EPA would, however,
  require that, in developing the
  appropriate application rate for
  nitrogen, any soil residue of nitrogen
  resulting from previous contributions by
  organic fertilizers, crop residue or
  legume crops should be taken into
  account when determining the
  appropriate nitrogen application rate.
  State Agricultural Departments and
  Land Grant Universities have developed
  methods for accounting for residual
  nitrogen contributed from legume crops,
  crop residue and organic fertilizers.
  . Option 1 would also prohibit
  application of manure and wastewater
  within 100 feet of surface waters, tile
  drain inlets, sinkholes and agricultural
  drainage wells. EPA strongly encourages
  CAFOs to construct vegetated buffers,
  however, Option 1 only prohibits
  applying manure within 100 feet of
  surface water and would not require
  CAFOs to take crop land out of
  production to construct vegetated
 buffers. CAFOs may continue to use
  land within 100 feet of surface water to
 grow crops. Under Option 1, EPA
 included costs for facilities to construct
 minimal storage, typically three to six
 months, to comply with the manure
 application rates developed in the PNP.
 EPA included these costs because data
 indicate pathogen concentrations in
 surface waters adjacent to land receiving.
 manure are often not significantly
 different from pathogen levels in surface
 waters near lands not receiving manure
 when the manure has been stored and
 aged prior to land application.  EPA
 believes the 100 foot setback, in
 conjunction with proper manure
 application, will minimize the  potential
 runoff of pathogens, hormones such as
 estrogen, and metals and reduce the
 nutrient and sediment runoff.
  EPA is aware of concerns that the
 presence of tile drain inlets, sinkholes
 and agricultural drainage wells may be
 widespread in some parts of the
 country. This could effectively preclude
 manure based fertilization of large areas
 of crop land. EPA requests comment on
 the presence of such features in crop
 land and the extent to which a 100 foot
 setback around such features would
 interfere with land application of
 manure. EPA also requests comment on
how it might revise the setback
requirement to address such concerns
and still adequately protect water
quality.
  EPA analysis shows application rates
are the single most effective means of
reducing runoff. Nevertheless, no
combination of best management

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                                                                     3055
practices can prevent pollutants from
land application from reaching surface
waters in all instances; vegetated buffers
provide an extra level of protection.
Buffers are not designed to reduce
pollutants on their own; proper land
application and buffers work in tandem
to reduce pollutants from reaching
surface waters. Data on the effectiveness
of vegetated buffers indicate that a 35 to
66 foot vegetated buffer (depending
primarily on slope) achieves the most
cost-effective removal of sediment and
pollutants from surface runoff.
However, EPA chose not to propose
requiring operations to take land out of
production and construct a vegetated
buffer because a buffer may not be the
most cost-effective application to
control erosion in all cases. There are a
variety  of field practices that should be
considered for the control of erosion.
EPA encourages CAFOs to obtain and
implement a conservation management
plan to minimize soil losses, and also to
reduce  losses of pollutant bound to the
soils.
  Today's proposal requires a greater
setback distance than the optimum
vegetated buffer distance. Since EPA is
not requiring the construction of a
vegetated buffer, the additional setback
 distance will compensate for the loss of
pollutant reductions in the surface
runoff leaving the field that would have
 been achieved with a vegetated buffer
 without requiring CAFOs to remove this
 land from production.
   EPA solicits comment on additional
 options to control erosion which would,
 in turn, reduce the  amount of pollutants
 reaching waters of the U.S. The options
 for controlling erosion include: (1)
 implementing one of the three NRCS
 Conservation Practice Standards for
 Residue Management: No-Till and Strip
 Till (329A), Mulch Till (329B), or Ridge
 Till (329C) in the state Field Office
 Technical Guide; (2) requiring a
 minimum 30% residue cover; (3)
 achieving soil loss  tolerance or "T; or
 (4) implementing of the Erosion and
 Sediment Control Management Measure
 as found in EPA's draft National
 Management Measures to Control
 Nonpoint Source Pollution from
' Agriculture. This measure is
  substantially the same as EPA's 1993
  Guidance Specifying Management
  Measure for Sources of Nonpoint
  Pollution in Coastal Waters which says
  to:                        :
    «* * * Apply the  erosion control
  component of a Resource Management
  System (RMS) as denned in the 1993 Field
  Office Technical Guide of the U.S.
  Department of AgricultureBNational
  Resources Conservation Service to minimize
1  delivery of sediment from agricultural lands
to surface waters, or design and install a
combination of management and physical
practices to settle the settleable solids and
associated pollutants in runoff delivered
from the contributing area for storms of up
to and including a 10-year, 24-hour
frequency."
  Farmers entering stream buffers in the
Conservation Reserve Program's (CRP)
Continuous' Sign-Up receive bonus
payments, as an added incentive to
enroll, include a 20 percent rental
bonus, a $100 per acre payment up-front
(at the time they sign up), and another
bonus  at the time they plant a cover.
These bonus payments more than cover
costs associated with enrolling stream
buffers, (i.e., rents forgone for the
duration of their 10 or 15 year CRP
contracts, and costs such as seed, fuel,
machinery and labor for planting a
cover crop). The bonuses provide a
considerable incentive to enroll stream
buffers because the farmers receive
payments from USDA well in excess of
what they could earn by renting the
land for crop production. Farmers can
enter buffers into the CRP program at
anytime.
   EPA may also consider providing
CAFOs the option of prohibiting manure
application within 100 feet or
constructing a 35 foot vegetated buffer.
EPA solicits comment on any and all of
these options.
   Option 2. Option 2 retains all the
 same requirements for the feedlot and
 manure storage areas described under
 Option 1 with one exception: Option 2
 would impose a BMP that requires
 manure application rates be phosphorus
 based where necessary, depending on
 the specific soil conditions at the CAFO.
   Manure is phosphorus rich, so
 application of manure based on a
 nitrogen rate may result in application,
 of phosphorus in excess of crop uptake
 requirements. Traditionally, this has not
 been a cause for concern, because the
 excess phosphorus does not usually
 cause harm to the plant and can be
 adsorbed by the soil where it was
 thought to be strongly bound and thus
 environmentally benign. However, the
 capacity for soil to adsorb phosphorus
 will vary according to soil type, and
 recent observations have shown that
 soils  can and do become saturated with
 phosphorus. When saturation occurs,
 continued application of phosphorus in
 excess of what can be used by the crop.
 and adsorbed by the soil results in the
 phosphorus leaving the field with storm
 water via leaching or runoff.
 Phosphorus bound to soil may also be
 lost from the field through erosion.
    Repeated manure application at a
 nitrogen rate has now resulted in high
 to excessive soil phosphorus
concentrations in some geographic
locations across the country. Option 2
would require manure application be
based on the crop removal rate for
phosphorus in locations where soil
concentrations or soil concentrations in
combination with other factors indicate
that there is an increased likelihood that
phosphorus will leave the field and
contribute pollutants to nearby surface
water and groundwater. Further, when
soil concentrations alone or in
combination with other factors exceed a
given threshold for phosphorus, the
proposed rule would prohibit manure
application. EPA included this
restriction because the addition of more
phosphorus under these conditions is
unnecessary for ensuring optimum crop.
production.
  Nutrient management under Option 2
includes all the steps described under
Option 1, plus the requirement that all
CAFOs collect and analyze soil samples
at least once every 3 years from all fields
that receive manure. EPA would require
soil sampling at 3 year intervals because
this reflects a minimal but common
interval used in crop rotations. This
frequency is also commonly adopted in
nutrient management plans prepared
voluntarily or under state programs.
When soil conditions allow for manure
 application on a nitrogen basis, then the
 PNP and record keeping requirements
 are identical to Option 1. Permit
 nutrient plans would have to be
 reviewed and updated each year to
 reflect any changes in crops, animal
 production, or soil measurements and
 would be rewritten and certified at a
 minimum of once every five years or
 concurrent with each permit renewal.
 EPA solicits comment on conditions,
 such as no changes to the crops, or herd
 or flock size, under which rewriting the
 plan would not be necessary and would
 not require the involvement of a
 certified planner.
   The CAFO's PNP would have to
 reflect conditions that require manure
 application on a phosphorus crop
 removal rate. The manure application
 rate based on phosphorus requirements
 takes into account the amount of
 phosphorus that will be removed from
 the field when the crop is harvested.
 This defines the amount of phosphorus'
 and the amount of manure that may be
 applied to the field. The PNP must also
 account for the nitrogen requirements of
 the crop. Application of manure on a
 phosphorus basis will require the
 addition of commercial fertilizer to meet
 the crop requirements for nitrogen.
 Under Option 2, EPA believes there is
 an economic incentive to maximize
 proper handling of manure by
  conserving nitrogen and minimizing the

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  expense associated with commercial
  fertilizer. EPA expects manure handling
  and management practices will change
  in an effort to conserve the nitrogen
  content of the manure, and encourages
  such practices since they are likely to
  have the additional benefit of. reducing
  the nitrogen losses to the atmosphere.
   EPA believes management practices
  that promote nitrogen losses during
  storage will result in higher applications
  of phosphorus because in order to meet
  the crops requirements for nitrogen a
  larger amount of manure.must be
  applied. Nitrogen volatilization
  exacerbates the imbalance in the ratio of
 nitrogen to phosphorus in the manure as
 compared to the crop's requirement.
 Thus application of manure to meet the
 nitrogen requirements of the crop will
 result in over application of phosphorus
 and the ability of the crops and soil to
 assimilate phosphorus will reach a
 point at which the facility must revise
 the PNP to reflect phosphorus based
 application rates. EPA solicits comment
 on additional incentives that can be
 used to discourage those  manure
 storage, treatment, and handling
 practices that result in nitrogen
 volatilization.
   Under both Option 1 (N) and Option
 2 (P), the application of nitrogen from
 all sources may not exceed the crop
 nutrient requirements. Since a limited
 amount of nutrients can be applied to
 the field in a given year, EPA expects
 facilities will select the site-specific
 practices necessary to optimize use of
 those nutrients. Facilities that apply
 manure at inappropriate times run the
 risk of losing the value of nutrients and
 will not be permitted to reapply
 nutrients to compensate for this loss.
 Consequently crop yields may suffer,
 and in subsequent years, the allowable
 application rates will be lower. For
 these reasons, facilities with no storage
 are assumed to need a minimal storage
 capacity to allow improved use of
 nutrients.
   Option 2 provides three methods for
 determining the manure application rate
 for a CAFO. These three methods are:
 • Phosphorus Index
 •  Soil Phosphorus Threshold Level
 •  Soil Test Phosphorus Level
   These three methods are adapted from
NRCS' nutrient management standard
 (Standard 590),  which is being used by
States' Departments of Agriculture to
develop State nutrient standards that
incorporate one or a combination of
these three methods. EPA is proposing
to require that each authorized state
Permit Authority adopt one of these
three methods in consultation with the
State Conservationist. CAFOs would
                    then be required to develop their PNP
                    based on the State's method for
                    establishing the application rate. In
                    those states where EPA is the permitting
                    authority, the EPA Director would adopt
                    one of these three methods in
                    consultation with that State's
                    Conservationist.
                      Phosphorus Index—This index
                    assesses the risk that phosphorus will be
                    transported off the field to surface water
                    and establishes a relative value of low,
                    medium, high or very high, as specified
                    in § 412.33. Alternatively, it may
                    establish a numeric ranking. At the
                    present time there are several versions
                    of the P-Index under development.
                    Many states are working on a P-Index
                    for their state in response to the NRCS
                    590 Standard, and NRCS itself
                    developed a P-Index template in 1994
                    and is in the process of updating that
                    template at the present time. There are
                    efforts underway in the scientific
                    community to standardize a phosphorus
                    index and assign a numeric ranking.
                      At a minimum the phosphorus index
                    must consider the following factors:
                    •  Soil erosion
                    •  Irrigation erosion
                    •  Runoff class
                    •  Soil P test
                    •  P fertilizer application rate
                    •  P fertilizer application method
                    •  Organic P source application rate
                    •  Organic P source application method
                      Other factors could also be included,
                    such as:
                    •  Subsurface drainage
                    •  Leaching potential
                    •  Distance from edge of field to surface
                     water
                    • Priority of receiving water
                     Each of these factors is listed in a
                    matrix with a score assigned to each
                    factor. For example, the distance from
                    edge of field to surface water assigns a
                    score to different ranges of distance. The
                   greater the measured distance, the lower
                   the score. Other factors may not be as
                   straightforward. For example, the
                   surface runoff class relates field slope
                   and soil permeability in a matrix, and
                   determines a score for this element
                   based on the combination of these
                   factors. The same kind of approach .
                   could also be used for the subsurface
                   drainage class, relating soil drainage
                   class with the depth to the seasonal high
                   water table. The values for all variables
                   that go into determining a P-Index can
                   either be directly measured, such as
                   distance to surface water, or can be
                   determined by data available from the
                   state, such as soil drainage class that is
                   based on soil types found in the state
                   and assigned to all soil types. Finally,
                   each factor is assigned a weight
  depending on its relative importance in
  the transport of phosphorus.
    When a P-Index is used to determine
  the potential for phosphorus transport
  in a field and the overall score is high,
  the operations would apply manure on
  a phosphorus basis (e.g., apply to meet
  the crop removal rate for phosphorus).
  When a P-Index determines that the
  transport risk is very high, application
  of manure would be prohibited.  If the P-
  Index results in a rating of low or
  medium, then manure may be applied
•  to meet the nitrogen requirements of the
  crop as described under Option 1.
  However, the CAFO must continue to
  collect soil samples at least every three
  years. If the phosphorus concentration
  in the soil is sharply increasing, the
  CAFO may want to consider managing
  its manure differently. This may include
  changing the feed formulations to
  reduce the amount of phosphorus being
  fed to the animals, precision feeding to
  account for nutrient needs of different
  breeds and ages of animals. It may also .
  include changing manure storage
  practices to reduce nitrogen losses.
  There is a great deal of research on feed
  management, including potential effects
  on milk production when phosphorus
  in rations fed to dairy cows is reduced,
  and the cost savings of split sex and
  multistage diets and the addition of or
  adding the enzyme phytase to make the -
 phosphorus more digestible by poultry
 and swine. Phytase additions in the feed
 of monogastrics have proven effective at
 increasing the ability of the animal to
 assimilate phosphorus and can reduce
 the amount of phosphorus excreted.
 Phytase use is also reported to increase
 bioavailability of proteins and essential
 minerals, reducing the need for costly
 supplemental phosphorus,  and reducing
 necessary calcium supplements for
 layers. The CAFO may also consider
 limiting the application of manure. For
 example, the CAFO may apply manure
 to one field to meet the nitrogen
 requirements for that crop but not return
 to that field until the crops have
 assimilated the phosphorus that was
 applied from the manure application.
   Phosphorus Threshold—This
 threshold which would be developed
 for different soil types is a measure .of
 phosphorus in the soil that reflects the
 level of phosphorus at which
 phosphorus movement in the field is
 acceptable. Scientists are currently
 using a soluble phosphorus
 concentration of 1 part per million
 (ppm) as a measure of acceptable
 phosphorus movement. When the soil
 concentration of phosphorus reaches
 this threshold the concentration of
 phosphorus in the runoff would be
 expected to be 1 ppm. The 1 ppm value

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                                                                      3057
 has been used as an indicator of
 acceptable phosphorus concentration
1 because it is a concentration that has
 been applied to POTWs in their NPDES
 permits. An alternative phosphorus
 discharge value could be the water
 quality concentration for phosphorus in
 a given receiving stream.
   States which adopt this method in
 their state nutrient management
 standard would need to establish a
 phosphorus threshold for all types of
 soils found in their state.
   Use of the phosphorus threshold in
 developing an application rate allows
 for soils with a phosphorus
 concentration less than three quarters
 the phosphorus threshold to apply
 manure on a> nitrogen basis. When soils
 have a phosphorus concentration
 between 3/4 and twice the phosphorus
 threshold then manure must be applied
 to meet the crop removal requirements
 for phosphorus. For soils which have
 phosphorus concentrations greater than
 twice the phosphorus threshold, no
 manure may be applied.
    Soil Test Phosphorus—The soil test
; phosphorus is an agronomic soil test
 that measures for phosphorus. This
 method is intended to identify the point
 at which the phosphorus concentration
 in the soil is high enough to ensure
 optimum crop production. Once that
 concentration range (often reported as a
 "high" value from soil testing
 laboratories) is reached, phosphorus is
 applied at the crop removal rate. If the
 soil test phosphorus level reaches a very
 high concentration, then no manure
 may be applied. Most soils need to be
 nearly saturated with phosphorus to
 achieve optimum crop yields. The soil
 phosphorus concentration should take
 into account the crop response and
 phosphorus application should be
 restricted when crop yield begins to
 level off.
    The soil test phosphorus method
  establishes requirements based on low,
  medium, high and very high soil
  condition, and applies the same
  restrictions to these measures as are
  used in the P-Index. States that adopt
  this method must establish the soil
  concentration ranges for each of these
 ' risk factors for each soil type and crop
  in their state.
    EPA anticipates that in most states,
  the permit authority will incorporate the
  State's nutrient standard (590 Standard)
  into CAFO permits. For example, if the
  permit authority, in consultation with
  the State Conservationist, adopts a
  Phosphorus Index, then CAFO permits
  would include the entire P-Index as the
  permit condition dictating how the
  application rate must be developed. If a
  permit authority selects the Phosphorus
Threshold, then the CAFO permits must
contain soil concentration limitations
that reflect phosphorus-based
application, as well as the level at
which manure application is prohibited.
  Each State Conservationist, in
consultation with land grant university
scientists and the state, must develop a
Phosphorus Index for that state by May
2001. EPA may consider eliminating the
use of the soil phosphorus threshold
level and the soil test phosphorus level
as methods for determining the manure
application rate for a CAFO and
requiring the use of the state
Phosphorus Index. Scientists studying
phosphorus losses from agricultural
lands are supporting the development
and use of the Phosphorus Index since
it combines the factors critical in
determining risk of phosphorus rate and
transport to surface waters, including
the soil phosphorus threshold level,
when developed. EPA is soliciting
comment on this option.
   Finally, under Option 2 EPA is
proposing to require CAFOs that
transfer manure off-site to provide the
recipient of the manure with
information as to the nutrient content of
the manure and provide the recipient
with information on the correct use of
the manure. See Section VII.E.4, for a
complete discussion of the requirements
for off-site transfer of manure.
   As discussed in Section VI,
compliance costs for manure transfer
assessed to the CAFO include hauling
costs and record keeping. If the
recipient is land applying the manure,
the recipient is most likely a crop
 farmer, and the recipient is assumed to
 already have a nutrient management
 plan that considers typical yields and
 crop requirements. The recipient is also
 assumed to apply manure and wastes on
 a nitrogen basis, so the application costs
 are offset by the costs for commercial
 fertilizer purchase and application. EPA
 assumes the recipient may need to
 sample soils for phosphorus, and costs
 for sampling identically to the CAFO,
i.e. every three years. EPA has not
 accounted for costs that would result
 from limiting the amount or way
 recipients are currently using manure.
 EPA solicits comment .on the impact to
 recipients who currently use manure
 and may have to change their practices
 as a result of this requirement, hi cases
 where manure is received for alternative
 uses, the recipient is deemed to already
 maintain the appropriate records.
   EPA solicits comments on whether
 there should be required training for
 persons that will apply manure. There
 are some states which have these
 requirements. Proper application is
 critical to controlling pollutant
 discharges from crop fields. Some states
 have establish mandatory training for
 persons that apply manure. EPA will
 consult with USDA on the possibility of
 establishing a national training program
 for manure applicators.
  Rotational Grazing. At the request of
 the environmental community, EPA has
 investigated rotational grazing as an
 alternative to confinement-based
 livestock production. Any pasture or
 grazing operation is by definition not a
 form of confinement, therefore use of
 these practices are outside of the scope
 of these regulations.
  Intensive rotational grazing is known
 by many terms, including intensive
 grazing management, short duration
 grazing, savory grazing, controlled
 grazing management, and voisin grazing
 management. This practice involves
 rotating livestock and poultry among
 several pasture subunits or paddocks,
 often on a daily basis, to obtain
• maximum efficiency of the pasture land.
   Due to the labor, fencing, water, and
 land requirements for intensive
 rotational grazing, typically only small
 dairy operations with less than 100 head
 use this practice. Few beef feedlots
 practice intensive rotational grazing.
 Poultry on pasture is usually housed in
 a portable building or pen holding up to
 100 birds that is moved daily; rarely are
 more than 1,000 birds in total raised in
 this manner. Swine have also been
 successfully raised on pasture, most
 frequently as a seasonal farrowing
 operation in combination with seasonal
 sheep or cow grazing. Climate and
 associated growing seasons make it very
 difficult for operations to use an
 intensive rotational  grazing system
 throughout the entire year. Most dairy
 operations and beef feedlots that use
 rotational grazing typically operate
 between 3 and 9 months of the year,
 with 12 months most likely only in the
 southern states. Poultry on pasture are
 produced for about 6 months, and pigs
 are typically farrowed once per year.
   Grazing systems are not directly
 comparable to confined feeding
 operations, as one system can not
 readily switch to the other. Intensive
 rotational grazing systems are reported
 to have advantages over confined
 feeding operations:  reduced housing
 and feed costs, improved animal health,
 less manure handling, and more
 economic flexibility. Intensive
 rotational grazing also encourages grass
 growth and development of healthy sod,
 which in turn reduces erosion. In a good
 rotational system, manure is more
 evenly distributed and will break up
 and disappear from the surface faster.
    Despite-these advantages, studies do
 not indicate significant reductions of

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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001 / Proposed Rules
 pathogens or nutrients in runoff to
 nearby streams as compared to manured
 fields. Rotational grazing systems may
 still require manure maintenance near
 watering areas and paths to and from
 the paddock areas. There are also limits
 to the implementation of intensive
 rotational grazing systems, which are
 highly dependent upon: available
 acreage, herd size, land resources, labor,
 water availability, proximity of pasture
 area to milking center for dairy
 operations, and feed storage capabilities.
 Grazing systems usually produce lower
 animal weight gain and milk production
 levels, provide limited1 manure handling
 options, and do not provide the level of
 biosecurity that confinement farms can
 obtain.
  Proposed Basis for BPT Limitations.
 EPA is not proposing to establish BPT
 requirements for the beef, dairy, swine,
 veal and poultry subcategories on the
 basis of Option 1, because it does not
 represent the best practicable control
 technology. In areas that have high to
 very high phosphorus build up in the
 soils, Option 1 would not require that
 manure application be restricted or
 eliminated. Thus, the potential for
 phosphorus to be discharged from land
 owned or controlled by the CAFOs
 would not be controlled by Option 1.
 Consequently Option 1 would not
 adequately control discharges of
 phosphorus from these areas. Option 2
 would reduce the discharge of
 phosphorus in field runoff by restricting
 the amount of phosphorus that may be
 applied to the amount that is
 appropriate for agricultural purposes or
 prohibiting the application of manure
 when phosphorus concentrations in the
 soil are very high and additional
 phosphorus is not needed to meet crop
 requirements.
  EPA is proposing to establish BPT
 limitations for the beef, dairy, swine,
 veal and poultry subcategories on the
 basis of Option 2 with the exception
 that it is co-proposing options with and
 without the certification regulations for
 off-site land application of manure.
 EPA's decision to base BPT limitations
 on Option 2 treatment reflects
 consideration of the total cost of
 application of technology in relation to
 the effluent reduction benefits to be
 achieved from such application. Option
 2 is expected to cost $549 million under
 the two-tier structure and achieve 107
 million pounds of pollutant reductions
 for a total cost to pound ratio of $0.57.
 The three-tier structure is estimated to
 cost $551 for a total cost to pound ratio
 of $0.51.
  The Option 2 technology is one that
is readily applicable to all CAFOs. The
production area requirements represent
                    the level of control achieved by the
                    majority of CAFOs in the beef, dairy,
                    swine, poultry and veal subcategories.
                    USDA and the American Society of
                    Agricultural Engineers cite the 25-year,
                    24-hour storm as the standard to which
                    storage structures should comply. This
                    has been the standard for many years,
                    and most existing lagoons and other
                    open liquid containment structures are
                    built to this standard. As described
                    above, the land application
                    requirements associated with Option 2
                    are believed to represent proper
                    agricultural practice and to ensure that
                    CAFO manure is applied to meet the
                    requirements of the crops grown and not
                    exceed the ability of the soil and crop
                    to absorb nutrients.
                      EPA believes any of the three methods
                    for determining when manure should be
                    applied on a phosphorus basis would
                    represent BPT. Each method has distinct
                    advantages which, depending on the
                    circumstances, could make one method
                    preferred over another. There has been
                    considerable work done in this area
                    within the past few years and this work
                    is continuing. EPA believes that this
                    proposed BPT approach provides
                    adequate flexibility to allow states to
                    develop an approach that works best for
                    the soils and crops being grown within
                    their state. Nonetheless, EPA will
                    continue to work with soil scientists
                    and may consider standardizing the
                    factors included in the phosphorus
                    index  to develop a standard rating scale,
                    for the purpose of CAFO requirements.
                    EPA also solicits comment on whether
                    there should be some EPA oversight  or
                    approval of the phosphorus method
                    developed by the states. Specifically
                    EPA solicits comment whether of EPA
                    should establish standards that must be
                    included in a phosphorus index. These
                    standards may include specifying
                    additional criteria which should be
                    considered in the index, such as
                    distance to surface water. EPA also
                    seeks comment on whether it should
                    establish minimum standards on how
                    these criteria must be factored into a
                    Phosphorus Index, such as specifying
                    the weight to be assigned to the various
                    criteria included in the Index and
                    assigning the values for specific ranges
                    for each criteria.  EPA may consider
                    establishing a minimum standard for the
                    phosphorus threshold method for
                    example requiring that at a minimum
                    the phosphorus threshold be based on
                    the soil phosphorus concentration that
                    would result in a soluble phosphorus
                    concentration in the runoff of 1 ppm.
                    EPA may also consider establishing
                    specific sampling protocols for
 collecting manure and soil samples and
 analyzing for nutrients. .
   CAFOs must also develop and
 implement a PNP that establishes the
 appropriate manure application rate.
 EPA believes the land application rates
 established in accordance with one of
 the three methods described in today's
 proposed regulation,  along with the
 prohibition of manure application
 within 100 feet of surface water, will
 ensure manure and wastewater are
 applied in a manner consistent with
 proper agricultural use. EPA has
 included a discussion of how to develop
 a PNP in section VIII.C.6.
   EPA believes that state sampling and
 analytical protocols are effective;
 however, soil phosphorus levels can
 vary depending on how the soil samples
 are collected. For example, a CAFO that
 surface-applies manure will deposit
 phosphorus in the surface layer of the
 soil and should collect soil samples
 from the top layer of soil. If this CAFO
 collects soil samples to a depth of
 several inches the analysis may
 understate the phosphorus
 concentrations in the soil. EPA solicits
 comments on the need to establish
 sampling protocols for soil sampling.
 4. Best Control Technology for
 Conventional Pollutants (BCT)
   In evaluating possible BCT standards,
 EPA first considered whether there are
 any candidate technologies (i.e.,
 technology options); that are
 technologically feasible and achieve
 greater conventional pollutant
 reductions than the proposed BPT
 technologies. (Conventional pollutants
 are defined in the Clean Water Act as
 including: Total Suspended Solids
 (TSS), Biochemical Oxygen Demand
 (BOD), pH, oil and grease and fecal
 coliform.) EPA considered the same
 BAT technology options described
below and their effectiveness at
reducing conventional pollutants. EPA's
 analysis of pollutant reductions has
 focused primarily on the control of
nutrients, nitrogen arid phosphorus.
However, the Agency has also analyzed
what the technology options can
achieve with respect to sediments (or
TSS), metals, and pathogens. Although
livestock waste also contains BOD, EPA
did not analyze the loadings or loadings
reductions associated with the
technology options for BOD. Thus, the
only conventional pollutant considered
in the BCT analysis is TSS. EPA
identified no technology option that
achieves greater TSS removals than the
proposed BPT technologies (see the
Technical Development Document).
EPA does not believe  that these
technology options would substantially

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                                                                     3059
reduce BOD loads. There are therefore
no candidate technologies for more
stringent BCT limits. If EPA had
identified technologies that achieve
greater TSS reductions than the
proposed BPT, EPA would have
performed the two part BCT cost test.
(See 51 FR 24974 for a description of the
methodology EPA employs when setting
BCT standards.) EPA solicits comment
on the assumptions it used in
considering BCT.
  EPA is proposing to establish BCT
limits for conventional pollutants
equivalent to the proposed BPT limits.

5. Best Available Technology
Economically Achievable (BAT)
  EPA is considering six technology
options to control discharges from
CAFOs in the beef, veal and poultry
subcategories, and seven technology
options for the dairy and hog
subcategories. All of the technology
options include restrictions on land
application of manure, best management
practices (BMPs), inspections and
record keeping for the animal
confinement areas, and wastewater
storage or treatment structures. The
following table summarizes the
requirements for each of the seven
technology options. Note that a given
technology option may include a
combination of technologies.
                      TABLE 8-1 .—REQUIREMENTS CONSIDERED IN THE TECHNOLOGY OPTIONS

Zero Discharge w/overflow when a 25-24 Design Stand-



100" LA sotback 	



Hydrologio Link Assessment & Zero Discharge to Ground-


Frozen/snow covered/saturated application prohibitions 	
Option 1.
X
X
X
X
X






Option 2
X
X
X
X
X
X




Option 3
X
X
X
X
X
X
X


Option 4
X
X
X
X
X
X
X
X

Option 5
Cattle &
Dairy
Cattle &
Dairy
X
X
X
X
Swine &
Poultry

Swine
Option 6

X
X
X
X
X


Swine &
Dairy
Option 7

X
X
X
X
X



X
  X = All Subcategories.


  Option 1. This option is equivalent to
 Option 1 described under BPT Section
 VIII.3. Option I* would require zero
 discharge from the production area and
 that liquid storage be designed,
 constructed and maintained to handle
' all process wastewater and storm water
 runoff from the 25-year, 24-hour storm
 event. In addition, Option 1 requires
 management practices to ensure that the
 production area (which includes
 manure and wastewater storage) is being
 adequately maintained.
  Option 1 also would establish a
 requirement to develop a PNP. which
 establishes the proper land application
 rate for manure and wastewater to meet
 the nitrogen requirements for the crops
 being grown by the CAFO and require
 a 100 foot setback from surface water,
 sinkholes, tile drain inlets and
 agricultural drainage wells.
   Option 2. This option is equivalent to
 Option 2 described under BPT (section
 VII.3). Option 2 includes all of the
 requirements established under Option
 1. However, Option 2 would further
 restrict the amount of manure that can
 be applied to crop land owned or
 controlled by the CAFO. The CAFO
 would be required to apply manure and
 wastewater at the appropriate rate
taking into account the nutrient
requirements of the crop and soil
conditions. Specifically, Option 2
would require that manure be applied at
crop removal rate for phosphorus if soil
conditions warrant and, if soils have a
very high levelphosphorus build-up, no
manure or wastewater could be applied
to the crop land owned or controlled by
the CAFO.
   Option 3. Option 3 includes all the
requirements for Option 2 and would
require that all operations perform an
assessment to determine whether the
ground water beneath the feedlot and
manure storage area has a direct
hydrological connection to surface
water. As described in Section VII, EPA
has authority to control discharges to
surface water through ground water that
has a direct hydrological connection to
surface water. A hydrological
connection refers to the interflow and
exchange between surface
impoundments and surface water
through an underground corridor, or
ground water. EPA is relying on the
permitting authority to establish the
region-specific determination of what
constitutes a direct hydrological link.
Option 3 would require all CAFOs to
 determine whether they have a direct
 hydrological connection between the
 ground water beneath the production
 area and surface waters. If a link is
 established, the facility would have to
 monitor ground water up gradient and
 down gradient of the production area to
 ensure that they are achieving zero
 discharge to ground water. EPA has
 assumed that CAFOs would comply
 with the zero discharge requirement by
 installing liners of synthetic material
 beneath lagoons and ponds, and
 impervious pads below storage of dry
 manure stockpiles. EPA's costs for liners
 reflect both a synthetic liner and
 compacted clay to protect the liner and
 prolong its useful life.
   CAFOs with a direct hydrologic link
 would be required to sample the
 groundwater from the monitoring wells
' (located up gradient and down gradient
 of the production area) at a minimum
 frequency of twice per year. These
 samples are necessary to ensure that
 pollutants are not being discharged
 through groundwater to surface water
 from the production area. The samples
 shall be monitored for nitrate, ammonia,
 total coliform, fecal coliform, Total
 Dissolved Solids (TDS) and total
 chloride. Differences in concentration  of
 these pollutants between the monitoring

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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
well(s) located up gradient and down
gradient of the production area are
assumed to represent a discharge of
pollutants and must be prevented. As
noted below, coliforms are not
necessarily good indicators of livestock
discharges. Also, it is difficult to
determine "concentrations" of coliforms
as they are not necessarily evenly
distributed in the way chemical
contaminants generally are. EPA
requests comment on technical concerns
associated with including total and fecal
coliforms in the groundwater
monitoring and protection requirements
and on ways to address such concerns.
  Option 4. Option 4 includes all the
requirements for Option 3 and would
require sampling of surface waters
adjacent to feedlots and/or land under
control of the feedlot to which manure
is applied. This option would require
CAFOs to sample surface water both
upstream and downstream from the
feedlot and land application areas
following a one half inch rain fall (not
to exceed 12 sample events per year).
The samples would be analyzed for
concentrations of nitrogen, phosphorus
and total suspended solids (TSS). EPA
selected these pollutants because it
believes these pollutants provide an
adequate indication of whether a
discharge is occurring from the
operation. All sampling results would
be reported to the permit authority. Any
difference in concentration between the
upstream and downstream samples
would be noted. This monitoring
requirement could provide some
indication of discharges from the land
application or feedlot areas.
  EPA also considered requiring that
pathogens and BODS be analyzed in
samples collected. EPA decided that
this would not be practical, because
sampling under Option 4 is linked to
storm events which limits the ability to
plan in advance for analysis of the
samples and making arrangements for
shipping samples to laboratories. Fecal
coliform and BOD samples all have very
short holding times before they need to
be analyzed. Most CAFOs are located in
rural areas with limited access to
overnight shipping services and are
probably not near laboratories that can
analyze  for these pollutants. Further,
fecal coliform and similar analytes that
are typically used as indicators in
municipal wastewater are not
necessarily good indicators of livestock
discharges. & CAFOs were required to
monitor for pathogens which could
indicate discharges of manure or CAFO
wastewater, it would'be better to require
monitoring for fecal enterococci, or even
specific  pathogens such as salmonella,
Giardia, and Cryptosporidium.
                    However, the cost for analyzing these
                    parameters is very high and the holding
                    times for these parameters are also very
                    short.
                      Furthermore, EPA determined
                    pathogen analyses are also
                    inappropriate because the pathogens in
                    manure are found in areas without
                    animal agriculture. For example
                    Enterobacter, Klebsiella, Bacillus cereus,
                    Clostridium, and Listeria are all
                    naturally occurring soil and plant
                    microorganisms and are found in soils
                    that have never received manure.
                    Pathogens may also be deposited onto
                    land from wildlife. Thus, EPA
                    concluded that requiring analysis for
                    these pollutants was impractical at best
                    and potentially very expensive.
                      Option 5. Option 5 includes the
                    requirements established by Option 2
                    and would establish a zero discharge
                    requirement  from the production area
                    that does not allow for an overflow
                    under any circumstances. By keeping
                    precipitation from contacting with the
                    animals, raw materials, waste handling
                    and storage areas, CAFOs could operate
                    the confinement areas and meet zero
                    discharge regardless of rainfall events.
                    Option 5 includes the same land
                    application requirements as Option 2,
                    which would restrict the rate of manure
                    and wastewater application to a crop
                    removal rate  for phosphorus where
                    necessary depending on the specific soil
                    conditions at the CAFO. Additionally,
                    as in Option  2, application of manure
                    and wastewater would be prohibited
                    within 100 feet of surface water.
                      EPA considered Option 5 for the
                    poultry, veal and hog subcategories,
                    where it is common to keep the animals
                    in total confinement, feed is generally
                    maintained in enclosed hoppers and the
                    manure and wastewater storage can be
                    handled so as to prevent it from
                    contacting storm water. EPA considered
                    a number of ways a facility might meet
                    the requirements of no discharge and no
                    overflow. In estimating the costs
                    associated with Option 5, EPA
                    compared the total costs and selected
                    the least expensive technology for a
                    given farm size, geographic region, and
                    manure management system. Costs also
                    depend on whether the facility's PNP
                    indicates land application must be
                    based on nitrogen or phosphorus, and
                    how many acres the facility controls.
                    The technologies described below were
                    used singularly or in combination to
                    meet the requirements of Option 5.
                      Many facilities can achieve Option 5
                    by covering open manure and storage
                    areas, and by constructing or modifying
                    berms and diversions to control the flow
                    of precipitation. EPA costed broiler and
                    turkey operations for storage sheds ,
sufficient to contain six months of
storage. Some poultry facilities,
particularly turkey facilities, compost
used litter in the storage sheds, allowing
recycle and reuse of the litter. EPA
costed swine, veal, and poultry facilities
which use lagoons or liquid
impoundments for impoundment
covers.
  EPA believes that operations which
have excess manure nutrients and use
flush systems to move manure out of the
confinement buildings will have an
incentive to construct a second lagoon
cell. A second storage or treatment cell
should accomplish more decomposition
of the waste and will allow flush water
to be recycled out of the second cell or
lagoon, thus reducing the addition of
fresh water to the system. Reducing the
total volume of stored waste reduces the
risk of a catastrophic failure of the
storage structure. In the absence of large
volumes of water, facilities with an
excess of manure nutrients will be able
to transfer the excess manure off-site
more economically due to a lower
volume of waste needing to be hauled.
Water reduction also results in a more
concentrated product which would have
a higher value as a fertilizer.
  Covered systems substantially reduce
air emissions, and help maintain the
nutrient .value of the manure. Covered
systems also may benefit facilities by
reducing odors emanating from open
storage. This option also creates a strong
incentive for facilities to utilize covered
lagoon digesters or multistage covered
systems for treatment. The use of covers
will allow smaller and more stable
liquid impoundments to be constructed.
Finally, the use of covered
impoundments encourages treatment
and minimal holding times, resulting in
pathogen die-off and reduction of BOD
and volatile solids.
  Other technologies can be effectively
used at some facilities, such as
conversion of flush systems to  scrape
systems,  or by retrofit of slatted floor
housing to V-shaped under house pits
that facilitate solid liquid separation.
Solids  can be stored or composted in
covered sheds, while the urine can be
stored in small liquid impoundments.
  In the event the faciluy has
insufficient land to handle all nutrients
generated, EPA evaluated additional
nutrient management strategies. First,
the  manure could pass through solid
separation, resulting in a smaller
volume of more concentrated nutrients
that is more effectively transported
offsite. Second, land application could
be based  on the uppermost portion of a
covered lagoon containing a more dilute
concentration of nutrients. Data
indicates much of the phosphorus

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                                                                                                           3061
                ler
accumulates in the bottom sludge,
which is periodically removed and
could be transported offsite for proper
land application. Though many
facilities report sludge removal of a
properly operating lagoon may occur as
infrequently as every 20 years, EPA
assumed facilities would pump out the
phosphorus and metals enriched sludge _
every three years. This is consistent
with the ANSI/ASAE standards for  ,
anaerobic treatment lagoons (EP403.3
JUL99) that indicates periodic sludge
removal and liquid drawdown is
necessary to maintain the treatment
volume of the lagoon.  Third, swine and
poultry farms can implement a variety
of feeding strategies, as discussed undi
Option 2 (see Section  VII.C.3). Feed
management including phytase,
multistage diets, split sex feeding, and
precision feeding have been shown to
reduce phosphorus content in the
manure by up to 50%. This results in
 less excess nutrients to be transported
 offsite, and allows for more manure to
be land applied at the CAFO.
   EPA is aware of a small number of
 swine facilities that are potentially
 CAFOs and use either open lots or some
 type of building with outside access to
 confine the animals. EPA data indicate
 these types of operations are generally
 smaller operations that would need to
 implement different technologies than
 those described above. CAFOs that
 provide outdoor access for the animals
 need to capture contaminated storm
 water that falls on these open areas.
 Open hog lots would find it difficult to
 comply with a requirement that does
 not allow for overflows in the event of
 a large storm. EPA costed these facilities
 to replace the open lots with hoop
 houses to confine the animals and
 storage sheds to contain the manure.
 Hoop structures are naturally ventilated
 structures with short wooden or
  concrete sidewalls and a canvas,        .
 - synthetic, or reflective roof supported
 by tubes or trusses. The floor of the
  house is covered with straw or similar
 bedding materials. The manure and
  bedding is periodically removed and
  stored. The drier nature of the manure
  lends to treatment such as composting
  as well as demonstrating reduced
  hauling costs as compared to liquid
  manure handling systems.
    EPA considered a variation to Option
  5 that would require CAFOs to use dry
  or drier manure handling practices: This
  variation assumed conversion to a
   completely dry manure handling system
   for hogs and laying hens using liquid
   manure -handling systems. In addition to
   the advantages of reduced water use
   described above, a completely dry
   system is more likely to minimize
leaching to ground water and, where
directly connected hydrologically to
surface water, will also reduce loads to
surface waters. For the beef and dairy
subcategories EPA assumes that the
liquid stream would be treated to
remove the solids and the solids would
be composted. It is not practical to
assume beef and dairy operations can
avoid the generation of liquid waste
because operations in both
subcategories tend to have animals in
open areas exposed to precipitation
resulting in a contaminated storm water
that must be captured. Also dairies
generate a liquid waste stream from the
washing of the milking parlor.
   Option 6. Option 6 includes the
requirements of Option 2 and requires
that large hog and dairy operations (hog
operations and dairies with 2,000 AUs)
would install and implement enclosed
anaerobic digestion to treat their manure
and use the captured methane gas for
 energy or heat generation. With proper
 management, such a system can be used
 to generate additional on-farm revenue.
 The enclosed  system will reduce air
 emissions, especially odor and
 hydrogen sulfide, and potentially
 reduces nitrogen losses from ammonia
 volatilization. The treated effluent will
 also have less odor and should be more
 transportable relative to undigested
 manure, making  offsite transfer of
 manure more economical. Anaerobic
 digestion under thermophilic or heated
 conditions would achieve additional
 pathogen reductions.
   Option 7. Option 7 includes the
 requirements of Option 2 and would
 prohibit manure application to frozen,
 snow covered or saturated ground. This
 prohibition requires that CAFOs have
 adequate storage to hold manure for the
 period of time during which the ground
 is frozen or saturated. The necessary
 period of storage ranges from 45 to 270
. 'days depending on the region. In
 practice, this may result in some
 facilities needing storage to hold
 manure and wastes for  12 months. EPA
 requests comment on whether there are
  specific conditions which warrant a
  national standard that prohibits
  application when the ground is frozen,
  snow covered or saturated.
                      6. Proposed Basis for BAT
                        BAT Requirements for the Beef and
                      Dairy Subcategories. EPA is proposing
                      to establish BAT requirements for the
                      beef and dairy subcategories based on
                      the same technology option. The beef
                      subcategory includes stand-alone heifer
                      operations and applies to all confined
                      cattle operations except for operations
                      that confine mature dairy cattle or veal.
                      Under the twoTtier structure, the BAT
requirements would apply to any beef
operation with 500 head of cattle or
more. Under the three-tier structure, the
BAT requirements for beef would apply
to any operation with more than 1,000
head of cattle and any operation'with
300 to 1,000 head which meets the
conditions identified in section VII.B.2
and 3 of this preamble.
  EPA proposes to establish BAT
requirements for dairy operations which
meet the following definitions: under
the two-tier structure, all  dairy with 350
head of mature dairy cows or more
would be subject to  today's proposed
BAT requirements. Under the three-tier
approach any dairy  with more than 700
head of mature dairy cows or 250 to 700
head of mature dairy cows which meets
the conditions identified  in section VII
of this preamble would be subject to
today's proposed BAT requirements.
  EPA proposes to establish BAT
requirements for the beef and dairy
 subcategories based on Option 3. BAT
would require all beef and dairy CAFOs
 to monitor the ground water beneath the
 production area by  drilling wells up
 gradient and down  gradient to measure .
 for a plume of pollutants discharged to
 ground water at the production area. A
 beef or dairy CAFO can avoid this
 ground water monitoring by
 demonstrating, to the permit writer's
 satisfaction, that it  does not have a
 direct hydrological connection between
 the ground water beneath the
 production area and surface waters.
   EPA proposes to require.CAFOs in the
 beef and dairy subcategories to monitor
 their ground water unless they
 determine that the  production area is
 located above ground water which has
 a direct hydrological connection to
 surface water. CAFOs would have to
 monitor for ammonia, nitrate, fecal
  colifonri, total coliform,  total chlorides
  and TDS. EPA selected these pollutants
 because they may be indicators of
  livestock waste and are pollutants of
  concern to ground water sources. If the
  down gradient concentrations are higher
  than the up gradient concentration this
  indicates a discharge which must be
  controlled. As discussed above, EPA
  requests comment on the inclusion of
  total and fecal coliforms among the
  required analytes. For operations that do
  not demonstrate that they do not have
  a direct hydrologic connection, EPA
  based the BAT zero discharge
  requirement on the installation of liners
  in liquid storage structures such as
  lagoons and storm water retention
  ponds  and concrete pads for the storage
  of dry  manure stockpiles.
    Beef and dairy CAFOs must also
  develop and implement a PNP that is
  based on application of manure and'

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  wastewater to crop land either at a crop
  removal rate for phosphorus where soil
  conditions require it, or on the nitrogen
  requirements of the crop. EPA believes
  the land application rates established in
  accordance with one of the three
  methods described in today's proposed
  regulation, along with the prohibition of
  manure application within 100 feet of
  that surface water will ensure manure
  and wastewater are applied in a manner
  consistent with proper agricultural use.
  See EPA's document .entitled "Managing
  Manure Nutrients at Concentrated
  Animal Feeding Operations" for the
  detailed discussion of how a PNP is
  developed.
   EPA believes that technology option 3
  is economically achievable and
  represents the best available technology
  for the beef and dairy subcategories, and
  is therefore proposing this option as
  BAT for these subcategories. The
  incremental annual cost of Option 3
  relative to Option 2 for these
  subcategories is $170 million pre-tax
  under the two-tier structure, and $1205
  million pre-tax under the three tier
  structure. EPA estimated annual ground
  water protection benefits from the
  proposed requirements of $70-80
  million. EPA estimates Option 3 for the
 beef and dairy subcategories will reduce
 loadings to surface waters from
 hydrologically connected ground water
 by 3 million  pounds of nitrogen. To
 determine economic achievability, EPA
 analyzed how many facilities would
 experience financial stress severe
 enough to make them vulnerable to
 closure under each regulatory option.
 As explained in more detail in the
 Economic Analysis, the number of
 facilities experiencing stress may
 indicate that an  option might not be
 economically achievable, subject to
 additional considerations.  Under Option
 2, no facilities in either the beef or dairy
 sectors were found to experience stress,
 while under Option 3, the analysis
 projects  10 beef and 329 dairy CAFOs
 would experience stress under the two-
 tier structure, and 40 beef and 610 dairy
 CAFOs would experience stress under
 the three-tier structure. Of these, EPA
 has determined that 40 beef operations
 are considered small businesses based
 on size standards established by the
 Small Business Administration. This
 analysis assumes that 76% of affected
 operations would be able to demonstrate
 that  their ground water does not have a
 hydrological connection to surface
 water and would therefore not be
 subject to the proposed requirements.
EPA projects the  cost of making this
demonstration to the average CAFO
would he $3,000. EPA is aware that
                    concerns have been raised about these
                    cost estimates, and about its estimates of
                    how many facilities would be able to
                    avoid the groundwater monitoring and
                    protection requirements on this basis.
                    EPA requests comment on this analysis
                    and on its proposed determination that
                    Option 3 is economically achievable for
                    the beef and dairy sectors.
                      EPA is not proposing to base BAT
                    requirements for the beef and dairy
                    subcategories on Option 2 because it
                    does not as comprehensively control
                    discharges of pollutants through ground
                    water which has a direct hydrological
                    connection with surface water. •
                    However, EPA is requesting comment
                    on Option 2 as a possible basis for BAT
                    in the beef and dairy subcategories. EPA
                    notes that even under Option 2, permit
                    writers would be required to consider
                    whether a facility is located in an area
                    where its hydrogeology makes it likely
                    that the ground water underlying the
                    facility is hydrologically connected to
                    surface water and whether a discharge
                    to surface water from the facility
                    through such hydrologically connected
                    ground water may cause or contribute to
                    a violation of State water quality •
                    standards. In cases where such a
                    determination was made by the permit
                    writer, he or she would impose
                    appropriate conditions to prevent
                    discharge via a hydrologic connection
                   would be included in the permit. The
                   main difference between Option 2 and
                   Option 3 is thus'that under Option 3,
                   the burden of proof would be on the
                   facility to demonstrate that it does not
                   discharge to ground water that is
                   hydrologically connected to surface
                   water, while under Option 2, ground
                   water protection and monitoring
                   requirements would only be included in
                   the permit if there were an affirmative
                   determination by the permitting
                   authority that such requirements were
                   necessary to prevent a discharge of
                   pollutantsjio surface waters via
                   hydrologically connected ground water
                   that may be sufficient to cause a
                   violation of State water quality
                   standards. Under today's proposal, the
                   Option 2 approach to preventing
                   discharges via hydrologically connected
                   ground water would be used for the
                   veal, swine and poultry subcategories.
                   EPA requests comment on applying this
                   approach to the beef and dairy
                   subcategories as well.
                    EPA is not proposing to establish BAT
                   requirements for the beef and dairy
                   subcategories on the basis of Option 4
                   due to the additional cost associated
                   with ambient stream monitoring and
                   because the addition of in-stream
                   monitoring does not by itself achieve
                   any better controls on the discharges
 . from CAFOs as compared to the other
  options. In-stream monitoring could be
  an indicator of discharges occurring
  from the CAFO; however, it is equally
  likely that in-stream monitoring will
  measure discharges that may be
  occurring from adjacent non-CAFO
  agricultural sources. Through the use of
 ^commercial fertilizers these non-CAFO
 "sources would likely be contributing the
  same pollutants being analyzed under
  Option 4. EPA has not identified a better
  indicator parameter which would
  isolate constituents from CAFO manure
  and wastewater from other possible
 , sources contributing pollutants to a
  stream. Pathogen analysis could be an
  indicator if adjacent operations do not
  also have livestock or are not using
 manure or biosolids as fertilizer sources.
 However, as described earlier, EPA has
 • concerns about the ability of CAFOs to
 collect and analyze samples for these
 pollutants because of the holding time
 constraints associated with the
 analytical methods for these parameters.
 Accordingly, EPA does not believe that
 specifying these additional in-stream
 monitoring BMP requirements would be
 appropriate; and would not be useful in
 ensuring compliance with the Clean
 Water Act. Moreover, in-stream .
 monitoring would be a very costly
 requirement for CAFOs to comply with.
   EPA is not proposing to establish BAT
 requirements for the beef and dairy
 subcategories on the basis of Option 5.
 Option 5 would require zero discharge
 with no overflow from the production
 area. Most beef feedlots are open lots
 which have large areas from which
 storm water must be collected; thus, it
 is not possible to assume that the
 operation can design a storm water
 impoundment that will never
 experience an overflow even under the
 most extreme storm. Stand alone heifer
 operations (other than those that are •
 pasture-based) are configured and
 operated in a manner very similar to
 beef feedlots. Unlike the hog, veal and
 poultry subcategories, EPA is not aware .
 of any beef operations that keep  all
 cattle confined under roof at all times.
  Dairies also frequently keep animals
 in open areas for some period of time,
 whether it is simply the pathway from
 the barn to the milk house or an  open
 exercise lot. Storm water from these
 open areas must be collected in addition
 to any storm water that contacts food or
 silage.  As is the case for beef feedlots,
 the runoff volume from the exposed
 areas is a function of the size of the area
 where the cattle are maintained,  and the
 amount of precipation. Since the CAFO
 operator cannot control the amount of
precipation, there always remains the
possibility that an extreme storm event

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                                                                     3063
can produce enough rainfall that the
resulting runoff would exceed the
capacity of the lagoon.
.  EPA did consider a new source option
for new dairies that would enforce total
confinement of all cattle at the dairy.
This new source option poses a barrier
to entry for new sources, therefore, EPA
assumes that this option if applied to
existing sources would he economically
unachievable. Furthermore, EPA did
evaluate a variation of Option 5 that
would apply to existing beef and dairy
operations and would require the use of
technologies which achieve a less  wet
manure. These technologies include
 solid-liquid separation and composting
the solids. EPA is not proposing to
 establish BAT on the use of these
 technologies, but does believe these
 technologies may result in cost savings
 at some operations. Additionally,
 composting will achieve pathogen
 reductions. As described in section
 VIII.C.9., EPA is continuing to examine
 pathogen controls and may promulgate
 requirements on the discharge of
 pathogens. If EPA set limitations on
 pathogens, composting technology
 would likely become a basis for
 achieving BAT limits. EPA invites
 comment on composting and its
 application to dry beef and dairy
 manure.
    For any operation that has inadequate
 crop land on which to apply its manure
 and wastewater, solid-liquid separation
 and composting could benefit the
 CAFO, as these technologies will make
 the,manure more transportable. Drier
 manure is easier to transport; and
 therefore, EPA believes solid liquid
  separation and composting will be used
  in some situations to reduce the
  transportation cost of excess manure. In
  addition, composting is a value-added
  process that improves the physical
  characteristics (e.g., reduces odor and
  creates a more homogenous product) of
  the manure. It can also make the  manure
  a more marketable product. As a result,
  a CAFO-with excess manure may find
  it easier to give away, or even sell, its
  excess manure. EPA encourages  all
  CAFOs to consider technologies  that
  will reduce the volume of manure
  requiring storage and make the manure
  easier to transport.
    Option 6, which requires anaerobic
  digestion treatment with methane
  capture, was not considered for the beef
  subcategory, but was considered for the
   dairy subcategory for treatment of liquid
  manure. Anaerobic digestion can only
  be  applied to liquid waste. As described
   previously in Section VI, beef feedlots
   maintain a dry manure, yet they capture
   storm water runoff from the dry  lot and
   manure stockpile. The storm water
runoff is generally-too dilute to apply
digestion technology.
  Most dairies, however, handle manure
as a liquid or slurry which is suited to
treatment through anaerobic digestion.
EPA concluded that application of
anaerobic digesters at dames will not
necessarily lead to significant
reductions in the pollutants discharges
to surface waters from CAFOs. An
anaerobic digester does not eliminate
the need for liquid impoundments to
store dairy parlor water and bam flush
water and to capture storm water runoff
from the open areas at the dairy. Neither
do digesters reduce the nutrients,
nitrogen or phosphorus. Thus, basing
BAT on digester technology would not
change the performance' standard that a
production area at a CAFO would
achieve and would not reduce or
eliminate the need for proper land
application of manure.  Digesters were
considered because they achieve some
 degree of waste stabilization and more
importantly they capture air emissions
 generated during manure storage.  The
 emission of ammonia from manure
 storage structures is a potentially
 significant contributor  of nitrogen to
 surface waters. Covered anaerobic
 digesters will prevent these emissions
 while the waste is in the digester,  but
 the digester does not convert the
 ammonia into another  form of nitrogen,
 such as nitrate; which is not as volatile.
 Thus as soon as the manure is exposed
 to air the ammonia will be lost.
 Operations may consider additional
 management strategies for land
 application such as incorporation in
 order to maintain the nitrogen value as
 fertilizer and to reduce emissions.
   As mentioned above, the application
 of ambient temperature or mesophilic
 anaerobic digesters would not change
 the performance standard that a CAFO
 would achieve. EPA considered
 anaerobic digestion as a means to
  control pathogens. Thermophilic
  digestion which applies heat to the
  waste will reduce pathogens. As
  described in Section VIII.C.9. EPA is
  still evaluating effective controls  for
  pathogens.
    EPA is not proposing to base BAT
  requirements on Option 7 for the beef
  and dairy subcategories. Option 7 would
  prohibit manure application on
  saturated, snow covered or frozen
  ground. Pollutant runoff associated with
  application of manure or wastewater to
  saturated, snow covered or frozen
  ground is a site specific consideration,
  and depends on a number of site
  specific variables, including distance to
  surface water and slope of the land. EPA
  believes that establishing a national
  standard that prohibits manure or
wastewater application is inappropriate
because of the site specific nature of
these requirements and the regional
variability across the nation. This is
described in Section VII.E.S.b, above.
However, Section VII also explains that
EPA is proposing to revise 40 CFR Part
122 to require the permit authority to
include, on a case-by-case basis,
restrictions on the application of CAFO
waste to frozen, snow covered or
saturated ground in CAFO permits. This
permit condition should account for
topographic and climatic conditions
found in the state.
 .  Requirements for the beef and dairy
subcategories would still allow for an
overflow in the event of a chronic or
catastrophic storm that exceeds the 25-
year, 24-hour storm. EPA believes this
standard reflects the best available
technology. Under the proposed
revisions to Part 122, permits will
require that any discharge from the
 feedlot or confinement area be reported
to the permitting authority within 24
 hours of the discharge event. The CAFO
 operator must also report the amount of
 rainfall and the approximate duration of
 the storm event.
   BAT Requirements for the Swine, Veal
 and Poultry Subcategories. EPA is
 proposing to establish BAT
 requirements for the swine, veal and
 poultry subcategories based on Option
 5. For the purpose of simplifying this
 discussion, the term poultry is used to
 include chickens and turkeys. Option 5
 requires zero discharge of manure and
 process wastewater and provides no
 overflow allowance for manure and
 wastewater storage. Land application
 requirements for these operations would
 be the same as the requirements under
 Option 2.
   EPA is proposing Option 5 because
 swine, veal and poultry operations can
 house the animals under roof and feed
 is also not exposed to the weather.
 Thus, there is no opportunity for storm
 water contamination. Broiler and turkey
  operations generate a dry manure which
  can be kept covered either under a shed
  or with tarps. Laying hens with dry
  manure handling usually store manure
  below the birds' cages and inside the
  confinement building.  Veal and poultry
  operations confine the animals under
  roof, thus there are no  open animal  •
  confinement areas to generate
  contaminated storm water. Those
  operations with liquid manure storage
  can comply with the restrictions
  proposed under this option by diverting
  uncontaminated storm water away from
  the structure, and covering the lagoons
  or impoundments.
    The technology basis for the poultry
  BAT requirements at the production

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  area are litter sheds for broiler and
  turkey CAFOs, and underhouse storage
  for laying hens with dry manure
  handling systems. For laying hen
  CAFOs with liquid manure handling
  systems, EPA's technology basis is solid
  separation and covered storage for the
  solids and covered lagoons.
 , Laying hen farms may also have egg
  wash water from in-line or off-line
  processing areas. Only 10% of laying
  hen operations with fewer than 100,000
  birds have on farm egg processing,
  while 35% of laying hen operations
  with more than 100,000 birds have on
  farm egg processing. The wash water is
  often passed through a settling system to
  remove calcium, then stored in above
  ground tanks, below ground tanks, or
  lagoons. Today's proposal is based on
  covered storage of the egg wash water
  from on-farm processing, to prevent
  contact with precipitation. The ultimate
  disposal of egg wash water is through
 land application which must be done in
 accordance with the land application
 rates established in the PNP. EPA
 believes the low nutrient value of egg
 washwater is unlikely to cause
 additional incremental costs to laying
 hen facilities to comply with the
 proposed land application
 requirements.
   EPA assumes large swine operations
 (e.g., operations with more than 1,250
 hogs weighing 55 pounds or greater)
 operate using total confinement
 practices, EPA based BAT Option 5 on
 the same approach described above of
 covering liquid manure storage. CAFOs
 can operate covered lagoons as
 anaerobic digesters which is an effective
 technology for achieving zero discharge
 and will provide the added benefits of
 waste stabilization, odor reduction  and
 control of air emissions from manure
 storage structures. Anaerobic digesters
 also can be operated to generate
 electricity which can be used by the
 CAFO to offset operating costs.
  Although Option 5 is the most
 expensive option for the hog
 subcategory, as shown on Table
 X.E.2(a), EPA believes this option
 reflects best available technology
 economically achievable because it
 prevents discharges resulting from
 liquid manure overflows that occur in
 open lagoons and pond. Similarly, the
 technology basis of covered treatment
 lagoons and drier manure storage is
 believed to reduce the likelihood of
 those catastrophic lagoon failures
 associated with heavy rainfalls. Option
 5 also achieves the greatest level of
 pollutant reductions from runoff
 reaching the edge of the field. Non-
water quality environmental impacts
include reduced emissions and odor,
                    with a concurrent increase in nitrogen
                    value of the manure, however as
                    mentioned previously, the ammonia
                    concentration is not reduced and once
                    the manure is exposed to air the
                    ammonia will volatilize. Water"
                    conservation and recycling practices
                    associated with Option 5 will promote
                    increased nutrient value of the manure,
                    reduced hauling costs via reduced water
                    content, and less fresh water use.
                      The technology basis of Option 5,
                    solid-liquid separation and storage of
                    the solids, has the advantage of creating
                    a solid fraction which is more
                    transportable, thus hog CAFOs that have
                    excess manure can use this technology
                    to reduce the transportation costs.
                      EPA is aware of three open lot hog
                    operations that have more than 1,250
                    hogs and there may be a small number
                    of others, but the predominant practice
                    is to house the animals in roofed
                    buildings with total confinement. For
                    open lot hog CAFOs, EPA is proposing
                    to base BAT the application of hoop
                    structures as described above.
                     Veal operations use liquid manure
                    management and store manure in
                    lagoons. EPA has based BAT on covered
                    manure and feed storage. The animals
                    are housed in buildings with no outside
                    access. Thus, by covering feed and
                    waste storage the need to capture
                    contaminated storm water is avoided.
                     In evaluating the economic
                    achievability of Option 5 for the swine,
                    veal and poultry subcategories, EPA
                    evaluated the costs and impacts of this
                    option relative to Option 2. For these
                    subcategories, the incremental annual
                    cost of Option 5 over Option 2 would
                   be $110 million prertax under the two-
                   tier structure, and $140 million pre-tax
                   under the three-tier structure. Almost all
                   of these incremental costs are projected
                   to be in the swine sector. Since the
                   majority of the costs are borne by the
                   swine subcategory, EPA solicits
                   comment on establishing BAT on the
                   basis Option 5 for the only the veal and
                   poultry subcategories, and establishing
                   BAT on the basis of Option 2 that the
                   swine subcategory. EPA projects that
                   there would be no additional costs
                   under the two-tier structure, and only
                   very small additional costs under the
                   three-tier structure for the veal and
                   poultry subcategories to move from
                   Option 2 to Option 5. Under Option 2,
                   EPA estimates 300 swine operations and
                   150 broiler operations would experience
                   stress under the two-tier structure, and
                   300 swine operations and 330 broiler
                   operations would experience stress
                   under the three-tier structure. Under '
                   Option 5 an additional 1,120 swine
                   operations would experience stress
                   under both the two-tier and three-tier
  structures. All affected hog operations
  have more than 1000 AU. None of these
  affected hog operations are small
  businesses based on the Small Business
  Administration's size standards. There
  would be no additional broiler
  operations experiencing stress under
  Option 5, and no veal, layer, or turkey
  operations are projected to experience
  stress under either Option 2 or Option
  5, EPA did not analyze the benefits of
  Option 5 relative to Option 2. Under
  Option 2 operations are required to be
  designed, constructed and operated to
  contain all process generated waste
  waters, plus the runoff from a 25-year,
  24-hour rainfall event for the location of
  the point source. Thus, the benefit of
  Option 5 over Option 2 would be the
  value of eliminating discharges during
  chronic or catastrophic rainfall events of
  a magnitude of the 25-year, 24-hour
  rainfall event or greater. Further benefit
  would be realized as a result of
  increased flexibility on the timing of
  manure application to land. By
 preventing the rainfall and run-off from
 mixing with wastewater, CAFOs would
 not need to operate such that land
 application during storm events was
 necessary.
   EPA is not proposing Option 2 for
 these sectors. However, EPA notes that
 at the time of the SBREFA outreach
 process, removing the 25-year, 24-hour
 design standard for any sector was not
 considered largely due to concern that
 a different design standard would lead
 to larger lagoons or impoundments. EPA
 staff explicitly stated this to the SERs
 and other member of the Panel.
 Although not extensively discussed,
 since it did not appear at that time to
 he an issue, retention of this standard
 was supported by both the SERs and the
 Panel. At that time, EPA was not
 planning to evaluate such an option
 because of the concern that this would
 encourage larger lagoons. Since the
 Panel concluded it outreach, EPA
 decided to evaluate, and tiltimately
 propose removing this design standard
 for the veal, swine and poultry
 subcategories because  of reports of
 lagoon failures resulting from rainfall
 and poor management. As mentioned
 previously, all of the'se sectors maintain
 their animals under roof eliminating the
 need to capture contaminated storm
 water from the animal confinement area.
 In addition, most poultry operations
 generate a dry manure, which when
 properly stored, under some type of
 cover, eliminates any possibility of an
 overflow in the event of a large storm.
Therefore EPA believes that Option 5
technology which prevents the
introduction of storm-water into manure

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                                                                    3065
 storage is achievable and represents Best
 Available Technology, without
 redesigning the capacity of existing
 manure storage units. However, EPA
 requests comment on retaining te 25-
 year, 24-hour storm design standard
 (and thus basing BAT on Option 2) for
 these sectors, consistent with its
 intention at the time of the SBREFA
 outreach process.
   EPA is not proposing to base BAT for
 the swine, poultry and veal
 subcategories on Option 3, because EPA
 believes Option 5 is more protective of
 the environment. If operators move
 towards dry manure handling
 technologies and practices to comply
 with Option 5, there should be less
 opportunity for ground water
 contamination and surface water
 contamination through a direct
 hydrological connection. EPA strongly
 encourages any newly constructed
 lagoons or anaerobic digesters to be
  done in such a manner as to minimize
  pollutant losses to ground water. A
  treatment lagoon should be lined with
  clay or synthetic liner or both and solid
  storage should be on a concrete pad or
  preferably a glass-lined steel tank as
  EPA has included in its estimates of
  BAT costs. Additionally, Option 5
  provides the additional non-water
  quality benefit of achieving reductions
  in air emissions from liquid storage
  systems. EPA estimates that the cost of
  complying with both Option 3 and 5 at
  existing facilities would be
  economically unachievable.
     EPA believes the proposed technology
  basis for broilers, turkeys and laying
  hens with dry manure management will
  avoid discharges to ground water since
  the manure is dry and stored in such a
  way as to prevent storm water from
  . reaching it. Without some liquid to
  provide a transport mechanism,
  pollutants cannot move through the soil
  profile and reach the ground water and
   surface water through a direct
   hydrological connection.
     EPA is not proposing to base BAT on
   Option 4 for the same reasons described
   above for the beef and dairy
   subcategories.             ,
     EPA is not proposing to base BAT on
   Option 6, because EPA believes that the
   zero discharge aspect of the selected
   option will encourage operations to
   consider and install anaerobic digestion
   in situations where it will be cost
   effective.                    .
     As with beef and dairy, EPA is not
   proposing to base BAT for swine, veal
   and poultry on Option 7, but believes
   that permit authorities should establish
   restrictions as necessary in permits
   issued to CAFOs. Swine, veal and
;   poultry operations should take the
timing of manure application into
account when developing the PNP. Any
areas that could result in pollutant
discharge from application of manure to
frozen, snow covered or saturated
ground should be identified in the plan
and manure or wastewater should not.
be'applied to those areas when there is
a risk of discharge.
   EPA solicits comment on the use or
remote liquid level monitoring at
livestock operations. As described above
in Section VIII.C.3, this technology
could provide advanced notification
that levels are reaching a critical point,
and corrective actions could then be
taken. This technology does not prevent
precipitation from entering the lagoon
arid does not prevent overflows,
therefore EPA chose not to propose this
technology as BAT for swine or veal
 operations. However, EPA solicits
 comments on applicability of this
 technology to livestock operations,
 especially at swine  and veal as an
 alternative to covers on lagoons.
 PNP Requirements
   There are a number of elements that
 are addressed by both USDA's
 "Guidance for Comprehensive Nutrient
 Management Plans (CNMPs)" and EPA's
 PNP which would be required by the
 effluent guidelines and NPDES
 proposed rules and is detailed in the
 guidance document "Managing Manure
 Nutrients at Concentrated Animal
 Feeding Operations." EPA's proposed
 PNP would establish requirements for
 CAFOs that are consistent with the
 technical guidance published by USDA
  experts, but go beyond that guidance by
  identifying specific management
  practices that must be implemented.
  What follows is a brief description of
  what must be included in a PNP.
    General Information. The PNP must
  have a Cover Sheet which contains the
  name and location of the operation, the
  name and title  of the owner or operator
  and the name and title of the person
  who prepared the plan. The date
  [month, day, year) the plan was
  developed and amended must be clearly
  indicated on the Cover Sheet. The
  Executive Summary would briefly
  describe the operation in terms  of herd
  or flock size, total animal waste
  produced annually, crop identity for the
  full 5 year period including a
  description of the expected crop
  rotation and, realistic yield goal. The
  Executive Summary must include
 ' Indication of the field conditions for
  each field unit resulting from the
  phosphorus method used (e.g.,
  phosphorus index), animal waste
   application rates, the total number of
   acres that will receive manure,  nutrient
content of manure and amount of
manure that will be shipped off-site. It
should also identify the manure
collection, handling, storage, and
treatment practices, for example animals
kept on bedding which is stored in a
shed after removal from confinement
house, or animals on slatted floors over
a shallow pull plug pit that is drained
to an outdoor in-ground slurry storage
inpoundment. Finally, the Executive
Summary would have to identify the
watershed(s) in which the fields
receiving manure are located or the
nearest surface water body. While the
General Information section of a PNP
would give a general overview of the
CAFO and its nutrient management
plan, subsequent sections would
provide further detail.
   Animal Waste Production. This
 subsection details types and quantities
 of animal waste produced along with
 manure nutrient sampling techniques
 and results. Information would be
 included on the maximum number of
 livestock ever confined and the
 maximum livestock capacity of the
 CAFO, in addition to the  annual
 livestock production. This section
 would provide an estimate of .the
 amount of animal waste collected each
 year. Each different animal waste source
 should be sampled annually and tested
 by an accredited laboratory for nitrogen,
 phosphorous, potassium, and pH.
   Animal Waste Handling, Collection,
 Storage, and Treatment. This subsection
 details best management practices to
 protect surface and groundwater from
 contamination during the handling,
 collection, storage, and treatment of
 animal waste. A review would have to
 be  conducted of potential water
  contamination sources from existing
  animal waste handling, collection,
  storage, and treatment practices. The
  capacity ne'eded for storage would be
  calculated.
    Feedlot runoff would have to be
  contained and adequately managed.
  Runoff diversion structures and animal
  waste storage structures would have to
  be visually inspected for: seepage,
  erosion, vegetation, animal access,
  reduced freeboard, and functioning rain
  gauges and irrigation equipment, on a
  weekly basis. Deficiencies based on
  visual inspections would have to be
  identified and corrected within a
  reasonable time frame. Depth markers
  would have to be permanently installed
  in all lagoons, ponds, and tanks.
   Lagoons, ponds, and tanks would have
   to be maintained to retain capacity for
   the 25-year, 24-hour storm event. Dead
   animals, required to be  kept out of
   lagoons, would have to be properly
   handled and disposed of in a timely

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   manner. Finally, an emergency response
   plan for animal waste spills and releases
   would have to be developed.
     Land Application Sites. This
   subsection details field identification
   and soil sampling. County(ies) and
   watershed code(s) where feedlot and
   land receiving animal waste
   applications are located would be
   identified. Total acres of operation
   under the control of the CAFO (owned
   and rented) and total acres where
   animal waste will be applied would be
   included. A detailed farm map or aerial
   photo, to be included, would have to
   indicate: location and boundaries of the
   operation, individual field boundaries,
   field identification and acreage, soil
   types and slopes, and the location of
  nearby surface waters and other
  environmentally sensitive areas (e.g.,
  wetlands, sinkholes, agricultural
  drainage wells, and aboveground tile
  drain intakes) where animal waste
  application is restricted.
    Separate soil sampling, using an
  approved method, would have to be
  conducted every 3 years on each field
  receiving animal waste. The samples
  shall be analyzed at an accredited
  laboratory for total phosphorous.
  Finally, the phosphorous site rating for
  each field would have to be recorded
  according to the selected assessment
  tool.
   Land Application. This subsection
  details crop production and animal
  waste application to crop production
  areas. Details of crop production would
  have to include: Identification of all
  planned crops, expected crop yields and
  the basis for yield estimates, crop
  planting and harvesting dates, crop
 residue management practices, and
 nutrient requirements of the crops to be
 grown. Calculations used to develop the
 application rate, including nitrogen
 credits from legume crops, available
 nutrients from past animal waste
 applications, and nutrient credits from
 other fertilizer and/or biosolids
 applications would have to be included.
   Animal waste application rates cannot
 exceed nitrogen requirements of the
 crops. However, animal waste
 application rates would be limited to
 the agronomic requirements for
 phosphorous if the soil phosphorous
 tests are rated "high", the soil
 phosphorous tests are  equal to %, but
 not greater than twice the soil
 phosphorous threshold value, or the
 Phosphorous Index rating is "high."
 Finally, animal waste could not be
 applied to land if the soil phosphorous
 tests are rated "very high", the soil
 phosphorous tests are greater than twice
 the soil phosphorous threshold value, or
the Phosphorous Index rating is "very
                    high." In some cases, operators may
                    choose to further restrict application '
                    rates to account for other limiting
                    factors such as salinity or pH.
                      Animal wastes cannot be applied to
                    wetlands or surface waters, within 100
                    feet of a sinkhole, or within 100 feet of
                    water sources such as rivers, streams,
                    lakes, ponds, and intakes to agricultural
                    drainage systems (e.g., aboveground tile
                    drain intakes, agricultural drainage
                    wells, pipe outlet terraces). EPA
                    requests comment on how serious
                    would be the limitations imposed by
                    these requirements. Manure spreader
                    and irrigation equipment would have to
                    be calibrated at a minimum once each
                    year, but preferably before each
                    application period. Finally, the date of
                    animal waste application and
                    calibration application equipment, and
                    rainfall amounts 24-hours before and
                    after application would be recorded.
                     Other Uses/Off-Site Transfer. The
                    final required subsection for a PNP
                    details any alternative uses and off-site
                   transport of animal wastes. If used, a
                   complete description of alternative uses
                   of animal waste would have to be
                   included. If animal wastes are
                   transported off-site the following would
                   have to be recorded: date (day, month,
                   year), quantity, and name and location
                   of the recipient of the animal waste.
                     Voluntary Measures. Many voluntary
                   best management practices can be
                   included within various subsections of
                   a PNP. These voluntary best
                   management plans are referenced in
                   EPA's guidance document for PNP
                   "Managing Manure Nutrients at
                   Concentrated Animal Feeding
                   Operations."
                    Annual Review and Revision. While a
                   PNP is required to be renewed every 5
                   years (coinciding with NPDES
                   permitting), an annual review of the
                   PNP would have to occur and the PNP
                   would be revised or  amended as
                   necessary.
                    The most likely factor which would
                   necessitate an amendment or revision to
                   a PNP is a change in the number of
                   animals at the CAFO. A substantial
                  increase in animal numbers (for
                  example an increase of greater than
                  20%) would significantly increase the
                  volume of manure and total nitrogen
                  and phosphorous produced on the
                  CAFO. Because of this, the CAFO will
                  need to re-evaluate animal waste storage
                  facilities to ensure adequate capacity,
                  and may need to re-examine the land
                  application sites and rates.
                    A second reason which would require
                  an amendment or revision to a PNP is
                  a change in the cropp.ing program which
                  would significantly alter land
                  application of animal waste. Changes in
   crop rotation or crop acreage could
   significantly alter land application rates
   for fields receiving animal waste. Also
   the elimination or addition of fields
   receiving animal waste application
   would require a. change in the PNP.
    Changes in animal waste collection,
   storage facilities, treatment, or land
   application method would require an
   amendment or revision to a PNP. For
.   example, the addition of a solid-liquid
   separator would change the nutrient
  content of the various animal waste
  fractions and the method of land
  application thereby necessitating a
  revision in a PNP. Changing from
  surface application to soil injection
  would alter'ammonia volatilization
  subsequently altering animal waste
  nutrient composition requiring a
  revision of land application rates.
    When CAFOs Must Have PNPs. EPA
  proposes to allow two groups of CAFOs
  up to 90 days to obtain a PNP:
    3. Existing CAFOs which are being
  covered by a NPDES permit for the first
  time; or
    4. Existing CAFOs that are already
  covered under an existing permit which
  is reissued within 3 years from the date
  of promulgation of these regulations.
    EPA proposes that all other existing
  CAFOs must have a PNP at the time
  permits are issued or renewed.

  7. New Source Performance Standards
   For purposes of applying the new
  source performance standards (NSPS)
 being proposed today, a source would
 be a new source if it commences
 construction after the effective date of
 the forthcoming final rule. (EPA expects
 to take final action on this proposal in
 December 2002, which is more than 120
 days after the date of proposal—see 40
 CFR 122.2). Each source that meets this
 definition would be required to achieve
 any newly promulgated NSPS upon
 commencing discharge.
   In addition, EPA is proposing
 additional criteria to define "new
 source" that would apply specifically to
 CAFOs under Part 412. EPA intends that
 permit writers will consult the specific
 "new source" criteria in Part 412  rather
 than the more general criteria set forth
 in 40 CFR 122.29(b)(l). The other
 provisions of 40 CFR 122.29 continue to
 apply. EPA proposes to consider an
 operation as a new source if any of the
following three criteria apply.
   The definition of new source being
proposed for Part 412 states three
criteria that  determine whether a source
is a "new source."
  First, a facility would be a new source
if it is constructed at a site at which no
other source is located. These new
sources have the advantage of not

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                                                                     3067
having to retrofit the operation to
comply with BAT requirements, and
thus can design to comply with more
stringent and protective requirements.
   The second criterion for defining a
new source would be where new
construction at the facility "replaces the
housing, waste handling system,
production process, or production
equipment that causes the discharge or
potential to discharge pollutants at an
 existing source." Confinement housing
 and barns are periodically replaced,
 allowing the opportunity to install
 improved systems that provide
 increased environmental protection.
 The modern confinement housing used
 at many swine, dairy, veal, and poultry
 farms allows for waste handling and
 storage in  a fashion that generates little
 or no process water. Such systems
• negate the need for traditional flush
 systems and storage lagoons, reduce the
 risks of uncontrollable spills, and
 decrease the costs of transporting
 manure.
   Third, a source would be a new
 source if construction is begun after the
 date this rule is promulgated and its
 production area and processes are
 substantially independent of an existing
 source at the same site. Facilities may
 construct additional production areas
 that are located on one contiguous
 property,  without sharing waste
 management systems or commingling
 waste streams. Separate production
  areas may also be constructed to help
  control biosecurity. New production
  areas may also be constructed for
  entirely different animal types, in which
  case the more stringent NSPS
  requirements for that subcategory would
  apply to the separate and newly
  constructed production area. In
  determining whether production and
  processes are substantially independent,
  the permit authority is directed to
  consider such factors as the extent to
  which the new production areas are
  integrated with the existing production
  areas, and the extent to which the new
  operation is engaging in the same
  general type of activity as the existing
   source.
    EPA also considered whether a
 •  certain level of facility expansion,
   measured as an increase in animal
   production, should cause an operation
   to be subject to new source performance
   standards. If so, upon facility expansion
   the CAFO would need to go beyond
   compliance with BAT requirements to
   meet the more stringent standards
   represented by NSPS. In today's
   proposal, that increment of additional
   control,  for the swine, poultry and veal
   subcategories, would amount to the
   need to monitor ground water and
install liners in lagoons and
impoundments to prevent discharges to
ground water that has a direct
hydrological connection to surface
water; unless the CAFO could
demonstrate that no such direct
hydrological link existed. In the beef
and dairy subcategories, the NSPS
proposed today are the same as the BAT
standards.
-   The Agency, however, decided
against proposing to identify facility
expansion as a trigger for the
application of NSPS. Many CAFOs
oversize or over-engineer their waste
handling systems to accommodate
future increases in production. Thus, in
many cases, the actual increases in
 production may not present a new
 opportunity for the. CAFO to install the
 additional NSPS technologies—e.g.
 liners. To install liners, these operations
 would need to retrofit their facilities the
 same as existing sources would. EPA
 has explained above that such
 retrofitting would not be economically
 achievable in these animal sectors.
 Similarly, the costs associated with
 these requirements would represent a
 barrier to the expansion. Therefore, it
 would not be appropriate to require
 these operations, upon facility
 expansion, to meet the additional
 ground water-related requirements that
 are a part of today's proposed NSPS.
    EPA considered the saine seven
 options for new source performance
 standards (NSPS) as it considered for
 BAT. EPA also considered an additional
 option for new dairies, which if
 selected, would prohibit dairies from
  discharging any manure or process
 wastewater from animal confinement
  and manure storage areas (i.e.,
  eliminating the allowance for
  discharging overflows associated with a
  storm event). New sources have the
  advantage of not having to retrofit the
  operation to comply with the
                 1th
requirements and thus can design the
operation to comply with more stringent
requirements. In selecting new source
performance standards, EPA evaluates
whether the requirements under
consideration would impose a barrier to
entry to new operations.
  EPA is proposing to select Option 3 as
the basis for NSPS for the beef and dairy
subcategories. Option 3 includes all the
requirements proposed for existing
sources including complying with zero
discharge from the production area
except in the event of a 25-year, 24-hour
storm and the requirement to develop a
PNP which establishes the rate at which
manure and wastewater  can be applied
to crop or pasture land owned or
controlled by the CAFO. The
application of manure and wastewater
would be restricted to a phosphorus
based rate where necessary depending   :
on the specific soil conditions at the
CAFO. Additionally, other best
management practice requirements
would apply, including the prohibition
of manure and wastewater application
within 100 feet of surface water. The
proposed new source standard for the
beef and dairy subcategories includes a
requirement for assessing whether the
ground water beneath the production
area has a direct hydrological
connection to surface water. If a direct
hydrological connection exists, the
operation must conduct additional
monitoring of ground water up gradient
and down gradient from the production
area, and implement any necessary
controls based on the monitoring results
to ensure that zero discharge to surface
water via the .ground water route is
achieved for manure stockpiles and
liquid impoundments or lagoons. For
the purpose of estimating compliance
 costs, EPA has assumed that operations
 located in areas with a direct
 hydrological connection will install
 synthetic material or compacted clay
 liners beneath any liquid manure
 storage and construct Impervious pads
 for any dry manure storage areas. The
 operator would be required to collect
 and analyze ground water samples twice
 per year for total dissolved solids,
 chlorides, nitrate, ammonia, total
 colifomis and fecal coliform. EPA
 believes that Option 3 is economically
 achievable for existing sources. Since
 new sources are able to install
 impermeable liners at the time the
 lagoon or impoundment is being
 constructed, rather than retrofitting
 impoundments at existing source, costs
 associated with this requirement should
 be less for new sources in comparison
 to existing sources. EPA has concluded
 that Option 3 requirements will riot
 pose a barrier to entry for new sources.
    EPA is proposing to establish NSPS
  for all swine and poultry operations
 based on Option 5 and Option 3
  combined. In addition the BAT
  requirements described in Section
  Vin.C.6, the proposed new source
  standards would require no discharge
  via any ground water that has a direct
  hydrological link to surface water. As
  described above, Option 3 requires all
  CAFOs to monitor the ground water and
  impose appropriate controls to ensure
  compliance with the zero discharge
  standard, unless the CAFO has
  demonstrated  that there is no direct
  hydrological link between the ground
  water and any surface waters. The
  proposed new source standard also
  restricts land application of manure and.

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  wastewater to a phosphorus based rate
  where necessary depending on the
  specific soil conditions at the CAFO.
  Additionally, other best management
  practice requirements would apply,
  including that application of manure
  and wastewater would be prohibited
  within 100 feet of surface water.
    EPA encourages new swine and
  poultry facilities to be constructed to
  use dry manure handling. Dry manure
  handling is currently the standard
  practice at broiler and turkey
  operations. As described previously,
  some existing laying hen operations and
  most hog operations use liquid manure
  handling systems. The proposed new
  source performance standard would not
  require the use of dry manure handling
  technologies, but EPA believes this is
  the most efficient technology to comply
  with its requirements.
   EPA has analyzed costs of installing
  dry manure handling at new laying hen
  and swine operations. Both sectors have
  operations xvhich demonstrate dry
  manure handling can be used as an
  effective manure management system.
  The dry manure handling systems
  considered for both sectors require that
  the housing for the animals be
  constructed in a certain fashion, thus
 making this practice less practical for
 existing sources. Both sectors have
 developed a high rise housing system,
 which houses the animals on the second
 floor of the building allowing the
 manure to drop to the first floor or pit.
 In the laying hen sector this is currently
 a common practice and with aggressive
 ventilation, the manure can be
 maintained as a dry product. Hog
 manure has a lower solids content, thus
 the manure must be mixed with a
 bedding material (e.g., wood chips, rice
 or peanut hulls and other types of
 beading) which will absorb the liquid.
 To further aid in drying the hog manure,
 air is forced up through pipes installed
 in the concrete floor of the pit. With
 some management on the part of the
 CAFO operator, involving mixing and
 turning the hog manure in the pit
 periodically, the manure can be
 composted while it is being stored. The
 advantages of the high rise system for
 hogs and laying hens include a more
 transportable manure, which, in the
 case of the hog high rise system, has
 also achieved a fairly thorough
 decomposition. The air quality inside
 the high rise house is greatly improved,
 and the potential for leaching pollutants
 into the groundwater is greatly reduced.
 The design standard of these high rise
 houses include concrete floors and also.
 assume that the manure would be
retained in the building until it will be
land applied, thus there is no
                    opportunity for storm water to reach the
                    manure storage and virtually no
                    opportunity for pollutants to leach to
                    groundwater beneath the confinement
                    house. EPA believes that the cost
                    savings associated with ease of manure
                    transportation, as well as improved
                    animal health and performance, with
                    the dry manure handling system for
                    hogs will off-set the increased cost of
                    operation and maintenance associated
                    with the high rise hog system. Thus,
                    EPA concludes the high-rise house does
                    not pose a barrier to entry and is the
                    basis for NSPS in both the laying hen
                    and hog sectors. Although the high rise
                    house is the basis of the new source
                    standards for the swine and laying hen
                    sectors, operations are not prevented
                    from constructing a liquid manure
                    handling system. If new sources  in these
                    sectors choose to construct a liquid
                    manure handling system, they would be
                    required to line the lagoons, if the
                    operation  is located in an area that has
                    a direct hydrologic connection, but the
                    cost associated with fining a lagoon at
                    the time it is being constructed is much
                    less than the cost to retrofit lagoon
                    liners.
                     EPA proposes to establish new source
                    requirements for the veal subcategory on
                    the basis of Option 5 which requires
                    zero discharge with no overflow from
                    the production area and Option 3 which
                    requires zero discharge of pollutants to
                    groundwater which has a direct
                   hydrological connection to surface
                   water, with the ground water
                   monitoring or hydrological assessment
                   requirements described above. EPA
                   believes that a zero discharge standard
                   without any overflow will promote the
                   use of covered lagoons, anaerobic
                   digesters or other types of manure
                   treatment systems. Additionally, this
                   will minimize the use of open air
                   manure storage systems, thus reducing
                   emission of pollutants from CAFOs.
                    New veal CAFOs would not be
                   expected to modify existing housing
                   conditions since EPA is not aware of
                   any existing veal operations that use dry
                   manure handling systems. New veal
                   CAFOs would be expected to also use
                   covered lagoons, or anaerobic digesters
                   to comply with the zero discharge
                   standard. New veal CAFOs would be
                   required to line their liquid manure
                   treatment or storage structures with
                   either synthetic material or compacted
                   clay to prevent the  discharge of
                   pollutants to ground water which has a
                   direct hydrological connection to
                   surface water. In addition, the CAFO
                   would have to monitor the groundwater
                   beneath the production area to ensure
                   compliance with the zero discharge
                   requirement. The CAFO would not need
  to install liners or monitor ground water
  if it demonstrates that there is no direct
  hydrologic link between the ground
  water and any surface waters.
   In addition to the seven options
  considered for both existing and new
  sources, EPA also investigated a new
  source option for dairies that would
  prohibit all discharges of manure and
  process wastewater to surface waters,
  eliminating the current allowance for
  the discharge of the overflow of runoff
  from the production area. To comply
  with a zero discharge requirement,
  dairies would need to transform the
  operation so they could have full
  control over the amount of manure and
  wastewater, including any runoff,
  entering impoundments. Many dairies
  have drylot areas where calves, heifers,
  and bulls are confined, as well as
  similar drylot areas where the mature
  cows are allowed access. EPA estimated
  compliance costs for a zero discharge'
  requirements assuming that the
  following changes would occur at new
  dairies:
   (1) Freestall bams for mature cows
 would be constructed with six months
 underpit manure storage, rather than
 typical flush systems with lagoon
 storage;
   (2) Freestall barns with six months
 underpit manure storage would be
 constructed to house heifers;
  . (3) Calf barns with a scrape system
 would be constructed with a scrape
 system and six months of adjacent
 manure storage; and
   (4) New dairies would include
 covered walkways, exercise areas, parlor
 holding, and handling areas.
   Drylot areas are continually exposed
 to precipitation. The amount of
 contaminated runoff from such areas
 that must be captured is directly related
 to the size of the exposed area and the
 amount of precipitation. Under the
 current regulations, dairies use the 25-
 year, 24-hour rainfall event (in addition
 to other considerations) when
 determining the necessary storage
 capacity for a facility. Imposing a zero
 discharge requirement that prevents any
 discharge .from impoundments would
 force dairies to reconfigure in a way that
 provides complete control over all
 sources of wastewater. EPA considered
 the structural changes in dairy design
 described here to create a facility that
 eliminates the potential for
 contaminated runoff.
  While EPA believes that confining all
mature and immature dairy cattle is
technically feasible, the costs of zero
discharge relative to the costs for Option
3 are very high. Capital costs to comply
with zero discharge increase by two
orders of magnitude. EPA estimates

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                   Federal Register/Vol.  66,  No. 9/Friday, January 12, 2001/ProposedRules
                                                                     3069
 annual operating and maintenance costs
 would rise between one to two orders of
 magnitude above the costs for Option 3.
 These costs may create a barrier to entry
 for new sources. In addition, EPA
 believes selecting this option could have
 the unintended consequence of
. encouraging dairies to shift calves and
 heifers offsite to standalone heifer
 raising operations (either on land owned
 by the dairy or at contract operations) to
 avoid building calf and heifer barns. If
 these offsite calf/heifer operations are of
 a size that they avoid being defined as
 a CAFO, the manure from the immature
 animals would not be subject to the
 effluent.guidelines.
    EPA is not basing requirements for
 new dairies on the zero discharge option
 for the reasons discussed above. EPA
 solicits comment on the approach used
 to estimate the costs for new dairies to
 comply with a zero discharge
 requirement. Comments are particularly
 solicited on aspects such as: converting
 from flush systems to underpit manure
 storage; types of housing for calves and
 heifers; and whether the potential for
 uncontrollable amounts of precipitation
  runoff have been sufficiently eliminated
  (including from silage). EPA also solicits
  comment on a regulatory scenario that
  would establish a zero discharge
  requirement for manure and process
  wastewater from bams (housing either
  mature or immature dairy cattle) and the.
  milking parlor, but would maintain the
  current allowance for overflow of runoff
  from drylot areas.
  .  As an alternative to underpit manure
  storage, dairies could achieve zero
  discharge for parlor-wastes and barn
  flush water by constructing systems
  such as anaerobic digesters and covered
  lagoons. These covered systems, if
  properly operated, can facilitate
  treatment of the manure and  offer
  opportunities to reduce air emissions.
  The resulting liquid and solid wastes
  would be more stable than untreated
  manure. EPA solicits comment on the
  usefulness of applying stabilization or
  treatment standards to liquid and slurry
  manures prior to land application.
   Commenters encouraging the use of
   such standards should recommend
   appropriate measurement parameters  .
   such as volatile solids, BOD, COD, and
   indicator organism reductionfs) to
   establish stability or treatment levels.
     EPA- has not identified any basis for
   rejecting the zero discharge option for
    dairies solely due to animal health
   reasons. EPA solicits comment on the
   technical feasibility of confining mature
    and/or immature dairy cattle in barns at
    all times.
      Ten-year protection period. The NSPS
    that are currently codified in part 412
will continue to have force and effect for
a limited universe of CAFOs. For this
reason, EPA is proposing to retain the
NSPS promulgated in 1974 for part 412.
Specifically, following promulgation of
the final rule that revises part 412, the
1974 NSPS would continue to apply for
a limited period of time to certain new
sources and new dischargers. See CWA
section  306(d) and 40 CFR 122.29(d).
Thus, if EPA promulgates revised NSPS
for part 412 in December 2002, and
those regulations take effect in January
2003, qualified new sources and new
dischargers that commenced discharge
after January 1993 but before January
2003 would be  subject to the currently
codified NSPS for ten years from the
date they commenced discharge or until
the end of the period of depreciation or
amortization of their facility, whichever
comes first. See CWA section  306 (d) and
40 CFR 122.29(d). After that ten year
period  expires, any new or revised BAT
limitations would apply with respect to
toxic and noncpnventional pollutants.
 Limitations on conventional pollutants
 would  be based on the!974 NSPS unless
 EPA promulgates revisions to BPT/BCT
 for conventional pollutants that are
 more stringent than the 1974 NSPS.
   Rather than reproduce the 1974 NSPS
 in the proposed rule, EPA proposes to
 refer permitting authorities to the NSPS
 codified in the 2000 edition of the Code
 of Federal Regulations for use during
 the applicable ten-year period.

  8. Pretreatment Standards for New or
 Existing Sources (PSES AND PSNS)
   EPA is not proposing to establish
  Pretreatment Standards for either new
  or existing sources. Further, EPA is
  withdrawing the existing provisions
  entitled "Pretreatment standards for
  existing sources" at §§412.14, 412.16,
  412.24, 412.26. Those existing
  provisions establish no limitations. The
  vast majority of CAFOs are located in
  rural areas that do not have access to
  municipal treatment systems. EPA is not
  aware of any existing CAFOs that
  discharge wastewater to POTWs at
  present and does not expect new
  sources to be constructed in areas  where
  POTW access will be available. For
  those reasons, EPA is not establishing
  national pretreatment standards.
  However, EPA also wants to make it
  clear that if a CAFO discharged
  wastewater to a POTW, local
  pretreatment limitations could be
  established by the Control Authority.
  These local limits are similar to BPJ
  requirements in an NPDES permit.
9. Effluent Guidelines Controls for
Pathogens
  The third most common reason for
waterbddies being listed on State
§ 303(d) lists as an impaired watershed
is pathogens. Degradation of surface
waters by excessive levels of pathogens
has been attributed to several sources,
including natural wildlife, faulty septic
systems, and animal agriculture. As
described in Section 5, stream water
quality may be impacted by animal
feeding operations due to feedlot surface
runoff, spills from liquid
impoundments, tile drain effluent,
leaching and runoff from land receiving
manure, and seepage from waste
storage. Degradation of aquatic and
riparian habitat also occurs when
animal grazing operations are poorly
managed.
   Iii today's notice, EPA is not setting
specific requirements for the control of.
pathogens. The proposed BAT is
expected to reduce pathogens to surface
waters through the implementation of
the zero discharge requirements at the
production area, and through the
 implementation of the PNP at the land
 application area. Even without explicit
 requirements or limits for pathogen .
 controls, EPA expects considerable
 reduction in the discharge of pathogens
 for reasons described below. Runoff
 simulations and loadings analysis
 predict a 50% reduction in fecal
 coliforms and a 60% reduction in fecal
 streptococci under the regulatory
 scenario proposed today. Following this
 proposal, EPA intends to further analyze
 technologies  for the treatment or
 reduction of pathogens in manure, and
 solicits comment on other approaches to
 control pathogens.
    One mechanism for pathogen
 discharge to surface waters is
 catastrophic spills, whether caused by
 intentional discharges or through
 overflow following major storms. EPA
 expects the requirements for no
 discharge from the production area, as
 well as routine inspection and
 mandatory management practices for
 the control of liquid impoundment
  levels, will reduce catastrophic spills.
  For the swine and poultry sectors EPA
  believes the  elimination of the storm
  event at which an overflow is allowed
  will also reduce discharge of pathogens.
  At the production area, operators would
  be required to handle animal mortalities
  in a manner so as to prevent
  contamination of surface water. The
  proper use of manure as a fertilizer, as
  specified in the proposed regulations,
  may result in increased storage capacity
  and longer retention times of both liquid
  and solid manure storage, allowing

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  3070
Federal  Register/Vol. 66, No. 9/Friday, January 12, 2001 /Proposed Rules
  increased opportunity for natural die-off
  of pathogens. For example, runoff from
  fields receiving poultry litter that had
  been stored prior to application showed
  no significant difference in pathogen
  content in runoff from control fields
  (GEIS, 1999), supporting the conclusion
  that pathogen reductions will occur
  from increased storage times.
    Application rate has been identified
  as the single most important manure
  management practice affecting pollution
  of surface waters from fields receiving
  manure. Other practices affecting
  pathogen content in the runoff include
  amount of application, incorporation
  methods, tillage, saturation of the
  receiving field, and elapsed time
  following application before a rainfall.
  In one case study, swine lagoon effluent
  applied to tile drained fields at 1.1
  inches showed no difference in runoff
  quality than the control fields, but
  application at three times the rate
  showed high levels of fecal coliform in
  the surface water. Fecal bacteria in
  runoff from land receiving fresh manure
  may often be a significant proportion of
  the fecal contamination measured in the
  surface waters. Vegetated filter strips are
  useful in removing pollutants from
 runoff on manured fields, particularly
 nutrients and sediment, but have not
 been identified as generally effective in
 reducing bacterial concentrations in the
 runoff. Surface applications of manure
 are more likely to result in fecal
 coliform transport when the soil is
 saturated, particularly in fine sandy
 loam soils.
   EPA believes nutrient management
 practices and rates established in the
 PNP would limit the quantity of
 nutrients that may be applied to fields
 and will reduce the occurrence of
 manure application to saturated soils, or
 when a heavy storm event is predicted.
 Nutrient loss to surface water under
 these conditions would result in
 reduced crop yields and would be
 reflected in revisions made to the PNP
 in subsequent years translating to a
 lower manure application rate.
  EPA has collected data on
 technologies useful in treating manure
 and wastes for pathogens. Anaerobic
 digesters and even simple manure
 storage for an extended period of time
 promote pathogen reductions through
 selective growth conditions and natural
 die-off over time. The addition of heat,
 such as is used in thermophilic
 digesters, further reduces pathogens.
 Proper composting processes also
 involve high temperatures—achieving
temperatures approaching 140 degrees F
in the pile. Heat treatment over several
days is likely to kill protozoans such as
Giardia and Cryptosporidium. The
                    addition of lime to achieve high alkaline
                    conditions, e.g., achieving a pH S12,
                    also is effective at killing many
                    pathogens by disrupting the cell
                    membrane or disrupting virus viability.
                      EPA will continue to analyze the
                    performance and applicability of
                    treatments to reduce pathogens in CAFO
                    waste, and will analyze the costs of
                    these processes. The processes
                    described above and others used to
                    significantly reduce pathogens in
                    biosolids or sewage sludge such as heat
                    treatment, drying, thermophilic aerobic
                    digestion, pasteurization, disinfection,  '
                    and extended storage will be analyzed
                    for their applicability to animal
                    manures. EPA will give consideration to
                    establishing the same performance
                    standards as required for Class A sludge
                    in Part 503. If supported by appropriate
                    data, the final rule could establish these
                    or other appropriate standards as
                    performance standards that the wastes
                    would be required to meet prior to land
                    application. The CAFO would need to
                    demonstrate achievement of these
                    standards prior to land application
                   because of the impracticability of
                   measuring the pollutant loadings in any
                  • eventual runoff from the land
                   application areas to the waters. EPA
                   solicits comment on this possible
                   approach and specifically requests data
                   relating to pathogen treatment and
                   reductions that are demonstrated to be
                   effective on CAFO waste. EPA also
                   solicits data on management practices
                   that can be applied to the land
                   application of manure, which may
                   reduce pathogens in runoff.
                   10. Antibiotics

                     Related to concerns over pathogens in
                   animal manures are concerns over
                   antibiotics and other pharmaceuticals
                   that may be present in the manure. As
                   discussed in Section V, an estimated
                   60-80% of all livestock receive
                   antibiotics. Some antibiotics are
                   metabolized, and some are excreted
                  with the manure. In cases where
                   antimicrobials are administered to
                  animals through the feed, spilt feed and
                  wastelage may contribute to antibiotic
                  content of the waste storage. The
                  presence of antibiotics in manure and
                  the environment has been shown to
                  result in antibiotic resistant pathogens.
                  EPA solicits comments on the direct
                  effects of antibiotic residues and
                  antimicrobial resistance, specifically on
                  how manure management may
                  contribute to the problem of antibiotics
                  reaching the environment and
                  contributing to pathogen resistance.
                  EPA also solicits  data and information
                  on effective treatment or practices that
  may be implemented by CAFOs to
  reduce these releases.

  IX. Implementation of Revised
  Regulations

  A. How Do the Proposed Changes Affect
  State CAFO Programs?
   EPA is proposing a number of changes
  to the effluent guidelines and the
  NPDES permit regulations for CAFOs in
  today's proposed rule. Under 40 CFR
  123.25, authorized NPDES State
  programs must administer their permit
  programs in conformance with NPDES
  requirements, including the
  requirements that address concentrated
  animal feeding operations (§ 122.23) and
  the incorporation of technology-based
  effluent limitation guidelines and
  standards in permits (§ 122.44). Thus,
  today's proposed rule would require the
  43 States [note that State is defined in
  § 122.2] with authorized NPDES permit
  programs for CAFOs to revise their
  programs as necessary to be consistent
 with the revised federal requirements.
  Current NPDES regulations note that
 authorized NPDES State permit
 programs are not required to be
 identical to the federal requirements;
 however, they must be at least as
 stringent as the federal program. States
 are not precluded from imposing
 requirements that are more stringent
 than those required under federal
 regulations.
   Any State with an existing approved '
 NPDES permitting program under
 section 402  must be revised to be
 consistent with changes to federal
 requirements within one year of the date
 of promulgation of final changes to the
 federal CAFO regulations [40 CFR
 123.62(e)]. hi cases where a State must
 amend or enact a statute to conform
 with the revised CAFO requirements,
 such revisions must take place within
 two years of final changes to the federal
 CAFO regulations. States that do not
 have an existing approved NPDES
 permitting program but who seek
 NPDES authorization after these CAFO
 regulatory provisions are promulgated
 must have authorities that meet or
 exceed the revised federal CAFO
 regulations at the time authorization is
 requested.
  m States not authorized to administer
 the NPDES program, EPA will
 implement the revised requirements.
 Such States may still participate in
 water quality protection through
participation in the CWA section 401
 certification  process (for any permits) as
well as through other means (e.g.,
development of water quality standards,
development of TMDLs, and
coordination with EPA).

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                  Federal Register/Vol. 66, No, 9/Friday, January 12, 2001/Proposed Rules
                                                                     3071
   EPA is aware that the majority of
 States authorized to implement the
 NPDES program supplement the NPDES
 CAFO requirements with additional
 State requirements, and some States
 currently regulate or manage CAFOs
 predominantly under State non-NPDES
 programs. It has been suggested that
 EPA provide a mechanism through
 which State non-NPDES GAFO
 programs can be recognized alternatives
 that would be authorized under the
 GWA.
   No permit issued by a non-NPDES
 program will satisfy the NPDES permit
 requirement. Facilities required to be
 covered by a NPDES permit must obtain
 a permit from an agency authorized to
 issue a NPDES permit. However, EPA
 believes that the current NPDES
 program provides a reasonable degree of
 flexibility consistent with CWA
 requirements, and that the proposed
 CAFO regulation provides opportunities
 to incorporate State programs in several
 ways.
   It is possible for non-NPDES State
 programs that currently regulate AFOs
 to gain EPA's approval as NPDES-
 authorized programs. Such a change
 would require a formal modification of
 the State's approved NPDES program,
 and the State would have to
 demonstrate that its program meets all
 of the minimum criteria specified in 40
 CFR Part 123, Subpart B for substantive
 and procedural regulations. Among
 other things, these criteria include the
 restriction that permit terms may not
 exceed 5 years, and include provisions
 on public participation in permit
 development and enforcement, and EPA
 enforcement authority.
   hi addition, today's proposal provides
 specific flexibility on particular issues.
 First, with regard to the off-site transfer
 of manure, EPA is requiring under one
 co-proposed option that the CAFO
 operator obtain a certification from
 recipients that, if they intend to land
, apply the manure, it will be done
 according to appropriate agricultural
 practices. EPA is proposing to waive
 this requirement in a State that is
  implementing an effective program for
  addressing excess manure generated by
  CAFOs. Second, EPA is proposing to
  require that processors be permitted, or
  co-permitted, along with their contract
  producers. EPA is requesting comment
  on an option that would waive this
  requirement in certain instances in
  States with effective programs for
  managing excess manure. EPA is also
  soliciting comment on one particular
  type of program, an Environmental
  Management System developed by the
  processor, as sufficient to waive co-
  permitting requirements. EPA is
interested in comments on other
specific requirements of today's
proposal that might be satisfied in
whole or in part by State program
requirements. This could include ways
to ensure that states with unique
programs that meet or exceed the
provisions of the revised regulations
and the CWA requirements could utilize
their own programs that include similar
objectives such as enhanced water
quality protection, public participation
and accountability.
  A third possible means of providing
flexibility for States would be available
if the three-tier regulatory structure is
adopted in the final regulation. In the
three-tier structure, all facilities over
1,000 AU would be considered CAFOs
by definition, and those between 300
AU and 1,000 AU would be CAFOs only
if they meet one of several conditions,
described in detail in Section VII.B.3, or
if designated by the permit authority as
a significant contributor .of pollution to
waters of the U.S. Those with fewer that
300 AU would become CAFOs only if
designated by the permit authority. A
State with an effective non-NPDES
program could succeed in helping  many
operations avoid permits by ensuring
they do not meet any of the conditions
that would define them as CAFOs.
  EPA is also soliciting comment on
whether or not to adopt both the. two-
tier and the three-tier structures, and to
provide a mechanism to allow States to
select which of the two alternative
proposed structures to adopt in their
State NPDES program. Under this
option, a State could adopt the structure
that best fits with the administrative
 structure of their program, and that best
 serves the character of the industries
 located in their State and the associated
 environmental problems. This option is
 viable only if the Agency is able to
 determine that the two structures
 provide substantially similar
 environmental benefits by regulating
 equivalent numbers of facilities and
 amounts of manure. Otherwise, States
 would be in a position to choose a less
 stringent regulation, contrary to the
 requirements of the Clean Water Act. A
 discussion of this option can be found
 in Section VII.B.4.
   The requirements for State NPDES
 program authorization are specified
 under § 402 (b) of the CWA and within
 the broad NPDES regulations (40 CFR
 Part 123). These provisions set out
  specific requirements for State
  authorization applicable to the entire
 NPDES program and the Agency does
  not believe that broad changes to these
  requirements are appropriate in this
  proposed rulemaking.
B. How Would EPA's Proposal to
Designate CAFOs Affect NPDES
Authorized States?

  Today's proposal would provide
explicit authority, even in States with
approved NPDES programs, for the EPA
Regional Administrator to designate an
AFO as a CAFO if it meets the
designation criteria in the regulations.
EPA's authority to designate AFOs as
CAFOs would be subject to the same
criteria and limitations to which State
designation authority is subject.
However, EPA does not propose to
assume authority or jurisdiction to issue
permits to the CAFOs that the Agency
designates in approved NPDES States.
That authority would remain with the
approved State. EPA requests comment
on this prosed new designation
authority.
C. How and When Will the Revised
Regulations be Implemented? '

  EPA anticipates that this these
proposed regulations will be
promulgated as final regulations in
December, 2002, and published in the  •
Federal Register shortly thereafter
(approximately January, 2003). As
mentioned, authorized States programs
will need up to two years after that date
to revise their programs to reflect the
new regulations. Following a State's
revision of its program and approval of
the revisions by EPA, we expect many
States to want additional time to
develop new or revised CAFO general
permits. EPA believes it is reasonable to
allow States one additional year to
 develop these new or revised general
permits. To summarize, some States will
need until approximately January
 2006—i.e., three years after the final
 rule is published—before they can make
 CAFO general permits available that
 reflect the new regulations in the State.
   At the same time, once these
 regulations are finalized, we estimate
 that there will be a large number of
 operations that will need to apply for a
 permit, described in Section VII.B.4. It
 is important to take into account that
 some States will not be making CAFO
 general permits available to these
 facilities until three years after the final
 rule. If EPA were to make the new Part
 122 regulations effective shortly after we
 issue the final rule (January 2003), there
 would be large numbers of facilities that
 would be newly defined as CAFOs at
 that time. They would be required to
 apply for a permit right away, but States
 would not be able to issue "general
 permits at that time or a large number
 of individual permits all at once. This
 would leave the facilities potentially in

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 3072
Federal  Register/Vol. 66, No. 9/Friday,  January 12, 2001/Proposed Rules
 the detrimental position of being
 unpermitted dischargers.
   To avoid this situation, EPA proposes
 that the revisions to the CAFQ
 definition in part 122 (including, for
 example, changes to the threshold
 number of animals to qualify as a CAFO
 and other changes such as the
 elimination of the 25-year, 24-hour
 storm exemption) would not take effect
 until three years after publication of the
 final rules. See proposed section
 122.23(f). We expect, therefore, that
 these changes would not take effect
 until approximately January, 2006.
 Operations that are brought within the
 regulatory definition of a CAFO for the
 first time under these regulatory
 revisions would not be defined as
 CAFOs under final and effective
 regulations until that date.
   EPA also considered an alternate
 approach in which the effective date for
 the part 122 revisions would be
 different in each State, depending on
 when the State actually adopted and got
 approval for the changes and issued
 general permits. An advantage of this
 approach would be that the new
 regulations would potentially be
 effective at an earlier date, i.e., before
 January 2006, in some States. EPA is not
 proposing this approach, however. We
 decided that it would be preferable to
 provide one uniform effective date for
 these particular revisions, which would
 provide necessary clarity and
 consistency to the national NPDES
 program for CAFOs. EPA does seek
 comment, however, on which approach
 would be preferable to adopt in the final
 regulations. States, however, are free to
 implement more stringent requirements,
 and may choose to implement the
 revised CAFO definition at an earlier
 date.
   It should be noted that EPA is
 proposing this delayed effective date
 only for the proposed regulatory
 changes that affect which operations
 would be defined as CAFOs. There is no
 need to delay the effective date of any
 of the other revisions EPA is proposing
 to the CAFO regulations at 40 CFR part
 122, such as those that specify land
 application requirements and other
 requirements. These other revisions to
 the part 122 regulations would become
 effective 60 days after publication of the
 final regulations (January 2003). For any
 operation that is a CAFO according to
 the current definition and that is being
 permitted after that date, or having its
 permit renewed, the permit would be
 developed under these new part 122
 provisions.
  EPA is proposing that the revised
 effluent guidelines, once promulgated as
final regulations, would be effective 60
                    days after promulgation. The 1989
                    statutory deadline for meeting BAT has
                    long passed, and we do not believe there
                    is any reason why permit writers could
                    not begin incorporating the revised
                    effluent guidelines into permits
                    beginning 60 days after promulgation.
                      If a CAFO submits a timely
                    application for a permit renewal, but
                    has not received a decision on that
                    application prior to the expiration date
                    of the original permit, then the original
                    permit would be administratively
                    "continued" until there is a decision
                    from the permit authority on the new
                    application (in EPA-administered States
                    and States with comparable
                    administrative procedure laws). If that
                    continuance lasts  beyond the date that
                    is the effective date of the revised
                    NPDES regulations and effluent
                    guidelines, then the CAFO's new permit
                    would reflect both sets of new
                    regulations.
                     EPA also proposes to adopt specific
                    timing requirements in the permit with
                    respect to the CAFO's development of
                    PNPs. As described in Section VIII, EPA
                    proposes to establish BAT as
                    encompassing the following timing
                    requirements: (1) for all new permittees
                    and for applicants who hold existing
                    individual permits, compliance with the
                    PNP would be an immediate
                   requirement of the permit. Therefore,
                    the draft PNP must be submitted to the
                    permit authority along with the permit
                    application or NOI; the final PNP must
                   be adopted by the  permittee within 90
                    days of being permitted; (2) for
                   applicants who are authorized under an
                   existing general permit, the permittee
                   must develop a Permit Nutrient Plan
                   within 90 days of submittal of the NOI;
                   and (3) the PNP for all CAFOs would
                   need to include milestones for
                   implementation. This time is necessary
                   because, while operators can begin
                   preparing necessary data, it would be
                   difficult to develop a PNP before the
                   permit authority issues a final permit
                   that specifies the terms and conditions
                   of the permit. (Operators of existing
                   CAFOs with individual NPDES permits,
                   who must submit their draft PNP with
                   the permit application, are expected to
                   reapply for coverage under the revised
                   regulation early enough to provide time
                   to develop its PNP without causing a
                   lapse in coverage.) For facilities that
                   have been designated as CAFOs, the
                   permit writer will  develop the
                   implementation schedule in order to
                   provide reasonable time to prepare the
                   PNP.
                     Prior to the effective date of the
                   revised regulations, State and EPA
                   permit authorities will be issuing
                   permits to facilities that currently meet
 the definition of a CAFO under the,
 existing regulations or that have been
 designated as CAFOs. Consistent with
 the AFO Strategy, discussed in section
 III.B., during 2000 to 2005-States with
 authorized NPDES programs are to focus
 on issuing permits to the largest CAFOs,
 those with 1,000 AU or greater. In States
 where EPA is the permit authority, EPA
 will issue permits to operations defined
 as CAFOs that are over 300 AU. The
 permits are valid for a maximum of five
 years, at which time these facilities
 would obtain new permits under the
 revised regulation.
   One of the significant changes to the
 NPDES and ELG regulation for CAFOs
 will be the requirement to develop and
 implement Permit Nutrient Plans that
 are developed, or reviewed and
 approved, by certified planners.
 Concern has been raised about the
 availability of the necessary expertise to
 develop and certify the plans.  EPA
 believes that there will be sufficient lead
 time before this regulation is
 implemented to expect the market to
 have developed the CNMP and PNP
 planning expertise and infrastructure
 because, during this period, CNMPs will
 be developed under both the USDA
 voluntary program and EPA's Round I
 permitting.
   For facilities subject to the
 requirements of the revised regulation,
 EPA anticipates that during the period
 between the time this regulation is
 promulgated arid the time it is effective,
 operators will be able to anticipate the
 status of their facilities, and therefore
 can begin gathering data that will be
 needed for the Permit Nutrient Plan and
 other requirements, such as soil type,
 manure sampling, cropping information, -
 and other data needed to calculate the
 allowable manure application rate.
 (Note: States are supposed to have
 adopted their NRCS 590 standard by
 May 2001.)
  EPA also proposes that CAFOs that
 are new sources may not receive permit
 coverage until the PNP is developed. In
 this case, a complete application must
 include the PNP. The owner or operator
 of a new facility is expected to design
 and construct the new facility in a
 manner that anticipates the ELG and
 NPDES requirements for manure
 management, rather than incurring the
 costs of retrofitting an already
 constructed facility.
  EPA recognizes that some practices
 such as liners and groundwater wells for
beef and dairy operations may take time
to implement. The PNP will include a
schedule for implementing the
provisions of the PNP, including
milestones with dates.

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                  Federal'Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
                                                                      3073
  Facilities Constructed After the
Proposed Regulation is Published. EPA
is soliciting comment on whether the
revised regulations should apply 60
days after publication of the final rule
to facilities that commence operation
after that date, even if they would not
be defined as a CAFO under the existing
rules. Although EPA is proposing to'
delay for three years the effective date
of the proposed regulations for existing
facilities that are not currently defined
as CAFOs, it is considering whether to
require all facilities defined as CAFOs
under the final rule that commence
operation after the final rule is
published to obtain an NPDES permit
and comply with the other requirements
of the final rule. For example, a dry
poultry operation or an animal feeding
operation of 501 cattle that is
constructed during the three year period
after publication of the final rule might
be required to comply immediately with
the revised regulations rather than
remaining outside the scope of the
NPDES program until three years after
publication of the final rule.
  Requiring newly constructed facilities
to obtain permits does not pose the
same problem as requiring all existing
AFOs which are not defined as CAFOs
under the current rule to obtain permits
immediately after promulgation of the
final rule. Once a new definition of a
CAF0 becomes effective, a large number
of existing facilities would need a
permit on the same date. EPA expects
that most existing facilities will seek
coverage under a general permit.
However, EPA and authorized States
will need some time after the final rule
is promulgated to develop those general
permits. An existing facility would face
the dilemma of either ceasing operations
or discharging without a permit if it was
required to obtain a permit but none
was available. By contrast, new facilities
would commence operation over a
period of time and present less of a
burden on permit authorities. If a
general permit was not available,
issuing individual permits to the
smaller number of newly constructed
facilities would present less of a burden.
If all else fails, a newly constructed
facility could not commence operation
until it had a permit. This approach
would be consistent with EPA's general
approach for regulation of .new sources
. and new dischargers, who are required
to obtain an NPDES permit (and comply
with any applicable NSPS) prior to
commencing operation. See 40 CFR
 122.29,124.60(a). Finally, unlike an
 existing facility, a newly constructed
facility is in a better position to plan its
facility to comply with the revised
regulations.
  If EPA did not delay the effective date
for facilities that are constructed after
the final rule is published, the rule
would address additional sources
sooner. On the other hand it would
further complicate the regulatory
structure because it would temporarily
create another category of facilities. EPA
solicits comments on whether all
provisions of the rule should be
effective 60 days after the final rule is
published for facilities that are
constructed after that date.
D. How Many CAFOs are Likely to be
Permitted in Each State and EPA
Region?

  Tables 9-1 and 9-2 delineate the
number of facilities, in each State and
EPA Region, that are expected to be
affected by either of today's proposed
two-tier and three-tier structures,
respectively. In both proposed
structures, all CAFOs with more than
1,000 AU would be required to apply for
a NPDES permit. The differences lie
primarily in how the middle-sized
operations are affected.
BILLING CODE 6560-50-P

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3074
Federal Register/Vol. 66, No. 9/Friday, January 12, 2001 / Proposed Rules
      Table 9-1. Projected Estimated Number of Potential CAFOs Potentially Regulated Under
                        the Three-Tier Structure by Region, State and Size
EPA
Region

Region 1







Region 2



Region 3






legion 4









legion 5







State

Connecticut
Maine
Massachusetts
New
Hampshire
Rhode Island
Vermont


New Jersey
New York


Delaware
Maryland
Pennsylvania
Virginia
West Virginia


Alabama
Florida
Georgia
Kentucky
Mississippi
N. Carolina
S. Carolina
Tennessee


Illinois
, Indiana
Michigan
Minnesota
Ohio
Wisconsin


<300AU

0
0
0
0
0
0


0
0


0
0
0
0
0

•
0
0
0
0
0
0
0
0


1
1
1
2
0
3



Regiona
Subtotal






0



0






0









0







8

300-
1,000 AU

39
60
41
29
c,
129


27
514


332
437
628
551
135


1,224
247
1,360
233
766
1,454
306
265


461
455
345
785
369
574



Regiona]
Subtotal






303



542






2,084









5,854







2,988

>1,000
AU

9
8
7
4
0
15


6
79


97
137
321
216
75


557
169
834
179
433
1,218
201
114


377
328
144
496
217
141



Regiona]
Subtotal






' 43



85






845









3,706







1,704

Total

48
68
48
. 33
5
144


33
593


429
573
949
767
210


1,782
416
2,193
412
1,199
2,672
508
378


839
784
490
1,283
586
718



Regional
Subtotal



!


346



627






2,929









9,560







4,700


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Federal Register/Vol. 66, No.  9/Friday, January 12,  2001 /Proposed Rules
3075
EPA
Region

Region 6






Region 7 •





Region 8







Region 9





RegionlO





State

Arkansas
Louisiana
New Mexico
Oklahoma
Texas


Iowa
Kansas
Missouri
Nebraska


Colorado
Montana
North Dakota
South Dakota
Utah
Wyoming


Arizona
California
Hawaii
Nevada


, Alaska
Idaho
Oregon
Washington


Total Potential Permittees
<300AU

0
0
0
0
0


2
0
0
. 0


0
0
0
0
0
0


0
0
0
0


0
0
0
0


10

Regional
Subtotal





0





2







0





0





0


300-
1,000 AU

1,418
211
30
289
841


1,440
188
. 449
442


121
32
35
181
123
18


30
956
16
15


3
176
156
320


19,260

Regional
Subtotal





2,789





2,519







509





1,017





655


>1,000
AU

580
86
112
175
675


1,318
277
321
641


210
55
28
,. 177
53
24


83
1,031
16
20


1
151
72
168


12,660

Regional
Subtotal





1,629





2,557







548





1,151





392


Total

1,999
297
141
464
1,516


2,760
465
770
1,083


331
87
63
358
176
42


113
1,988
33
35


4
328
228
488


31,930

Regional
Subtotal





4,418





5,078







1,057





2,168





1,047



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3076
Federal Register/Vol. 66, No. 9/Friday, January 12, 2001 / Proposed Rules
     Note: An additional 7,000 facilities in the 300 AU to 1,000 AU size category would potentially

     be subject to the rule, but are projected to file a certification indicating that they do not need to

     apply for a permit.
      Table 9-2. Projected Estimated Number of Potential CAFOs Potentially Regulated Under
                         the Two-Tier Structure by Region, State and Size
EPA
Region

Region 1







Region 2



Region 3





Region 4


•






legion 5
State

Connecticut
Maine
Massachusetts
New
Hampshire
Rhode Island
Vermont


New Jersey
New York


Delaware
Maryland
Pennsylvania
Virginia
West Virginia

Alabama
Florida
Georgia
Kentucky
Mississippi
N. Carolina
S. Carolina
Tennessee


Illinois
<500AU

1
1
1
1
0
3


1
21


'3
5
15
10
1

1
1
5
7
1
0
1
0


14

Regional
Subtotal






7



22






34








16


500-
1,000 AU

22
30
21
15
2
64


15
259


169
229
380
325
94

719
178
936
165
488
911
231
148


420

Regional
Subtotal






153



274






1,197








3,776


>1,000
AU

9
8
7
4
0
15


6
79


97
137
320
216
75

557
170
833
179
433
1,221
202
114


377

Regional
Subtotal






43-



85






846








3,710


Grand
Total

32
39
29
20
•3
82


22
359


268
371
715
552
170

1,278
349
1,774
351
922
2,133
434
261


811

Regional
Subtotal






204



380






2,076








7,502



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                Federal Register/Vol. 66, No. 9/Friday, January  12, 2001/Proposed Rules
3077
EPA
Region








Region 6






Region 7




Region 8







Region 9





RegionlO





State

Indiana
Michigan
Minnesota
Ohio
Wisconsin


Arkansas
Louisiana
New Mexico
Oklahoma
Texas


Iowa
Kansas
Missouri
Nebraska

Colorado
Montana
North Dakota
South Dakota
Utah
Wyoming


Arizona
California
Hawaii
Nevada


Alaska
Idaho
Oregon
Washington


Total Potential Permittees
<500AU

6
9
30
- 3
25


1
0
0
0
0


58
5
9
11

0
0
0
0
0
0


0
0
0
0


0
0
0
0


250

Regional
Subtotal





87






1





83






0





0





0

250
500-
1,000 AU

396
222
621
269
309


777
120
26
165
532


1,374
182
323
437

81
25
27
149
65
9


23
545
10
8


2
97
82
167


12,860

Regional
Subtotal





2,237






1,620





2,315






355





586





348

12,860
>1,000
AU

328
144
496
217
141


579
86
112
175
676


1,318
277
321
640

210
55
28
177
53
24


83
1,029
16
21


1
151
72
169


12,660

Regional
Subtotal





1,703






1,628





2,556






548





1,149





393

12,660
Grand
Total

730
375
1,147
489
475


1,357
206
138
340
1,208


2,750
464
652
1,087

291
80
54
326
118
33


106
1,574
26
29


3
248
153
336


25,770

Regional
Subtotal





4,027






3,249





4,953






902





1,735





741

25,770
BILLING CODE 6560-50-C

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 3078
Federal Register/Vol. 66, No.  9/Friday, January  12, 2001/Proposed Rules
   As described in today's preamble, the
 three-tier structure would affect more
 facilities because all AFOs with 300 AU
 or more would be required to do
 something. However, not all would be
 required to apply for a permit, and,
 depending on the vigor with which
 States and AFOs seek to avoid the
 conditions defining these facilities as
 CAFOs, the actual number of permittees
 could be smaller. EPA projects that a
 minimum of 4,000 middle-sized
 facilities and a maximum of 19,000
 would apply for a permit under the
 three-tier structure.  By contrast, the
 proposed two-tier structure would
 require all 13,000 facilities between 500
 AU and 1,000 AU to apply for a permit.
   Further, the number of small facilities
 likely to be designated differs between
 the two proposed structures. Under the
 three-tier structure,  EPA expects very
 few AFOs to be designated, potentially
 10 per year nationally. Under the two-
 tier structure, however, this number is
 likely to rise to 50 per year, given that
 AFOs from 300 AU to 499 AU have the
 potential to generate significant
 quantities of manure that, if not
 properly managed, may lead the facility
 to be a significant contributor of
 pollution to the waters.
 E. Funding Issues
  While most CAPO owners and
 operators are interested in taking
 appropriate measures to protect and
 preserve the environment, there are
 legitimate concerns  over the costs of
 doing so. While EPA's cost analysis
 indicates that this rule is affordable,
 some businesses in some locales may
 experience economic stress. (See
 Section X). Further, concern has been
 expressed as to whether facilities  below
 1,000 AU that become CAFOs due to the
 changes in this proposed rulemaking
 may potentially cause operations to lose
 cost-share money available under EPA's
 Section 319 Nonpoint Source Program
 and USDA's Environmental Quality
 Incentive Program (EQIP). Once a
 facility is considered a point source
 under NPDES, the operation is not
 eligible for cost sharing under the
 Section 319 nonpoint source program.
 However, the USDA EQIP program is in
 fact available to most facilities, and
 being a,permitted CAPO is not a reason
 for exclusion from the EQIP program.
 EQIP funds may not be used to pay for
 construction of storage facilities at
 operations with greater than 1,000
 USDA animal units; however, EQIP is
 available to these facilities for technical
 assistance and financial assistance for
 other practices. One USDA animal unit
equals 1,000 pounds of live weight of
any given livestock species or any
                    combination of livestock species. (The
                    approximate number of animal
                    equivalents would be: 1,000 head of
                    beef; 741 dairy cows; 5,000 swine,
                    250,000 layers; and 500,000 broilers).
                      To this end, EPA anticipates that State
                    and Federal Agencies will facilitate
                    compliance with this rule by providing
                    technical assistance and funding for
                    smaller CAFOs, as available.

                    F. What Provisions are Made for Upset
                    and Bypass?

                      A recurring issue of concern has been
                    whether industry guidelines should
                    include provisions authorizing
                    noncompliance with effluent limitations
                    during periods of "upsets" or
                    "bypasses". An upset, sometimes called
                    an "excursion," is an unintentional
                    noncompliance occurring for reasons
                    beyond the reasonable control of the
                    permittee. It has been argued that an
                    upset provision is necessary in EPA's
                    effluent limitations because such upsets
                    will inevitably occur even in properly
                    operated control equipment. Because
                    technology based limitations require
                    only what the technology can achieve,
                    it is claimed that liability for such
                    situations is improper. When confronted
                    with this issue, courts have disagreed on
                    whether an explicit upset exemption is
                    necessary, or whether upset incidents
                    may be handled through EPA's exercise
                    of enforcement discretion. Compare
                    Marathon Oil Co. v. EPA, 564 F.2d 1253
                    (9th Cir.1977), with Weyerhaeuser v.
                    Costle, 594 F.2d 1223 (8th Cir. 1979).
                    See also Sierra Club v. Union Oil Co.,
                    813 F.2d 1480 (9th Cir. 1987), American
                    Petroleum Institute v. EPA, 540 F.2d
                    1023 (10th Cir. 1976), CPC
                    International, Inc. v. Train, 540 F.2d
                    1320 (8th Cur. 1976), and FMC Corp. v.
                    Train, 539 F.2d 973 (4th Cir. 1976).
                     A bypass, on the other hand, is an act
                    of intentional noncompliance during
                    which waste treatment facilities  are
                    circumvented because of an emergency
                    situation. EPA has in the past included
                    bypass provisions in NPDES permits.
                    EPA has determined that both upset and
                    bypass provisions should be included in
                    NPDES permits and has promulgated
                    permit regulations that include upset
                    and bypass permit provisions. See 40
                    CFR 122.41. The upset provision
                    establishes an upset as an affirmative
                    defense to prosecution for violation of,
                    among other requirements, technology-
                    based effluent limitations. The bypass
                    provision authorizes bypassing to
                    prevent loss of life, personal injury, or
                    severe property damage. Consequently,
                    although permittees in the  offshore oil
                    and gas industry will be entitled to
                    upset and bypass provisions in NPDES
permits, this regulation does not address
these issues.

G. How Would an Applicant Apply for
Variances and Modifications to Today's
Proposed Regulation?

  Once this regulation is in effect, the
effluent limitations must be applied in
all NPDES permits thereafter issued to
discharges covered under this effluent
limitations guideline subcategory. The
CWA, however, provides certain
variances from BAT and BCT
limitations. Under 301(1), the only
variance available for discharges from
the production area is an. FDF variance
under 301(m). For the land application
area, 301(g) variances don't apply
because EPA is not setting BAT effluent
limitations for the five pollutants to
which that provision applies. 301(c) and
FDF variances are available for effluent
limitations covering the land
application area.
  The Fundamentally Different Factors
(FDF) variance considers those facility
specific factors which a permittee may
consider to be uniquely different from
those considered in the formulation of
an effluent guideline as to make the
limitations inapplicable. An FDF
variance must be based only on
information submitted to EPA during
the.rulemaking establishing the effluent
limitations from which the variance is
being requested, or on information the
applicant did not have a reasonable
opportunity to submit during the
rulemaking process for these effluent
limitations guidelines. If fundamentally
different factors are determined, by the
permitting authority (or EPA), to exist,
the alternative effluent limitations for
the-petitioner must be no less stringent
than those justified by the fundamental
difference from those facilities
considered in the formulation of the
specific effluent limitations guideline of
concern. The alternative effluent
limitation, if deemed appropriate, must
not result in non-water quality
environmental impacts significantly
greater than those accepted by EPA in
the promulgation of the effluent
limitations guideline. FDF variance
requests with all supporting information
and data must be received by the
permitting authority within 180 days of
publication of the final effluent
limitations guideline (Publication date
here). The specific regulations covering
the requirements for and the
administration of FDF variances are
found at 40 CFR 122.21(rn)(l), and 40
CFR part 125, subpart D.

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                  Federal Register/Vol. 66, No. 9/Friday, January 12,  2001 /Proposed Rules
                                                                     3079
X. What Are the Costs and Economic
Impacts of the Proposed Revisions?

A. Introduction and Overview
  This section presents EPA's estimates
of the costs and economic impacts that
would occur as a result of today's
proposed regulations. Costs and
economic impacts are evaluated for each
commodity sector, including the beef,
veal, heifer, dairy, swine, broiler, turkey
and egg laying sectors. A description of
each of the ELG technology options and
the NPDES scenarios considered by
EPA, and the rationale for selecting the
proposed BAT Option and NPDES
, Scenario, are provided in Sections VII
and VIE of this document. Detailed
information on estimated compliance
costs are provided in the Development
Document for the Proposed Revisions to
the National Pollutant Discharge
Elimination System Regulation and the
Effluent Guidelines for Concentrated
Animal Feeding Operations (referred to
as the "Development'Document").
EPA's detailed economic assessment
can be found in Economic Analysis of
the Proposed Revisions to the National
Pollutant Discharge Elimination System
Regulation and the Effluent Guidelines
for Concentrated Animal Feeding
Operations (referred to as "Economic
Analysis"). EPA also prepared the
Environmental and Economic Benefit
Analysis of the Proposed Revisions to
the National Pollutant Discharge
Elimination System Regulation and the
Effluent Guidelines for Concentrated
Animal Feeding Operations  ("Benefits
 Analysis") in support of today's
 proposal. These documents are available
 at EPA's website at http://www.epa.gov/
 owm/afo.htm.
   This section presents EPA's estimate
 of the total annual incremental costs
 and the economic impacts that would be
 incurred by the livestock and poultry
 industry as a result of today's proposed
 rule. This section also discusses EPA's
 estimated effects to small entities and
 presents the results of EPA's cost
 effectiveness and cost-benefit analysis.
 All costs presented in this document are
 reported in. 1999 pre-tax dollars (unless
 otherwise indicated).
 B. Data Collection Activities

 1. Sources of Data To Estimate
 Compliance Costs
    As part of the expedited approach to
 this rulemaking, EPA has chosen not to
 conduct an industry-wide survey of all
 CAFOs using a Clean Water Act Section
 308 questionnaire. Rather, EPA is
 relying on existing data sources and
 expertise provided by the U.S.
 Department of Agriculture (USDA),
industry, State agriculture extension
agencies, and several land grant
universities. More detailed information
on the data used for,this analysis can be
found in the Development Document
and also the Economic Analysis.
  EPA collected and evaluated data
from a variety of sources. These sources
include information compiled through
EPA site visits to over 100 animal
confinement operations and information
from industry trade associations,
government agencies, and other
published literature. EPA also received
information from environmental groups
such as the Natural Resources Defense
Council and the Clean Water Network.
The Agency contacted university
experts, state Cooperatives and
extension services, and state and EPA
regional representatives to identify
facilities for site visits. EPA also
attended USDA-sponsored farm tours
and site visits arranged by other groups,
as well as industry, academic, and
government conferences.
  EPA obtained data and information
from several agencies in USDA,
including the National Agricultural
Statistics Service.(NASS), Natural
Resources Conservation Service (NRCS),
the Animal and Plant Health Inspection
Service (APHIS), and the Economic
Research Service (ERS). The collected
data include statistical survey
. information and published reports.
   EPA gathered information from a
wide range of published NASS reports,
 including annual data summaries for
 each commodity group. USDA's NASS
 is responsible for objectively providing
 important, usable, and accurate
 statistical information and data support
 services on the structure and activities
 of agricultural production in the United
 States. Each year NASS conducts
 surveys and prepares reports covering
 virtually every facet of U.S. agricultural
 production. The primary sources of data
 are animal production facilities in the
 United States. NASS collects voluntary
 information using mail surveys,
 telephone and in-person interviews, and
 field observations. NASS is also
 responsible for conducting a Census of
 Agriculture.                  •
   EPA's main source of primary USDA
 data containing farm level descriptive
 information is USDA's Census of
 Agriculture (Census). USDA's Census is
 a complete accounting of United States
 agricultural production and is the only
 source of uniform,.comprehensive
 agricultural data for every county in the
 nation. The Census is conducted every
 5 years by NASS. The Census includes
 all farm operations from which $1,000
 or more of agricultural products are
 produced and sold. The most recent
Census reflects calendar year 1997
conditions. This database is maintained
by USDA. Data used for this analysis
were compiled with the assistance of
staff at USDA's NASS. (USDA
periodically publishes aggregated data
from these databases and also compiles
customized analyses of the data to
members of the public and other
government agencies. In providing such
analyses, USDA maintains a sufficient
level of aggregation to ensure the
confidentiality of any individual
operation's activities or holdings.)
  USDA's NRCS publishes the
Agricultural Waste Management Field
Handbook, which is an agricultural
engineering guidance manual that
explains general waste management
principles and provides detailed design
information for particular waste
management systems. USDA's
Handbook reports specific design
information on a variety of farm
production and waste management
practices at different types of feedlots.
The Handbook also reports runoff
calculations under normal and peak
precipitation as well as information on
manure and bedding characteristics.
EPA used this information to develop its
cost and environmental analyses. NRCS
personnel also contributed technical
expertise in the development of EPA's
estimates of compliance costs and
environmental assessment framework
by providing EPA with estimates of
. manure generation in excess of expected •
crop uptake. This information is
provided in the record that supports this
rulemaking.
   NRCS also compiled and performed.
 analyses on Census data that EPA used
 for its analyses. These data identify the
 number of feedlots, their geographical
 distributions, and the amount of
 cropland available to land apply animal
 manure generated from their confined
 feeding operations (based on nitrogen
 and phosphorus availability relative to
 crop need).
   EPA gathered information from
 several reports on the livestock and
 poultry industries from the National
 Animal Health Monitoring System
 (NAHMS). USDA's APHIS provides
 leadership in ensuring the health and
 care of animals and plants, improving
 agricultural productivity and
 competitiveness, and contributing to the
 national economy and public health.
 One of its main responsibilities is to
 enhance the care of animals. In 1983,
 APHIS initiated the NAHMS as an
 information-gathering program to
 collect, analyze, and disseminate data
 on animal health, management, and
 productivity. NAHMS conducts national
 studies to gather data and generate

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 3080
Federal Register/Vol. 66,  No. 9/Friday, January 12,  2001 / Proposed Rules
 descriptive statistics and information
 from data collected by other industry
 sources.
   USDA's ERS provides economic
 analyses on efficiency, efficacy, and
 equity issues related to agriculture,
 food, the environment, and rural
 development to improve public and
 private decision-making. EPA's analysis
 of economic impacts at a model CAFO
 references a wide range of published
 ERS reports and available farm level
 statistical models. ERS also maintains
 farm level profiles of cost and returns
 compiled from NASS financial data.
   Databases and reports  containing the
 information and data used by EPA in
 support of this proposed rule are
 available in the rulemaking record.
 2. Sources of Data To Estimate
 Economic Impacts
   To estimate economic  impacts, EPA
 used farm level data from USDA,
 industry, and land grant  universities.
 The major source of primary USDA data
 on farm financial conditions is from the
 Agricultural Resources Management
 Study (ARMS). ARMS is USDA's
 primary vehicle for data  collection on a
 broad range of issues about agricultural
 production practices and costs. These
 data provide a national perspective on
 the annual changes in the financial
 conditions of production agriculture/
  USDA's ARMS data provide aggregate
 farm financial data, which EPA used for
 its cost impact analysis. The ARMS data
 provide complete income statement and
 balance sheet information for U.S. farms
 in each  of the major commodity sectors,
 including those affected by the
 proposed regulations. The ARMS
 financial data span all types of farming
 operations within each sector, including
 full-time and part-time producers,
 independent owner operations and
 contract grower operations, and
 confinement and non-confinement
 production facilities.
  ERS provided aggregated data for
 select representative farms through
 special tabulations of the ARMS data
 that differentiate the financial
 conditions among operations by
 commodity sector, facility size (based
 on number of animals on-site) and by
 major producing region for each sector.
 The 1997 ARMS data also provide
 corresponding farm level summary
 information that matches the reported
 average financial data to both the total
 number of farms and the total number
 of animals for each aggregated data
 category. As with the Census data, ERS
 aggregated the  data provided to EPA to
 preserve both the statistical
representativeness and confidentiality
of the ARMS survey data. ARMS data
                    used for this analysis are presented in
                    the Economic Analysis and are available
                    in the rulemaking record.
                     EPA obtained additional market data
                    on the U.S. livestock and poultry
                    industries as a whole from a wide
                    variety of USDA publications and
                    special reports. These include: Financial
                    Performance of U.S. Commercial Farms,
                    1991-1994; USDA Baseline Projections
                    2000, Food Consumption, Prices and
                    Expenditures, 1970-1997; Agricultural
                    Prices Annual Summary; annual NASS
                    statistical bulletins for these sectors; and
                    data and information reported in
                    Agricultural Outlook and ERS's
                    Livestock, Dairy, and Poultry Situation
                    and Outlook reports. Other source
                    material is from ERS's cost of
                    production series reports for some
                    sectors and trade reports compiled by
                    USDA's Foreign Agricultural Service
                    (FAS). Information on the food
                    processing segments of these industries
                    is from the U.S. Department of
                    Commerce's Census of Manufacturers
                    data series. Industry information is also
                    from USDA's Grain Inspection Packers
                    and Stockyards Administration (GBPSA).
                     Industry and the associated trade
                    groups also provided information for
                    EPA's cost and market analyses. In
                    particular, the National Cattlemen's Beef
                    Association (NCBA) conducted a survey
                    of its membership to obtain financial
                    statistics specific to cattle feeding
                    operations. EPA used these and other
                    data to evaluate how well the ARMS
                    data for beef operations represent
                    conditions at cattle feedyards. EPA also
                    obtained industry data from the
                   National Milk Producers Federation
                    (NMPF) and the National Pork
                   Producers Council (NPPC).
                     EPA also used published research by
                   various land grant universities and their
                   affiliated research organizations, as well
                   as information provided by
                   environmental groups.
                     Databases and reports containing the
                   information and data provided to and
                   used by EPA in support of this proposed
                   rule are available in the rulemaking
                   record.

                   C. Method for Estimating Compliance
                   Costs

                   l.Baseline Compliance
                     For the purpose of this analysis, EPA
                   assumes that all CAFOs that would be
                   subject to the proposed regulations are
                   currently in compliance with the
                   existing regulatory program (including
                   the NPDES regulations and the effluent
                   limitations guidelines and standards for
                   feedlots) and existing state laws and  .
                   regulations. As a practical matter, EPA
                   recognizes that this is not true, since
 only 2,500 operations out of an
 estimated 12,700 CAFOs with more than
 1,000 AUhave actually obtained
 coverage under an NPDES permit and
 the remainder may in fact experience
 additional costs to comply with the
 existing requirements. EPA has not
 estimated these additional costs in the
 analysis that is presented in today's
 preamble because the Agency did not
 consider these costs part of the
 incremental costs of complying with
 today's proposed rule.
   To assess 'the incremental costs
 attributable to the proposed rules, EPA
 evaluated current federal and state
 requirements for animal feeding
 operations and calculated compliance
 costs of the proposed requirements that
 exceed the current requirements.
• Operations located in states that
 currently have requirements that meet
 or exceed the proposed regulatory
 changes would already be in
 compliance with the proposed
 regulations and would not incur any
 additional  cost. These operations are not
 included as part of the cost analysis. A
 review of current state waste
 management requirements for
 determining baseline conditions is
 included in the Development Document
 and also in other sections of the record
 (See State Compendium: Programs and
 Regulatory Activities Related to Animal
 Feeding Operations compiled by EPA
 and available at http://www.epa.gov/
 owm/afo.htm#Compendium).
   EPA also accounted for current
 structures and practices that are
 assumed to be already in place at
 operations that may contribute to
 compliance with the proposed
 regulations. Additional information is
 also provided in the following section
 (X.C.2(a)). This information is also
 provided in the Development
 Document.

 2. Method for Estimating Incremental
 CAFO Compliance Costs
   a. Compliance Costs to CAFO
 Operators. For the purpose of estimating
total costs and economic impacts, EPA
 calculated the costs of compliance for
CAFOs to implement each of the
regulatory options being considered
(described in Section  VIII of this
preamble). EPA estimated costs
associated with four broad cost
components: nutrient management
planning, facility upgrades, land
application, and technologies for
balancing on-farm nutrients. Nutrient
management planning costs include
manure and soil testing, record keeping,
monitoring  of surface  water and
groundwater, and plan development.
Facility upgrades reflect costs for

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                  federal Register/Vol. 66, No.  9/Friday, January 12, 2'00l/ Proposed Rules
                                                                     3081
manure storage, mortality handling,
storm water and field runoff controls,
reduction of fresh water use, and
additional farm management practices.
Land application costs address
agricultural application of nutrients and
reflect differences among operations
based on cropland availability for
manure application. Specific
information on the capital costs, annual
operating and maintenance costs, start-
up or first year costs, and also recurring
costs assumed by EPA to estimate costs
and impacts of the proposed regulations
is provided in the Development
Document.
   EPA evaluated compliance costs using
a representative facility approach based
on more'than 170 farm level models that
were developed to depict conditions
and to evaluate, compliance costs for
select representative CAFOs. The major
factors used to differentiate individual
model CAFOs include the commodity
sector, the farm production region, and
the facility size (based on herd or flock
size or the number of animals on-site).
EPA's model CAFOs primarily reflect
the major animal sector groups,
including beef cattle, dairy, hog, broiler,
turkey, and egg laying operations.
Practices at other subsector operations
are also reflected in the cost models,
 such as replacement heifer operations,
 veal operations, flushed caged layers,
 and hog grow- and farrow-finish
 facilities. EPA used model facilities
 with similar waste management and
 production practices to depict
 operations in regions that were not
 separately modeled.
   Another key distinguishing factor
 incorporated into EPA's model CAFOs
 includes information on the availability
 of crop and pasture land for land
 application of manure nutrients. For
 this analysis, nitrogen and phosphorus
 rates of land application are evaluated
  for three categories of cropland
  availability: Category 1 CAFOs are
  assumed to have sufficient cropland for
  all on-farm nutrients generated,
  Category 2 CAFOs are assumed to have
  insufficient cropland, and Category 3
  CAFOs are assumed to have no
  cropland. EPA used 1997 information
  from USDA to determine the number of
  CAFOs within each category. This
  information takes into account which
  nutrient (nitrogen or phosphorus) is
  used as the  basis to assess land
  application and nutrient management
  costs.
    For Category 2 and Category 3 CAFOs,
  EPA evaluated additional technologies
 , that may be necessary to balance
  nutrients. EPA evaluated additional
  technologies that reduce off-site hauh'ng
  costs associated with excess on-farm
nutrients, as well as to address ammonia
volatization, pathogens, trace metals,
and antibiotic residuals. These
technologies may include Best
Management Practices (BMPs) and
various farm production technologies,
such as feed management strategies,
solid-liquid separation, composting,
anaerobic digestion, and other retrofits
to existing technologies. EPA
considered all these technologies for
identification of "best available
technologies" under the various options
for BAT described in Section VIII.
   EPA used soil sample information
compiled by researchers at various land
grant universities to determine areas of
phosphorus and nitrogen saturation, as
described in the Development
Document. This information provides
the basis for EPA's assumptions of
which facilities would need to apply
manure nutrients on a phosphorus- or
nitrogen-based standard.
   EPA's cost models also take into
account other production factors,
including climate and farmland
geography, land application and waste
management practices and other major
production practices typically found in
the key producing regions of the
 country. Model facilities  reflect major
 production practices used by larger
 confined animal farms, generally those
 with more than 300 AU. Therefore, the
 models do not reflect pasture and
 grazing type farms, nor do they reflect
 typical costs to small farms. EPA's cost
 models also take into account practices
 required under existing state regulations
 and reflect cost differences within
 sectors depending on manure
 composition, bedding use, and process
 water volumes. More information on the
 development of EPA's cost models is
 provided in the Development
 .Document.
   To estimate  aggregate incremental
 costs to the CAFO industry from
 implementing a particular technology
 option, EPA first estimated the total cost
 to a model facility to employ a given
 technology, including the full range of
 necessary capital, annual, start-up, and
 recurring costs. Additional detailed
 information on-the baseline and
 compliance costs attributed to model
 CAFOs across all sectors and across all
 the technology options considered by
 EPA is provided in the Development
 Document.
    After estimating the total cost to an
 individual facility to employ a given
 technology, EPA then weighted the
  average facility level cost to account for
  current use of the technology or
  management practice nationwide. This
  is done by multiplying the total cost of
  a particular technology or practice by
the percent of operations that are
believed to use this particular  ,
technology or practice in order to derive
the average expected cost that could be
incurred by a model CAFO. EPA refers
to this adjustment factor as the
"frequency factor" and has developed
such a factor for each individual cost
(i.e. each technology) and cost
component (i.e. capital and annual
costs) in each of its CAFO models. The
frequency factor reflects the percentage
of facilities that are, technically, already
in compliance with a given regulatory
option since they already employ
technologies or practices that are
protective of the environment. The
frequency factor also accounts for
compliance with existing federal and
state regulatory requirements as well as,
the extent to which an animal sector has
already adopted or established
management practices to control
discharges.
   EPA developed its frequency factors
based on data and information from
USDA's NRCS and NAHMS, state
agricultural extension agencies, industry
trade groups and industry-sponsored
surveys, academic literature, and EPA's
farm site visits. More detailed
information on how EPA developed and
 applied these weighting factors is
 provided in the Development
 Document. To identify where farm level
 costs may be masked by this weighting
 approach, EPA evaluated costs with and
 without frequency factors. The results of
 this sensitivity analysis indicate that the
 model CAFO costs used to estimate
 aggregate costs and impacts, as
 presented in this preamble, are stable
 across a range of possible frequency
 factor assumptions.
   The data and information used to
 develop EPA's model CAFOs were
 compiled with the assistance of USDA,
 in combination with other information
 collected by EPA from extensive
 literature searches, more than 100 farm
 site visits, and numerous consultations
 with industry, universities, and
 agricultural extension agencies.
 Additional detailed information on the
 data and assumptions  used to develop
 EPA's model CAFOs that were used to
 estimate aggregate incremental costs to
 the CAFO industry is provided in the
 Development Document.
   b. Compliance Costs to Recipients of
  CAFO Manure. To calculate the cost to
  offsite recipients of CAFO manure
  under the proposed regulations, EPA
 builds upon the cropland availability
  information in the CAFO models,
  focusing on the two categories of farms
  that have excess manure nutrients and
  that need to haul manure offsite for
  alternative use or to be spread as

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Federal  Register/Vol. 66, No.  9/Friday, January  12,  2001/Proposed Rules
  fertilizer (i.e., Category 2 and Category
  3 CAFOs, where facilities are assumed
  to have insufficient or no available
  cropland to land apply nutrients,
  respectively). EPA also uses this
  information to determine the number of
  offsite recipients affected under select
  regulatory alternatives, shown in Tables
  10-3 and 10-4.
   USDA defines farm level "excess" of
  manure nutrients on a confined
  livestock farm as manure nutrient
  production less crop assimilative
  capacity. USDA has estimated manure
  nutrient production using the number'of
  animals by species, standard manure
  production per animal unit, and
  nutrient composition of each type of
  manure. Recoverable manure is the
  amount that can be collected and
  disposed by spreading on fields or
  transporting off the producing farm.
   Depending on the nutrient used to
  determine the rate of manure
  application [nitrogen or phosphorus),
  EPA estimates that approximately 7,500
  to 10,000 CAFOs with more than 300
 AU are expected to generate excess
 manure. This includes about 2,600
 animal feeding operations that have  no
 major crop or pasture land. These
 estimates were derived from a USDA
 analysis of manure nutrients relative to
 the capacity of cropland and
 pastureland to assimilate nutrients.
 EPA's estimate does not account for
 excess manure that is already disposed
 of via alternative uses such as
 pelletizing or incineration.
   For the purpose of this analysis, EPA
 assumes that affected offsite facilities
 are field crop producers who use CAFO
 manure as a fertilizer substitute.
 Information on crop producers that
 currently receive animal manure for  use
 as a fertilizer substitute is not available.
 Instead, EPA approximates the number
 of operations that receive CAFO manure
 and may be subject to the proposed
 regulations based on the number of
 acres that would be required to land
 apply manure nutrients generated by
 Category 2 and Category 3 CAFOs. EPA
 assumes that offsite recipients will only
 accept manure when soil conditions
 allow for application on a nitrogen
 basis. Therefore, the manure application
 rate at offsite acres in a given region is
 the nitrogen-based application rate for
 the typical crop rotation and yields
 obtained in that region. EPA then
 estimates the number of farms that
 receive CAFO manure by dividing the
 acres needed to assimilate excess
 manure nitrogen by the national average
 farm size of 487 acres, based on USDA
 data. The results of this analysis
indicate that 18,000 to 21,000 offsite
                    recipients would receive excess CAFO
                    manure.
                      The costs assessed to manure
                    recipients include the costs of soil
                    testing and incremental recordkeeping.
                  •  EPA evaluated these costs using the
                    approach described in Section X.C.2(a).
                    Excess manure hauling costs are already
                    included in costs assessed to CAFOs
                    with excess manure. For the purpose of
                    this analysis, EPA has assumed that
                    crop farmers already maintain records
                    documenting crop yields, crop rotations,
                    and fertilizer application, and that crop
                    farmers already have some form of
                    nutrient management plan for
                    determining crop nutrient requirements.
                    EPA estimates, on average, per-farm
                    incremental costs of approximately $540
                    to non-CAFOs for complying with the
                    offsite certification requirements. This
                    analysis is provided in the Development
                    Document.

                    3. Cost Annualization Methodology
                     As part of EPA's costing analysis, EPA
                    converts the capital costs that are
                    estimated to be incurred by a CAFO to
                    comply with the proposed
                    requirements, described in Section
                    X.C.2,to incremental annualized costs.
                    Annualized costs better describe the
                    actual compliance costs that a model
                    CAFO would incur, allowing for the
                    effects of interest, depreciation, and
                   taxes. EPA uses these annualized costs
                   to estimate the total annual compliance
                    costs and to assess the economic
                   impacts of the proposed requirements to
                   regulated CAFOs that are presented in
                   Sections X.E and X.F.
                     Additional information on the
                   approach used to annualize the
                   incremental compliance costs
                   developed by EPA is provided in
                   Appendix A of the Economic Analysis.
                   EPA uses a 10-year recovery period of
                   depreciable property based on the
                   Internal Revenue Code's guidance for
                   single purpose agricultural or
                   horticultural structures. The Internal
                   Revenue Service defines a single
                   purpose agricultural structure as any
                   enclosure or structure specifically
                   designed, constructed and used for
                  housing, raising, and feeding a
                  particular kind of livestock, including
                  structures to contain produce or
                  equipment necessary for housing,
                  raising, and feeding of livestock. The
                  method EPA uses to depreciate capital
                  investments is the Modified Accelerated
                  Cost Recovery System (MACRS).
                    EPA assumes a real private discount/
                  interest rate of 7 percent, as
                  recommended by the Office of
                  Management and Budget. EPA also
                  assumes standard federal and average
                  state tax rates across the broad facility
  size categories to determine an
  operation's tax benefit or tax shield,
  which is assumed as an allowance to
  offset taxable income.

  D. Method for Estimating Economic
  Impacts
   To estimate economic impacts under
  the proposed regulations, EPA
  examined the impacts across three
  industry segments: regulated CAFOs,
  processors, and national markets.
  1. CAFO Analysis
   EPA estimates the economic impacts
  of today's proposed regulations using a
  representative farm approach. A
  representative farm approach is
  consistent with past research that USDA
  and many land grant universities have
  conducted to assess a wide range of
  policy issues, including environmental
  legislation pertaining to animal
  agriculture. A representative farm
  approach provides a means to assess
 average impacts across numerous
 facilities by grouping facilities into
 broader categories to account for the
 multitude of differences among animal
 confinement operations. Information on
 how EPA developed its model CAFOs is
 available in the Economic Analysis.
 Additional information on EPA's cost
 models is provided in the Development
 Document. At various stages in the
 proposed rulemaking, EPA presented its
 proposed methodological approach to
 USDA personnel and to researchers at
 various land grant universities for
 informal review and feedback.
   Using a representative farm approach,
 EPA constructed a series of model
 facilities that reflect the EPA's estimated
 compliance costs and available financial
 data. EPA uses these model CAFOs to
 develop an average characterization for
 a group of operations. EPA's cost
 models were described earlier in
 Section X.C.2(a). From these models,
 EPA estimates total annualized
 compliance costs by aggregating the
 average facility costs across all
 operations that are identified for a
 representative group. EPA's cost models
 are compared to corresponding model
 CAFOs that characterize financial
 conditions across differently sized,
 differently managed, and geographically
 distinct operations. As with EPA's cost
 models, EPA's financial models are
 grouped according to certain
 distinguishing characteristics for each
 sector, such as facility size and
 production region, that may be shared
 across a broad range of facilities.
Economic impacts under a post-
regulatory scenario are approximated by
extrapolating the average impacts for a
given model CAFO across the larger

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001 /Proposed Rules
                                                                     3083
number of operations that share similar
production characteristics and are
identified by that CAFO model.,
  EPA compares its estimated
compliance costs at select model CAFOs
to corresponding financial conditions at
these model facilities. For this analysis,
EPA focuses on three financial measures
that are used to assess the affordability
of the proposed CAFO regulations.
These include total gross revenue, net
cash income, and debt-to-asset ratio.
Financial data used by EPA to develop
its financial models are from the 1997
ARMS data summaries prepared by ERS
and form the basis for the financial
characterization of the model CAFOs.
To account for changes in an operation's
income under post-compliance
conditions, EPA estimated the present
value of projected facility earnings,
measured as a future cash flow stream.
The present value of cash flow
represents the value in terms of today's
 dollars of a series of future receipts. EPA
 calculated baseline cash flow as the
 present value of a 10-year stream of an
 operation's cash flow. EPA projected
 future earnings from the 1997 baseline
 using USDA's Agricultural Baseline
 Projections data. Section 4 of the
 Economic Analysis provides additional
 information on the baseline financial
 conditions attributed to EPA's model
 CAFO across all sectors as well as
 information on the data and
 assumptions used to develop these
 models.
  EPA evaluates the economic
achievability of the proposed
requirements based on changes in
representative financial conditions for
select criteria, as described in Section
X.F.I. For some sectors, EPA evaluates
economic impacts at model CAFOs
under varying scenarios of cost
passthrough between the CAFO and the
latter stages in the food marketing chain,
such as the processing and retail sectors.
These three scenarios include: zero cost
passthrough, full (100 percent) cost
passthrough, and partial cost
passthrough (greater than.zero). Partial
cost passthrough values used for this
analysis vary by sector and are based on
estimates of price elasticity of supply
and demand reported in the  academic
literature. This information is available
in the docket.
   Table 10-1 lists the range of
annualized compliance costs developed
for EPA's analysis. Annualized costs for
each sector are summarized  across the
 estimated range of minimum and
maximum costs across all facility sizes
 and production regions and  are broken
 out by land use category (described in
 Section X.C.2). In some cases,
 "maximum" costs reflect average costs
 for a representative facility that has a
 large number of animals on-site; EPA's
 cost models for very large CAFOs are
 intended to approximate the average
 unit costs at me very largest animal
 feeding operations. More detailed
 annualized costs broken out by
 production region, land use category,
                                                                         and broad facility size groupings are
                                                                         provided in the Economic Analysis.
                                                                           Estimated annualized costs shown in
                                                                         Table 10-1 are presented in 1999 dollars
                                                                         (post-tax). All costs presented in today's
                                                                         preamble have been converted using the
                                                                         Construction Cost Index to  1999 dollars
                                                                         from the 1997 dollar estimates that are
                                                                         presented throughout the Development
                                                                         Document and tie Economic Analysis.
                                                                         , As shown in the table, costs for Category
                                                                         3 CAFOs may be lower than those for
                                                                         Category 1 CAFOs since facilities
                                                                         without any land do not incur any
                                                                         additional incremental costs related to
                                                                         hauling. EPA has assumed that these
                                                                         operations are already hauling off-site in
                                                                         order to comply with existing
                                                                         requirements. More detailed cost
                                                                         estimates for individual technologies are
                                                                         provided in the Development
                                                                         Document.
                                                                           To assess the impact of the
                                                                         regulations on offsite recipients of
                                                                         CAFO manure, EPA compares the
                                                                         estimated cost of this requirement to
                                                                         both aggregate and average per farm
                                                                         production costs and revenues (a sales
                                                                         test). This analysis uses EPA's estimated
                                                                         compliance costs and 1997 aggregate
                                                                         farm revenues and production costs
                                                                         reported by USDA. For the purpose of
                                                                         this analysis, EPX assumes that these
                                                                          costs will be incurred by non-CAFO
                                                                          farming operations (i.e., crop producers)
                                                                          that use animal manures as a fertilizer
                                                                          substitute and will not be borne by ,
                                                                          CAFOs.
              TABLE 10-1.—RANGE OF ANNUALIZED MODEL CAFO COMPLIANCE COSTS ($1999, POST-TAX)

Sector


Veal 	 	 	 '•- 	 • 	
Heifers 	 .' 	

Urtrtc- PP2 	



Turkeys 	 • 	
Category 1 1
Minimum
Maximum
Category 2 1
Minimum
Maximum
Category 3 1
Minimum
(1999 dollars per model CAFO across all size group
2,100
1,500
1,700
5,200
300
300
4,800
300
1,500
4,900
986,000
8,100
16,900
44,600
52,300
82,900
36,300
24,800
59,000
111,900
8,500
1,100
2,000
14,700
5,500
8,800
4,400
2,100
1,400
. 4,800
1,219,800
6,100
17,900
67,700
63,500
100,600
25,800
29,300
31,700
29,500
1,000
1,000
1,200
4,200
11,400
10,000
3,900
1,500
1,200
3,800
Maximum
s>
896,700
6,000
11,700
40,300
81,500
115,500
21,400
18,100
27,600
20,800
                      '.finiSh (includes breeder and nursery pigs); "Hogs: GF- are
     "Layers: wet" are operations with liquid manure systems; "Layers: dry  are operations
SgorffbAFOs have sufficient cropland for all on-farm nutrients generated; Category 2 CAFOs have insufficient cropland; and-Category 3

                                                                           systems.


                                                                           co-permitting requirements. EPA bases
                                                                           these assumptions on data from the
                                                                           Department of Commerce on the
                                                                           number of slaughtering and meat
                                                                           packing facilities in these sectors and
                                                                           information from USDA on the degree of
  2. Processor Analysis
    As discussed in Section VI, EPA
  estimates that 94 meat packing plants
  that slaughter hogs and 270 poultry
  processing facilities may be subject to
  the proposed co-permitting
  requirements (Section VI). Given the
  structure of the beef and dairy sectors
  and the nature of their contract
  relationships, EPA expects that no meat
  packing or processing facilities in these
  sectors will be subject to the proposed

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Federal Register/Vol. 66, No. 9/Friday, January  12,  2001./Proposed Rules
  animal ownership at U.S. farms, as
  described in Section VI of this
  document. Additional information is
  provided in Section 2 of the Economic
  Analysis. EPA is seeking comment on
  this assumption as part of today's
  notice.
   EPA did not conduct a detailed
  estimate of the costs and impacts that
  would accrue to individual co-
  permittees. Information on contractual
  relationships between contract growers
  and processing firms is proprietary and
  EPA does not have the necessary market
  information and data to conduct such an
  analysis. Market information is not
  available on the number and location of
  firms that contract out the raising of
  animals to CAFOs or on the number and
  location of contract growers, and the
  share of production, that raise animals
  under a production contract. In
  addition, EPA does not have data on the
  exact terms of the contractual
  agreements between processors and
  CAFOs to assess when a processor
  would be subject to the proposed co-
 permitting requirements, and EPA does
 not have financial data for processing
 firms or contract growers that utilize
 production contracts.
   EPA, however, believes that the
 framework used to estimate costs to
 CAFOs does provide a means, to
 evaluate the possible upper bound of
 costs that could accrue to processing
 facilities in those industries where
 production contracts are more widely
 utilized and where EPA believes the
 proposed co-permitting requirements
 may affect processors. EPA's CAFO'
 level analysis examines the potential
 share of (pre-tax) costs that may be
 passed on from the CAFO, based on
 market information for each sector.
 Assuming that a share of the costs that
 accrue to the CAFO are eventually borne
 by processors, EPA is proposing that
 this amount approximates the
 magnitude of the costs that may be
 incurred by processing firms in those
 industries that may be affected by the
 proposed co-permitting requirements.
 EPA solicits comment on this approach.
  To assess the impact of the
 regulations on processors, EPA
 compares the passed through
 compliance costs to both aggregate
 processor costs of production and to
 revenues (a sales test). These analyses
 use estimated compliance costs, cost
passthrough estimates, and aggregate
revenues and production costs by
processing sector. National processor
cost and revenue data are from the U.S.
                    Department of Commerce's Census of
                    Manufacturers data series. For some
                    sectors, EPA evaluates the impact of the
                    proposed regulations on processors
                    under two scenarios of cost passthrough
                    from the animal production sectors
                    (described in Section X.D.I), including
                    full cost and partial cost passthrough.
                    More detail on this approach is
                    provided in Section 4 of the Economic
                    Analysis.
                      This suggested approach does not
                    assume any addition to the total costs of
                    the rule as a result of co-permitting.
                    This approach also does not assume that
                    there will be a cost savings to contract
                    growers as a result of a contractual
                    arrangement with a processing firm.  '
                    This approach merely attempts to
                    quantify the potential magnitude of
                    costs that could accrue to processors
                    that may be affected by the co-
                    permitting requirements. Due to  lack of
                    information and data, EPA has not
                    analyzed the effect of relative market
                    power between the contract grower and
                    the integrator on the distribution of
                    costs, nor the potential for additional
                    costs to be imposed by the integrator's
                    need to take steps to protect itself
                    against liability and perhaps to
                  ;  indemnify itself against such liability
                    through its production contracts. EPA
                    has also not specifically analyzed the
                    environmental effects of co-permitting.
                    EPA has conducted an extensive review.
                    of the agricultural literature on market
                   power in each of the livestock and
                   poultry sectors and concluded that there
                   is little evidence to suggest that
                   increased production costs would be
                   prevented from being passed on through
                   the market levels. This information is
                   provided in the rulemaking record.
                   However, as discussed in Section
                   VII.C.5, EPA recognizes that some
                   industry representatives do not support
                   these assumptions of cost passthrough
                   from contract producers to integrators
                   and requests comments on its cost
                   passthrough assumptions, both in
                   general and as they relate to the analysis
                   of processor level impacts under the
                   proposed co-permitting requirements.
                    EPA's processor analysis does not
                   explicitly account for the few large
                   corporate operations that are vertically
                  integrated, to the extent that the
                  corporation owns and operates'all
                  aspects of the operation, from animal
                  production to final consumer product.
                  These operations are covered by EPA's
                  CAFO analysis to the extent that they
                  are captured by USDA's farm survey
                  and are included among EPA's model
  CAFOs. While the ARMS data may
  include information on CAFOs that are
  owned by corporate operations, these
  data cannot be broken out to create a
  model specifically designed to represent
  these operations. Since EPA's analysis
  uses farm financial data and n'ot
  corporate data, this analysis does not
  reflect the ability of corporations to
  absorb compliance costs that may be
  incurred at CAFOs that are owned by
  that entity. EPA expects that its analysis
  overestimates the impact to corporate
  entities since revenues of corporate
  entities are, in most cases, no less than
  and are likely to exceed those at a
  privately-owned and operated CAFOs.
  3. Market Analysis

   EPA's market analysis evaluates the
  effects of the proposed regulations on
 national markets. This analysis uses a
 linear partial equilibrium model
 adapted from the COSTBEN model
 developed by USDA's Economic
 Research Service. The modified EPA
 model provides a means to conduct a
 long-run static analysis to  measure the
 market effects of the proposed
 regulations in terms of predicted
 changes in farm and retail prices and
 product quantities. Market data used as
 inputs to this model are from a wide
 range of USDA data and land grant
 university research. EPA consulted
 researchers from USDA and the  land
 grant universities in the development of
 this modeling framework. The details of
 this model are described in Appendix B
 of the Economic Analysis.
   Once price and quantity changes are
 predicted by the model, EPA uses
 national multipliers that relate changes
 in sales to changes in total direct and
 indirect employment and also to
 national economic  output.  These
 estimated relationships are based on the
 Regional Input-Output Modeh'ng System
 (RIMS II) from the U.S.  Department of
 Commerce. This approach is described
 in Section 4 of the Economic Analysis.
 E. Estimated Annual Costs of the
 Proposed Regulatory Options/Scenarios

  As discussed in Section VII and VIII,
 EPA considered various! technology
 options and also different scope
 scenarios as part of the development of
today's proposed regulations. A
summary overview of the ELG options
and NPDES scenarios is provided in
Table 10-2. More detail is available in
Sections VII and VIII of  today's
preamble.

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  Federal Register/Vol. 66. No.  9/Friday, January 12, 2001 /Proposed Rules

TABLE 10-2.—SUMMARY DESCRIPTION OF OPTIONS/SCENARIOS CONSIDERED BY EPA
                                                                                                           3085
                                             Technology Options (ELG)
Option 1  	

Option 2  	

Option 3  BAT (Beef/Heifers/Dairy)
Option 4 	

Option 5 BAT (Swine/Poultry/Veal)

Option 6	

Option 7
              N-based land application controls and inspection and recordkeeping requirements for the production area

                          S   b°uf rSS the rate of manure application to a P-based rate where necessary (de-
              AdSoOption 3 by requiring sampling of surface waters adjacent to production area and/or land under

                                               
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Federal Register/Vol. 66. No. 9/Friday, January 12, 2001/Proposed Rules
   1. Costs to CAFOs Under the Proposed
   Regulations

    Tables 10-3 and 10-4 summarize the
   total annualized compliance costs to
   CAFOs attributed to the proposed two-
   tier structure and three-tier structure.
   The table shows these costs broken out
   by sector and by broad facility size
   group. EPA calculated all estimated
   costs using the data, methodology and
   assumptions described in Sections X B
   and X.C.
    Under the two-tier structure, EPA
   estimates that the incremental
   annualized compliance cost to CAFO
  operators would be approximately $831
  million annually (Table 10-3). Table
  10-5 shows estimated costs for the two-
  tier structure at the 750 AU threshold,
  estimated by EPA to total $721 million
  annually. Most of this cost (roughly 70
  percent) is incurred by CAFOs with
  more than 1,000 AU. Overall, about one-
  third of all estimated compliance costs
  are incurred within the hog sectors.
    Under the three-tier structure, EPA
  estimates that the total cost to CAFO
                    operators would be $925 million
                    annually (Table 10-4). These costs are
                    expressed in terms of pre-tax 1999
                    dollars. (Post-tax costs are estimated at
                    $573 million and $635 million annually,
                    respectively, and include tax savings to
                    CAFOs. EPA uses estimated post-tax
                    costs to evaluate impacts to regulated
                    facilities, discussed in Section X.F.).
                    Estimated total annualized costs for the
                    three-tier structure include the cost to
                    permitted CAFOs as well as the
                    estimated cost to operations to certify to
                    the permit authority that they do not
                    meet any ofthe conditions and are thus
                    are not required to obtain a permit. EPA
                    estimates certification costs at about $80
                    million annually, which covers
                    phosphorus-based PNP costs, facility
                    upgrades, and letters of certification
                    from manure recipient.  More
                    information on these costs and how they'
                    are calculated is provided in Section 5
                    of the Economic Analysis.
                     Estimated total annualized costs
                    shown in Table 10-3 and 10-4 include
                    costs to animal confinement operations
                   that may be designated as CAFOs. Total
   annualized costs to designated facilities
   is estimated at less than one million
   dollars annually (Tables 10-3 and 10-
   4). As discussed in Section VI, EPA
   assumes tHat designation may bring an
   additional 50 operations each year
   under the two-tier structure; under the
   three-tier structure, EPA expects that an
   additional 10 operations may be
   designated each year. In this analysis,
   estimated costs to designated facilities
   are expressed on an average annual
  basis over a projected 10-year period.
  For the purpose of this analysis, EPA
  assumes that operations that may be
  designated as CAFOs and subject to the
  proposed regulations will consist of
  beef, dairy, farrow-finish hog, broiler
  and egg laying operations under the
  two-tier structure. Under the three-tier
  structure, EPA estimates that fewer
  operations would be designated as
  CAFOs, with 10 dairy and hog
  operations being designated each year,
  or 100 operations over a 10-year period.
  Additional information is provided in
  the Economic Analysis.
           TABLE 10-3.-ANNUAL PRE-TAX COST OF TWO-TIER STRUCTURE (BAT OPTION/SCENARIO 4A), $1999
                             Sector


Number of
operations
(number) 2
Total >1000AU
500-1000
AU
($1999, millions, pre-tax)
<500 AU 1

Beef 	
Veal 	 	
Heifer 	 	
Dairy 	 	
Hog 	 ";;;;;;;;; 	
Broiler 	 	 • 	
Layer 	 	
Turkey 	 	
Subtotal 	
	 — 	 1
T ORf)
90
800
3,760
8,550
9,780
1,640
1,280
25540


0.3
11.6
177.6
294.0
97.1
14.2
19.6
oon 7


191.5
0.03
3.7
108.6
225.5
55.4
9.9
10.4


24.7
0.3
7.9
65.4
67.0
41.6
4.3
9.2
220.2

0.1
NA
NA
3.6
1.5
0.1
NA
NA
5.4
Offsite Recipients 	
Source: USEPA. See Economic Analysis. Table 6-2 provides informatinn nn
vffiSta^ n0t»?dd dUe '? rOUndin9- NA = ^pS^oSscB^,
IS?8.1 S.sUn?ate3 shown are for designated CAFOs (see Sf>ntinnlvi\ 1/ot'enan
17,923
NA
affected oper
o definitions p
96
840.3
ations.
irovided in Ta
NA
NA|
ble 10-2.
MA
NA

NA
NA
                               ™T6 **" * Si"gle animal ^ The number °f CAFOs shown includes expected defined CAFOs only and
         TABLE 10-4.

Sector
— — 	 	 . 	
Number of
operations
(number)2
Total
>1000 AU
300-1000
AU
<300 AU 1
($1999, million, pre-tax)
Beef...
Veal ...
Heifer.
Dairy..
Hog....
                                                 Regulated CAFOs
                                             3,210
                                               140
                                               980
                                             6,480
                                             8,350
227.7
  0.8
 14.4
224.6
306.1
191.5
0.03
3.7
108.6
225.5
36.2
0.8
. 10.7
115.3
80.4
0.0
0.0
0.0
0.7
0.2

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                 Federal Register/Vol. 66, No. 9/Friday, January  12,  20011 Proposed Rules
                                                                     3087
  TABLE 10-4.—ANNUAL PRE-TAX COST OF THREE-TIER STRUCTURE (BAT.OPTION/SCENARIO 3), $1999—Continued
Sector


Turkey 	 ; 	
Subtotal 	 • 	 • 	
Number of
operations
13,740
2,010
2,060
31,930
Total
116.6
15.3
24.9
930.4
>1000AU
55.4
9.9
10.4
605.0
300-1000
AU
61.2
5.4
14.5
324.5
<300 AU 1
0.0
0.0
0.0
0.8
                                             Other Farming Operations
Offsite Recipients 	
Total 	
21,155
NA
11.3
936.7
NA
NA
NA
NA
NA
NA
                                                                               Table 10*.

              SfSfSA StKSSf£ffS&S^S^ The number of CAFOs shown includes expected defined CAFOs only and
excludes designated facilities.
2. Costs to CAFOs of Alternative
Regulatory Options and Scenarios

  Alternative regulatory options
considered by EPA during the
development of today's proposed
regulations include various technology
options and also different regulatory
scope scenarios. Sections VII and VIII
present the Agency's rationale for each
regulatory decision.
  Table 10-5 summarizes the total
annualized (pre-tax) costs of alternative
 technology options for each NPDES
 scenario and ELG technology basis
 considered by EPA. As shown in the
 table, the total estimated costs across
. these options range from $355 million
 (Option I/Scenario 1) to $1.7 billion
 annually (Option 5, applicable to all the
 animal sectors, and Scenario 4b). By
 scenario, this reflects the fact that fewer
 CAFOs would be affected under
 Scenario 1 (a total of about 16,400
 operations) as compared to Scenario 4b
 (about 39,300 operations affected). As
noted in Section X.E, EPA's estimate of
the number of CAFOs and
corresponding compliance costs does
not adjust for operations with mixed
animal types and may be overstated. By
technology option, with the exception of
Options 1 and 4, costs are evaluated
incremental to Option 2 (see Table 10-
2). Compared to Option 2, Option 5
costs are greatest. Additional breakout
of these costs by sector are provided in
the Economic Analysis.
        TABLE 10-5.—ANNUALIZED PRE-TAX COSTS FOR THE ALTERNATIVE NPDES SCENARIOS ($1999, MILLION)
Option/Scenario


Ontinn 9 	 ••»• 	 * 	





BAT Option 	
Scenario 4a
"Two-Tier".
25,540
$432.1
$548.8
'$746.7
$903.9
$1,515.9
$621.6
$671 .3
$830.7
Scenaro 2/3
"Three-Tier"
28,860
$462.8
$582.8
$854.1
$1,088.2
$1,632.9
$736.9
$781.9
$925.1
Scenario 1
16,420
$354.6
$444.4
$587.0
$707.0
$1,340.9
$501.5
$542.4
$680.3
Scenario 5
>750 AU
25,770
$384.3
$484.0
$649.5
$768.0
$1,390.4
$541.3
$585.1
$720.8
Scenario 4b
>300 AU
39,320
$493.6
$633.3
$883.6
$1,121.2
$1,671.3
$706.6
$756.6
$979.6
Source: USEPA. See Economic Analysis. Cost estimates shown include costs to designated OR!^'0"3; 1 '
^Ta^^ « CAFOS °niy and
 3. Costs to Offsite Recipients of CAFO
 Manure Under the Proposed Regulations

   As described in Section VII, EPA is
 proposing that offsite recipients of
 CAFO manure certify to the CAFO that
 manure will be land applied in
 accordance with proper agriculture
 practices. As shown in Table 10-3, EPA
 estimates that 18,000 non-CAFO
 farming operations will receive manure
 and therefore be required to certify
 proper manure utilization under the
 proposed two-tier structure. Under the
 alternative three-tier structure, up to
 3,000 additional farming operations may
  be affected. EPA's analysis assumes that
  affected CAFO manure recipients are
  mostly field crop producers who use
  CAFO manure as a fertilizer substitute.
  EPA's analysis does not reflect manure
  hauled offsite for alternative uses such
  as incineration or pelletizing. EPA
  estimates the annualized cost of this
  requirement to offsite recipients to be
  $9.6 to $11.3 million across the  co-
  proposed alternatives (Tables 10-3  and
  10-4). This analysis is provided in the
  Development Document.
    Estimated costs to recipients of CAFO
  manure include incremental
 recordkeeping and soil tests every 3
 years. Conservation Technology
 Information Center (CTIC) Core 4 survey
 data suggest an average of 46 percent
 crop farmers regularly sample their soil.
 EPA believes crop farmers already
 maintain records pertaining to crop
 yields, nutrient requirements, and
 fertilizer applications. EPA also
 assumed that crop farmers have a
 nutrient management plan, though the
 plan is not necessarily a PNP (Permit
 Nutrient Plan) or CNMP
 (Comprehensive Nutrient Management
 Plan). EPA has evaluated alternative

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  3088
Federal Register/Vol.. 66, No.  9/Friday, January 12, 2001 / Proposed Rules
  approaches to ensuring that manure is
  handled properly, but is not proposing
  to establish specific requirements for
  offsite recipients. The costs to offsite
  recipients do not include the costs of
  spreading manure at the offsite location
  or any additional payments made to
  brokers or manure recipients in counties
  with excess manure. These costs are
  likely to be offset by the fertilizer
  savings and organic value associated
  with manure. EPA's analysis accounts
  for the costs incurred by the CAFO for
  offsite transfer of excess manure in the
  estimated industry compliance costs,
  described in Section X.E.1. These costs
  include the cost of soil and manure
  sampling at the CAFO site, training for
  manure applicators, application
  equipment calibration, and the hauling
  cost of excess manure generated by the
  CAFO.
   Under the proposed regulations,
  CAFOs would be required to apply
  manure on a phosphorus basis where
  necessary, based on soil conditions, and
  on a nitrogen basis elsewhere. EPA
  anticipates that offsite recipients of
  CAFO manure will only accept manure
 when soil conditions allow for
 application on a nitrogen basis. EPA
 believes this is a reasonable assumption
 because crop farms are less likely to
 have a phosphorus buildup associated
 with long term application of manure.
 EPA's analysis assumes a nitrogen-based
 application rate for offsite locations that
 is identical to the rate used by CAFOs
 in the same geographic region. A
 summary of the data and methodology
 used by EPA to calculate the number of
 affected offsite recipients and to
 estimate costs is presented in Section
 X.C.2(b). EPA solicits comment on the
 costs and assumptions pertaining to
 offsite recipients.

 F. Estimated Economic Impacts of the
 Proposed Regulatory Options/Scenarios
  This section provides an overview, of
 EPA's estimated economic impacts
 across four industry segments that are
 included for this analysis: CAFOs (both
 existing and new sources), non-CAFO
 recipients of manure, processors, and
 consumer markets. More detailed
 information on each of these analyses is
 available in the Economic Analysis.
 1. CAFO Level Analysis
  This section presents EPA's analysis
 of financial impacts to both existing and
 new CAFOs that will be affected by the
 proposed regulations, as well as impacts
 to offsite recipients of CAFO manure
 xvho will also be required to comply
with the proposed PNP requirements.
  a. Economic Impacts to Existing
 CAFOs under the Proposed Regulations.
                    As discussed in Section X.C.I, EPA's
                    CAFO level analysis examines
                    compliance cost impacts for a
                    representative "model CAFO." EPA
                    evaluates the economic achievability of
                    the proposed regulatory options at
                    existing animal feeding operations
                    based on changes in representative
                    financial conditions across three
                    criteria. These criteria are: a comparison
                    of incremental costs to total revenue
                    (sales test), projected post-compliance
                    cash flow over a 10-year period, and an
                    assessment of an operation's debt-to-
                    asset ratio under a post-compliance
                    scenario. To evaluate economic impacts
                    to CAFOs in some sectors, impacts are
                    evaluated two ways'assuming that a
                    portion of the costs may be passed on
                    from the CAFO to the consumer and
                    assuming that no costs passthrough so
                    that all costs are absorbed by the CAFO.
                      EPA used the financial criteria to
                    divide the impacts of the proposed
                    regulations into three impact categories.
                    The first category is the affordable
                    category, which means that the
                    regulations have little or no financial
                    impact on CAFO operations. The second
                    category is the moderate impact
                    category, which means that the
                    regulations will have some financial
                    impact on operations at the affected
                    CAFOs, but EPA does not consider these
                    operations to be vulnerable to closure as
                    a result of compliance. The third
                    category is the financial stress category,
                    which means that EPA considers these
                    operations to be vulnerable to closure
                    post-compliance. More information on
                    these criteria is provided in Section 4 of
                    the Economic Analysis.
                     The basis for EPA's economic
                    achievability criteria for this rulemaking
                   is as follows. USDA's financial
                    classification of U.S. farms identifies an
                   operation with negative income and a
                   debt-asset ratio in excess of 40 percent
                   as "vulnerable." An operation with
                   positive income and a debt-asset ratio of
                   less than 40 percent is considered
                   "favorable." EPA adopted this
                   classification scheme as part of its
                   economic achievability criteria, using
                   net cash flow to represent income. This
                   threshold and cash flow criterion is
                   established by USDA and other land
                   grant universities, as further described
                   in Section 4 of the Economic Analysis.
                   The threshold values used for the cost-
                   to-sales test (3 percent, 5 percent and 10
                   percent) are those determined by EPA to
                   be appropriate for this rulemaking and
                   are consistent with threshold levels
                   used by EPA to measure impacts of
                   regulations for other point source
                   dischargers (as also documented in the
                   Economic Analysis).
    For this analysis, EPA's determination
  of economic achievability used all three
  criteria. EPA considered the proposed
  regulations to be economically
  achievable for a representative model
  CAFO if the average operation has a
  post-compliance sales test estimate
  within an acceptable range, positive
  post-compliance cash flow over a 10-
  year period, and a post-compliance
  debt-to-asset ratio not exceeding 40
  percent. If the sales test shows that
  compliance costs are less than 3 percent
  of sales, or if post-compliance cash flow
  is positive and the post-compliance
  debt-to-asset ratio does not exceed 40
  percent and compliance costs are less
  than 5 percent of sales, EPA considers
  the options to be "Affordable" for the
  representative CAFO group. A sales test
  of greater than 5 percent but less than
  10 percent of sales with positive cash
  flow and a debt-to-asset ratio of less
  than 40 percent is considered indicative
  of some impact at the CAFO level, but
  at levels not as severe as those
 indicative of financial distress or
 vulnerability to closure. These impacts
 are labeled "Moderate" for the
 representative CAFO group. EPA
 considers both the "Affordable" and
 "Moderate" impact categories to be
 economically achievable by the CAFO.
   If (with a sales test of greater than 3
 percent) post-compliance cash flow is
 negative or the post-compliance debt-to-
 asset ratio exceeds 40 percent, or if the
 sales test shows costs equal to or
 exceeding 10 percent of sales, the
 proposed regulations are estimated to be
 associated with potential financial stress
 for the entire representative CAFO
 group. In such cases, each of the
 operations represented by that group
 may be vulnerable to closure. These
 impacts are labeled as "Stress." EPA
 considers the "Stress" impact category
 to indicate that the proposed
 requirements may not be economically
 achievable by the CAFO, subject to
 other considerations.
  Tables 10-6 and 10-7 present th.e
 estimated CAFO level impacts in terms
 of the number of operations that fall
 within the affordable, moderate, or
 stress impact categories for each of the  .
 co-proposed alternatives by sector and
 facility size group. For some sectors,
 impacts are shown for both the zero and
 the partial cost passthrough
 assumptions (discussed more fully
below). Partial cost passthrough values
vary by sector, as described in Section
X.D.I.
  EPA's costs model analyzes impacts
under two sets of conditions for ELG •
Option 3. Option 3A assumes that there
is a hydrologic connection from
groundwater to surface waters at the

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                  Federal Register/Vol. 66, No. 9/Friday, January 12,  2001/Proposed Rules
                                                                      3089
CAFO; Option 3 assumes average costs
conditions across all operations—both
operations with, and without a
hydrplogic link. Based on available data
and information, EPA's analysis
assumes 24 percent of the affected
operations have a hydrologic connection
to surface waters. More detail on this
assumption may be found in the
rulemaking record. EPA solicits
comment on this assumption as part of
today's proposed rulemaking.
  Based/on results shown in Tables 10-
6 and 10-^-7, EPA proposes that the
regulatory alternatives are economically
achievable for all representative model
CAFOs in the veal, turkey and egg
laying sectors. The proposed
requirements under the two-tier
structure are also expected to be
economically achievable by all affected
heifer operations. Furthermore,
although operations across most sectors
may experience moderate impacts, EPA
does not expect moderate financial
impacts to result in closure and
considers this level of impact to be
economically achievable.
  In the beet cattle, heifer, dairy, hog
and broiler sectors, however, EPA's
analysis indicates that the proposed
regulations will cause some operations
to experience financial stress, assuming
no cost passthrough. These operations
may be vulnerable to closure by
 complying with the proposed
regulations. Across all sectors, an
 estimated 1,890 operations would
 experience financial stress under the
two-tier structure and an estimated
 2,410 operations would experience
 stress under the three-tier structure. For
 both tier structures, EPA estimates that
 the percentage of operations that would
 experience impacts under the stress
 category represent 7 percent of all
 affected CAFOs or 8 percent of all
 affected operations in the sectors where
 impacts are estimated to cause financial
 stress (cattle, dairy, hog, and broiler
 sectors).
   Tables 10-76 shows results for the two-
 tier structure at the 500 AU threshold.
 By sector, EPA estimates that 1,420 hog
 operations (17 percent of affected  hog
 CAFOs), 320 dairies (9 percent of
 operations), 150 broiler operations (2
 percent), and 10 beef operations (less
 than 1 percent) would experience
 financial stress. The broiler and hog
 operations with these impacts have
 1 more than 1,000 AU oh-site (i.e., no
 operations with between 500 and 1,000
 AU fall in the stress category). The dairy
 and cattle operations with -stress
 impacts are those that have a ground
 water link to surface water. Although
 not presented here, the results of the  ,
 two-tier structure at the 750 AU
threshold are very similar in terms of
number of operations affected. The
results of this analysis are presented in
the Economic Analysis.
  Table 10-7 presents results for the
three-tier structure, and show that 1,420
hog operations (17 percent of affected
hog CAFOs under that alternative), 610
dairies (9 percent of operations), 330
broiler operations (2 percent), and 50
beef and heifer operations (1 percent)  .  ,
will be adversely impacted. Hog
operations with stress impacts all have
more than 1,000 AU. Affected broiler
facilities include operations with more
than 1,000 AU, as well as operations
with less than 1,000 AU. Dairy and
cattle operations in the stress category
 are operations that have a hydrologic
 link from ground water to surface water.
 Based on these results, EPA is proposing
' that the proposed regulations are
 economically achievable.
   In the hog and broiler sectors, EPA
 also evaluated financial impacts with an
 assumption of cost passthrough. For the
 purpose of this analysis, EPA assumes
 that the hog sector could passthrough 46
 percent of compliance costs and the
•broiler sector could passthrough 35
 percent of compliance costs. EPA
 derived these estimates from price
 elasticities of supply and demand for
 each sector reported in the academic'
 literature. More detailed information is
 provided in Section 4 and Appendix C
 of the Economic Analysis. Assuming
 these levels of cost passthrough in these
 sectors, the magnitude of the estimated
 impacts decreases to the affordable or
 moderate impact category. Even in light
 of the uncertainty of cost passthrough
 (both in terms of whether the operations
 are able to pass cost increases up the
 marketing chain and the amount of any
 cost passthrough), EPA proposes that
 the proposed regulations will be
 economically achievable to all hog and
 broiler operations.
   Although EPA's analysis does not
 consider cost passthrough among cattle
 or dairy operations, EPA does expect
 that long-run market and structural
 adjustment .by producers in this sector
 will diminish the estimated impacts.
 However, EPA did determine that an
 evaluation of economic impacts to dairy
 producers would require that EPA  ,,
 assume cost passthrough levels in
 excess of 50 percent before operations in
 the financial stress category would,
 instead, fall into the affordable or
  moderate impact category. EPA did not
  conduct a similar evaluation of
  estimated impacts to beef cattle and
  heifer operations.
    EPA believes that the assumptions of
  cost passthrough are appropriate for the
  pork and poultry sectors. As discussed
in Section VI, EPA expects that meat
packing plants and slaughtering
facilities in the pork and poultry
industries may be affected by the
proposed co-permitting requirements in
today's proposed regulations. Given the
efficiency of integration and closer
producer-processor linkages, the
processor has an incentive to ensure a
continued production by contract
growers, EPA expects that these
operations will be able to  pass on a
portion of all incurred compliance costs
and will, thus, more easily absorb the
costs associated with today's proposed
rule. This passthrough may be achieved
either through higher contract prices or
through processor-subsidized
centralized off-site or on-site waste
treatment and/or development of
marketable uses for manure.
  EPA recognizes, however, that some
industry representatives do  not support
assumptions of cost passthrough from
contract producers to integrators, as also
noted by many small entity
representatives during the SBREFA
outreach process as well as by members
of the SBAR Panel. These commenters
have noted that integrators have a
 contracts, which may ultimately allow
 them to force producers to incur all
 compliance costs as well as allow them
 to pass any additional'costs down to
 growers that may be incurred by the
 processing firm. To examine this issue,
 EPA conducted an extensive review of
 the agricultural literature on market
 power in each of the livestock and
 poultry sectors and concluded that there
 is little evidence to suggest that
 increased production costs would be
 prevented from being passed on through
 the market levels. This information is
 provided in the rulemaking record.
 Given the uncertainty of whether costs
 will be passed on, EPA's results are
 presented assuming some degree of cost
 passthrough and also no cost
 passthrough (i.e., the highest level of
 impacts projected). EPA requests
 comment on its cost passthrough
 assumptions. Although EPA does
 consider the results of both of these
 analyses in making its determination of
 economic achievability, EPA's overall
 conclusions do not rely on assumptions
 of cost passthrough.
   Finally, EPA believes its estimated
 impacts may be overstated since the
 analysis does not quantify various cost
 offsets that are available to most
 operations. One source of potential cost
 offset is cost share and technical
 assistance available to operators for on-
 site improvements that are available
 from various state and federal programs,
 such as the Environmental Quality

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 3090
Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
 Incentives Program (EQIP) administered
 by USDA. Another source of cost offset
 is revenue from manure sales,
 particularly of relatively higher value
 dry poultry litter. EPA's analysis does
 not account for these possible sources of
 cost offsets because the amount of cost
 offset is likely variable among facilities,
 depending on certain site-specific
 conditions. If EPA were to quantify the
 potential cost offsets as part of its
 analysis, this would further support
                     EPA's proposed determination that the
                     proposed requirements are
                     economically achievable to affected
                     operations. This analysis and additional
                     supporting documentation is provided
                     in Section 6 of the Economic Analysis.
                       Appendix D of the Economic Analysis
                     provides results of sensitivity analyses,
                     conducted by EPA, to examine the
                     impact under differing model
                     assumptions. This analysis examines
                     the change in the modeling results from
 varying the baseline assumptions on
 gross and net cash income, debt-to-asset
 ratios as well as other variability factors
 for model CAFOs. These sensitivity
 analyses conclude that 'the results
 presented here are stable across a range
 of possible modeling assumptions. EPA
 also conducted sensitivity analysis of
 the compliance costs developed for the
 purpose of estimating GAFO level
 impacts, as documented in the
 Development Document.
          TABLE 10-6.—IMPACTED OPERATIONS UNDER THE TWO-TIER STRUCTURE (BAT OPTION/SCENARIO 4A)
Sector
Fed Cattle 	
Veal 	
Heifer 	
Dairy 	 	
Hogs: GF1 	
Hogs: FF1 	
Broilers4 	
Layers — Wet2 	
Layers — Dry2 	
Turkeys 	
Total3 	

Number of
CAFOs
3,080
90
800
3,760
2,690
5,860
9,780
360
1,280
1,280
28,970
(Number of affected operations)
Zero cost passthrough
Affordable
2,830
90
680
3,240
1,710
5,210
1,960
360
1,280
1,230
18,580
Moderate
240
. 0
120
200
180
30
7,670
0
0
50
8,490
Stress
10
0.
0
320
810
610
150
0
0
0
1,890
Partial cost passthrough
Affordable
ND
ND
ND
ND
2,690
5,860
8,610
ND
ND
ND
26,840
Moderate
ND
ND
ND
ND
0
0
1,170
ND
ND
ND
1,800
. Stress
ND
ND
ND
ND
0
0
0
ND
ND
ND
330
  Source: USEPA. See Economic Analysis. Impact estimates shown include impacts to designated operations.
  Numbers may not add due to rounding. ND=Not Determined. Option/Scenario definitions provided in Table 10-2
  Category definitions ("Affordable," "Moderate" and "Stress") are provided in Section X.F.1.
  i "Hogs: FF' are farrow-finish (includes breeder and nursery pigs); "Hogs: GF" are grower-finish only.
  flayers: wet" are operations with liquid manure systems; ''Layers: dry' are operations with dry systems.
  3 Total  does not adjust for operations with mixed animal types, for comparison purposes, to avoid understating costs at operations with more
than one animal type that may incur costs to comply with the proposed requirements for each type of animal that is raised on-site.

         TABLE 10-7.—IMPACTED OPERATIONS UNDER THE THREE-TIER STRUCTURE (BAT OPTION/SCENARIO 3)
Sector
Fed Cattle 	
Veal 	
Heifer 	
Dairy 	
Hogs: GF2 	
Hogs: FF1 	
Broilers 	
Layers — Wet2 	
Layers — Dry2 	
Turkeys 	
Total3 	

Number of
CAFOs
3,210
140
980
6,480
2,650
5,710
13,740
360
1,660
2,060
37,000
(Number of affected operations)
Zero cost passthrough
Affordable
2,540
140
800
5,300
1,660
5,070
1,850
360
1,660
1,950
21,300
" Moderate
650
0
150
560
190
30
11,560
0
0
110
, '13,250
Stress
20
0
30
610
810
610
330
0
0
0
2,410
Partial cost passthrough
Affordable
ND
ND
ND
ND
2,650
5,710
12,320
ND
ND
ND
33,410
Moderate
ND
ND
ND
, ND
0
0
1,440
ND
ND
ND
2,930
Stress
ND
ND
ND
ND
0
0
0
ND
ND
ND
660
  Source: USEPA. See Economic Analysis. Impact estimates shown include impacts to designated operations
  Numbers may not add due to rounding. ND=Not Determined. Option/Scenario definitions provided in Table 10-2
  Category definitions ("Affordable," "Moderate" and "Stress") are provided in Section X.F.1.
  1 "Hogs: FF" are farrow-finish (includes breeder and nursery pigs); "Hogs: GF" are grower-finish only.
  2 "Layers: wet" are operations with liquid manure systems; "Layers: dry* are operations with dry systems.
  3'Total" does not adjust for operations with mixed animal types, for comparison purposes, to avoid understating costs at operations with more
than one animal type that may incur costs to comply with the proposed requirements for each type of animal that is raised oh-site
  b. Economic Impacts to Existing
CAFOs under Alternative Regulatory
Options and Scenarios. Table 10-8
presents estimated financial stress
                    impacts to model CAFOs under
                    alternative option and scenario
                    combinations, assuming that no costs
                    passthrough. The results shown are
aggregated and combine impacts in the
cattle sector (including all beef, veal and
heifer operations), hog sector (including
all phases of production), and poultry

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                  Federal Register/Vol. 66, No.  9/Friday, January 12, 2001/Proposed Rules
                                                                      3091
sector (including all broiler, egg laying
and turkey operations). Results are
shown for Scenario 4a (two-tier),
'Scenario 3 (three-tier), and Scenario 4h.
Results are shown for technology
Options 1 through 5. Additional
information is available in the Economic
Analysis that supports today's
rulemaking.
   As shown in Table 10-8, the number
of potential closures range from 610
operations (Option 1 in combination
with all Scenarios) to more than 14,000
potential closures (Option 4/Scenario
4b). Among options, the number of
possible closures are highest under the
more stringent options, including
Options 3A (i.e., requires groundwater
controls at operations where there is a
determined groundwater hydrologic
connection to surface waters), Option 4
(groundwater controls and surface water
sampling), and Option 5 (i.e., zero
discharge from the animal production
area with no exception for storm
events). Differences across scenarios
reflects differences in the number of
affected operations; accordingly, the
number of closures is greatest under
Scenario 4b that would define as  CAFOs
all confinement operations with more
than 300 AU.
                TABLE 10-8.—"STRESS" IMPACTS AT CAFOs UNDER ALTERNATIVE OPTIONS/SCENARIOS
Sector
Number of
CAFOs
(Number of operations)
Option 1
Option 2
Option 3
Option
.-3A1
Option 4
Option 5
BAT option
                                        BAT Option/NPDES Scenario 4a (>500 AU)
Cattle 	 	 	 	 .'.-.. 	
Dairy . 	 	 	

Poultry 	 	 	
Total2 	
3,960
3,760
8,550
12,700
28,970
0
0
610
0
610
0
0
300
150
450
0
0
230
260
490
10
320
310
. 100
. 730
.0
0
570
6,660
7,230
30
0
1,420
150
1,590
10
320
1 ,420
150
1,890
                                        BAT Option/NPDES Scenario 4b (>300 AU)
Cattle 	 ..........

Hogs 	 	 	 	 	
Poultry 	 	 	 	 	 	 	
Total2 	 	 	 	 	
5,330
7,140
14,370
18,300
45,140
0
0
610
0
610
0
0
300
320
620
0
0
230
470
700
90
700
330
380
1,500
30
6
570
11,030
11,630
180
0
1,420
320
1,910
90
700
1,420
320
2,530
BAT Option/NPDES Scenario 3 (>300 AU with certification)
Cattle 	 •*•»••


Poultry
Total2 	 	 : 	
4,330
6,480
'8,360
17,830
37,000
0
0
610
0
610
0
0
300
330
630
0
0
230
470
700
50
610
320
370
1,350
0
0
570
10,740
11,310
100
0
1,420
330
1,850
50
610
1,420
330
2,410
   'Source- USEPA. See Economic Analysis. Impact estimates shown include impacts to designated operations.
   Numbers may not add due to rounding. ND = Not Determined. Option/Scenario definitions provided in Table 10-2.           '****-,
   10ption 3A impacts reflect operations where there is a determined groundwater hydrologic connection to surface waters (assumed at 24 per-

 Ce""To4h|" doefnotTdlusffor operations with mixed animal types, for comparison purposes, to avoid understating costs at operations with more
 than one animal type that may incur costs to comply with the proposed resuirements for each type of animal that is raised on-site. The number
 of CAFOs shown includes expected defined CAFOs only and excludes designated facilities.
    c. Economic Analysis of New CAFOs
 from NSPS under the Proposed
 Regulations. For new sources, EPA is
 proposing that operations meet
 performance standards, as specified by
 the BAT requirements (Option 3 NSPS,
 beef and dairy subcategories, and
 Option 5 NSPS, swine and poultry
 subcategories), with the additional
 requirement that all new hog and
 poultry operations also implement
 groundwater controls where there is a
 hydrologic link to surface water (Option
 3 NSPS, swine and poultry
 subcategories). Additional information
 on new source requirements is provided
 in Section VIII of this document.
    In general, EPA believes that new
  CAFOs will be able to comply at costs
 that are similar to, or less than, the costs
 ..for existing sources, because new
 sources can apply control technologies
 more efficiently than sources that need
 to retrofit for those technologies. New
 sources will be able to avoid these costs
 that will be incurred by existing
 sources. Furthermore, EPA believes that
 new sources can avoid the costs
 associated with ground water protection
 through careful site selection. There is
 nothing about today's proposal that
 would give existing operators a cost
 advantage over new feedlot operators;
 therefore, new source standards are not
 expected to present a barrier to entry for
 new facilities.
    EPA's analysis of the NSPS costs
 indicate that requiring Option 3 for new
 sources in the beef and dairy
 subcategories  and both Option 3 NSPS
 and Option 5 NSPS for the swine and
 poultry subcategories ("Option 5+3
 NSPS") would be affordable and would
 not create any barriers to entry into
 those sectors. The basis for this  .
 determination is as follows. Option 5+3
 NSPS is considered equivalent to
 Option 5 for new sources in terms of
 cost. EPA is proposing that Option 3
 NSPS for beef and dairy subcategories
 and Option 5 NSPS for swine and
 poultry subcategories is  economically
 achievable for existing sources. Since
 the estimated costs for these options are
 the same as or less expensive than costs
 for these same options for  existing
 sources,  no barriers to entry are created.
   Under Option 5+3 NSPS, costs for
 new sources in the swine and poultry
 subcategories would be the same as or

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 3092
Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Proposed Rules
 less than those for equivalent existing
 sources (BAT under Option 5), as long
 as new sources are not sited in areas
 where there is a hydrologic link to
 surface water. New operations are not  .
 expected to incur costs estimated under
 Option 3A, which includes groundwater
 controls, since they are not likely to
 establish a new operation where there is
 a hydrologic link to surface waters (and
 where operating expenses would be
 more costly). Thus EPA assumes that
 the costs for Option 5+3 NSPS are the
 same as those for Option 5 NSPS, which
 in turn are the same as those for Option
 5 BAT. EPA is proposing that Option 5
 BAT is economically achievable for
 existing sources in the swine and
 poultry subcategories and therefore this
 same option should be affordable to new
 sources. Furthermore, because costs to
 new sources for meeting Option 5 NSPS
 are no more expensive than the costs for
 existing sources to meet Option 5 BAT,
 there should be no barriers to entry.
  The estimated costs of Option 3 NSPS
 for the beef and dairy subcategories are
 the same as or less than the costs for
 Option 3 BAT, which includes
 retrofitting costs. EPA is proposing that
 Option 3 BAT is economically
 achievable for existing sources in these
 sectors. Since Option 3 NSPS is no more
 expensive than Option 3 BAT, this
 option should also be economically
 achievable for new sources and should
 not create any barriers to entry.  In fact,
 new sources may be able to avoid the
 cost of implementing groundwater
 controls through careful site selection,
 thus their costs may be substantially
 lower than similar existing sources.
  EPA did not consider an option
 similar to Option 5+3 NSPS for  the beef
 and dairy subcategories (Option 8
 NSPS), but found this option to be
 substantially more expensive than
 Option 3 BAT for the dairy sector and
 could create barriers to entry for this
 sector. Therefore, EPA rejected this
 option. See Section 5 of the Economic
 Analysis for more details on these
 analyses.
  d. Economic Impacts to Offsite
 Recipients of CAFO Manure of the
 Proposed Regulations. As discussed in
 Section X.D. 1, EPA assesses the
 economic impact to offsite recipients of
 CAFO manure by comparing the
 estimated cost of this requirement to
both aggregate and average per-farm
                    production costs and revenues. For the
                    purpose of this analysis, EPA assumes
                    that these regulatory costs will be borne
                    by a non-CAFO farming operation that
                    uses animal manures as a fertilizer
                    substitute.
                      EPA estimates that 17,900 to 21,200
                    farming operations will incur $9.6
                    million to $11.3 million in costs
                    associated with requirements for the
                    offsite transfer of CAFO manure (Tables
                    10-3 and Table 10-4). This translates to
                    an average cost of roughly $540 per
                    recipient. As reported by USDA, farm
                    production expenses in 1997 totaled
                    $150.6 billion nationwide. Revenue
                    from farm sales totaled $196.9 billion.
                    Averaged across the total number of
                    farms, average per-farm costs and
                    revenues were $78,800 and $113,000 in
                    1997, respectively. Using these data, the
                    ratio of incremental costs to offsite
                    recipients as a share of average
                    operating expenses and average farm
                    revenue is well under one percent. Total
                    estimated compliance costs ($9.6
                    million to $11.3 million annually) as a
                    share of aggregate farm expenses and
                    sales is also under one percent. This
                    analysis is provided in Section 5 of the
                    Economic Analysis.

                    2. Processor Level Analysis
                     As discussed in Section X.D.2, EPA
                    did not conduct a detailed estimate of
                    the costs and impacts that would accrue
                    to individual co-permittees due to lack
                    of data and market information.
                    However, EPA believes that the
                    framework used to estimate costs to
                    CAFO provides a means to evaluate the
                    possible upper bound of costs that could
                    accrue to potential co-permittees, based
                    on the potential share of (pre-tax) costs
                    that may be passed on from the CAFO
                    (described in Section X.D.2). EPA is
                    proposing that this amount
                    approximates the magnitude of the costs
                    that may be incurred by processing
                    firms in those industries that may be
                    affected by the proposed co-permitting
                    requirements.
                     Table 10-9 presents the results of
                   EPA's analysis. This analysis focuses on
                   the potential magnitude of costs to co-^
                   permittees in the pork and poultry
                   sectors only since these are the sectors
                   where the proposed co-permitting
                   requirements could affect processing
                   facilities. However, EPA did not
                   evaluate the potential magnitude of
 costs to egg and turkey processors
 because the compliance costs to CAFOs
 in these industries is projected to be
 easily absorbed by CAFOs (see Section
 X.F.I). The results presented in Table
 10-9 are for the pork and broiler
 industries only. EPA also did not
 evaluate the potential costs to cattle and
 dairy processors because EPA does not
 expect that the proposed co-permitting
 requirements to affect meat packing and
 processing facilities in these industries,
 for reasons 'outlined in Section VI.
   The potential magnitude of costs to
 co-permittees is derived from the
 amount of cost passthrough assumed in
 the CAFO level analysis, described in
 Section X.F.I. For this analysis, two
 scenarios of cost passthrough to
 processors are evaluated: partial cost
 passthrough (greater than zero) and also
 100 percent cost passthrough. EPA's
 partial cost passthrough scenario
 assumes that 46 percent of all hog
 compliance costs and that 35 percent of
 all broiler compliance costs are passed
 on to the food processing sectors. Based
 on the results of this analysis, EPA
 estimates that the range of potential
 annual costs to hog processors is $135
 million (partial cost passthrough) to
 $306 million (full cost passthrough).
 EPA estimates that the range of potential
 annual costs to broiler processors as $34
 million (partial cost passthrough) to
 $117 million (full cost passthrough).
 These results are shown in Table lD-^9
 and are expressed in 1999 pre-tax
 dollars.
  To assess the magnitude of impacts
 that could accrue to processors using
 this approach, EPA compares the passed
 through compliance costs to both
 aggregate processor costs of production
 and to revenues (a sales test). The
 results of this analysis are shown in
 Table 10—9 and are presented in terms
 of the equivalent 1997 compliance cost
 as compared to 1997 data from the
 Department of Commerce on the
 revenue and costs among processors in
 the hog and broiler industries. As
 shown, EPA estimates that, even under
 full cost passthrough, incremental cost
 changes are less than two percent and
passed through compliance costs as a
 share of revenue are estimated at less
than one percent. EPA solicits comment
 on this approach. Additional
information is provided m the
Economic Analysis.

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               Federal Register/Vol.  66, No. 9/Friday, January  12, 2001 /Proposed Rules
                                                                                          3093
      TABLE
10-9—IMPACT OF PASSED THROUGH COMPLIANCE COSTS UNDER CO-PROPOSED ALTERNATIVES
Sector

Passed through
compliance cost
Partial CPT
($1999,
100% CPT
million)
1997
revenues
1997
delivered
cost
($1997, million)
1997 Passed through cost-
to-revenues
Partial CPT
100% CPT
Passed through cost-to-
delivered cost
Partial CPT
100% CPT
(percent, comparing costs in $1997)
                                              Hog Processors

Three-Tier 	
135
141
294
306
38,500
15,700
0.3%
0.4%
0.7%
0.8%
0.8%
1.8%
1.9%
Broiler Meat Processors

Three-Tier 	 	 	 .":.

34
41
ocessor reven
97
117
17,700
9,100
0.2%
0.2%
0.5%
0.6%
0.4%
0.4%
1.0%
1.2%
s.!&cit=rpSr^^^^^
broiler sector.


3. Market Level Analysis
  As discussed in Section X.D.3, EPA's
market analysis evaluates the effects of
the proposed regulations on commodity
prices and quantities at the national
level. EPA's market model predicts that
the proposed regulations will not result
in significant industry-level changes in
production and prices for most sectors.
Tables 10-10 and 10-11 show predicted
farm and retail price changes across the
two-tier (500 AU threshold) and three-
tier structures. For comparison
purposes, the average annual percentage
change in price from 1990 to 1998 is
. shown. Analyses of other technology
options and scenarios considered by
EPA are provided in the record.
   EPA expects that predicted changes in
animal production may raise producer
                                   prices, as the market adjusts to the
                                   proposed regulatory requirements. For
                                   most sectors, EPA estimates that
                                   producer price changes will rise by less
                                   than one percent of the pre-regulation
                                   baseline price^Table 10-10). The
                                   exception is in the hog sector, where
                                   estimated compliance costs slightly
                                   exceed one percent of the baseline price.
                                   At the.retail level, EPA expects that the
                                   proposed regulations will not have a
                                   substantial impact on overall
                                   production or consumer prices for
                                   value-added meat, eggs, and fluid milk
                                   and dairy products. EPA estimates that
                                   retail price increases resulting from the
                                    proposed regulations will be under one
                                    percent of baseline prices in all sectors,
                                    averaging below the rate of general price
                                    inflation for all foods (Table 10-11). In
                                                            terms of retail level price changes, EPA
                                                            estimates that poultry and red meat
                                                            prices will rise about one cent per
                                                            pound. EPA also estimates that egg
                                                            prices will rise by about one cent per
                                                            dozen and that milk prices will rise by
                                                            about one cent per gallon.
                                                              Appendix D of the Economic Analysis
                                                            provides results of sensitivity analyses,
                                                            conducted by EPA, to examine the
                                                            impact under differing model
                                                            assumptions. EPA examined variations
                                                            in the price elasticities and prices
                                                            assumed for these industries, based on
                                                            information reported in the agricultural
                                                            literature  and statistical compendiums.
                                                            These sensitivity analyses demonstrate
                                                            that the results presented here are stable
                                                             across a range of possible modeling
                                                             assumptions.
         TABLE 10-10.—ESTIMATED INCREASES IN FARM PRICES UNDER THE CO-PROPOSED ALTERNATIVES
Option/Scenario



Three-Tier 	
Beef
($/cwt)
$68.65
4.6%
. 0.22
0.24
Dairy
($/cwt)
$13.90
8.0%
0.06
0.08
Hogs
($/cwt)
$56.41
15.2%
0.61
0.66
Broilers
(cents/lb)
38.43
5.7%
0.19
0.23
Layers
(cents/doz.)
72.51
1 1 .5%
0.14
.15
Turkeys
(cents/ib)
41.66

01ft

 Source: USEPA, except historical data that are from USDA. Option/Scenario definitions provided in Table 10-2

         TABLE 10-11.—ESTIMATED INCREASES IN RETAIL PRICES UNDER THE CO-PROPOSED ALTERNATIVES
Option/Scenario

Awn Phn Qft— QR f%^ 	

Three-Tier 	
Beef
.($/lb)
$2.91
2.3%
0.00
0.00
Dairy
(Index)
145.50
2;4%
0.61
0.78
Hogs
($/lb)
$2.55
5.1%
0.01
0.01
Broilers
(cents/lb)
156.86
3.0%
0.19
0.23
Layers
(cents/doz.)
110.11
7.2%
0.14
0.15
Turkeys
(cents/lb)
.109.18

0-\C

  EPA does not expect that the
proposed regulations will result in
significant changes in aggregate
employment or national economic
                         output, measured in terms of Gross
                         Domestic Product (GDP). EPA expects,
                         however, that there will be losses in
                         employment and economic output
                                                                           associated with decreases in animal
                                                                           production due to rising compliance
                                                                           costs. These losses are estimated
                                                                           throughout the entire economy, using

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  3094
Federal  Register/Vol. 66, No. 9/Friday, January  12, 2001/Proposed  Rules
  available modeling approaches, and are
  not attributable to the regulated
  community only. This analysis also
  does not adjust for offsetting increases
  in other parts of the economy and other
  sector employment that may be
  stimulated as a result of the proposed
  regulations, such as the construction
  and farm services sectors.
   Table 10-12 show these predicted
  changes. Employment losses are
                    measured in full-time equivalents
                    (FTEs) per year, including both direct
                    and indirect employment. Under the
                    two-tier structure (500 AU threshold),
                    EPA estimates that the reduction in
                    aggregate national level of employment
                    is 16,600 FTEs. Under the three-tier
                    structure, EPA estimates total aggregate
                    job losses at 18,900 FTEs. This projected
                    change is modest when compared to
                    total national employment, estimated at
  about 129.6 million jobs sin 1997. EPA's
  estimate of the aggregate reductions in
  national economic output is $1.7 billion
  under the two-tier structure. Under the
  three-tier structure, EPA estimates the
  loss to GDP at $1.9 billion. This
  projected change is alsp modest when
  compared to total GDP, estimated at
  $8.3 trillion in 1997. Additional
  information is available in the Economic
  Analysis.
                    TABLE 10-12.—ESTIMATED DECREASES IN EMPLOYMENT AND ECONOMIC OUTPUT
Option/ Scenario

Two-Tier 	
Three-Tier 	
Beef
Dairy
Hogs
Poultry
Total
Estimated Decreases in Employment (Number of FTEs)

4,600
4,900
3,200
4,100
6,400
6,900
2,400
3,000
16,600
18,900
                                     Estimated Decreases in Economic Output ($GDP)
Two-Tier 	
Three-Tier 	
Source: USEF
$476
$510
$307
$396
$681
$734
$251
.tans
$1,715
«1 QAR
»A. Option/Scenario definitions provided in Table 10-2. FTE = Full-time equivalent.
 G. Additional Impacts
 1. Costs to the NPDES Permitting
 Authority
   Additional costs will be incurred by
 the NPDES permitting authority to alter
 existing state programs and obtain EPA
 approval to develop new permits,
 review new permit applications and
 issue revised permits that meet the
 proposed regulatory requirements..
 Under the proposed rule, NPDES
 permitting authorities will incur
 administration costs related to the
 development, issuance, and tracking of
 general or individualpermits.
   State and federal administrative costs
 to issue a general permit include costs
 for permit development, public notice
 and response to comments, and public
 hearings. States and EPA may also incur
 costs each time a facility operator
 applies for coverage under a general
 permit due to the expenses associated
 with a Notice of Intent (NOI). These per-
 facility administrative costs include
 initial facility inspections and annual
record keeping expenses associated with
 tracking NOIs. Administrative costs for
an individual permit include
application review by a permit writer,
public notice, and response to
                   comments. An initial facility inspection
                   may also be necessary. EPA developed
                   its unit permit costs assumed for this
                   analysis based on information obtained
                   from a state permitting personnel. The
                   cost assumptions used to estimate
                   develop, review, and approve permits
                   and inspect facilities are presented in
                   the Development Document.
                     EPA assumes that, under the two-tier
                   structure, an estimated 25,590 CAFOs
                   would be permitted. This estimate
                   consists of 24,760 State permits (17,340
                   General and 7,420 Individual permits)
                   and 1,030 Federal permits (720 General
                   and 310 Individual permits). Under the
                   three-tier structure, an estimated 31,930
                   CAFOs would be permitted, consisting
                   of 30,650 State permits (21,460 General
                   and 9,190 Individual permits) and 1,280
                   Federal permits (900 General and 380 '
                   Individual permits). Information on the
                   estimated number of permits required
                   under other regulatory alternatives is
                   provided in the Economic Analysis. The
                   basis for these estimates is described in
                   the Development Document that
                   supports this rulemaking.
                    As shown in Table 10-13, under the
                   two-tier structure, EPA estimates State
                   and Federal administrative costs to
                    TABLE 10-13.—ANNUAL STATE AND FEDERAL ADMINISTRATIVE COSTS, $1999
 implement the permit program to be
 $6.2 million per year: $5.9 million for
 states and $350,000 for EPA. Under the
 three-tier structure, EPA estimates State
 and Federal administrative costs to
 implement the permit program to be
 $7.7 million per year: $7.3 million for
 states and $416,000 for EPA. EPA
 expects that the bulk (95 percent) of
 estimated administrative costs will be
 incurred by the state permitting
 authority. EPA has expressed these costs
 in 1999 dollars, annualized over the 5-
 year permit life using a seven percent
 discount rate. The range -of costs across
 each of the regulatory options is $4.2
 million to $9.1  million annually
 (alternatives Scenario 1 and Scenario
 4b, respectively). See Table 10-13. (EPA
 did not estimate permit authority costs
 under alternative NPDES Scenarios 5
 and 6, described in Table 10-2.) This
.analysis is available in the record and is
 summarized in  Section 10 of the
 Economic Analysis.
   This analysis was conducted to
 evaluate the costs of the proposed rule
 to governments, as required under the
 Unfunded Mandates Reform Act
 (UMRA), as discussed in Section XIII.C
 of this preamble.
Regulatory scenario
Scenario 1 	
Scenario 2 	
Scenario 3 ("Three-tier") 	
Scenario 4a ('Two-tier") 	 	 	

State

o,y^,yyo
/,
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                 Federal Register/Vol.  66, No. 9/Friday, January 12,  2001/Proposed Rules
                                                                     3095
              TABLE 10-13.—ANNUAL STATE AND FEDERAL ADMINISTRATIVE COSTS, $1999—Continued

Scenario 4b 	
Regulatory scenario

State
8,645,520
Federal
483,010
Total
9,128,530
 , Source: USEPA. See Economic Analysis. Other supporting documentation is in the Development'Document.
2. Community Impacts ,
  As discussed in Section X.F.3, EPA
does not expect that the proposed
regulations will result in significant   •
increases in retail food prices or
reductions in national level
employment.
  EPA also considered other community
level impacts associated with this
rulemaking. In particular, EPA
considered whether the proposed rule
could have community level and/or
regional impacts if it substantially
altered the competitive position of
livestock and poultry production across
the nation, or led to growth or
reductions in farm production (in- or
out-migration) in different regions and
communities. Ongoing structural and
technological change in these industries
has influenced where farmers operate
and has contributed to locational shifts
between the more traditional production
regions and the more emergent,
nontraditional regions. Production is
growing rapidly in these regions due to
competitive pressures from more
specialized producers who face lower
per-unit costs of production. This is
especially true in hog and dairy
production.
   To evaluate the potential for
differential impacts among farm
production regions, EPA examined
 employment impacts by region. EPA
 concluded from this  analysis that more
traditional agricultural regions would
 not be disproportionately affected by the
 proposed regulations. This analysis is
 provided in the Economic Analysis.
   EPA does not expect that today's
 proposed requirements will have a
 significant impact on where animals are
• raised. On one hand, on-site
 improvements in waste management
 and disposal, as required by the
 proposed regulations, could accelerate
 recent shifts in production to more
 nontraditional regions as higher cost
 producers in some,regions exit the
 market to avoid relatively higher
 retrofitting associated with bringing
 existing facilities into compliance. On
• the other hand, the proposed regulations
 may favor more traditional production
 systems where operators grow both
 livestock and crops, since these
 operations tend to have available
 cropland for land application of manure
 nutrients. These types of operations
tend to be more diverse and not as
specialized and, generally, tend to be
smaller in size. Long-standing farm
services and input supply industries in
these areas  could likewise benefit from
the proposed rule, given the need to
support on-site improvements in
manure management and disposal.
Local and regional governments, as well
as other non-agricultural enterprises,
would also benefit.
3. Foreign Trade Impacts
  Foreign trade impacts are difficult to
predict, since agricultural exports are
determined by economic conditions in
foreign markets and changes in the
international exchange rate for the U.S.
dollar. However, EPA predicts that
foreign trade impacts as a result of the
proposed regulations will be minor
given the relatively small projected
changes in overall supply and demand
for these products and the slight
increase in market prices, as described
in Section X.F.3.
   Despite its position as one of the
largest agricultural producers in the
world, historically the U.S. has not been
a major player in world markets for red
meat (beef and pork) or dairy products.
m fact, until recently, the U.S. was a net
importer of these products, The
presence of a large domestic market for
value-added meat and dairy products
has limited U.S. reliance, on developing
 export markets for its products. As the
U.S. has taken steps to expand export
 markets for red meat and dairy
 products, one major obstacle has been
 that it remains a relatively high cost
 producer of these products compared to
 other net exporters, such as New
 Zealand, Australia, and Latin America,
 as well as  other more established and
 government-subsidized exporting
 countries, including the European
 Union and Canada. Increasingly,
 however, continued efficiency gains and
 low-cost feed is making the U.S.more
 competitive in world markets for these
 products,  particularly for red meat.
 While today's proposed regulations may
 raise production costs and potentially
 reduce production quantities that would
 otherwise be  available for export, EPA
 believes that  any quantity and price
 changes resulting from the. proposed
 requirements will not significantly alter
 the competitiveness of U.S. export
 markets for red meat or dairy foods.
  In contrast, U.S. poultry products
account for a controlling share of world
trade and exports account for a sizable
and growing share of annual U.S.
production. Given the established
presence of the U.S. in world poultry
markets and the relative strength in
export demand for these products, EPA
does not expect that the predicted
quantity and price changes resulting
from today's proposed regulations will
have a significant impact on the
competitiveness of U.S. poultry exports.
  As part of its market analysis, EPA
evaluated the potential for changes in
traded volumes, such as increases in
imports and decreases in exports, and
concluded that volume trade will not be
significantly impacts by today's
proposed regulations! EPA estimates
that imports (exports) will increase
(decrease) by less than 1 percent
compared to baseline (pre-regulation)
levels in each of the commodity sectors.
By sector, the potential change in
imports compared to baseline trade
levels ranges from a 0.02 percent
increase in broiler imports to a 0.34-
percent increase in dairy product
imports. The predicted drop in U.S.
exports ranges from a 0.01 percent
reduction in turkey exports to a 0.25
percent reduction in hog exports.

H. Cost-Effectiveness Analysis

   As part of the process of developing
 effluent limitations guidelines and
 standards, EPA typically  conducts a
 cost-effectiveness analysis to compare
 the efficiencies of regulatory options for
 removing pollutants and to compare the
 proposed BAT option to other
 regulatory alternatives that were
 considered by EPA. For the purpose of
 this regulatory analysis, EPA defines f
 cost-effectiveness as the incremental'
 annualized cost of a technology option
 per incremental pound of pollutant
 removed annually by that option. The
 analyses presented in this section
 include a standard cost-effectiveness
 (C-E) analysis for toxic pollutants, but
 also expand upon EPA's more
 traditional approach to include an
 analysis of the cost-effectiveness of
 removing nutrients and sediments. This
 expanded approach is more appropriate
 for evaluating the broad range of
 pollutants in animal manure and
 wastewater.

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 3096
Federal Register/Vol. 66, No.  9/Friday, January 12,  2001/Proposed Rules
   The American Society of Agricultural
 Engineers (ASAE) reports that the
 constituents present in livestock and
 poultry manure include: boron,
 cadmium, calcium, chlorine, copper,
 iron, lead, magnesium, manganese,
 molybdenum, nickel, potassium,
 sodium, sulfur, zinc, nitrogen and
 phosphorus species, total suspended
 solids, and pathogens. Of these
 pollutants, EPA's standard C-E analysis
 is suitable to analyze only the removal
 of metals and metallic compounds.
 EPA's standard C-E analysis does not
 adequately address removals of
 nutrients, total suspended solids, and
 pathogens. To account for the estimated
 removals of nutrients and sediments
 under the proposed regulations in the
 analysis, the Agency has developed an
 alternative approach to evaluate the
 pollutant removal effectiveness relative
 to cost. At this time, EPA has not
 developed an approach that would
 allow a similar assessment of pathogen
 removals. Section 10 of the Economic
 Analysis describes the methodology,
 data, and results of this analysis.  (EPA
 did not estimate cost-effectiveness for
 the alternative NPDES Scenarios 5 and
 6, described in Table 10-2.)
   For this analysis, EPA has estimated
 the expected reduction of select
 pollutants for each of the regulatory
 options considered. These estimates
 measure the amount of nutrients,
 sediments, metals and metallic
 compounds that originate from animal
 production areas that would be removed
 under a post-regulation scenario (as
 compared to a baseline scenario) and
 not reach U.S. waters. Additional
 information on EPA's estimated '
 loadings and removals under post-
 compliance conditions is provided in
 the Development Document and the
 Benefits Analysis that support today's
 rulemaking.
 1. Cost-Effectiveness: Priority Pollutants
   For this rulemaking, EPA identified a
 subset of metallic compounds for use in
 the C-E
   For this rulemaking, EPA identified a
 subset of metallic compounds for use in
 the C-E analysis: zinc, copper cadmium,
 nickel, arsenic, and lead. These six
 compounds are a subset of all the toxic
 compounds reported to be present in
 farm animal manure (varies by animal
 species). Therefore, if loading
reductions of all priority pollutants in
 manure were evaluated, tie proposed
regulations would likely be even more
 cost-effective (i.e., lower cost per
pound-equivalent removal).
 : EPA calculates cost-effectiveness as
the incremental annual cost of a
                    pollution control option per incremental
                    pollutant removal. In C-E analyses, EPA
                    measures pollutant removals in toxicity
                    normalized units called "pounds-
                    equivalent," where the pounds-
                    equivalent removed for a particular
                    pollutant is determined by multiplying
                    the number of pounds of a pollutant
                    removed by each option by a toxicity
                    weighting factor. The toxic weighting
                    factors account for the differences in
                    toxicity among pollutants and are
                    derived using ambient water quality
                    criteria. The cost-effectiveness value,
                    therefore, represents the unit cost of
                    removing an additional pound-
                    equivalent of pollutants. EPA calculates
                    the cost-effectiveness of a regulatory
                    option as the ratio of pre-tax annualized
                    costs of an option to the annual pounds-
                    equivalent removed by that option,
                    expressed as the average or incremental
                    cost-effectiveness for that option. EPA
                    typically presents C-E results in 1981
                    dollars for comparison purposes with
                    other regulations. EPA uses these
                    estimated compliance costs to calculate
                    the cost-effectiveness of the proposed
                    regulations, which include total
                    estimated costs to CAFOs and offsite
                    recipients of CAFO manure (Section
                    X.E) and costs to the permitting
                    authority (Section X.G.I). Additional
                    detail on this approach is provided in
                    Appendix E of the Economic Analysis.
                     Cost-effectiveness results for select
                    regulatory alternatives are presented in
                    Table 10-14. Results shown in Table
                    10-14 include the BAT Option (Option
                    3 for beef and dairy subcategories and
                    Option 5 for the swine and poultry
                    subcategories) and Option 3+5 (both
                    Option S.and 5 for all subcategories).
                    Options are shown for four CAFO
                    coverage scenarios, including CAFOs
                    with more than 1,000 AU  and CAFOs
                    With more than 500 AU (two-tier
                    structure), and operations with more
                    than 300 AU, both under Scenario 4b
                    and as defined under Scenario 3 (three-
                    tier structure).  The differences in CAFO
                    coverage provide an upper and lower
                    bound of the analysis to roughly depict
                    the alternative NPDES scenarios. Both
                    incremental and average