National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations (CAFOs)

[Federal Register: February 12, 2003 (Volume 68, Number 29)]
[Rules and Regulations]
[Page 7175-7274]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12fe03-8]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123 and 412
[FRL-7424-7]
RIN 2040-AD19

National Pollutant Discharge Elimination System Permit Regulation
and Effluent Limitation Guidelines and Standards for Concentrated
Animal Feeding Operations (CAFOs)

AGENCY: Environmental Protection Agency.
ACTION: Final rule.

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SUMMARY: Today's final rule revises and clarifies the Environmental
Protection Agency's (EPA) regulatory requirements for concentrated
animal feeding operations (CAFOs) under the Clean Water Act. This final
rule will ensure that CAFOs take appropriate actions to manage manure
effectively in order to protect the nation's water quality.
Despite substantial improvements in the nation's water quality
since the inception of the Clean Water Act, nearly 40 percent of the
Nation's assessed waters show impairments from a wide range of sources.
Improper management of manure from CAFOs is among the many contributors
to remaining water quality problems. Improperly managed manure has
caused serious acute and chronic water quality problems throughout the
United States.
Today's action strengthens the existing regulatory program for
CAFOs. The rule revises two sections of the Code of Federal Regulations
(CFR), the National Pollutant Discharge Elimination System (NPDES)
permitting requirements for CAFOs (Sec. 122) and the Effluent
Limitations Guidelines and Standards (ELGs) for CAFOs (Sec. 412).
The rule establishes a mandatory duty for all CAFOs to apply for an
NPDES permit and to develop and implement a nutrient management plan.
The effluent guidelines being finalized today establish performance
expectations for existing and new sources to ensure appropriate storage
of manure, as well as expectations for proper land application
practices at the CAFO. The required nutrient management plan would
identify the site-specific actions to be taken by the CAFO to ensure
proper and effective manure and wastewater management, including
compliance with the Effluent Limitation Guidelines. Both sections of
the rule also contain new regulatory requirements for dry-litter
chicken operations.
This improved regulatory program is also designed to support and
complement the array of voluntary and other programs implemented by the
United States Department of Agriculture (USDA), EPA and the States that
help the vast majority of smaller animal feeding operations not
addressed by this rule. This rule is an integral part of an overall
federal strategy to support a vibrant agriculture economy while at the
same time taking important steps to ensure that all animal feeding
operations manage their manure properly and protect water quality.
EPA believes that these regulations will substantially benefit
human health and the environment by assuring that an estimated 15,500
CAFOs effectively manage the 300 million tons of manure that they
produce annually. The rule also acknowledges the States' flexibility
and range of tools to assist small and medium-size AFOs.

DATES: These final regulations are effective on April 14, 2003.

ADDRESSES: The administrative record is available for inspection and
copying at the Water Docket, located at the EPA Docket Center (EPA/DC)
in the basement of the EPA West Building, Room B-102, at 1301
Constitution Ave., NW., Washington, DC. The administrative record is
also available via EPA Dockets (Edocket) at http://www.epa.gov/edocket
under Edocket number OW-2002-0025. The rule and key supporting
materials are also electronically available on the Internet at
http://www.epa.gov/npdes/caforule.

FOR FURTHER INFORMATION CONTACT: Gregory Beatty, U.S. EPA, Office of
Water, Office of Wastewater Management (4203M), 1200 Pennsylvania
Avenue NW., Washington, DC 20460, 202-564-0724, for information
pertaining to the NPDES Regulations (Part 122) or Paul Shriner, U.S.
EPA, Office of Water, Office of Science and Technology (4303T), 1200
Pennsylvania Avenue NW., Washington, DC 20460, 202-566-1076, for
information pertaining to the Effluent Guideline (Part 412).

SUPPLEMENTARY INFORMATION:
A. General Information
1. What entities are potentially regulated by this final rule?
2. How Can I Get Copies of This Document and Other Related
Information?
B. Under what legal authority is this final rule issued?
C. How is this preamble organized?
D. What is the Comment Response Document?
E. What other information is available to support this final rule?
I. Background Information
A. What is the context for this rule?
B. Why is EPA revising the existing effluent guidelines and
NPDES regulations for CAFOs?
C. What are the environmental and human health concerns
associated with improper management of manure and wastewater at
CAFOs?
1. How do the amounts of animal manure compare to human waste?
2. What are ``excess manure nutrients'' and why are they an
indication of environmental concern?
3. What pollutants are present in animal manure and wastewater?
4. How do these pollutants reach surface water?
5. How is water quality impaired by animal manure and
wastewater?
6. What ecological and human health impacts have been caused by
CAFO manure and wastewater?
D. What are the roles of the key entities involved in the final
rule?
1. CAFOs.
2. States.
3. EPA.
4. USDA.
5. Other stakeholders.
6. The public.
E. What principles have guided EPA's decisions embodied in this
rule?
F. What are the major elements of this final rule? Where do I
find the specific requirements?
1. NPDES Regulations for CAFOs.
2. Effluent Limitations Guidelines requirements for CAFOs.
II. What Events Have Led to This Rule?
A. The Clean Water Act
1. The National Pollutant Discharge Elimination System (NPDES)
permit program
2. Effluent limitations guidelines and standards
3. Effluent guidelines planning process--Section 304(m)
requirements
B. Existing Clean Water Act requirements applicable to CAFOs
1. Scope and requirements of the 1976 NPDES regulations for
CAFOs
2. Scope and requirements of the 1974 feedlot effluent
guidelines
C. USDA-EPA Unified National Strategy for Animal Feeding
Operations
III. How Was This Final Rule Developed?
A. Small Business Advocacy Review (SBAR) Panel
B. Proposed Rule
C. 2001 Notice of Data Availability
D. 2002 Notice of Data Availability
E. Public Comments
F. Public outreach
1. Pre-proposal activities
2. Post-proposal activities
IV. CAFO Roles and Responsibilities
A. Who is affected by this rule?
1. What is an AFO?
2. What is a CAFO?
3. What types of animals are covered by today's rule?
4. Is my AFO a CAFO if it discharges only during large storm
events?
5. How are land application discharges of manure and process
wastewaters at CAFOs covered by this rule?
6. How is EPA applying the Agricultural Storm Water Exemption
with respect to Land Application of CAFO Manure and Process
Wastewaters?

[[Page 7177]]

7. When and how is an AFO designated as a CAFO?
8. Can EPA designate an AFO as a CAFO where the State is the
permitting authority?
9. How can States use non-NPDES programs to prevent medium and
small operations from being defined or designated as CAFOs?
10. What CAFOs are new sources?
B. Who needs a permit and when?
1. Who needs to seek coverage under an NPDES permit?
2. How can a CAFO make a demonstration of no potential to
discharge?
3. When must CAFOs seek coverage under a NPDES permit?
4. What are the different types of permits?
5. How does a CAFO apply for a permit?
6. What are the minimum required elements of an NOI or
application for an individual permit?
C. What are the requirements and conditions in an NPDES permit?
1. What are the different types of effluent limitations that may
be in a CAFO permit?
2. Effluent limitations guidelines for Large CAFOs
3. What technology-based limitations apply to Small and Medium
CAFOs?
4. Will CAFOs be required to develop and implement a Nutrient
Management Plan?
5. Does EPA require nutrient management plans to be developed or
reviewed by a certified planner?
6. What are the special conditions applicable to all NPDES CAFO
permits?
7. Standard conditions applicable to all NPDES CAFO permits
D. What records and reports must be kept on-site or submitted?
V. States' Roles and Responsibilities
A. What are the key roles of the States?
B. Who will implement these new regulations?
C. When and how must a State revise its NPDES permit program?
D. When must States issue new CAFO NPDES permits?
E. What types of NPDES permits are appropriate for CAFOs?
F. What flexibility exists for States to use other programs to
support the achievement of the goals of this regulation?
VI. Public Role and Involvement
A. How can the public get involved in the revision and approval
of State NPDES Programs?
B. How can the public get involved if a State fails to implement
its CAFO NPDES permit program?
C. How can the public get involved in NPDES permitting of CAFOs?
D. What information about CAFOs is available to the public?
VII. Environmental Benefits of the Final Rule
A. Summary of the environmental benefits
B. What pollutants are present in manure and other CAFO wastes,
and how do they affect human health and the environment?
1. What pollutants are present in animal waste?
2. How do these pollutants reach surface waters?
3. How is water quality impaired by animal wastes?
4. What ecological and human health impacts have been caused by
CAFO wastes?
C. How will water quality and human health be improved by this
rule?
1. What reductions in pollutant discharges will result from this
rule?
2. Approach for determining the benefits of this rule
3. Benefits from improved surface water quality
4. Benefits from improved ground water quality
D. Other (non-water quality) environmental impacts and benefits
VIII. Costs and Economic Impacts
A. Costs of the final rule
1. Method for estimating the costs of this rule
2. Estimated annual costs of the final CAFO regulations
B. Economic Effects
1. Effects on the CAFO operation
2. Market analysis
C. Cost-Benefit and Cost-Effectiveness Analyses
1. Cost-Benefit Analysis
2. Cost-Effectiveness Analysis
IX. Coordination With Other Federal Programs
A. How does today's rule function in relation to other EPA
programs?
1. Water quality trading
2. Total Maximum Daily Load (TMDL)
3. Watershed permitting
4. Coastal Zone Act Reauthorization Amendments of 1990 (CZARA)
5. Clean Water Act section 319 Program
6. Source Water Protection Program
7. What is EPA's position regarding Environmental Management
Systems?
B. How is EPA coordinating with other federal agencies?
X. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
1. Background
2. Summary of Final Regulatory Flexibility Analysis
3. Compliance guide
4. Use of Alternative Definition
D. Unfunded Mandates Reform Act
1. Private costs
2. State Local and Tribal Government Costs
3. Funding and technical assistance available to CAFOs
4. Funding available to States
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
Appendix--Form 2B

A. General Information

1. What Entities Are Potentially Regulated by This Final Rule?

This final rule applies to new and existing animal feeding
operations (AFOs) that meet the definition of a concentrated animal
feeding operation (CAFO), or AFOs that are designated as CAFOs by the
permitting authority. CAFOs are defined by the Clean Water Act as point
sources for the purposes of the National Pollutant Discharge
Elimination System (NPDES) program. (33 U.S.C. 1362). The rule also
applies to States and Tribes with authorized NPDES Programs.
Table 1 lists the types of entities EPA is now aware could
potentially be regulated by this final 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 is regulated by this action, you should carefully examine
the definitions and other provisions of 40 CFR 122.23 and the
provisions of 40 CFR Part 412, including the applicability criteria at
40 CFR 412.1. If you have questions regarding the applicability of this
action to a particular entity, consult one of the persons listed in the
preceding For Further Information Contact section.

Table 1.--Entities Potentially Regulated by this Rule
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Examples of regulated North American industry Standard industrial
Category entities code (NAIC) classification code
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Federal, State, and Local
Government:
Industry................... ....................... See below................. See below

[[Page 7178]]

Operators of animal ..........................
production operations
that meet the
definition of a CAFO:
Beef cattle feedlots 112112.................... 0211
(including veal).
Beef cattle ranching 112111.................... 0212
and farming.
Hogs................ 11221..................... 0213
Sheep............... 1241, 11242............... 0214
General livestock, 11299..................... 0219
except dairy and
poultry.
Dairy farms......... 11212..................... 0241
Broilers, fryers, 11232..................... 0251
and roaster
chickens.
Chicken eggs........ 11231..................... 0252
Turkey and turkey 11233..................... 0253
eggs.
Poultry hatcheries.. 11234..................... 0254
Poultry and eggs.... 11239..................... 0259
Ducks............... 112390.................... 0259
Horses and other 11292..................... 0272
equines.
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2. How Can I Get Copies of This Document and Other Related Information?

a. Docket. EPA has established an official public docket for this
action under Docket ID No. W-00-27. The official public docket consists
of the documents specifically referenced in this action, any public
comments received, and other information related to this action.
Although a part of the official docket, the public docket does not
include Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. The official public docket
is the collection of materials that is available for public viewing at
the Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room
B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
Reading Room is (202) 566-1744, and the telephone number for the Water
Docket is (202) 566-2426.
b. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/.
An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.epa.gov/edocket/ to view public comments,
access the index listing of the contents of the official public docket,
and to access those documents in the public docket that are available
electronically. Although not all docket materials may be available
electronically, you may still access any of the publicly available
docket materials through the docket facility identified in section
A.2.a. Once in the system, select ``search,'' then key in the
appropriate docket identification number (OW-2002-0025).

B. Under What Legal Authority Is This Final Rule Issued?

Today's final rule is issued under the authority of Sections 301,
304, 306, 307, 308, 402, and 501 of the Clean Water Act, 33 U.S.C.
1311, 1314, 1316, 1317, 1318, 1342, and 1361.

C. How Is This Preamble Organized?

Below is an outline for the preamble to the final rule. It is
written in a question-and-answer format that is designed to help the
reader understand the information in the rule. Each question is
followed by a concise answer, a brief summary of what was proposed, the
key comments that the Environmental Protection Agency (EPA) received on
the proposed rule, and the principal rationale for EPA's decision.
List of Acronyms
AFO--animal feeding operation
BAT--best available technology economically achievable
BCT--best conventional pollutant control technology
BOD--biochemical oxygen demand
BPJ--best professional judgment
BMP--best management practice
BPT--best practicable control technology currently available
CAFO--concentrated animal feeding operation
CFR--Code of Federal Regulations
CFU--colony forming units
CNMP--comprehensive nutrient management plan
CSREES--USDA's Cooperative State Research, Education, and Extension
Service
CWA--Clean Water Act
CZARA--Coastal Zone Act Reauthorization Amendments
ELG--effluent limitations guideline
EMS--environmental management system
EPA--Environmental Protection Agency
EQIP--Environmental Quality Incentives Program
FAPRI--Food and Agricultural Policy Research Institute
FR--Federal Register
ICR--Information Collection Request
NODA--Notice of Data Availability
NOI--notice of intent
NPDES--National Pollutant Discharge Elimination System
NRCS--USDA's Natural Resources Conservation Service
NRDC--Natural Resources Defense Council
NSPS--new source performance standards
NTTAA--National Technology Transfer and Advancement Act
NWPCAM--National Water Pollution Control Assessment Model
OMB--U.S. Office of Management and Budget
POTW--publicly owned treatment works
RFA--Regulatory Flexibility Act
SBA--U.S. Small Business Administration
SBAR (panel)--Small Business Advocacy Review Panel
SBREFA--Small Business Regulatory Enforcement Fairness Act
SRF--State Revolving Fund
TMDL--total maximum daily load
TSS--total suspended solids
UMRA--Unfunded Mandates Reform Act
USDA--United States Department of Agriculture
WWTP--wastewater treatment plant

D. What Is the Comment Response Document?

EPA received more than 11,000 comments on the proposed rule and on
the two supplemental Notices of Data

[[Page 7179]]

Availability. EPA evaluated all the significant comments submitted and
prepared a Comment Response Document containing the Agency's responses
to those comments. The Comment Response Document complements and
supplements this preamble by providing more detailed explanations of
EPA's final actions. The Comment Response Document is available at the
Water Docket. See Section E below for additional information.

E. What Other Information Is Available to Support This Final Rule?

In addition to this preamble, today's final rule is supported by
extensive other information that is part of the administrative record,
such as the Comment Response Document, and the key supporting documents
listed below. These supporting documents and the administrative record
are available at the Water Docket and via e-Docket.
? ``Development Document for the Final Revisions to the
National Pollutant Discharge Elimination System Regulation and the
Effluent Guidelines for Concentrated Animal Feeding Operations'' (EPA
821-R-03-001). Hereafter referred to as the Technical Development
Document, this document presents EPA's technical conclusions concerning
the rule. EPA describes, among other things, the data collection
activities in support of the rule, the wastewater treatment technology
options, wastewater characterization, and the estimated costs to the
industry.
? ``Economic Analysis of the Final Revisions to the National
Pollutant Discharge Elimination System Regulation and the Effluent
Guidelines for Concentrated Animal Feeding Operations'' (EPA 821-R-03-
002). Hereafter referred to as the Economic Analysis, this document
presents the methodology employed to assess economic impacts of the
final rule and the results of the analysis.
? ``Cost Methodology for the Final Revisions to the National
Pollutant Discharge Elimination System Regulation and the Effluent
Guidelines for Concentrated Animal Feeding Operations'' (EPA 821-R-03-
004). Hereafter referred to as the Cost Support Document, this document
presents the methodology employed to estimate costs that will be borne
by CAFOs to comply with the requirements of the final rule.
? ``Environmental and Economic Benefit Analysis of the Final
Revisions to the National Pollutant Discharge Elimination System
Regulation and the Effluent Guidelines for Concentrated Animal Feeding
Operations'' (EPA 821-R-03-003). Hereafter referred to as the Benefits
Analysis, this document presents the methodologies and results of
analyses used to assess environmental impacts of the final rule.
? ``Environmental Assessment of Proposed Revisions to the
National Pollutant Discharge Elimination System Regulation and the
Effluent Guidelines for Concentrated Animal Feeding Operations'' (EPA
821-R-01-002). Hereafter referred to as the Environmental Assessment,
this document illustrates the environmental impacts associated with
animal agriculture.
? ``Information Collection Request for Final Revisions to the
National Pollutant Discharge Elimination System Regulation and the
Effluent Limitations Guidelines for Concentrated Animal Feeding
Operations'' (EPA ICR No. 1989-02). Hereafter referred to as the ICR,
this document presents estimates of the labor and capital costs
associated with the recordkeeping and reporting requirements of the
final rule.

I. Background Information

A. What Is the Context for This Rule?

Nationally, there are an estimated 1.3 million farms with
livestock. About 238,000 of these farms are considered animal feeding
operations (AFOs)--agriculture enterprises where animals are kept and
raised in confinement. AFOs annually produce more than 500 million tons
of animal manure that, when improperly managed, can pose substantial
risks to the environment and public health. EPA and the United States
Department of Agriculture (USDA) are committed to a comprehensive
national approach to ensure that manure and wastewater from AFOs are
properly managed. EPA and USDA are relying on a comprehensive suite of
voluntary programs (e.g. technical assistance, training, funding, and
outreach) and regulatory programs to ensure that AFOs establish
appropriate site-specific comprehensive nutrient management plans
(CNMPs) that will protect the environment and public health. Today's
rule is a part of this suite of actions. It ensures that the largest of
these operations, CAFOs, are required to develop and implement a
nutrient management plan as a condition of an NPDES permit. The
requirement in this rule to develop and implement a nutrient management
plan can generally be fulfilled by developing and implementing a CNMP.
Congress passed the Clean Water Act to ``restore and maintain the
chemical, physical, and biological integrity of the nation's waters.''
(33 U.S.C. 1251(a)). The Clean Water Act establishes a comprehensive
program for protecting our Nation's waters. Among its core provisions,
the Act prohibits the discharge of pollutants from a point source to
waters of the United States except as authorized by an NPDES permit.
The Clean Water Act also requires EPA to establish national technology-
based effluent limitations guidelines and standards (ELGs) for
different categories of sources. Section 502 of the Clean Water Act
specifically defines the term ``point source'' to include CAFOs. In
1974 and 1976, EPA promulgated regulations that established ELGs for
large feedlots (CAFOs) and established permitting regulations for
CAFOs. Today's final rule revises the more than 25-year old
requirements that apply to CAFOs. This regulatory action, which applies
primarily to the largest CAFOs, is an important component of the
overall effort to ensure effective management of manure.
Focusing EPA's regulatory program on the largest operations, which
present the greatest potential risk to water quality, is consistent
with the Unified National Strategy for Animal Feeding Operations
jointly developed by EPA and USDA (USEPA/USDA, March 1999). The
Strategy specifies that the vast majority of operations that confine
animals are and will continue to be addressed through locally focused
voluntary programs. The Strategy defines a national objective for all
AFOs to develop CNMPs to minimize impacts on water quality and public
health from AFOs. The vast majority (estimated to be about 95%) of
these CNMPs will be developed under voluntary programs. The requirement
in today's rule that the largest of these operations develop and
implement a nutrient management plan is consistent with the objective
of the Strategy.

B. Why Is EPA Revising the Existing Effluent Guidelines and NPDES
Regulations for CAFOs?

Despite more than 25 years of regulation of CAFOs, reports of
discharge and runoff of manure and manure nutrients from these
operations persist. Although these conditions are in part due to
inadequate compliance with and enforcement of existing regulations, EPA
believes that the regulations themselves also need revision. The final
regulations being announced today will reduce discharges that impair
water quality by strengthening the permitting requirements and
performance standards for CAFOs. These changes are

[[Page 7180]]

expected to mitigate future water quality impairment and the associated
human health and ecological risks by reducing pollutant discharges from
facilities that confine a large number of animals in a single location.
EPA's revisions to the existing regulations 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. These large operations
often do not have sufficient land to effectively use the manure as
fertilizer. Furthermore, there is limited land acreage near the CAFO to
effectively use the manure. This trend has coincided with increased
reports of large-scale discharges from CAFOs, as well as continued
runoff that is contributing to the significant increase in nutrients
and resulting impairment of many U.S. water bodies.
Finally, EPA's revisions to 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
final regulations.

C. What Are the Environmental and Human Health Concerns Associated With
Improper Management of Manure and Wastewater at CAFOs?

This section provides a brief summary of the environmental and
human health concerns associated with the improper management of manure
and wastewater at CAFOs. It is intended to provide the necessary
context for discussions in subsequent sections of this preamble.
Information is provided on the amount of manure generated by animal
agriculture and the areas of the country where the amount of manure
generated by these operations is considered excess at the farm and
county levels as defined in analyses by USDA. This information is
critical to framing the action EPA is taking today. A detailed
discussion of the environmental and human health impacts is presented
in Section VII of this preamble, entitled Environmental Benefits of the
Final Rule.
Livestock and poultry manure, if not properly handled and managed
by the CAFO, can contribute pollutants to the environment and pose a
risk to human and ecological health. EPA's administrative record for
this final rule includes estimates of the amount of manure and excess
nutrients generated each year by CAFOs and provides information on the
types of pollutants known to be present in animal manure and
wastewater. The administrative record also documents the potential
environmental problems associated with CAFOs, based on States reporting
water quality impairment attributable to agricultural and animal
production, survey data that show human and ecological health risks
associated with these pollutants, and documented cases linking these
risks to the discharge and runoff of pollutants from livestock and
poultry facilities. More information is provided in the 2001 proposed
rule (66 FR 2972-2974 and 66 FR 2976-2984) and other support documents
referenced in the proposal and in the administrative record for this
final rule. The administrative record contains information on the
scientific and technical literature, as well as available survey and
monitoring data, to corroborate the Agency's findings.
1. How Do the Amounts of Animal Manure Compare to Human Waste?
USDA estimates that operations that confine livestock and poultry
animals generate about 500 million tons of manure annually (as
excreted). This compares to EPA estimates of about 150 million tons
(wet weight) of human sanitary waste produced annually in the United
States, assuming a U.S. population of 285 million and an average waste
generation of about 0.518 tons per person per year. By this estimate,
all confined animals generate 3 times more raw waste than is generated
by humans in the U.S. As a result of today's action, EPA is regulating
close to 60 percent of all manure generated by operations that confine
animals. Of the estimated amount of nutrients generated by these
operations that is in excess of cropland needs, EPA's regulation will
account for nearly 70 percent of manure generated by these operations.
2. What Are ``Excess Manure Nutrients'' and Why Are They an Indication
of Environmental Concern?
An analysis developed by USDA provides a means to consider the
potential environmental risk from confined livestock and poultry manure
based on the amount of ``excess'' manure nutrients generated by CAFOs.
USDA defines ``excess manure nutrients'' on a confined livestock farm
as manure nutrient production that exceeds the capacity of the crop to
assimilate the nutrients. USDA's analysis of 1997 Census of Agriculture
data indicates that a considerable portion of the manure nutrients
generated at larger animal production facilities exceeds the crop
nutrient needs, both at the farm and local county levels. Given
consolidation trends in the industry toward larger-sized operations
that tend to have less available land on which to spread manure, the
amount of excess manure nutrients being produced has been rising.
Among the principal reasons for the farm-level excess of nutrients
generated is inadequate land for utilizing manure. USDA data show that
the amount of nutrients, and the amount of excess nutrients, produced
by confined animal operations rose about 20 percent from 1982 to 1997.
During that same period, cropland and pastureland controlled by these
farms declined from an average of 3.6 acres in 1982 to 2.2 acres per
1,000 pounds live weight of animals in 1997. The combination of these
factors has contributed to an increase in the amount of excess
nutrients produced at these operations. Larger-sized operations with
1,000 or more animals exceeding 1,000 pounds accounted for the largest
share of excess nutrients in 1997. Roughly 60 percent of the nitrogen
and 70 percent of the phosphorus generated by these operations must be
transported off-site.
By sector, USDA estimates that operations that confine poultry
account for the majority of on-farm excess nitrogen and phosphorus.
Poultry operations account for nearly one-half of the total recoverable
nitrogen, but on-farm use is able to absorb less than 10 percent of
that amount. In 1997 poultry operations accounted for about two-thirds
of the total excess on-farm nitrogen. About half of the estimated on-
farm excess phosphorus was generated by poultry. This is attributable
to not only the limited land area for manure application but also the
generally higher nutrient content of poultry manure compared to the
manure of most other farm animals, as reported in the scientific
literature. Dairies and hog operations are the other dominant livestock
types shown to contribute to excess on-farm nutrients, particularly
phosphorus.
The regions of the United States that show the largest increase in
excess nutrients between 1982 and 1997 are the Southeast and the Mid-
Atlantic. The excess amounts are mostly the result of the number and
concentration of large poultry and hog operations in those regions.
These operations generate high nutrient concentrations and often have
the smallest land area per animal unit

[[Page 7181]]

for manure application in the United States.
USDA's analysis also indicates which counties have the potential
for excess manure nutrients defined as manure nutrients produced in a
county in excess of the assimilative capacity of crop and pastureland
in that county. (The analysis includes counties that have nutrient
levels that exceed the assimilative capacity for all of the crop and
pastureland in the county, as well as those counties where half of the
county's total nitrogen or phosphorus could be provided by manure from
confined animal operations.) The counties with potential excess manure
nitrogen totaled 165 counties across the United States in 1997; the
counties with potential excess manure phosphorus totaled 374 counties.
The areas of particular concern for potential county-level excess
manure nutrients are in North Carolina, Georgia, Alabama, Mississippi,
Arkansas, California, Maryland, Delaware, Pennsylvania, Virginia, and
Washington. If current trends in the livestock and poultry industry
continue, more manure will be produced in areas without the physical
capacity to agronomically use all the nutrients contained in that
manure.
USDA's analysis is reported in ``Confined Animal Production and
Manure Nutrients'' (Agriculture Information Bulletin 771) and also in
``Confined Animal Production Poses Manure Management Problems'' in the
September 2001 issue of USDA's Agricultural Outlook. Both are available
at USDA's Web site at http://www.ers.usda.gov/. Additional
documentation on how this analysis was conducted is in USDA's ``Manure
Nutrients Relative to the Capacity of Cropland and Pastureland to
Assimilate Nutrients: Spatial and Temporal Trends for the United
States,'' December 2000, available at http://www.nhq.nrcs.usda.gov/
land/pubs/manntr.html. These documents are also available in the
administrative record for today's final rule (i.e. docket number W-00-
27).
3. What Pollutants Are Present in Animal Manure and Wastewater?
Pollutants most commonly associated with animal waste include
nutrients (including ammonia), organic matter, solids, pathogens, and
odorous compounds. Animal waste can also be a source of salts and
various trace elements (including metals), as well as pesticides,
antibiotics, and hormones. These pollutants can be released into the
environment through discharge or runoff if manure and wastewater are
not properly handled and managed.
4. How Do These Pollutants Reach Surface Water?
Pollutants in animal waste and manure can enter the environment
through a number of pathways. These include surface runoff and erosion,
overflows from lagoons, spills and other dry-weather discharges,
leaching into soil and ground water, and volatilization of compounds
(e.g., ammonia) and subsequent redeposition on the landscape. As
documented in the administrative record, pollutants from animal manure
and wastewater can be released from an operation's animal confinement
area, treatment and storage lagoons, and manure stockpiles, and from
cropland where manure is often land-applied.
5. How Is Water Quality Impaired by Animal Manure and Wastewater?
Agricultural operations, including CAFOs, now account for a
significant share of the remaining water pollution problems in the
United States, as reported in the National Water Quality Inventory:
2000 Report (hereafter the ``2000 Inventory''). This report, prepared
every 2 years under Section 305(b) of the Clean Water Act, summarizes
States' reports of impairment to their water bodies and the suspected
sources of those impairments. A more comprehensive discussion of the
results of the 2000 Inventory is included in Section VII of this
preamble.
EPA's 2000 Inventory data indicate that the agricultural sector
including crop production, pasture and range grazing, concentrated and
confined animal feeding operations, and aquaculture is the leading
contributor of pollutants to identified water quality impairments in
the Nation's rivers and streams. This sector is 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. The inventory does not
allow a comprehensive breakout of water quality impairments
attributable to CAFOs, but EPA's data show that water quality concerns
tend to be greatest in regions where crops are intensively cultivated
and where livestock operations are concentrated.
The leading pollutants impairing surface water quality in the
United States as identified in the 2000 survey data include nutrients,
pathogens, sediment/siltation, and oxygen depleting substances. These
pollutants can originate from a variety of sources, including the
animal production industry.
The 2000 Inventory provides a general indication of national
surface water quality. While concerns have sometimes been raised about
the comparability and consistency of these data across States, the
report highlights in a general way the magnitude of water quality
impairment from agriculture and the relative contribution compared to
other sources. Moreover, the findings of this report are consistent
with other reports and studies conducted by government and independent
researchers that identify CAFOs as an important contributor of surface
water pollution, as summarized in the administrative record for this
rulemaking.
6. What Ecological and Human Health Impacts Have Been Caused by CAFO
Manure and Wastewater?
Among the reported environmental problems associated with animal
manure are surface water (e.g., lakes, streams, rivers, and reservoirs)
and ground water quality degradation, adverse effects on estuarine
water quality and resources in coastal areas and effects on soil and
air quality. The scientific literature, which spans more than 30 years,
documents how this degradation can contribute to increased risk to
aquatic and wildlife ecosystems; an example is the large number of fish
kills in recent years. Human and livestock animal health can also be
affected by excessive nitrate levels in drinking water and exposure to
waterborne human pathogens and other pollutants in manure. The
administrative record provides more detailed information on the
scientific and technical research to support these findings.
Section VII of this document provides additional information
concerning the adverse impacts of pollutants associated with manure in
surface water. Both ecological and human health impacts are addressed.

D. What Are the Roles of the Key Entities Involved in the Final Rule?

EPA recognizes the role of many interested parties in the
development of and, ultimately, the successful implementation of this
final rule. To the greatest extent possible, EPA has attempted to
strike a reasonable balance among the many interests. A short summary
of their broad roles is provided below.
1. CAFOs
Entities that are defined or designated as CAFOs have clear and
binding legal obligations under this regulation. In general, all CAFOs
have a mandatory duty to apply for an NPDES permit and

[[Page 7182]]

must comply with the technology and water quality-based limitations in
the permit as defined by the permitting authority. Only CAFOs that have
successfully demonstrated no potential to discharge may avoid a permit.
Each permitted CAFO must also develop and implement a site-specific
nutrient management plan. EPA fully expects that a CNMP that is
properly developed and implemented, consistent with USDA guidance, will
satisfy the nutrient management requirements of this rule.
2. States
The States, including their environmental, agriculture, and
conservation agencies, have the key leadership role in implementing
programs to ensure that AFOs take the important steps needed to
implement sound management practices that protect water quality. State
regulatory agencies will play a central role in implementing today's
final rule while supporting the voluntary efforts of other State
programs and agencies.
3. EPA
EPA's statutory obligation is to establish national regulations
that protect and restore the chemical, physical, and biological
integrity of the Nation's waters. EPA has undertaken an extensive
outreach process to promote understanding of the science, policy, and
economic issues surrounding animal agriculture. The Agency will
continue to work effectively with the varied interest groups to ensure
effective implementation, compliance assistance, and enforcement of
these regulations.
4. USDA
USDA is EPA's partner in working collaboratively to ensure that
USDA's voluntary programs and EPA's regulatory programs complement each
other to support effective nutrient management by AFOs. EPA and USDA
will continue to coordinate the development and implementation of tools
to support agriculture, in ways that respect the different roles of the
two agencies.
5. Other Stakeholders
A host of other entities, such as research and educational
institutions, soil and water conservation districts, watershed groups,
and many others, can contribute to the use of sound agricultural
practices and protection of water quality. The private sector plays an
important role in ensuring that CAFOs have the tools and expertise
available to protect water quality while enhancing production and
remaining profitable. For example, the private sector in partnership
with educational institutions and other stakeholders can explore
innovative technologies for the management and utilization of animal
manure and provide the needed expertise to support development of
sound, site-specific, and technically based nutrient management plans.
6. The Public
The public has had, and continues to demonstrate, a keen interest
in many aspects of animal agriculture. This final rule establishes
obligations for CAFOs to protect water quality and affirms the public's
role and involvement throughout the regulatory program.

E. What Principles Have Guided EPA's Decisions Embodied in This Rule?

EPA has considered the implementation of the existing regulations
which are more than 25 years old, changes in the industry, the
extensive comments on the proposed rule and supplemental notices of
data availability, and countless studies, reports, and data in
developing this final rule. At the same time, EPA has tried to embody
some important principles throughout the final rule. The Agency strives
to ensure its rules are based on sound science and economics, promote
emerging technologies, and protect watersheds. In addition, the
following principles have guided this rulemaking:
Simplicity and Clarity
EPA has tried to make this final rule as simple and easy to
understand as possible. This rule provides a clear understanding of who
is covered and what they are expected to do.
Emphasis on Large CAFOs
This rule focuses on the operations that pose the greatest risk to
water quality. These operations are predominantly large CAFOs and some
smaller CAFOs that pose a high risk to water quality.
Flexibility for States
This rule establishes a strong and consistent national expectation
for CAFOs, yet provides flexibility for States to address site-specific
situations.
Sound Nutrient Management Planning
This rule embodies the goal of developing site-specific nutrient
management plans to ensure that animal manure is used consistent with
proper agriculture practices that protect water quality.

F. What Are the Major Elements of This Final Rule? Where Do I Find the
Specific Requirements?

This section provides a very brief summary of the major elements of
this final rule and a brief index on where each of the requirements is
located in the final regulations. The regulations for the NPDES permit
program are in Part 122 of Title 40 of the Code of Federal Regulations.
These NPDES regulations include requirements that apply to all point
sources, including CAFOs. The national effluent limitations guidelines
for CAFOs are in Part 412 of Title 40 of the Code of Federal
Regulations. This summary is not a replacement for the actual
regulations.
1. NPDES Regulations for CAFOs
Overall, this final rule maintains many of the basic features and
the overall structure of the 1976 NPDES regulations with some important
exceptions. First, all CAFOs have a mandatory duty to apply for an
NPDES permit, which removes the ambiguity of whether a facility needs
an NPDES permit, even if it discharges only in the event of a large
storm. In the event that a Large CAFO has no potential to discharge,
today's rule provides a process for the CAFO to make such a
demonstration in lieu of obtaining a permit. The second significant
change is that large poultry operations are covered, regardless of the
type of waste disposal system used or whether the litter is managed in
wet or dry form.
Third, under this final rule, all CAFOs covered by an NPDES permit
are required to develop and implement a nutrient management plan. The
plan would identify practices necessary to implement the ELG and any
other requirements in the permit and would include requirements to land
apply manure, litter, and process wastewater consistent with site
specific nutrient management practices that ensure appropriate
agricultural utilization of the nutrients.
2. Effluent Limitations Guidelines Requirements for CAFOs
a. Existing sources. The final ELGs published today will continue
to apply to only Large CAFOs, historically referred to as operations
with 1,000 or more animal units, although the requirements for existing
sources and new sources are different for certain animal sectors. In
the case of existing sources, the ELGs will continue to prohibit the
discharge of manure and other process wastewater pollutants, except for
allowing the discharge of process wastewater whenever rainfall

[[Page 7183]]

events cause an overflow from a facility designed, constructed, and
operated to contain all process wastewaters plus the runoff from a 25-
year, 24-hour rainfall event. In addition, the ELGs that require land
application at the CAFO must be at rates that minimize phosphorus and
nitrogen transport from the field to surface waters in compliance with
technical standards for nutrient management established by the
Director. The ELGs also establish certain best management practice
(BMP) requirements that apply to the production and land application
areas.
b. New sources. For new large beef and dairy operations, the ELGs
establish production area requirements that are the same as those for
existing sources. In the case of large swine, veal, and poultry
operations that are new sources, a new zero discharge standard is
established. The rule also clarifies that where waste management and
storage facilities are designed, constructed, operated and maintained
to contain all manure, litter and process wastewater, including the
runoff and direct precipitation from a 100-year, 24-hour rainfall
event, and is operated in accordance with certain other requirements,
this will satisfy the new standard. Land application requirements for
both groups are identical to those established for existing sources.
Table 1.1 provides an annotated summary of the key elements of
these final regulations as well as the specific regulatory citation for
each change. The chart is intended only to provide a summary and
roadmap to the regulations and is not a definitive description of all
regulatory requirements. Table 1.2 provides a summary of the time
frames for the implementation and complying with the requirements of
today's rulemaking.

Table 1.1.--Regulatory Summary
------------------------------------------------------------------------
Topic Regulatory cite (40 CFR)
------------------------------------------------------------------------
Definitions
------------------------------------------------------------------------
Animal Feeding Operation (AFO)........... 122.23(b)(1)
Concentrated Animal Feeding Operation 122.23(b)(2)
(CAFO).
Production Area.......................... 122.23(b)(8)/412.2(h)
Land Application Area.................... 122.23(b)(3)/412.2(e)
Large CAFOs.............................. 122.23(b)(4)
Manure................................... 122.23(b)(5)
Medium CAFOs............................. 122.23(b)(6)
Process Wastewater....................... 122.23(b)(7)/412.2(d)
Overflow................................. 412.2(g)
10-year, 24-hour and 25-year, 24-hour 412.2(i)
storm.
Setback.................................. 412.4(b)(1)
Vegetated buffer......................... 412.4(b)(2)
Multi-year phosphorus application........ 412.4(b)(3)
------------------------------------------
Who Needs an NPDES Permit?
------------------------------------------------------------------------
Designated CAFOs......................... 122.23(c)
Duty to apply............................ 122.23(d)
Land application discharges from a CAFO 122.23(e)
are subject to NPDES requirements.
No Potential to Discharge determinations. 122.23(f)
------------------------------------------
When Must CAFOs Apply for Coverage Under an NPDES Permit?
------------------------------------------------------------------------
Sources covered under prior regulations.. 122.23(g)(1)
Newly covered CAFOs...................... 122.23(g)(2)
New sources and new dischargers.......... 122.23(g)(3) and (4)
Designated CAFOs......................... 122.23(g)(5)
------------------------------------------
How Do CAFOs Apply for an NPDES Permit?
------------------------------------------------------------------------
Permit application requirements-- 122.21(i)(1) and
Individual or general permits. 122.28(b)(2)(ii)
------------------------------------------
What Is Required in NPDES Permits Issued to CAFOs?
------------------------------------------------------------------------
Effluent limitations..................... 122.42(e)(1)
Requirements for CAFOs subject to the
ELGs (Part 412):
Subpart C--Dairy and Beef Cattle 412.30
Other Than Veal.
Subpart C--Dairy and Beef Cattle 412.31
Other Than Veal: Effluent
limitations attainable by the
application of the best practicable
control technology currently
available (BPT).
Subpart C--Dairy and Beef Cattle 412.32
Other Than Veal: Effluent
limitations attainable by the
application of the best control
technology for conventional
pollutants (BCT).
Subpart C--Dairy and Beef Cattle 412.33
Other Than Veal: Effluent
limitations attainable by the
application of the best available
control technology economically
achievable (BAT).
Subpart C--Dairy and Beef Cattle 412.35
Other Than Veal: New source
performance standards (NSPS).
Subpart D--Swine, Poultry, and Veal.. 412.40
Subpart D--Swine, Poultry, and Veal: 412.43
Effluent limitations attainable by
the application of the best
practicable control technology
currently available (BPT).
Subpart D--Swine, Poultry, and Veal: 412.44
Effluent limitations attainable by
the application of the best control
technology for conventional
pollutants (BCT).

[[Page 7184]]

Subpart D--Swine, Poultry, and Veal: 412.45
Effluent limitations attainable by
the application of the best
available control technology
economically achievable (BAT).
Subpart D--Swine, Poultry, and Veal 412.46
New source performance standards
(NSPS).
Subparts C and D--Required Land 412.4(c)
Application Best Management
Practices.
Subparts C and D--Inspection and 412.37 and 412.47
Record Keeping Requirements.
Additional NPDES CAFO permit
requirements:
Nutrient management plan development 122.42(e)(1)
and Implementation.
Record-keeping....................... 122.42(e)(2)
Transfer of manure................... 122.42(e)(3)
Annual reporting requirement......... 122.42(e)(4)
------------------------------------------------------------------------

Table 1.2.--Consolidated Time Line for Implementing Today's Rulemaking
------------------------------------------------------------------------
Time Frame
------------------------------------------------------------------------
Milestone:
Effective date of regulation....... April 14, 2003.
Effective date of Effluent June 12, 2003.
Guideline requirements for the
production area applicable to
Large CAFOs.
Effective date of Effluent By December 31, 2006.
Guideline requirements for the
land application area applicable
to Large CAFOs.
Effective date for all CAFOs to By December 31, 2006, except
develop and implement nutrient for Large CAFOs that are new
management plans. sources, by date of commencing
operations.
Duty to Apply:
Operations defined as CAFOs prior Must have applied by the date
to April 14, 2003. required in 40 CFR 122.21(c).
Operations defined as CAFOs as of As specified by the permitting
April 14, 2003, and that were not authority, but no later than
defined as CAFOs prior to that April 13, 2006.
date.
Operations that become defined as (a) Newly constructed
CAFOs after April 14, 2003, but operations: 180 days prior to
which are not new sources. the time the CAFO commences
operation. (b) Other
operations (e.g., increase in
number of animals): As soon as
possible but no later than 90
days after becoming defined as
a CAFO, except that, if the
operational change that causes
the operation to be defined as
a CAFO would not have caused
it to be defined as a CAFO
prior to April 13, 2003, the
operation must apply no later
than April 13, 2006 or 90 days
after becoming defined as a
CAFO, whichever is later.
New sources........................ 180 days prior to the time the
CAFO commences operation.
Designated CAFOs................... 90 days after receiving notice
of designation.
State Program Revision:
No statutory changes needed to April 12, 2004.
revise NPDES Program.
Statutory changes needed to revise April 13, 2005.
NPDES Program.
------------------------------------------------------------------------

II. What Events Have Led to This Rule?

The revisions to the National Pollutant Discharge Elimination
System (NPDES) and Effluent Limitation Guidelines Programs specified in
this final rule are focused on those livestock and poultry operations
that are defined or designated as CAFOs. CAFOs are defined as point
sources under the Clean Water Act. Following is a brief historical
context of key regulatory, legal, and policy actions which have
collectively led to today's action.

A. The Clean Water Act

Congress passed the Clean Water Act to ``restore and maintain the
chemical, physical, and biological integrity of the Nation's waters.''
(33 U.S.C. 1251(a)). The Clean Water Act establishes a comprehensive
program for protecting and restoring our Nation's waters. Among its
core provisions, the Clean Water Act prohibits the discharge of
pollutants from a point source to waters of the United States except as
authorized by an NPDES permit. The Clean Water Act establishes the
NPDES permit program to authorize and regulate the discharges of
pollutants to waters of the United States. EPA has issued comprehensive
regulations that implement the NPDES program at 40 CFR part 122. The
Clean Water Act also provides for the development of technology-based
and water quality-based effluent limitations that are implemented
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 discharge
pollutants to waters of the United States must apply for an NPDES
permit and may discharge pollutants only in compliance with the terms
of that permit. Such permits must include any nationally established,
technology-based effluent discharge limitations (effluent guidelines--
discussed below, in subsection II.A.2). In the absence of an applicable
national effluent guideline, NPDES permit writers may establish
technology-based requirements as determined by the permitting authority
on a case-by-case basis, based on their ``best professional judgment''
(BPJ). Water quality-based effluent requirements are also included in
permits where technology-based requirements are not sufficient to
ensure compliance with State water quality standards or where required
to implement a Total Maximum Daily Load (TMDL). For information on
TMDLs see section IX.A.2 of this preamble.
Technology- and water quality-based requirements may be in the form
of

[[Page 7185]]

numeric effluent limitations or in the form of specific BMPs or other
non-numeric effluent limitations and standards. In addition, NPDES
permits normally include reporting, record-keeping, and other
requirements and standard conditions (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, 45 States
and the Virgin Islands are authorized to administer the NPDES program.
This means that most CAFOs will obtain NPDES permits from State
governments, not from EPA. Alaska, Arizona, the District of Columbia,
Idaho, Massachusetts, New Hampshire, New Mexico, and Puerto Rico and
other territories are not currently authorized to implement the NPDES
program. In addition, Oklahoma, although authorized to administer the
NPDES program, does not have CAFO regulatory authority. No Tribe is
currently authorized to implement the NPDES program. This means that
CAFOs located in the above-named jurisdictions or in Indian Country
will obtain their NPDES permits from EPA.
An NPDES permit may be either an individual permit tailored for a
single facility or a general permit applicable to multiple facilities.
Before an individual permit is issued, the owner or operator must
submit a permit application with facility-specific information to the
permitting authority, which reviews the information and prepares a
draft permit. The permitting authority prepares a fact sheet explaining
the draft permit and publishes the draft permit and fact sheet for
public review and comment. Following the permitting authority's
consideration of public comments, a final permit is issued. Specific
procedural requirements apply to the modification, revocation and
reissuance, and termination of an NPDES permit. NPDES permits are
subject to a maximum 5-year term and may be renewed when their term
expires.
General NPDES permits are available to address categories of
discharges that involve similar operations with similar wastes. 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's or the State permitting authority's 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. To gain permit coverage, facilities generally must
submit a ``notice of intent'' (NOI) to be covered under the general
permit. Both general permits and individual permits are used to
implement the same pollution control standards.
2. Effluent Limitations Guidelines and Standards
Effluent limitations guidelines and standards (``effluent
guidelines'' or ``ELGs'') are national regulations that establish
limitations on the discharge of pollutants by industrial category and
subcategory. For each category and subcategory guidelines address three
classes of pollutants: (1) Conventional pollutants (i.e., total
suspended solids (TSS), oil and grease, biochemical oxygen demand
(BOD), fecal coliform bacteria, and pH); (2) toxic pollutants (e.g.,
toxic metals such as lead and zinc; toxic organic pollutants such as
benzene); and (3) non-conventional pollutants (e.g., phosphorus). These
technology-based requirements are subsequently incorporated into NPDES
permits. The Clean Water Act provides that effluent guidelines may
include numeric or non-numeric limitations. Non-numeric limitations are
usually in the form of BMPs. The effluent guidelines are based on the
degree of control that can be achieved using various levels of
pollution control technology, as outlined below.
a. Best Practicable Control Technology Currently Available (BPT) --
Section 304(b)(1) of the Clean Water Act. In the guidelines for an
industry category, EPA defines BPT effluent limits for conventional,
toxic, and non-conventional pollutants. 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 those
currently in place in an industrial category if the Agency determines
that the technology can be practically applied. 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 (33 U.S.C. 304(b)(1)(B)).
b. Best Available Technology Economically Achievable (BAT)--Section
304(b)(2) of the Clean Water Act. In general, BAT represents the best
existing economically achievable performance of direct discharging
facilities in the industrial category or subcategory. The factors
considered in assessing BAT are 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 requirements may be based on effluent
reductions attainable through changes in 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 Clean Water Act. The 1977 amendments to the Clean
Water Act required EPA to identify effluent reduction levels for
conventional pollutants associated with BCT technology for discharges
from existing industrial point sources. In addition to other factors
specified in Section 304(b)(4)(B), the Clean Water Act requires that
EPA establish BCT requirements after considering 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: BOD,
TSS, fecal coliform bacteria, 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
Clean Water Act. New Source Performance Standards (NSPS) reflect
effluent reductions that are achievable based on the best available
demonstrated control technology. New facilities have the opportunity to
install

[[Page 7186]]

the best and most efficient production processes and wastewater
treatment technologies. As a result, NSPS represents the greatest
degree of effluent reduction attainable through the application of the
best available demonstrated control technology for all pollutants
(conventional, non-conventional, and priority pollutants). In
establishing NSPS, EPA is directed by the Clean Water Act to take into
consideration the cost of achieving the effluent reduction and any non-
water quality environmental impacts and energy requirements.
3. Effluent Guidelines Planning Process--Section 304(m) Requirements
Section 304(m) of the Clean Water Act, added by the Water Quality
Act of 1987, requires EPA to establish schedules for (1) reviewing and
revising existing effluent limitations guidelines and standards and (2)
promulgating new effluent guidelines. On May 28, 1998, EPA published a
Notice of Proposed Effluent Guidelines Plan (63 FR 102) that
established schedules for developing new and revised effluent
guidelines for several industry categories. One of the industries for
which the Agency established a schedule was ``Feedlots'' (swine,
poultry, dairy and beef cattle).
a. Clean Water Act Section 304(m) consent decree. The Natural
Resources Defense Council (NRDC) and Public Citizen, Inc. filed suit
against the Agency, alleging violation of section 304(m) and other
statutory authorities that require promulgation of effluent guidelines
(NRDC et al. v. Whitman, Civ. No. 89-2980 (D.D.C.)). Under the terms of
the consent decree in that case, as amended, EPA agreed, among other
things, to propose effluent guidelines for swine, poultry, beef and
dairy portions of the animal industry by December 15, 2000, and to take
final action by December 15, 2002.

B. Existing Clean Water Act Requirements Applicable to CAFOs

EPA's regulation of CAFOs dates to the 1970s. The existing NPDES
CAFO regulations were issued on March 18, 1976 (41 FR 11458). The
existing national effluent limitations guidelines and standards for
feedlots were issued on February 14, 1974 (39 FR 5704). The discussion
below provides an overview of the scope and requirements imposed under
the existing NPDES CAFO regulations and feedlot effluent guidelines. It
also explains the relationship of these two regulations, and it briefly
summarizes other federal and State regulations that potentially affect
AFOs.
1. Scope and Requirements of the 1976 NPDES Regulations for CAFOs
This section provides a simplified summary of the previous NPDES
regulation to provide context for today's action. The previous NPDES
CAFO regulations promulgated in 1976, determined which AFOs were
defined or could be designated as CAFOs under the Clean Water Act and
therefore subject to NPDES permit regulations. Under those regulations,
CAFOs were defined as AFOs that confined more than 1,000 animal units
(AU). In addition, an AFO that confined 300 to 1,000 AU was defined as
a CAFO if it discharged pollutants through a man-made device or if
pollutants were discharged to waters of the United States that ran
through the facility or otherwise came into contact with the confined
animals. AFOs were not defined as CAFOs, however, if they discharged
only during a 25-year, 24-hour storm. Under the 1976 NPDES CAFO
regulations, the permitting authority could also designate any AFO a
CAFO, including those with fewer than 300 AU, if it met the discharge
criteria specified above and was determined to be a significant
contributor of pollution.
2. Scope and Requirements of the 1974 Feedlot Effluent Guidelines
This section provides a simplified summary of the previous effluent
guidelines to provide context for today's action. EPA uses the effluent
guidelines to establish national requirements limiting discharges to
waters of the United States. EPA established the effluent guidelines
for feedlots in 1974 based on the best available technology that was
economically achievable for the industry. The guidelines were
applicable to those facilities in specified sectors (or subcategories)
with as many as or more than 1,000 AU that were to be issued an NPDES
permit. The 1974 effluent guidelines did not allow discharges of
pollutants from CAFOs into the Nation's waters except when a chronic or
catastrophic storm caused an overflow from a facility that had been
designed, constructed, and operated to contain manure, process
wastewater and runoff resulting from a 25-year, 24-hour storm. For
permitted facilities where the ELGs did not apply (those with fewer
than 1,000 AU), technology-based discharge limits were established
using the permit writer's best professional judgment.

C. USDA-EPA Unified National Strategy for Animal Feeding Operations

In 1998, EPA and USDA jointly developed 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 on September 21, 1998. After sponsoring and
participating in 11 public listening sessions and considering public
comments on the draft strategy, a final Unified National Strategy for
Animal Feeding Operations was published on March 9, 1999. A copy of the
Strategy is available on the EPA and USDA web sites. The Unified
National Strategy for Animal Feeding Operations established 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 Strategy established a national
performance expectation that all AFOs should develop and implement
technically sound, economically feasible, and site-specific CNMPs to
minimize impacts on water quality and public health.
The Unified National Strategy for Animal Feeding Operations
identified seven strategic issues that should be addressed to better
resolve concerns associated with AFOs. These are (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 action
addresses the third strategic issue-- implementing and improving the
existing regulatory program.

III. How Was This Final Rule Developed?

The preamble to the proposed rule presented a detailed discussion
of the history of EPA actions addressing CAFOs, including issuance of
the original NPDES CAFO regulations and effluent limitations guidelines
(ELGs) for feedlots, development of the EPA/State Feedlot Workgroup
Report (1993), outreach dialogues with representatives of the pork
industry and poultry industry, EPA AFO strategy development, and
collaboration with USDA on the development of the

[[Page 7187]]

Unified National Strategy for Animal Feeding Operations (66 FR 2965).
The discussion below briefly summarizes the key events that have been
part of the process of preparing today's final rule.

A. Small Business Advocacy Review (SBAR) Panel

To address small business concerns, EPA's Small Business Advocacy
Chairperson convened a Small Business Advocacy Review (SBAR) Panel
under section 609(b) of the Regulatory Flexibility Act (RFA) as amended
by the Small Business Regulatory Enforcement Fairness Act (SBREFA).
Participants included representatives of EPA, the Small Business
Administration (SBA) and the Office of Management and Budget (OMB).
``Small Entity Representatives'' (SERs), who advised the Panel,
included small business livestock and poultry producers as well as
representatives of the major commodity and agricultural trade
associations. Information on the Panel's proceedings and
recommendations is in the April 7, 2000, Final Report of the Small
Business Advocacy Review Panel on EPA's Planned Proposed Rule on
National Pollutant Discharge Elimination System (NPDES) and Effluent
Limitations Guideline (Effluent Guidelines) Regulations for
Concentrated Animal Feeding Operations (hereinafter called the ``Panel
Report''), along with other supporting documentation included as part
of the Panel process. The Panel Report details the process that EPA
followed, provides meeting summaries, and offers other information,
including the composition of both the panel and the SERs.
The report also includes the Panel's recommendations on specific
issues concerning the NPDES CAFO regulation and ELGs. Key panel
recommendations were to: streamline reporting requirements; minimize
burden of any required certifications and testing requirements; and
carefully weigh the costs and benefits of removing the 25-year, 24-hour
storm exemption for operations with less than 1,000 animal units and of
modifying the specific criteria for defining medium-sized AFOs as
CAFOs. The entire SBAR report is available in the administrative record
for this rulemaking, which is available for public review.

B. Proposed Rule

On January 12, 2001, EPA published a proposal to revise and update
two regulations to ensure that manure, wastewater, and other process
waters generated by CAFOs do not impair water quality (66 FR 2959).
These two regulations were (1) the NPDES provisions that define which
operations are CAFOs and establish permit requirements and (2) the
ELGs, or effluent guidelines, for feedlots (beef, dairy, swine and
poultry subcategories), which establish the technology-based effluent
discharge standards for CAFOs. Key proposed changes that would affect
the CAFO definition included options for establishing either two or
three size categories of CAFOs, the thresholds for different size
operations defined as CAFOs, criteria applicable to medium operations,
inclusion of dry chicken operations that meet specified size
thresholds, and potential revisions to the designation criteria and
process. In addition, the proposed rule also presented options for co-
permitting entities that exercise substantial operational control over
a CAFO, ensuring appropriate public participation in permitting, and
encouraging proper management of excess manure that is transferred off-
site. Key proposed changes to the ELGs for feedlots included updating
the guidelines based on current practices and technologies, the
increased use of BMPs, and application of technology options to both
the CAFO production area and the land application area (including
nutrient management planning).

C. 2001 Notice of Data Availability

On November 21, 2001, EPA published a Notice of Data Availability
(hereinafter referred to as the ``2001 Notice'') that presented a
summary of new data and information submitted to EPA during the public
comment period on the proposed CAFO regulations, including data
received from USDA (66 FR 58556). The notice had four main components:
(1) Discussion of new data and changes EPA was considering to refine
its cost and economics model; (2) discussion of new data and changes
EPA was considering to refine its nutrient loading and benefits
analysis; (3) new data and changes EPA was considering to the proposed
NPDES permit program regulations; and (4) new data and changes EPA was
considering to the proposed ELG regulations. EPA's 2001 Notice also
discussed options that the Agency was considering to enhance
flexibility for the use of State NPDES and non-NPDES CAFO programs,
including implementation of environmental management systems (EMS).

D. 2002 Notice of Data Availability

On July 23, 2002, EPA published a second Notice of Data
Availability (hereinafter referred to as the ``2002 Notice'') that
presented a summary of new data and information submitted to EPA during
the public comment period on the proposed CAFO regulations, including
data received after publication of the 2001 Notice. The 2002 Notice had
three main components: (1) A discussion of alternative regulatory
thresholds for chicken operations using dry litter management
practices; (2) the potential creation of alternative performance
standards to encourage CAFOs to implement new technologies; and (3)
financial data and changes EPA was considering to refine its economic
analysis models. The 2002 Notice made these data and potential changes
available for public review and comment.

E. Public Comments

A general summary of public comments is included in the discussions
of the various issues addressed in this preamble. EPA has prepared a
Comment Response Document that includes responses to comments submitted
for the proposed rule and both notices. All of the comments including
supporting documents submitted on today's action are available for
public review in the administrative record for this final rule which is
filed under docket number W-00-27.
The proposed regulations were published in the Federal Register on
January 12, 2001 (66 FR 2959), and the comment period closed on July
30, 2001. EPA received approximately 11,000 comments in total on the
proposed rule. EPA received comments from a multitude of sources,
including private citizens, facility owners and operators,
environmental groups, local and State agencies, members of the academic
community, banks and insurance companies, congressional
representatives, and representatives (including trade associations)
from each of the animal sectors (beef, dairy, swine, poultry, horses,
ducks, turkey, and others). The comments are addressed in the Comment
Response Document prepared by EPA in support of today's final rule.
The comment period for the 2001 Notice was from November 21, 2001,
through January 15, 2002 (66 FR 58556). Approximately 300 comments were
received on the 2001 Notice. Responses to each of these comments are
also included in the Comment Response Document.
EPA prepared and published in the Federal Register a second notice
(2002 Notice) during the development of today's final rule. The comment
period

[[Page 7188]]

for the 2002 Notice was from July 23, 2002, through August 22, 2002.
Approximately 150 comments were received on the 2002 Notice. Responses
to each of these comments are also included in the Comment Response
Document.
In addition to the public comments received on the proposal and the
two Notices, approximately 200 additional comments on the two Notices
were received from various stakeholders. Responses to each of these
comments are included in the Comment Response Document.

F. Public Outreach

In support of both the proposed rule and today's final rule, EPA
has conducted extensive outreach activities. These activities are
documented in the administrative record for the final rule, which is
available for public review under docket number W-00-27. The discussion
that follows is focused on key outreach activities that EPA has
conducted.
1. Pre-Proposal Activities
During the development of the proposed regulations for CAFOs, EPA
met with many members of the stakeholder community through meetings,
conferences, and site visits. EPA convened a SBAR Panel to address
small entity concerns, provided outreach materials to and met with
several national organizations representing State and local
governments, and conducted approximately 110 site visits to collect
information on waste management practices at livestock and poultry
operations. EPA also established a workgroup that included
representatives from USDA, seven States, EPA regions, and EPA
headquarters. More detailed information on EPA's public outreach
efforts was published in section XII of the Federal Register notice for
the proposed rule (66 FR 3120).
2. Post-Proposal Activities
a. Public meetings and stakeholder outreach. Following publication
of the proposed rulemaking, EPA conducted nine public outreach meetings
on the proposed CAFO regulations. In addition, EPA continued to meet
with representatives of various stakeholder groups, including
representatives from various industry trade associations and
environmental groups, as well as researchers from select land grant
universities and research organizations. The land grant university
staff consulted on this rulemaking included researchers at the Food and
Agricultural Policy Research Institute (FAPRI) at the University of
Missouri and researchers at The National Center for Manure and Animal
Waste Management, composed of researchers from 16 land grant
universities supported by USDA-Cooperative State Research, Education
and Extension Service (CSREES). EPA has also consulted with State and
local governments and several national associations representing State
governments. A more detailed account of these efforts is provided in
the 2001 Notice (66 FR 58557-58558).
b. USDA-EPA Workgroup meetings. In April 2001 USDA initiated a
process to review the proposed revisions to EPA's CAFO rule and
identify issues and concerns posed by the rule. USDA identified 15
specific areas of concern and a number of overarching issues. As a
follow-up to this process, USDA and EPA's Office of Water initiated
monthly meetings on issues of significance for agriculture and the
environment, specifically water quality. The goal was to foster greater
communication between the two agencies to provide better information to
the public and policy makers on areas of mutual concern related to
agriculture and water quality, and to facilitate informed decisions on
approaches and needs to address the key agriculture and environment
issues. In July 2001 EPA and USDA convened a joint workgroup to address
the issues identified by the two agencies and begin to develop options
for EPA leadership to consider in developing the final rule. The
collaboration fostered increased understanding on the part of both
agencies with respect to the issues, data, and analyses used to
finalize today's CAFO rule.
c. Other outreach activities. As part of the development of this
rulemaking, EPA used several additional means to provide outreach to
stakeholders. Most notably, EPA has managed a number of Web sites that
post information related to these regulations. Supporting documents for
the proposed rule were posted to these sites, including the Technical
Development Document, Economic Analysis, Environmental Assessment,
Environmental and Economic Benefit Analysis of the proposed CAFO
regulations, and cost methodology reports and guidance related to
Permit Nutrient Plans. These are available at http://www.epa.gov/guide/cafo/.
Other outreach materials are available at http://www.epa.gov/
npdes/caforule and include brochures describing the proposed CAFO
regulations, a compendium of AFO-related State program information, and
various materials related to permitting issues to facilitate an
understanding of the NPDES program and development of comments on the
proposed rule by the public.

IV. CAFO Roles and Responsibilities

A. Who Is Affected by This Rule?

1. What Is an AFO?
In today's final rule, EPA is retaining the definition of an animal
feeding operation (AFO) as it was defined in the 1976 regulation at 40
CFR 122.23(b)(1). An animal feeding operation means a lot or facility
(other than an aquatic animal production facility) where the following
conditions are met: (1) 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 (2) crops, vegetation, forage growth, or post-
harvest residues are not sustained in the normal growing season over
any portion of the lot or facility. (Note: EPA is making a
typographical correction to the AFO definition. The comma between
vegetation and forage growth had been inadvertently dropped from the
1976 final rule in subsequent printings of the Federal Register).
What did EPA propose? In the January 12, 2001, proposed rule, the
Agency proposed to change the definition of an AFO, intending to
eliminate ambiguities about which facilities and operations would be
defined as AFOs in certain circumstances where the animals strip the
ground of vegetation. The proposal stated 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 growth during the
entire time that animals are present * * *.''
What were the key comments? While it was EPA's intent to clarify
the existing AFO definition, the proposed new regulatory language
created substantial confusion. For example, many commenters from the
beef cattle industry and others strongly believed that the proposed
language would include pastures, rangeland, and unconfined wintering
operations as AFOs and, in essence, would bring the entire beef
industry under the regulations, none of which was intended. These
commenters strongly recommended that the existing regulations should be
kept intact to avoid new ambiguity. The view of commenters from the
dairy sector and the Sustainable Agriculture Coalition was that the
exclusion of pastureland and rangeland from the AFO definition was
clear in the proposed rule and they found the proposed language
acceptable. Other livestock sectors and environmental groups generally
did not comment extensively on this issue.

[[Page 7189]]

Rationale. Based on public comment and further consideration, EPA
concludes that the proposal to revise the AFO definition to exclude
areas ``that sustain crops or forage growth during the entire time that
animals are present'' created further concern and confusion, rather
than clarification. EPA's intent was to make a minor change to the AFO
definition to clarify how it would apply to wintering/grazing
operations and to incidental vegetation that may exist in the area of
confinement. EPA is retaining the existing definition for animal
feeding operation because of the widespread familiarity that exists
with the existing definition and because EPA's desired clarification
can be achieved through preamble language rather than a change to the
rule.
In an attempt to address some of the public comments and confusion
created by the proposal, EPA is clarifying three topics in this
preamble. First, EPA is reiterating that true pasture and rangeland
operations are not considered AFOs, because operations are not AFOs
where the animals are in areas such as pastures, croplands or
rangelands that sustain crops or forage growth during the normal
growing season. In some pasture based operations, animals may freely
wander in and out of particular areas for food or shelter; this is not
considered confinement. However, pasture and grazing-based operations
may also have confinement areas (e.g. feedlots, barns, pens) that may
qualify as an AFO. Second, incidental vegetation in a clear area of
confinement, such as a feedlot or pen, would not exclude an operation
from meeting the definition of an AFO. Third, in the case of a winter
feedlot, the ``no vegetation'' criterion in the AFO definition is meant
to be evaluated during the winter, when the animals are confined.
Therefore, use of a winter feedlot to grow crops or other vegetation
during periods of the year when animals are not confined would not
exclude the feedlot from meeting the definition of an AFO. Note that
animals must be stabled or confined for at least 45 days out of any 12
month period to qualify the operation as an AFO. EPA assumes that AFOs
and permitting authorities will use common sense and sound judgement in
applying this definition.
2. What Is a CAFO?
In today's final rule, EPA is retaining the existing structure for
determining which AFOs are CAFOs, as well as retaining the existing
conditions for defining Medium CAFOs. EPA is also retaining the
existing conditions for designation of AFOs as CAFOs. Large facilities
are considered CAFOs if they fall within the size range provided in
Sec. 123.23(b)(4). Medium AFOs are defined as CAFOs only if they fall
within the size range provided in Sec. 122.23(b)(6) and they meet one
of the two specific criteria governing the method of discharge: (1)
Pollutants are discharged into waters of the United States 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 the facility and pass over, across, or through
the facility or otherwise come into direct contact with the confined
animals. Small facilities are CAFOs only if they are so designated by
EPA or the State NPDES permitting authority. Refer to Table 4.1 in
section IV.A.3 of this preamble for explicit definitions of Large,
Medium, and Small CAFOs in each animal sector. Also, as proposed, EPA
is no longer using the term ``animal units'' to define size classes in
this final rule. Instead, EPA is setting thresholds by specifying the
actual number of animals. EPA believes that using the number of animals
at an operation to define thresholds more simply illustrates which
operations are regulated. Using the number of animals also eliminates
any confusion caused by the difference between EPA's and USDA's
definitions of the term ``animal unit.''
What did EPA propose? EPA co-proposed two alternative ways to
structure the NPDES regulations for defining which AFOs are CAFOs. The
first alternative was a ``two-tier structure,'' and the second was a
``three-tier structure.'' In the first alternative, EPA proposed that
all AFOs with the equivalent of 500 animal units or more would be
defined as CAFOs, and those with fewer than the equivalent of 500
animal units would be CAFOs only if they are designated as such by EPA
or the State NPDES permitting authority. In the second alternative, EPA
proposed to retain a three-tier structure whereby all large operations
are CAFOs, medium operations are CAFOs if they meet specified risk-of-
discharge criteria, and small operations are CAFOs only if they are so
designated by EPA or the State NPDES permitting authority. EPA also
proposed to significantly revise the conditions whereby a medium AFO
could be defined as a CAFO. Finally, EPA proposed to require all medium
AFOs to certify to the permitting authority that they do not meet any
of the conditions for being defined a CAFO.
What were the key comments? The predominance of public comment did
not support the two-tier structure, as proposed, whereby all operations
with the equivalent of 500 animal units or more would be CAFOs. Many
commenters opposed such a low threshold as imposing unnecessary
permitting and engineering costs on small operations and on operations
that do not discharge, and would very likely cause many small operators
to go out of business. Opponents also indicated that the proposal did
not recognize geographic differences such as arid regions. Many of
those same comments were, however, supportive of a two-tier structure
if the regulatory threshold was set at the equivalent of 1,000 animal
units or even 750 animal units, leaving discretion for the permitting
authority to address all operations below that threshold. Conversely,
some commenters indicated that 500 animal units was too high, because
it did not address the pollution from smaller operations in their
region. There was some preference for a two-tier structure that
regulates all facilities above the equivalent of 300 AU, believing that
all those operations pose risk to the environment and should be
regulated as CAFOs.
Many commenters, including many State agencies, preferred to retain
the existing three-tier structure because so many of their existing
programs are based on the three-tier structure established in the 1976
regulations. They believe it would be very disruptive to their ongoing
programs to have to change the basic structure of the regulations that
define who is a CAFO.
Additionally, there was little support among the commenters for the
three-tier structure, as proposed, with the new set of broad conditions
that were proposed for redefining which of the medium facilities would
be CAFOs. Many commenters believed that the existing conditions were
adequate for addressing risk of discharge from medium facilities, and
that the proposed new conditions would be an unnecessary expansion of
who would be considered CAFOs. Further, many commenters indicated that
the revised conditions did not add clarity and would not improve
implementation. For example, many commenters indicated that one of the
proposed conditions, whether an AFO was within 100 feet of waters of
the United States, did not take into account facilities that are
implementing BMPs to control runoff. The condition for evidence of
discharge in the last five years did not take into account operations
that may have instituted new practices or corrected problems to prevent
future discharges, especially in light of the fact that, in the last
two or three years, there has been heightened

[[Page 7190]]

awareness of the impacts of AFOs and renewed effort by States to
implement both regulatory and non-regulatory AFO programs. The
condition defining a facility as a CAFO if it transferred excess manure
to off-site recipients also did not correlate closely enough to whether
a facility had a risk of discharging, especially in arid regions.
The SBAR Panel did not make a recommendation specifically on the
structure of the CAFO regulations. The Panel noted that some States
already have effective permitting programs for CAFOs in place and
recommended that EPA consider the impact of any new requirements on
existing State programs and include in the proposed rule sufficient
flexibility to accommodate such programs where they meet the minimum
requirements of federal NPDES regulations. The Panel further
recommended that EPA continue to consult with States in an effort to
promote compatibility between federal and State programs.
Rationale. The Clean Water Act specifically lists CAFOs as point
sources, and EPA has broad discretion under the Act to define that
term. In the proposal, EPA noted a range of different factors that it
considered relevant to determining which operations should be defined
as CAFOs.
EPA has concluded that a three-tier structure is preferable to a
two-tier structure because it is better suited to identifying those
operations that, through a combination of size, concentration and
potential to discharge, are more industrial and point source-like in
nature and pose the greatest risk to water quality and therefore are
appropriate to define as CAFOs. Another important reason to retain a
three-tier structure is that changing to a two-tier structure at this
point in time would be unnecessarily disruptive in the number of States
that currently have three-tier CAFO programs in place. Many of these
States have had these programs in place for over two decades, and they
have many years of practical experience in operating their programs and
issuing permits based on this existing definition. Changing to a two-
tier structure not only would be disruptive to the States that are
carrying out existing programs but would also create an unnecessary
need to build a new understanding of the regulations in the CAFO
industry. For these reasons, a three-tier structure is preferable even
though it does not have the simplicity of a two-tier structure.
Establishing a two-tier structure at a low threshold, e.g., at
either 300 animal units or 500 animal units would be highly burdensome
to permit authorities and AFO operators. While some parts of the
country experience problems from concentrations of small facilities,
this would impose significant costs on the regulated community and
permit authorities in all parts of the country, including those areas
that do not experience these problems. On the other hand, while it
might seem desirable to provide flexibility for States with effective
non-NPDES programs by establishing a threshold on the higher end, say
at 750 or 1,000 animal units, using such a high threshold across-the-
board would apply equally in States that do not have fully developed
and effective programs to address water quality risks posed by
operations with fewer than 1,000 animal units. This could lead to a
definition that would not appropriately identify those operations that
are large and concentrated enough and pose enough of a risk of
discharge (taking into account the absence of effective State non-NPDES
programs in some areas) that they should be identified as CAFOs. A high
threshold might also undercut the ability of some permit authorities to
address water quality problems associated with smaller facilities,
especially in States that have restrictions on imposing CAFO NPDES
requirements that are stricter than federal requirements.
Although the final rule retains the three-tier structure for
defining who is a CAFO, after consideration of the public comments, EPA
has not adopted the new set of conditions that were proposed for
defining which medium operations are CAFOs. Instead, EPA is retaining
the two conditions in the existing regulations. After careful
consideration of the comments, EPA agrees with those commenters who
believe that the new set of conditions proposed under the three-tier
structure for determining when a medium facility is a CAFO would not
necessarily have improved the clarity, effectiveness or enforceability
of the regulations, which were the Agency's intended goals. The
proposed new conditions were an attempt to better identify those medium
operations that are of sufficient size and concentration and pose
enough of a risk of discharge that they should be defined as CAFOs.
While these conditions may have been environmentally protective on the
whole, they were not finely targeted enough to identify the operations
that meet these criteria; instead, EPA now believes that they would
have caused substantial permitting burden and imposed costs on
essentially all operations above 300 animal units.
For example, many commenters indicated that one of the proposed
conditions, whether an AFO was within 100 feet of waters of the Unites
States, did not take into account facilities that are implementing BMPs
to control runoff. The condition for evidence of discharge in the last
five years did not take into account operations that may have
instituted new practices or corrected problems to prevent future
discharges, especially in light of the fact that, in the last two or
three years, there has been heightened awareness of the impacts of AFOs
and renewed effort by States to implement both regulatory and non-
regulatory AFO programs. The conditions defining a facility as a CAFO
if it did not have a permit nutrient plan or if it transferred excess
manure to off-site recipients also did not correlate closely enough to
whether a facility had a risk of discharging, especially in arid
regions.
EPA has concluded that retaining the existing two criteria provide
an appropriate basis for defining which medium-size operations are
CAFOs, while maintaining flexibility for States to tailor NPDES and
non-NPDES programs for more comprehensive risk factors that may vary
from State to State and even watershed to watershed.
3. What Types of Animals Are Covered by Today's Rule?
Today's revisions to the CAFO effluent guidelines address beef,
dairy, swine, veal calves and poultry operations and do not change the
effluent guidelines regulations for sheep, horses or ducks. On the
other hand, today's final revisions to the NPDES permit regulations
generally apply to all CAFOs regardless of species, and specifically
address the size thresholds for defining which beef, dairy, swine, veal
calves, poultry, sheep, horses, and duck operations are CAFOs. The
following sections discuss changes made to the size thresholds for
defining which operations in these sectors are CAFOs.
Although the following discussion focuses primarily on
circumstances where an AFO is defined as a CAFO, it is important to
note that small and medium-size AFOs can be designated as CAFOs by EPA
or an NPDES authorized State. Refer to section IV.A.7 and 8 for a
discussion of designation.
The thresholds for defining Large, Medium, and Small CAFOs in each
sector are summarized in Table 4.1 below.

[[Page 7191]]

Table 4.1.--Summary of CAFO Size Thresholds for All Sectors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sector Large Medium \1\ Small \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cattle or cow/calf pairs......... 1,000 or more......................... 300-999............................... Less than 300.
Mature dairy cattle.............. 700 or more........................... 200-699............................... Less than 200.
Veal calves...................... 1,000 or more......................... 300-999............................... Less than 300.
Swine (weighing over 55 pounds).. 2,500 or more......................... 750-2,499............................. Less than 750.
Swine (weighing less than 55 10,000 or more........................ 3,000-9,999........................... Less than 3,000.
pounds).
Horses........................... 500 or more........................... 150-499............................... Less than 150
Sheep or lambs................... 10,000 or more........................ 3,000-9,999........................... Less than 3,000.
Turkeys.......................... 55,000 or more........................ 16,500-54,999......................... Less than 16,500.
Laying hens or broilers (liquid 30,000 or more........................ 9,000-29,999.......................... Less than 9,000.
manure handling system).
Chickens other than laying hens 125,000 or more....................... 37,500-124,999........................ Less than 37,500.
(other than a liquid manure
handling system).
Laying hens (other than a liquid 82,000 or more........................ 25,000-81,999......................... Less than 25,000.
manure handling system).
Ducks (other than a liquid manure 30,000 or more........................ 10,000-29,999......................... Less than 10,000.
handling system).
Ducks (liquid manure handling 5,000 or more......................... 1,500-4,999........................... Less than 1,500.
system).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Must also meet one of two ``method of discharge'' criteria to be defined as a CAFO or may be designated.
\2\ Never a CAFO by regulatory definition, but may be designated as a CAFO on a case-by-case basis.

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 permitting authority designates it as a CAFO. See
Sec. 122.23(c) for a discussion of designation.
a. Chickens. In today's action, EPA is revising the CAFO definition
to include chicken operations that use manure handling systems other
than liquid manure handling systems (see 40 CFR Part 122, Appendix B of
the 1976 regulation). EPA has also eliminated the condition for
continuous overflow watering system from the CAFO definition. This
action establishes that dry litter chicken operations of specified
sizes will need to seek coverage under an NPDES CAFO permit. EPA is
establishing size thresholds for dry chicken operations based on the
phosphorus content of the manure, and is therefore distinguishing
between broiler and layer operations. EPA is not changing the existing
threshold for chicken operations using liquid manure systems. The size
thresholds for large, medium, and small chicken operations under
today's regulations are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
Large Medium Small
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chickens other than laying hens 125,000 or more......................... 37,500-124,999.......................... <37,500
(other than liquid manure
handling).
Laying hens (other than liquid 82,000 or more.......................... 25,000-81,999........................... <25,000
manure handling).
Laying hens or broilers (liquid 30,000 or more.......................... 9,000-29,999............................ < 9,000
manure handling).
--------------------------------------------------------------------------------------------------------------------------------------------------------

What did EPA propose? EPA proposed to regulate chicken operations
regardless of the type of manure handling or watering system used. EPA
proposed to include broilers and layers in a single category with one
threshold number. Under the co-proposed three-tier structure, EPA
proposed to adopt a Large CAFO threshold of 100,000 chickens and a
Medium CAFO threshold of 30,000 chickens. In the co-proposed two-tier
structure, the regulatory threshold would have been 50,000 chickens.
Subsequently, EPA published a notice of data availability (FR 67,
48099, July 23, 2002) in which the Agency considered whether, under a
three-tier structure, the threshold for large broiler operations should
remain as proposed at 100,000 broilers, changed to 125,000 broilers, or
established at some other threshold. EPA also considered whether the
large threshold for laying hens should remain as proposed at 100,000
laying hens, or be changed to 82,000 laying hens. EPA also noted that
the thresholds in the 1976 CAFO regulations for chicken operations with
liquid manure handling systems or continuous overflow watering systems
may remain unchanged in the final rule.
What were the key comments? Comments from poultry industry
representatives and owners and operators of poultry operations stated
that dry operations (those not using continuous flow watering systems)
should not be defined as CAFOs under the NPDES regulations because the
absence of water or other liquids would not result in pollutants being
discharged through a discrete point source. Some industry
representatives asserted that dry and wet manure handling pose
different levels of risk and, therefore, EPA's CAFO regulations should
distinguish between wet and dry poultry operations. A few commenters
indicated that they felt that EPA was proposing to regulate dry poultry
operations to address insufficient storage issues at some operations.
These commenters believed that properly stored poultry litter would not
result in a discharge. In addition some commenters disagreed with EPA's
statement that many poultry operations did not have sufficient land to
apply litter at agronomic rates. Commenters from this sector also felt
that voluntary programs were working to address the excess manure
issue. A more limited number of commenters indicated that the inclusion
of dry poultry operations should be limited to what they described as
very large operations. Commenters defined very large as ranging from
more than six houses to more than 10,000 animal units (e.g., 300,000
birds).
Many other commenters supported regulating poultry operations
regardless of the watering systems they use because that approach
provides equity across all animal sectors and addresses potential risk
to water quality posed by dry operations. Some commenters

[[Page 7192]]

further stated that EPA should use manure phosphorus as the basis for
setting thresholds for such operations.
Rationale. Why is EPA including chicken operations with dry manure
and litter handling systems in today's regulations? For some time,
poultry operators have been replacing continuous overflow watering
systems by more efficient water conserving methods (e.g., on-demand
watering). Given this trend, liquid manure systems are used at
approximately 25 percent of layer operations and are not generally used
at broiler operations. As a result, most chicken operations are not
covered by the existing regulations.
For the reasons articulated in the proposed rulemaking (66 FR
3010), and after carefully reviewing the public comments, EPA has
determined that including chicken operations with dry manure handling
systems is justified to protect water quality. EPA believes that dry
poultry operations continue to contaminate surface water and ground
water because of rainfall coming in contact with dry manure and litter
that is stacked in exposed areas; accidental spills such as from egg-
wash facilities and drinking water lines; improper handling of large
numbers of mortalities; and improper land application of litter. In
addition, included within the coverage of the CAFO regulations are
other sectors that use dry technologies, such as ducks, turkeys, and
certain swine, beef, and dairy operations using total confinement
housing. Inclusion of dry poultry operations is consistent with the
regulation of both wet and dry operations within these other animal
sectors.
Why were the size thresholds selected? EPA believes that it is
appropriate to distinguish between potential risk of discharge posed by
wet versus dry handling systems, using the pollutant of most concern,
i.e. phosphorus, for establishing regulatory thresholds. For nitrogen
and BOD, the levels for broilers would result in similar thresholds
varying only by 1% to 3%. EPA agrees with commenters who asserted that
EPA should determine the chicken threshold values by evaluating
phosphorus content in the manure on an annual basis, which takes into
account that phosphorus production does not continue during the periods
of the year when no manure is generated (i.e., clean out time between
flocks when no broilers are present). Traditionally, layers were kept
through one year of egg production and sold for meat at 18 to 20 months
of age (see Section 4 of the Technical Development Document). Depending
on the relative price of eggs to hens, it has become increasingly
common to recycle layers through more than one year of production.
Flock recycling consists of stopping the flock's egg production,
allowing a suitable rest period, and then bringing the flock back into
production. The entire process is known as ``force-molting''. Some
producers now keep the birds through two or three complete cycles of
egg production. Laying hens are now typically kept for 94 weeks of
production. Since layers will continue to produce manure throughout the
year the daily phosphorus levels were used in setting thresholds for
laying hens. Therefore, EPA is establishing different thresholds based
first on wet versus dry manure systems and second on the broad type of
poultry, e.g., chickens for meat (broilers) and chickens for eggs
(layers) based on phosphorus content of manure generation.
b. Swine Nurseries and Heifer Operations. Today's rule regulates
swine nurseries and heifer operations that are defined as CAFOs.
Specifically, the Agency has adopted a Large CAFO threshold of 10,000
or more immature swine (i.e. weighing less than 55 pounds) and a Medium
CAFO threshold of 3,000 to 9,999 immature swine. For heifers, EPA has
adopted a Large CAFO threshold of 1,000 head or more and a Medium CAFO
threshold of 300 to 999 head.
What did EPA propose? EPA is adopting what was proposed for these
animal types in a three-tier structure.
What were the key comments? While a majority of commenters
supported the inclusion of immature swine and dairy cattle in the
proposed rule, a number of commenters opposed this change, and
preferred to retain the exemption for immature animals. A number of
commenters noted that many States already have programs at least as
strict as the one EPA is proposing, and that States should be allowed
the flexibility to determine if including operations with immature
animals would improve water quality.
Rationale. Immature swine were not a concern in the past because
they were usually 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 swine operations have become
increasingly specialized, increasing the number of large, separate
nurseries where only immature swine are raised.
Under the three-phase production pyramids used by most large swine
operations, specialized farrowing operations that house only sows and
piglets until weaned represent the first phase of raising swine. The
weaned piglets are transferred to a nursery at a separate location
until they reach about 55 to 60 pounds, at which time they are
transferred to a grow-finish facility at another site. EPA's thresholds
for swine weighing less than 55 lbs were established on the basis of
the average phosphorus excreted from immature swine in comparison to
the average phosphorus excreted from swine weighing more than 55
pounds. (Refer to the Technical Development Document for more details).
For dairies, immature heifers are often removed to a separate
location until they reach maturity. EPA data indicate that some of
these animals are confined, some are pastured, and some move back and
forth between confinement and pasture. The previous CAFO definition
considered only the mature milking cows in determining whether an
operation was a CAFO and did not address operations that separately
confine immature heifers. EPA believes that these separately confined
heifer operations should be included in the regulatory definition of a
CAFO because they may generate as much manure as a CAFO dairy given
that the animals are maintained until fully grown, and they confine the
animals in a manner very similar to CAFO beef feedlots.
EPA agrees that the number of immature animals kept in confinement
with mature animals varies greatly and should not be the basis for
determining whether an AFO is a CAFO. In situations where immature
animals (e.g. heifers and swine) are confined with mature animals, the
immature animals are not counted for purposes of determining whether an
AFO is defined as a CAFO based on the number of mature animals. Once an
AFO is defined as a CAFO, based on any of the threshold values provided
in table 4.1, manure and process wastewater generated by all immature
and mature animals in confinement would be subject to NPDES permit
requirements.
c. Horses. Today's rule retains the animal number thresholds for
defining which horse operations are CAFOs. AFOs with 500 or more horses
are defined as Large CAFOs, AFOs with 150 to 499 horses are defined as
Medium CAFOs under certain conditions (see Sec. 122.23(b)(7)), and
AFOs with fewer than 150 horses are Small CAFOs only if designated in
accordance with Sec. 122.23(c).
What did EPA propose? In the January, 2001 proposed rule, EPA did
not consider changing the CAFO definition thresholds for horses. As a
result of the comments and data received on the proposal, EPA

[[Page 7193]]

considered in a subsequent Notice of Data Availability (66 FR 58556,
November 21, 2001) two alternative options for revising the horse
thresholds. One option would retain the existing regulatory threshold
in a two-tier structure. For example, if the regulatory threshold was
dropped to 500 AU, EPA would retain 500 horses as the 500 AU
equivalent, and those with fewer than 500 horses would be CAFOs only if
so designated on a case-by-case basis. EPA suggested this option
because the Agency agreed with commenters that there was no need to
increase regulation of this sector; by maintaining the status quo EPA
would be neither increasing nor decreasing the regulated universe. In
the second option, EPA would have set one horse equal to one beef cow
thereby establish regulatory thresholds similar to those for beef
operations. As a result, in a three-tier structure, Large horse CAFOs
would have 1,000 animals or more, and Medium horse CAFOs would have
300-999 horses. EPA presented the second option after examining data
submitted by industry that suggested that a 1,000 pound horse may
generate similar manure as a 1,000 pound beef cow. However, because
that data did not differentiate thoroughbred race horses (typically on
high-energy feed which might alter manure composition) from other
horses, EPA requested more definitive data to justify the second
approach.
What were the key comments? A number of comments were submitted by
horse industry associations and individual horse operations requesting
that EPA not lower the threshold for horses, as the existing regulation
was adequate. They further suggested that this rulemaking would be an
opportunity to revisit the basis for the existing threshold, and
requested that EPA change it to one horse being equal to one beef
cattle, asserting that there is no scientific basis for making one
horse equal to two beef cattle (which is how the existing regulation
defines horse CAFOs). Industry representatives provided data on manure
content to support their position, although they did not provide manure
data specific to racehorses. The commenters also explained that the
horse industry is fundamentally different in how it is organized and
operated from the other sectors that focus on food production, and that
this sector has not seen the kinds of changes (e.g., expansion and
consolidation) that EPA is seeking to address in today's rule. Further,
they point out that most large racetracks are in urban areas and are
currently subject to a variety of EPA-initiated and State-administered
programs related to water pollution and storm water runoff control.
Some commenters requested that EPA not reduce the regulatory
thresholds, and asked EPA to retain the ability of permit writers to
use BPJ to establish site-specific BMPs. Industry representatives also
asked the Agency to clarify that confinement pertains to stalls or
similar structures in buildings and not to fenced areas, and that it
does not include short visits to stalls for shoeing, veterinary
evaluation, or related activities.
Rationale. It should be noted that the thresholds for the CAFO
definition refer only to horse operations where animals are confined
for 45 days (non-consecutive) over a 12 month period. Thus, to be
considered a Large CAFO, the operation would need to confine 500 horses
at one time for 45 days or longer in a 12-month period, and to be a
Medium CAFO at least 150 horses would need to be confined for 45 days
or longer in a 12-month period. The areas associated with confinement
at horse facilities would constitute the production area, and would not
include pastures and other unconfined areas. EPA notes the 1974 ELG for
horses assumed the majority of horse CAFOs were racetracks. Although
race tracks accounted for less than 0.1 percent of all horse operations
today, race tracks still account for more than 96% of all horse
operations with 500 horses or more. Boarding/training stables comprise
the remaining few operations with 500 horses or more. Such operations
would not be considered CAFOs unless all of the horses were kept in
confinement (as opposed to pasture). Data suggests most horse
operations confine their animals for short-term stabling or visits to
stalls for shoeing, veterinary evaluation, or related activities.
However, according to consultations with the American Horse Council, it
is unlikely that these visits would involve a number of horses large
enough to define the operation as a CAFO. For example, a ranch
maintaining over 500 horses would typically have fewer than 100 stalls
or stables (i.e. confinement areas). Therefore, those operations that
confine enough horses for a long enough period to be defined as CAFOs
are generally racetracks.
In the 1970s regulations, the Agency considered racetracks when
originally determining the size of an operation that must comply with
the effluent guidelines, and the records indicate the size of operation
was based on the manure generated by thoroughbred racehorses. Based on
some comments that EPA should re-evaluate the classification of horses
by bodyweight or manure content, EPA collected more current manure
characteristics data from ASAE, USDA, and based on this data presented
alternative thresholds for horses in the 2001 NODA (see 66 FR 225, page
58595). After reviewing the data, EPA generally agrees that the
phosphorus content of horse manure is similar to that of a beef cow.
However, as described above, the majority of horse CAFOs are
racetracks, and the more general data on recreational and work horses
is not comparable. The Agency also reviewed the data submitted by horse
industry representatives and determined that this data also did not
distinguish manure generated by racehorses with that of a recreational
or farm horse, and thus EPA does not believe the record is sufficient
to justify a change to the existing regulatory thresholds.
The effluent guideline, which is not being changed in today's final
rulemaking, continues to be applicable to those horse operations
confining 500 horses or more, including stables such as at racetrack
operations. Other horse operations that may be defined or designated as
CAFOs would continue to follow permit requirements based on the BPJ of
the permitting authority.
d. Ducks. Today's final rulemaking revises the thresholds for
defining whether a duck operation is a CAFO. The following thresholds
apply to duck operations where the AFO uses other than a liquid manure
handling system (``dry systems''): 30,000 or more ducks for a Large
CAFO and 10,000 to 29,999 ducks for a Medium CAFO. For small operations
with fewer than 10,000 ducks, EPA or the State permitting authority may
designate them as a CAFO. For operations where the AFO uses a liquid
manure handling system (``wet systems''), EPA is retaining the existing
thresholds. That is, those with 5,000 or more ducks are considered
Large CAFOs; those with 1,500 to 4,999 ducks may be Medium CAFOs (if
the other conditions are met); and small operations with fewer than
1,500 ducks would become CAFOs only if designated in accordance with
Sec. 122.23(c).
What did EPA propose? In the January, 2001 proposed rule, EPA did
not consider changing the existing animal unit equivalents for ducks.
As a result of comments received on the proposal, EPA considered in a
subsequent 2001 Notice of Data Availability (NODA) (66 FR 58566,
November 21, 2001) two alternative options for establishing thresholds
for duck operations. One option would treat

[[Page 7194]]

dry systems similarly to chicken operations (e.g., at the time of the
NODA, EPA was considering 100,000 ducks would have constituted a Large
CAFO). Another option would establish a Large CAFO threshold of 30,000
ducks based on the quantity and content of duck manure, using data and
recommendations supplied by Purdue University. In all cases, the
threshold for Large CAFOs with wet systems would remain at 5,000 ducks.
What were the key comments? A number of commenters on both the
proposal and the NODA from duck industry associations, individual duck
operations and some States requested that EPA change the threshold in
the CAFO definition for ducks. They urged EPA to consider revising the
duck thresholds to a higher number. By retaining the 5,000 duck
threshold, they noted, essentially all duck operations in the United
States would be required to apply for an NPDES permit. Commenters noted
that management practices have changed significantly since the 5,000
duck threshold was established. The management practices currently used
to raise ducks are similar to chicken operations. Commenters claim that
these dry facilities should be regulated like chicken operations,
basing the threshold either on phosphorus manure levels or using a
threshold similar to chickens. State commenters agree that the
threshold for these types of facilities should be raised but suggest
retaining the existing threshold for wet systems.
Rationale. The existing NPDES regulation and the effluent guideline
make no distinction between dry and wet systems. The duck thresholds
were originally established in the 1970s and were based primarily on
ducks being raised outside on ponds or with a stream running through an
open lot. These types of facilities have been referred to as ``wet''
lot operations. Today's regulation refers to them as AFOs that use
liquid manure handling systems. This preamble also refers to them as
``wet systems.'' For purposes of today's rulemaking, these include duck
operations that use ponds, wet lots, or buildings with lagoons.
EPA agrees with commenters that the management practices more
typically used today to raise ducks are similar to chicken operations
where the birds are confined to a building on solid bedding or in a
building with a concrete pit underneath it where manure collects. These
types of facilities have been referred to as ``dry lot'' operations.
Where these practices are utilized, and are not combined with liquid
manure handling systems, such as lagoons, they present much less risk
of a discharge than do wet systems. Today's regulation refers to them
as AFOs that use ``other than liquid manure handling systems.'' This
preamble also refers to them as ``dry systems.''
After examining information concerning the current technologies of
the duck industry, EPA concurs that it is appropriate to adjust the
regulatory thresholds for dry systems, while retaining the existing
threshold for wet systems. EPA is setting the Large CAFO threshold for
duck operations with dry systems at 30,000 birds or more based on data
produced by Purdue University and the American Society of Agriculture
Engineers (ASAE), which are available in the administrative record.
This threshold was calculated using phosphorus manure levels and
assuming an approximate 3 duck to 1 chicken ratio. The medium size
threshold is 10,000 to 29,999 ducks and the small threshold is less
than 10,000 ducks. These thresholds were set at these levels based on
the same 3 duck to 1 chicken ratio. Data on both layer and broiler
chickens were averaged to obtain this ratio. This threshold is
generally consistent with the thresholds adopted in current State
programs, especially Indiana where the majority of the duck operations
are located. This decision is also consistent with today's final
decision on the chicken threshold, where EPA has established higher
thresholds for layer operations using other than liquid manure handling
systems than for layer operations using liquid manure handling systems.
e. Cow/Calf. In today's final rule, a beef cow/calf pair counts as
one animal when temporarily confined in a pen, lot, barn, or stable.
However, a cow/calf pair counts as two animals after the offspring are
weaned.
What did EPA propose? The proposed rule did not discuss a
convention to count cow/calf pairs. In response to comments from the
beef industry, EPA described a convention in the November 2001 NODA to
count a cow/calf pair as one animal for 120 days after the calf is
weaned, after which they would be considered two animals.
What were the key comments? Comments on the proposal from
organizations and individuals representing the beef sector indicated
that they thought the proposal would alter the way mature and immature
beef cow pairs are counted. They commented that if a cow/calf pair was
counted as two animals, the proposed rule would have a significant
impact on small beef operations that are largely pasture-based.
Environmental organizations generally did not comment on this issue.
In comments on the 2001 Notice, States and industry commenters
unanimously supported the proposal to explicitly count a cow/calf pair
as one animal. Many commenters said that, in practice, producers think
of the cow and calf as a single entity until weaning time when the
young animal becomes physically separated and requires separate penning
and housing, and suggested adopting this standard. Some commenters
suggested other alternatives, such as counting a cow/calf pair as 1.2
animal units, or differentiating the AU equivalent based on the age of
the calves (e.g., up to two months old the cow/calf would be counted as
one animal unit, from two to six months calves would be counted as 0.3,
from six months to a year counted as 0.6, etc.)
Rationale. As described in the 2001 Notice, EPA has always assumed
that cow/calf operations are typically pasture-based and would not
normally fall within the coverage of the CAFO regulations. Such
operations typically confine animals only temporarily for birthing,
veterinary care, or other purposes. This temporary confinement may
result in the operation being defined as an AFO, in which case it could
in turn be defined as a CAFO should it meet certain conditions.
However, it is not likely that this temporary confinement would involve
enough animals to define the operation as a CAFO. EPA would like to
make it clear that it is still not the Agency's intention to regulate
pasture-based or rangeland operations. Counting a cow/calf pair as one
animal is consistent with how EPA treats mother/offspring pairs housed
together at the same location in other sectors (e.g., dairy and swine).
After considering public comment, EPA determined that it was
appropriate to consider a cow/calf pair as one animal until the calf is
weaned, rather than to specify a particular time period after weaning,
which would have entailed additional, potentially burdensome, record
keeping requirements (e.g. date of weaning for each calf).
f. Eliminate the mixed animal calculation. With today's final
rulemaking, EPA is eliminating the formula for calculating whether an
AFO is a CAFO because of the accumulation of several different animal
types in confinement at one facility. An AFO is defined as a CAFO only
if the specific threshold for any one animal sector covered by today's
final regulations is met. Once a given operation is defined

[[Page 7195]]

as a CAFO, regardless of animal type, the regulations apply to all of
the manure, litter, and wastewater generated by the operation. In the
event that waste streams from multiple livestock species are co-
mingled, and the regulatory requirements for each species are not the
same, the permit must include the more stringent requirements.
What did EPA propose? EPA proposed to eliminate the mixed animal
calculation.
What were the key comments? A number of comments were received
concerning the elimination of the mixed animal calculation. Commenters
opposed to the elimination of the calculation believe it is more
protective of the environment to count all of the animals at an
operation, in order to address the cumulative quantities of manure
through the CAFO permit. Some commenters also claimed that eliminating
the mixed animal calculation would create an opportunity for larger
operations to avoid permitting by maintaining slightly fewer than the
regulatory thresholds for several types of animals. Comments supporting
EPA's proposal agreed that this change simplifies the regulation,
provides relief to small farms, and focuses the regulation on the
larger, more specialized facilities that tend to be more
industrialized.
Rationale. As described in the proposed rulemaking (66 FR 3005) EPA
is eliminating the mixed animal calculation for several reasons. First,
this action simplifies the regulations. In addition, EPA's analysis
indicates that the mixed animal calculation would have caused only a
small fraction of the smaller AFOs to have been defined as CAFOs, so
the Agency believes that this action does not materially change the
scope of coverage of this regulation. To the extent that coverage is
changed at all, it appropriately would be shifted away from smaller
operations that tend to have more sustainable practices and sufficient
crop land for land application of their manure nutrients. Should an AFO
with mixed animals types be found to be a significant contributor of
pollutants to waters of the United States, it could still be designated
a CAFO in accordance with the designation provisions of this final
rule.
4. Is My AFO a CAFO If It Discharges Only During Large Storm Events?
Today's final rule defines an operation as a CAFO regardless of
whether the operation discharges only in the event of a large storm. In
other words, today's final rule eliminates the 25-year, 24-hour storm
permitting exemption for defining a CAFO. EPA notes, however, that the
25-year, 24-hour storm design criterion in the ELGs for large CAFOs is
not being changed, except for new sources in the swine, veal, and
poultry sectors (see preamble section IV.C.2)
What did EPA propose? EPA proposed to eliminate the 25-year, 24-
hour storm event exemption from the definition of a CAFO.
What were the key comments? Comments from the animal agriculture
industry were generally opposed to eliminating the permit exemption.
Their position was that facilities that discharge only as a result of a
storm event that exceeds a 25-year, 24-hour storm should not be covered
by an NPDES permit. Environmental organizations and others supported
the elimination of the exemption based on the position that it was not
being used appropriately by the industry. States were split on whether
to eliminate the exemption, depending largely on their current
regulatory policy. Many commenters confused the proposed elimination of
this exemption with consideration of the appropriate design standard
for permitted facilities.
The SBAR Panel agreed that removing the 25-year, 24-hour exemption
was generally appropriate for Large CAFOs because of the significant
potential for environmental harm from Large CAFOs when the manure is
not properly managed. The Panel also recognized that, under the terms
of the proposal, eliminating the exemption would mean that some
facilities would need to apply for a permit even though they have
sufficient manure management and containment in place or, for some
other reason, do not discharge except in a 25-year, 24-hour storm.
The Panel recommended that EPA consider reduced application
requirements for small operators affected by the removal of the
exemption. In the proposed rule EPA requested comment on whether to
retain this exemption for small facilities as well as how many animals
would be considered ``small'' for this purpose. The Agency carefully
analyzed these issues during the development of this final rule.
Rationale. For the reasons stated in the proposal (66 FR 3006), and
based on EPA's analysis of comments and other information, the Agency
continues to believe that the 25-year, 24-hour storm permit exemption
has created confusion and ambiguity that undermines the ability of
permitting authorities to implement the CAFO regulations effectively.
Eliminating this provision will: (1) Ensure that all Large CAFOs are
appropriately permitted; (2) ensure through permitting that facilities
are, in fact, properly designed, constructed, operated, and maintained
to contain manure and the rainfall associated with a 25-year, 24-hour
storm event or the revised standard for new sources in the swine, veal
calf, and poultry sectors; (3) improve the ability of EPA and State
permit authorities to monitor compliance; (4) ensure that facilities do
not discharge pollutants from their production areas and that they land
apply manure, litter, or process wastewater in accordance with site
specific nutrient management practices that ensure appropriate
agricultural utilization of the nutrients in the manure, litter, and
process wastewater; and (5) achieve EPA's goals of simplifying the
regulations, providing clarity to the regulated community, and
improving the consistency of implementation.
The 25-year, 24-hour exemption was not applicable to operations
that became CAFOs by designation. Since small AFOs can only become
CAFOs by designation, the elimination of this exemption will not affect
the universe of Small CAFOs (refer to section IV.A.7 for a discussion
of designation).
Because EPA is not changing the criteria under which medium
facilities are defined as CAFOs, the elimination of the 25-year, 24-
hour storm permitting exemption is not expected to significantly affect
the universe of Medium CAFOs either. EPA believes that at most medium
facilities that meet the existing conditions for being defined as a
CAFO, discharges would most likely occur not only in the 25-year, 24-
hour storm but as a result of lesser storms as well. For example, a
facility with a pipe or other man-made conveyance is likely to
discharge to surface water in wet weather, or for that matter could
potentially discharge even in dry weather. Similarly, a facility that
has a stream or other water of the United States running through the
production area meets the definition of a CAFO and is also likely to
discharge in less than the 25-year, 24-hour storm. By using the
existing criteria, the Agency does not believe that there will be a
significant increase in the number of medium facilities defined as
CAFOs. Medium facilities that meet these conditions are encouraged to
take advantage of available technical support and eliminate the
conditions that cause them to be defined as a CAFO.
Accordingly, EPA believes that the Agency has addressed the
principal concerns raised by the SBAR Panel. In addition, the Agency
has taken steps to reduce the amount of information

[[Page 7196]]

required as part of the permit application process, thereby addressing
the other concern raised by the Panel.
In providing comments on the proposed rule, a number of commenters
appear to have confused EPA's proposal to eliminate the 25-year, 24-
hour storm event as a permit exemption with issues relating to the
design standard for the effluent limitation guideline. In this final
rule, the Agency is eliminating the use of the 25-year, 24-hour storm
only for the purpose of determining who is required to be covered by an
NPDES permit. The Agency is retaining the existing design standard for
containment based on the 25-year, 24-hour storm event (except for new
sources in certain animal sectors, as discussed elsewhere in this
preamble).
The elimination in today's rule of the 25-year, 24-hour storm
exemption from permitting is also compatible with today's requirement
for all CAFOs to apply for a NPDES permit. In section IV.B.1 below, EPA
explains the reasons for adopting a more comprehensive ``duty to
apply'' today, including the unique characteristics of CAFOs and the
zero discharge regulatory approach (except for large storm events) that
applies to them, the historical experience showing the lack of
permitting of Large CAFOs, and the need to simplify and clarify the
applicability of the rule. Retaining the 25-year, 24-hour storm
exemption from permitting would not be compatible with these reasons
and indeed would perpetuate confusion over which operations are
required to apply for a permit.
Having eliminated the 25-year, 24-hour storm exemption from
permitting, today's rule nevertheless allows operations to avoid
permitting if they can demonstrate that they truly have no potential to
discharge (see section IV.B.2). However, operations that do have the
potential to discharge, even if just in the 25-year, 24-hour storm, may
not receive a determination of no potential to discharge.
5. How Are Land Application Discharges of Manure and Process
Wastewaters at CAFOs Covered by This Rule?
Today's rule clarifies that runoff from the application of CAFO
manure, litter, or process wastewaters to land that is under the
control of a CAFO is a discharge from the CAFO and subject to NPDES
permit requirements, except where it is an agricultural storm water
discharge. All permits for CAFOs must contain terms and conditions on
land application in order to ensure appropriate control of discharges
that are not agricultural storm water.
What did EPA propose? EPA proposed to define an AFO to include both
the animal production areas of the operation and any land areas under
the control of the owner or operator on which manure and process
wastewaters are applied. The definition of a CAFO is based on the AFO
definition and therefore would have included the land application areas
as well. Accordingly, a CAFO's permit would include requirements to
control discharges from both its production area and its land
application area.
What were the key comments? A number of commenters asserted that
EPA lacks the authority to include permit requirements governing a
CAFO's land application of manure and process wastewaters. They claim
generally that the runoff from such land application is a nonpoint
source discharge and therefore is not subject to NPDES requirements. In
particular, they argue that because land application areas are not
places where animals are concentrated or fed, there is no basis in the
Act for including them in the definitions of AFO and CAFO. In addition,
in their view, runoff of CAFO manure and process wastewaters from land
application areas is excluded from the point source definition because
it is ``agricultural storm water.'' They believe that land application
runoff is appropriately addressed only through nonpoint source,
voluntary, incentive-based programs. Accordingly, these commenters
objected to the proposal to include land application areas in the
definition of an AFO and CAFO.
One commenter also stated that EPA's policy reasons for including
land application areas in the AFO and CAFO definitions are not
convincing. Excluding land application areas from the AFO and CAFO
definitions, this commenter notes, does not necessarily mean that CAFO
generated manure could be land applied without concern for the
environment. For example, as a nonpoint source discharge, land
application discharges would still be subject to State controls, the
Clean Water Act nonpoint source program (section 319), and the TMDL
program.
In contrast, certain other commenters indicated that there is a
significant need to better address manure and related discharges from
CAFO land application areas and therefore they agreed with the proposal
to include the land application areas in the AFO/CAFO definitions.
These commenters stated that this approach is consistent with recent
court decisions and that addressing land application runoff is critical
to ensuring water quality protection.
Rationale. EPA noted in the proposal that the runoff from land
application of manure at CAFOs is a major route of pollutant discharges
from CAFOs; that in some regions of the country, the amount of
nutrients present in land-applied manure has the potential to exceed
the nutrient needs of the crops; that areas exist of widespread
phosphorus saturation of the soils; and that research shows 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.
EPA fundamentally disagrees with those commenters who asserted that
the Agency lacks authority over land application discharges at CAFOs
because this is an attempt to regulate nonpoint source pollution. Under
the Clean Water Act, the Agency has broad discretion to determine what
are point source discharges from CAFOs. EPA explained in the proposal
why it is appropriate to clearly specify that land application
discharges of manure and process wastewater from areas where CAFO
manure and process wastewaters have been overapplied are discharges by
the CAFO that are subject to NPDES requirements rather than being
nonpoint source discharges. In brief, EPA stated in the proposal that
the pipes and other manure-spreading equipment that convey CAFO wastes
to the fields are an integral part of the CAFO, and so discharges from
this equipment should be considered discharges from the CAFO. Further,
land application areas are integral to CAFO operations, and there have
been significant discharges in the past attributed to land application
of CAFO wastes. The proposal noted in addition that 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.
EPA believes that, in explicitly including CAFOs in the definition
of a point source (CWA Sec. 502(14)), Congress intended that discharges
of manure and process wastewater from a CAFO to waters of the U.S.
should be regulated through the NPDES permit program. Since one
important manner by which CAFOs may produce such discharges is to apply
manure and process wastewater to land areas under their control, EPA
believes that Congress must have intended discharges from a CAFO's land
application area to be at least potentially included as

[[Page 7197]]

regulated point source discharges. However, Sec. 502 also includes a
specific exclusion from the definition of a point source for
``agricultural storm water discharges.'' EPA explains in the following
section how it interprets these two statutory provisions in order to
identify which discharges from a CAFO's land application area are
agricultural storm water discharges and therefore are not point source
discharges.
Because the runoff from land application of manure at CAFOs is a
major route of pollutant discharges from CAFOs, and for the other
reasons articulated above, EPA does not believe it is sufficient to
rely on non-regulatory controls cited by one of the commenters, such as
the CWA section 319 program, or State non-NPDES authorities.
While EPA is today making explicit in the regulations that a CAFO's
land application of CAFO manure and process wastewaters is subject to
NPDES requirements, the Agency is doing so through different regulatory
language from what was proposed. EPA proposed to amend the AFO
definition to include the land application areas at the facility as
well as the animal production areas. Following the proposal, however,
concerns were raised that this language could be misconstrued to mean
that CAFO permits must include terms and conditions on any pollutants
running off the operation's land application areas (for example, runoff
of pesticides). This was not EPA's intent. The focus of this rulemaking
is on the CAFO manure and process wastewaters that may be discharged by
the CAFO. Therefore, EPA has chosen not to include the land application
areas at an animal feeding operation within the definition of an AFO or
CAFO in the final regulations. Instead, EPA has added section
122.23(e), entitled ``Land application discharges from a CAFO are
subject to NPDES requirements,'' which states as follows: ``The
discharge of manure, litter or process wastewater to waters of the
United States from a CAFO as a result of the application of that
manure, litter or process wastewater by the CAFO to land areas under
its control is a discharge from that CAFO subject to NPDES permit
requirements, except where it is an agricultural storm water discharge
as provided in 33 U.S.C. 1362(14).'' This provision goes on to state
that a discharge of manure or process wastewater from a CAFO's land
application areas is an agricultural storm water discharge under
certain conditions, as discussed in the next preamble section.
The Agency emphasizes that in today's amendments to the CAFO
regulations, a CAFO's responsibility for land application discharges
extends only to the CAFO's own land application areas, which includes
areas at the CAFO itself or otherwise under the CAFO owner's or
operator's control. Also, as noted, today's land application rule
provisions apply only to the application of manure, litter, and process
wastewaters at the CAFO, and not to other pollutants that may exist at
the operation.
As explained above, EPA also believes that the final rules adopted
today appropriately account for the exclusion of ``agricultural storm
water discharges'' from the definition of a point source in the Clean
Water Act. This subject is discussed in the following section.
6. How Is EPA Applying the Agricultural Storm Water Exemption With
Respect to Land Application of CAFO Manure and Process Wastewaters?
EPA is clarifying in today's rule that discharges of manure,
litter, and process wastewaters from the land application areas of a
CAFO are agricultural storm water discharges where the manure or
process wastewater has been applied in accordance with site-specific
nutrient management practices that ensure appropriate agricultural
utilization of the nutrients in the manure or process wastewater. Such
practices, as specified in 122.42(e)(1) (vi)-(ix) must be included in
all CAFO permits.
What did EPA propose? For purposes of land application of manure
from an AFO or CAFO, EPA proposed to define the term ``agricultural
storm water discharge'' as a discharge composed entirely of storm
water, as defined in Sec. 122.26(a)(13), from a land area upon which
manure and/or wastewater 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. Also, as noted, the
proposed effluent guidelines included technology-based requirements for
a CAFO's land application areas that were based on the CAFO's use of
proper agricultural practices. (See 66 FR at 3029-32).
What were the key comments? A number of the commenters who claimed
that EPA does not have authority to regulate land application at CAFOs
focused on the exclusion for agricultural storm water discharges. In
their view, under this exclusion, all runoff of manure, litter, or
process wastewaters from a CAFO's crop fields is exempt from the NPDES
program as agricultural storm water. In contrast, other commenters took
the view that because of the Act's specific naming of CAFOs as point
sources, none of the runoff from CAFO crop fields is entitled to the
agricultural storm water exemption.
Rationale. The CWA states that the term ``point source'' does not
include ``agricultural storm water discharges'' (section 502(14)).
Nothing in the statutory language or legislative history indicates that
Congress did not mean to include agricultural storm water discharges
from a CAFO in this exclusion. EPA therefore believes that in order to
interpret the inclusion of CAFOs as point sources and the agricultural
storm water exclusion consistently, it is necessary to identify the
conditions under which discharges from the land application area of a
CAFO are point source discharges that are subject to NPDES permitting
requirements and those under which they are agricultural storm water
discharges and therefore are not point source discharges.
EPA has determined that it is appropriate to base the distinction
between agricultural storm water discharges and regulated point source
discharges of manure, litter, and process wastewater from a CAFO on
whether or not the manure and process wastewater has been applied in
accordance with site specific nutrient management practices that ensure
appropriate agricultural utilization of the nutrients in the manure or
process wastewater. The specific types of practices that EPA believes
are needed to ensure this are specified in 122.42(e) (1)(vi)-(ix).
Where such practices have been used, EPA believes it is reasonable to
conclude that any remaining discharge is agricultural storm water.
Conversely, where such practices have not been used, EPA believes it is
reasonable to conclude that land application discharges of manure,
litter, or process wastewater are not agricultural storm water but are
discharges that Congress meant to subject to NPDES permitting
requirements when it explicitly included CAFOs in the definition of a
point source.
When manure or process wastewater is applied in accordance with
practices designed to ensure appropriate agricultural utilization of
nutrients, it is a beneficial agricultural production input. This
fulfills an important agricultural purpose, namely the fertilization of
crops, and it does so in a way that minimizes the potential for a
subsequent discharge of pollutants to waters of the U.S. EPA recognizes
that even when the manure, litter, or process wastewater is land
applied in accordance with practices designed to

[[Page 7198]]

ensure appropriate agricultural utilization of nutrients, some runoff
of nutrients may occur during rainfall events, but EPA believes that
this potential will be minimized and any remaining runoff can
reasonably be considered an agricultural storm water discharge.
EPA notes that any dry weather discharge of manure or process
wastewater resulting from its application to land area under the
control of a CAFO would not be considered an agricultural storm water
discharge and would thus be subject to Clean Water Act requirements. As
a matter of common sense, only storm water can be agricultural storm
water. Further, if manure or process wastewater were applied so thickly
that it ran off into surface waters even during dry weather, this would
not be consistent with practices designed to ensure appropriate
agricultural utilization of nutrients.
In this rule, EPA is clarifying how it believes the scope of
regulated point source discharges from a CAFO is limited by the
agricultural storm water exemption. EPA does not intend its discussion
of how the scope of point source discharges from a CAFO is limited by
the agricultural storm water exemption to apply to discharges that do
not occur as the result of land application of manure, litter, or
process wastewater by a CAFO to land areas under its control and are
thus not at least potentially CAFO point source discharges. In
explaining how the scope of CAFO point source discharges is limited by
the agricultural storm water exemption, EPA intends that this
limitation will provide a ``floor'' for CAFOs that will ensure that,
where a CAFO is land applying manure, litter, or process wastewater in
accordance with site specific practices designed to ensure appropriate
agricultural utilization of nutrients, no further effluent limitations
will be authorized, for example, to ensure compliance with water
quality standards. Any remaining discharge of manure or process
wastewaters would be covered by the agricultural storm water exemption
and would be considered nonpoint source runoff. Further, the Agency
does not intend that the limitation on the scope of CAFO point source
discharges provided by the agricultural storm water exemption be in any
way constrained, so long as manure, litter, or process wastewater is
land applied by the CAFO in accordance with site specific nutrient
management practices that ensure appropriate utilization of nutrients.
In particular, EPA does not intend that the applicability of the
agricultural storm water exemption to discharges from land application
areas of a CAFO be constrained by requirements to control runoff
resulting from the application of pesticides or other agricultural
practices.
Although as noted above, manure and process wastewater discharges
from the land application area are not directly subject to water
quality-based effluent limits, EPA encourages States to address water
quality protection issues in their technical standards for determining
appropriate land application practices.
The Agency disagrees with the commenters who would interpret the
agricultural storm water provision to exclude all of the runoff from a
CAFO's land application areas. It would not be reasonable to believe
that Congress intended to exclude as an ``agricultural'' storm water
discharge any and all discharges of CAFO manure from land application
areas, for example, no matter how excessively such manure may have been
applied without regard to true agricultural needs. Similarly, EPA does
not agree with the commenters who believe that the agricultural storm
water discharge exclusion does not apply at all to CAFOs because
Congress singled out CAFOs by specifically including them in the
definition of point source. There is nothing in the text of the point
source definition (CWA section 502(14)) that indicates that Congress
intended the agricultural storm water discharge exclusion not to apply
to CAFOs.
After considering all the comments, EPA has decided that it is not
necessary to include a definition of the term ``agricultural storm
water'' in the rule text at section 122.23(b). EPA believes that the
amended regulatory text at 40 CFR 122.23(e), in combination with this
preamble discussion, adequately clarifies the distinction between
regulated point source discharges and non-regulated agricultural storm
water discharges from the land application area of a CAFO.
Under the final rule, as proposed, discharges from the production
area at the CAFO (e.g., the feedlot and lagoons) are not eligible for
the agricultural storm water exemption at all, because they involve the
type of industrial activity that originally led Congress to single out
CAFOs as point sources.
Today's final rule also requires all permits for CAFOs to include
terms and conditions to address land application. See section 122.42(e)
and Part 412. The Agency has included this requirement because it has
the authority to regulate point source discharges and any discharge of
CAFO manure, litter, or process wastewaters 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 non-
permitted point source discharges of manure, litter or process
wastewaters from CAFOs do not occur is to require that CAFOs apply for
NPDES permits that will establish requirements that ensure that manure,
litter, and process wastewater are only applied to CAFO land
application areas in accordance with site specific nutrient management
practices that ensure appropriate agricultural utilization of the
nutrients in the manure, litter, or process wastewater.
7. When and How Is an AFO Designated as a CAFO?
In today's final rule, EPA is retaining the requirement for an on-
site inspection and a determination that an AFO is a significant
contributor of pollutants to waters of the United States prior to
designating an AFO as a CAFO. A small AFO may be designated only if it
discharges either: (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 contact with the confined animals. Medium operations may also
be designated as CAFOs even if they do not meet either of the two
conditions for being defined as a CAFO.
What did EPA propose? In the proposed rule, EPA presented two
options with respect to the designation criteria. EPA proposed to
retain the existing criteria under a three-tier structure and proposed
to eliminate them under a two-tier structure. In addition, EPA
requested comment on several additional alternatives that would have
retained the criteria only for small operations.
EPA also proposed to modify the on-site inspection requirement to
explicitly include other forms of information gathering such as use of
monitoring data, fly-overs, and satellite imagery. EPA also proposed a
technical correction, changing the term ``significant contributor of
pollution'' to ``significant contributor of pollutants.''
What were the key comments? EPA received limited comment concerning
proposed changes to the designation criteria. Only a few States
specifically supported the elimination of the criteria. A few
representatives of the livestock industry generally supported
elimination of the criteria for operations of all sizes. Commenters
were generally opposed to EPA's proposal to modify the on-site
inspection requirement to

[[Page 7199]]

allow for alternative data gathering methods. Some commenters
acknowledged that the alternative methods of data collection proposed
by EPA can indicate situations where a potential water quality problem
exists; however, most commenters asserted that on-site inspections by
knowledgeable personnel are the only fair and accurate method of
determining whether an AFO is a significant contributor of pollutants.
The SBAR Panel raised concern over the proposed changes to the
designation criteria, and the potential to cause more small businesses
to be subject to regulation. The Panel supported the retention of the
existing designation criteria and process.
Rationale. EPA has decided to retain the existing designation
criteria and process because the existing criteria strike an
appropriate balance for ensuring protection of surface water quality
while maintaining flexibility for States to assist small and medium
operations before they become subject to NPDES requirements for CAFOs.
Retaining the requirement for an on-site inspection will help ensure a
reasoned assessment of the situation has been performed and make the
operation aware that it may be designated a CAFO.
AFOs that do not meet the regulatory definition of a CAFO can often
be effectively addressed by State voluntary programs or regulatory non-
NPDES programs focused on the elimination of the conditions that pose a
threat to water quality. Implementing these voluntary or non-NPDES
State programs can help to ensure that medium and small operations
implement proper practices and are not designated as CAFOs. If
documented threats to water quality are not addressed by the owner or
operator of particular AFOs, the NPDES CAFO regulations provide States
with appropriate flexibility to use designation as an effective
mechanism to designate these operations as CAFOs on a case-by-case
basis. Once designated as CAFOs, these operations are subject to the
permitting requirements defined in today's action. Note that the ELGs
apply only to Large CAFOs. For Medium and Small CAFOs appropriate
permit limits should be established according to the BPJ of the
permitting authority.
Although no change has been made to either the former designation
criteria or the requirement for an on-site inspection, EPA is adopting
as final a technical correction to the regulatory language on
designation, changing the term from ``significant contributor of
pollution'' to ``significant contributor of pollutants.'' for the
reasons discussed in the proposal. This technical correction makes the
NPDES CAFO regulations consistent with the rest of the NPDES program.
EPA received very few public comments on this revision.
If, after conducting an on-site inspection, the NPDES authorized
State (or EPA in certain circumstances--see below) determines that an
AFO is a significant contributor of pollutants to waters of the United
States, the AFO may be designated as a CAFO. The determination of
whether an AFO is a significant contributor of pollutants to waters of
the United States should consider the cumulative impacts of multiple
AFOs that may be causing or contributing to the exceedance of water
quality standards.
8. Can EPA Designate an AFO as a CAFO Where the State Is the Permitting
Authority?
Today's final rule explicitly authorizes the EPA Regional
Administrator to designate CAFOs in NPDES authorized States where the
Regional Administrator has determined that one or more pollutants in
the AFO's discharge contributes to an impairment in a downstream or
adjacent State or Indian country water that is impaired for that
pollutant. Upon designation, the operation would be required to apply
to the appropriate permitting authority for permit coverage. It should
be noted that EPA is not assuming authority or jurisdiction to issue
permits to the CAFOs that it designates in authorized NPDES States
(except for those in Indian Country). That authority would remain with
the authorized States.
What did EPA propose? EPA proposed to explicitly authorize EPA
designation of AFOs as CAFOs in NPDES authorized States, without
limiting this authority to AFOs contributing to impairments in
downstream or adjacent jurisdictions.
What were the key comments? In comments submitted on the proposed
rule, States and the livestock and poultry industry were generally
opposed to EPA designation in NPDES authorized States. A number of
commenters argued that EPA did not have the authority to designate in a
State with an authorized NPDES permit program. Environmental
organizations and allied commenters were generally supportive of EPA's
designation authority. Those supportive of EPA's proposal believed that
this authority would be an important component of ensuring that the
revised regulations are fairly implemented across the entire country.
Rationale. After careful consideration of the comments, EPA has
decided to limit EPA designation authority, in NPDES authorized States,
to circumstances where the Regional Administrator has determined that
one or more pollutants in the AFO's discharge contributes to an
impairment in a downstream or adjacent State or Indian country water
that is impaired for that pollutant. In these situations, the State in
which the discharge is located may not have the same incentives for
designating sources as it would if the impaired water affected by the
discharger were located in the State. This approach will ensure
consistent implementation of designation requirements across State
boundaries where there are serious water quality concerns. EPA expects
NPDES authorized States to ensure consistency within State boundaries.
It is not EPA's intention to make such designations lightly or without
close coordination with affected States. EPA's designation authority
will be helpful in sensitive situations where one State finds it
difficult to resolve water quality impairments caused by AFOs in
another State.
EPA disagrees with those commenters who believe that the Agency
does not have the legal authority to designate CAFOs in authorized
States. In today's action, EPA is asserting similar, albeit more
limited, authority to designate CAFOs as compared to designation of
storm water point sources. See 40 CFR 122.26(a)(1)(v) and 122.26(a)(9).
Ultimately, EPA's authority to designate derives from the CWA
itself. 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
(DC Cir. 1977). The interpretive authority arises from CWA Section
501(a) when EPA interprets the term ``point source'' at CWA Section
502(14).
9. How Can States Use Non-NPDES Programs To Prevent Medium and Small
Operations From Being Defined or Designated as CAFOs?
EPA promotes the efforts of States to actively use a variety of
strategies to work with owners and operators of AFOs to ensure that
they do not meet the criteria that would result in their being defined
or designated Small or Medium CAFOs.
Operators of medium and small facilities are encouraged to
participate in voluntary programs that promote sustainable agriculture
and the

[[Page 7200]]

reduction of environmental impacts. EPA anticipates that participation
in these programs will assist them in eliminating conditions which
would result in the AFO being defined or designated as a CAFO. For
example, it may be that an operation that confines 500 cattle and that
participates in a voluntary program to develop and implement a CNMP, as
defined by USDA, could proactively fix situations that may otherwise
cause them to meet the criteria for being defined or designated as a
CAFO. EPA intends to develop a small entity compliance guide to assist
small business and additional tools needed to assist AFOs in complying
with this requirement. Please refer to a more extensive discussion of
how this rule promotes and encourages State flexibility in section V.F.
10. What CAFOs Are New Sources?
Today's final rule makes no changes to the definition of ``new
source'' in 40 CFR 122.2 or the definition and criteria for new source
determinations in 40 CFR 122.29 with respect to CAFOs. For purposes of
applying the new source performance standards in today's final rule, a
source would be a new source if it commences construction after April
14, 2003 (see 40 CFR 122.2). Each source that meets this definition is
required to achieve the new New Source Performance Standard upon
commencing discharge.
What did EPA propose? EPA proposed additional criteria for
determining who is a new source, including:
1. The CAFO is constructed at a site at which no other source is
located;
2. The CAFO totally replaces the housing including animal holding
areas, exercise yards, and feedlot, waste handling system, production
process, or production equipment that causes the discharge or potential
to discharge pollutants at an existing source; or
3. The CAFO constructs a production area that is substantially
independent of an existing source at the same site.
What are the key comments? Some industry commenters expressed the
view that the new source definitions were too broad and would result in
many existing CAFOs being considered by their permitting authority as
new sources. Commenters interpreted the proposal to mean that
operations undergoing routine operation and maintenance or replacement
of individual structures and equipment could be considered a new source
under the proposed language. These existing facilities defined as new
would have to undergo costly improvements to comply with the NSPS. In
addition, the new source definition would be a disincentive to conduct
routine maintenance and improvements at an operation. The commenters
indicated that EPA did not provide enough rationale to include this
language and that other industries do not have such a broad new source
definition. Industry commenters, including some conservation districts,
concluded that EPA should retain the existing definition.
Comments from environmental organizations and private citizens
indicated their belief that all expanding AFOs should be considered
CAFOs and subject to NSPS, and that these standards should be more
restrictive than the existing source standards.
Rationale. After reviewing public comment and reconsidering this
proposed revision, EPA has concluded that the existing regulation at
Sec. 122.29(b) provides adequate criteria for determining who is a new
source. EPA's intention was to provide permit writers with clear and
specific criteria applicable to CAFOs to improve clarity of these
regulations. In retrospect, the only clarification that was provided
was related to Sec. 122.29(b)(ii), which refers to when the new
construction ``totally replaces the process or production equipment
that causes the discharge of pollutants at an existing source.'' While
the Agency disagrees with commenters that the proposed revisions would
expand the scope of the existing regulation, EPA decided that it was
not necessary to adopt the proposal as the existing regulation is
sufficient for EPA to provide guidance on determining new sources.
Further, EPA is not adopting the proposal in the interest of keeping
the regulation simple. Nevertheless, EPA believes some clarity as to
which CAFOs are new sources is appropriate. In response to commenters
who believe that EPA should consider any facility that expands to be a
new source, EPA did not propose such a definition, the reasons for
which are discussed at 66 FR 3066 of the proposed rulemaking. EPA is
clarifying that it is not the intent of this section to serve as a
disincentive to CAFOs to maintain, upgrade, or otherwise enhance
facilities and waste management systems to improve their operational
and environmental performance. Thus, EPA is clarifying that an
expanding source is not automatically defined as a new source. For
example, a facility that expands its operation by simply extending
existing housing structures by constructing new housing adjacent to
existing housing, is not typically considered a new source. Under
existing provisions at Sec. 122.29(b) such expansions at an existing
facility would not result in the facility becoming defined as a new
source unless the modifications totally replace the process or
production equipment that causes the discharge of pollutants, or the
new/modified facility's production and waste handling processes are
substantially independent of the preexisting source.

B. Who Needs a Permit and When?

1. Who Needs To Seek Coverage Under an NPDES Permit?
Today's rule requires all CAFO owners or operators to seek coverage
under an NPDES permit, except in very limited situations where they
make an affirmative demonstration of ``no potential to discharge,'' as
discussed below. This ``duty to apply'' applies without exception; it
makes no difference, for example, whether the CAFO manure management
system has been appropriately designed and operated to prevent
discharges except during large storm events. Recognizing that there may
be certain situations in which no reasonable potential to discharge
exists, EPA has also established the ability for a CAFO owner or
operator to demonstrate that the facility has no potential to discharge
from either its production areas or its land application areas. If the
permitting authority agrees with the demonstration of no potential to
discharge, the operation would not need to obtain an NPDES permit. The
no potential to discharge demonstration is not relevant to small or
medium operations because an actual discharge is a required criterion
for a small or medium operation to be considered a CAFO.
What did EPA propose? EPA proposed to require all CAFOs to seek
coverage under an NPDES permit, except where they can demonstrate no
potential to discharge.
What were the key comments? Environmental groups were largely in
favor of the duty to apply provision, and sought to ensure that all
Large CAFOs in particular had a duty to apply. These commenters
expressed concern about the impacts of unregulated operations, the
potential for CAFOs to discharge, and the lack of permitting of CAFOs
under the current regulations. Many commenters stated that because of
the potential to discharge CAFOs should have NPDES permits.
Trade associations and industry commenters were largely opposed to
the duty to apply requirement. A number of these commenters questioned
EPA's legal authority for requiring permit applications from CAFOs that
claim not to discharge. They argued that the Clean

[[Page 7201]]

Water Act requires an NPDES permit only for an actual discharge of
pollutants to the waters of the United States. Commenters also noted
that imposing a duty to apply is inconsistent with EPA's past
interpretations of the Clean Water Act, pointing to past instances in
which EPA has stated that permits are required only for actual
discharges.
An industry commenter also disagreed with EPA's reasons for finding
that there is a need to impose a duty to apply for a permit for CAFOs.
The commenter disagreed with EPA's belief that many large AFOs have not
applied for permits because of widespread confusion over the CAFO
regulatory requirements and stated that any confusion in the
regulations can easily be remedied by EPA. The commenter noted that
there could be other reasons these operations are not permitted (for
example, the operation does not discharge, it discharges only in a 25-
year, 24-hour storm, or is a dry poultry facility). Commenters also
questioned EPA's finding that many CAFOs are discharging without a
permit and stated their belief that CAFO discharges are no more
intermittent (and thus no more difficult to detect and document) than
those in other industries.
These commenters also asserted that EPA is not authorized and not
justified in putting the burden on the CAFO to show that it does not
discharge. According to the commenters, this presumption of a discharge
weakens the requirement of an actual discharge in the Act and will
result in EPA regulating facilities that Congress intended to exclude
from the NPDES program.
State comments were mixed. Most supported the duty to apply
provision, including the no potential to discharge determination,
agreeing with EPA that any operation that meets the definition of a
CAFO should be required to apply for a permit. Some States indicated
that the criteria for becoming a CAFO needed to be clear, and then
facilities would know when they are CAFOs and would comply with the
duty to apply. Other States opposed this proposal for a variety of
reasons, including that shifting the burden of proof to the facility
would be onerous, especially if EPA lowers the regulatory threshold;
that there was no need to impose a permit in order to ensure that
livestock operations have nutrient management plans; and that EPA
should not create duplicative efforts in States with effective
programs.
Although the SBAR Panel did not comment on the proposed duty to
apply requirements, the Panel did comment on EPA's proposal to require
all medium facilities either to certify that they are not CAFOs or to
seek coverage under an NPDES permit. The Panel recommended that EPA
carefully consider the burden of such requirements. The Panel also was
concerned that requiring full permit applications from the number of
Medium CAFOs contemplated at proposal may impose a significant burden
with limited environmental benefits, and recommended that EPA carefully
consider appropriate streamlining options. Finally, the SBAR Panel
recommended that, before adding any new application or certification
requirements for operators in this size range, EPA should carefully
weigh the burden and environmental benefits of expanding the scope of
the regulations in this way.
Rationale. After careful consideration of the comments, EPA is
adopting the ``duty to apply'' in today's final regulations. This
revised duty to apply is designed to identify and ultimately to prevent
actual unauthorized discharges to the waters of the United States,
consistent with the intent and goals of the Clean Water Act. CAFOs that
demonstrate that they do not have a potential to discharge will not
need to seek coverage under a permit, as discussed in section IV.B.2 of
this preamble.
EPA continues to believe that there is a strong need and a sound
basis for adopting this duty to apply and that it is within the
Agency's authority to do so. EPA fully discussed its rationale for this
provision in the proposal. There, the Agency discussed the duty for
CAFOs, other than those which discharge only in the event of a 25-year,
24-hour storm, to apply for a permit under the existing NPDES
regulations (40 CFR 122.21(a)) and explained a number of reasons behind
the need for a clarified and more broadly applicable duty to apply for
CAFOs.
EPA disagrees with the comment that there is no need for a duty to
apply because there may be legitimate reasons for so many operations
being unpermitted at present. In fact, there are numerous documented
instances in the administrative record of actual discharges at
unpermitted CAFOs that are not associated with 25-year, 24-hour storms.
EPA also disagrees that CAFO discharges are no more intermittent than
those in other industries. Operations in other industries are typically
designed to routinely discharge after appropriate treatment; this is
not the case at CAFOs, where discharges are largely unplanned and
intermittent. It is thus much easier for CAFOs to avoid permitting by
not reporting their discharges. EPA continues to believe that imposing
a duty to apply for all CAFOs is appropriate given that the current
regulatory requirements are being misinterpreted or ignored. Moreover,
simply clarifying the regulations would not necessarily be adequate,
because operations might still claim that the Clean Water Act requires
no permit application if the facility claims not to discharge. As
discussed in the proposal, Congress contemplated that EPA could set
effluent standards at zero discharge, where appropriate, and that EPA
would effectuate these standards through permits; this statutory scheme
would be negated if CAFOs were allowed to avoid permitting by claiming
that they already meet a zero discharge standard.
EPA noted in the proposal that it had not previously sought to
categorically adopt a duty to apply for an NPDES permit for all
facilities within a particular industrial sector. The Agency explained
that it is doing so for reasons that involve the unique characteristics
of CAFOs and the zero discharge regulatory approach (except for large
storm events) that applies to them. EPA also noted that since the
inception of the NPDES permitting program in the 1970s, only a small
number of Large CAFOs have actually sought permits. The Agency is
adopting this revised duty to apply for all of these reasons, including
this historical experience showing the lack of permitting of Large
CAFOs, while numerous documented discharges occurred over time. This
change also serves to substantially simplify and clarify the
applicability of the rule.
In addition, there is a sound basis in the administrative record
for the presumption that all CAFOs have a potential to discharge to the
waters of the United States such that they should be required to apply
for a permit, unless they can show no potential to discharge. EPA does
not agree with the claim that the presumption of a discharge will
weaken the requirement of an actual discharge in the Clean Water Act
and will result in EPA regulating facilities that Congress intended to
exclude from the NPDES program. CAFOs will have the opportunity to
demonstrate that they do not have a potential to discharge and
therefore would not be required to apply for a permit.
2. How Can a CAFO Make a Demonstration of No Potential To Discharge?
Today's rule specifies that a Large CAFO need not have an NPDES
permit if the permitting authority finds that the operation has no
potential to discharge.

[[Page 7202]]

This final rule provides that Large CAFOs may request and submit
technical information as the basis for a permitting authority to
determine that there is no potential to discharge. Today's rule also
establishes requirements for the permitting authority to issue a public
notice that such a request has been received. The request for a no
potential to discharge determination must be submitted by the date upon
which the CAFO is required to seek permit coverage (See 40 CFR
122.23(g) and section IV.B.3 and Table 4.2 of this preamble). Within 90
days of receiving the request, the Director will let the CAFO know
whether or not the request for a no potential to discharge
determination has been granted. If the request is denied, the CAFO must
seek permit coverage within 30 days after the denial.
What did EPA propose? EPA proposed that Large CAFOs have a duty to
apply for an NPDES permit unless the permitting authority, upon request
from the CAFO, makes a case-specific determination that a CAFO has no
potential to discharge pollutants to water of the United States.
What were the key comments? Trade associations and industry
commenters generally opposed the requirement to demonstrate ``no
potential to discharge.'' Their objections largely follow from their
view that CAFOs should not be required to apply for a permit in the
first instance absent evidence of an actual discharge. Having to show
``no potential to discharge'' in order to avoid a permit would place a
difficult or impossible burden on operations to prove a negative, in
their view. They also expressed concerns over the resources and expense
of showing ``no potential to discharge'' and about how permitting
authorities will be able to interpret and apply this standard
consistently. Certain environmental groups, on the other hand, were
also opposed to this provision, but their view is that CAFOs should be
required to apply for permits without exception, and there should be no
allowance for CAFOs to avoid permitting based on a finding of ``no
potential to discharge.'' They also voiced concerns that this provision
will invite abuse by States that seek to avoid permitting
responsibilities. On the subject of whether the rules should include a
public process for the ``no potential to discharge'' determination,
public commenters expressed views both for and against including this
process. Those seeking to have a public process included their belief
that it will serve as a check against any abuses in making these
determinations.
Rationale. Today's rule requires all CAFOs to apply for a permit
unless they have received a determination by the Director that the
facility has ``no potential to discharge.'' The ``duty to apply''
provision is based on the presumption that every CAFO has a potential
to discharge and therefore must seek coverage under an NPDES permit.
However, the Agency does not agree with commenters that there should be
no opportunity to rebut this presumption and avoid permitting because
EPA recognizes that, although they may be infrequent, there may be
instances where a CAFO truly does not have a potential to discharge.
For example, the CAFO may have no potential to discharge because it is
located at a great distance from any water of the United States (see
further discussion on this subject below). In such circumstances, it
would make little sense to impose NPDES permit requirements in order to
protect against such discharges. Therefore, the Agency believes that it
is reasonable to allow facilities that demonstrate ``no potential to
discharge'' to be released from the requirement to seek coverage under
an NPDES permit. Although today's regulation allows facilities to
submit ``no potential to discharge'' claims, an unpermitted CAFO that
does in fact discharge pollutants to waters of the U.S., with or
without a determination of ``no potential to discharge,'' would be in
violation of the Clean Water Act.
The requirement for demonstrating no potential to discharge is not
being extended to small and medium AFOs since the specific criteria
that must be met prior to becoming CAFOs requires the existence of a
discharge. Whereas large AFOs are defined as CAFOs based on number of
animals alone, small and medium AFOs only become CAFOs after meeting
specific discharge-related criteria. A small AFO can only be designated
as a CAFO by the State Director or Regional Administrator where it is
determined that it is a significant contributor of pollutants to waters
of the U.S. A medium AFO can become a CAFO by designation or
definition. As in the case of small AFOs, a medium AFO can only be
designated where it is determined to be a significant contributor of
pollutants to waters of the United States. A medium AFO that is a CAFO
by definition must meet one of the two ``method of discharge'' criteria
prior to being defined as a CAFO. Thus, it is meaningless to consider
such facilities as having no potential to discharge.
EPA's intention is that the term ``no potential to discharge'' is
to be narrowly interpreted and applied by permitting authorities. This
provision is intended to be a high bar that excludes those Large CAFOs
from having an NPDES permit only where the CAFO can demonstrate to a
degree of certainty that they have no potential to discharge to the
waters of the United States. The no potential to discharge status is
intended to provide relief where there truly is no potential for a
CAFO's manure or wastewater to reach waters of the United States under
any circumstances or conditions. Such circumstances would include, for
example, CAFOs that are located in arid areas and far from any water
body or those that have completely closed cycle systems for managing
their wastes and that do not land apply their wastes. For example, a
CAFO that meets the following conditions might be able to demonstrate
no potential to discharge: (1) Located in an arid or semi-arid
environment; (2) stores all its manure or litter in a permanent covered
containment structure that prevents wind dispersal and precipitation
from contacting the manure or litter; (3) has sufficient containment to
hold all process wastewater and contaminated storm water and (4) does
not land apply CAFO manure or litter because, for example, the CAFO
sends all its manure or litter to a regulated, offsite fertilizer plant
or composting facility. In particular, EPA believes that land
application of its manure and wastewater would, in most cases, be
enough by itself to indicate that a CAFO does have a potential to
discharge (although conceivably no potential to discharge could be
shown based on the physical features of the site, such as lack of
proximity to waters of the United States). This discussion should help
to address commenters concerns that there could be inconsistencies in
how permitting authorities could interpret and apply the standard for
``no potential to discharge''.
The term ``no potential to discharge'' means that there is no
potential for any CAFO manure, litter, or wastewater to be added to
waters of the United States from an operation's production or land
application areas, without qualification. If a Large CAFO chooses to
make a demonstration of no potential to discharge, it is the CAFO's
responsibility to provide appropriate supporting information that the
permitting authority can use when reviewing the demonstration. The
supporting information should include, for example, a detailed
description of the types of containment used for manure focusing on the
attributes of the containment that ensure no discharges

[[Page 7203]]

will occur. In addition, there may be instances where after preliminary
review of the demonstration, the permitting authority may require the
submission of supplemental information to assist in making a
determination.
EPA disagrees with commenters' statements that the demonstration of
``no potential to discharge'' will place an impossible or excessively
costly burden on facilities. EPA believes that, in many instances, the
information that is specified in 40 CFR 122.23(f)(2) will be adequate
for the Director to determine whether or not the facility has a
potential to discharge. In such instances, there would be no greater
cost to the facility than if it were to apply for a permit. If
additional information is necessary, the Agency does not believe that
it will result in greatly increased costs, because such information
(including, for example, design specifications or other technical
information) would be readily available to the facility and could be
easily provided to the permitting authority.
Today's rule requires that a request for a no potential to
discharge determination include most of the information required for a
permit application, as specified in Sec. 122.21(f) and (i)(1)(i)
through (ix). This information will serve as the primary source of
information relating to the facility's qualifications to avoid an NPDES
permit. While some additional information may be available to the
Director, including for example regional rainfall, soil, and
hydrological conditions, the Director may require supplemental, site-
specific information to make this determination. However, EPA is not
requiring a CAFO owner or operator pursuing a no potential to discharge
determination to certify to the development of its nutrient management
plan, as required by Sec. 122.21(i)(1)(x) for a CAFO that seeks permit
coverage after December 31, 2006.
Within 90 days of receiving a request for a no potential to
discharge determination the permitting authority will notify the CAFO
of its decision on the request. During this review period, a CAFO that
has submitted a request for a no potential to discharge determination
does not have a duty to seek coverage under an NPDES permit. The final
rule differs from the proposal in not imposing a duty to apply on CAFOs
that have submitted a no potential to discharge request until there is
a denial of the request by the Director. EPA believes that this is a
preferable approach, because it does not risk the imposition of NPDES
permit requirements on CAFOs even though they may qualify for a
determination that they have no potential to discharge. To guard
against abuse of this provision, the Agency is establishing a limited
time of 90 days for the Director to make its determination.
If the permitting authority finds that no potential to discharge
has not been demonstrated, the CAFO owner or operator must seek permit
coverage within 30 days of the denial of the request. States may use
the information submitted with the request for a no potential to
discharge determination to proceed with individual permit development
or for coverage under a general permit. However, in order to obtain
coverage, the CAFO owner or operator would also be required to provide
a request for coverage and include the information required by Sec.
122.21(i)(1)(x), when applicable.
After all necessary information is submitted, and before making a
final decision to grant a ``no potential to discharge'' determination,
today's rule requires the Director to issue a public notice stating
that a no potential to discharge request has been received. This notice
must be accompanied by a fact sheet which includes, when applicable:
(1) A brief description of the type of facility or activity which is
the subject of the no potential to discharge determination; (2) a brief
summary of the factual basis, upon which the request is based, for
granting the no potential to discharge determination; and (3) a
description of the procedures for reaching a final decision on the no
potential to discharge determination. The Director must base the
decision to grant a no potential to discharge determination on the
administrative record, which includes all information submitted in
support of a no potential to discharge determination and any other
supporting data gathered by the permitting authority. If the Director's
final decision is to deny the ``no potential to discharge''
determination, the CAFO owner or operator must submit a permit
application within 30 days after denial of the no potential to
discharge determination.
The Agency believes that the process described above addresses
concerns raised by commenters that States might abuse the intended
effect of this provision and allow facilities that should be permitted
as CAFOs to avoid permitting. The Agency believes this process should
ensure that the Director has adequate information to properly decide
whether a facility has a potential to discharge or not, and also
ensures that the public will be made aware of such determinations and
can act appropriately if it appears that determinations are not being
made as required by this provision. Also, as noted above, facilities
that actually do discharge without a permit are subject to enforcement
for a violation of the Clean Water Act--even if they have previously
received a no potential to discharge determination. This should provide
a strong incentive to CAFOs not to file a frivolous request.
3. When Must CAFOs Seek Coverage Under a NPDES Permit?
Table 4.2 summarizes the time frames by which CAFOs (existing and
new sources) must apply for an NPDES permit. Refer to section IV.A.11
of this preamble for a discussion of the new source definition.

Table 4.2.--Time for Seeking Coverage Under an NPDES Permit
------------------------------------------------------------------------
Time frame to seek
CAFO status coverage under an Examples
NPDES permit
------------------------------------------------------------------------
Operations defined as CAFOs Must have applied by Operations that
prior to April 14, 2003. the date required previously met the
in 40 CFR 122.21(c). definition of a
CAFO and were not
entitled to the 25-
year, 24-hour storm
permit exemption.
Operations defined as CAFOs As specified by the For example, ``dry''
as of April 14, 2003, and permitting chicken operations
that were not defined as authority, but no (operations that
CAFOs prior to that date later than April did not use a
(e.g. existing operations 13, 2006. liquid manure
that become defined as a handling or
CAFO as a result of changes continuous overflow
in this rule). watering system),
stand-alone
immature swine,
heifer and calf
operations, and
those AFOs that
were entitled to
the permitting
exemption for
discharging only in
the event of a 25-
year, 24-hour
storm.

[[Page 7204]]

Operations that become (a) newly For example, an AFO
defined as CAFOs after constructed that increases the
April 14, 2003, but which operations: 180 number of animals
are not new sources. days prior to the in confinement to a
time the CAFO level that would
commences result in the
operation; (b) operation becoming
other operations defined as a CAFO.
(e.g. increase in
number of animals):
As soon as possible
but no later than
90 days after
becoming defined as
a CAFO, except
that, if the
operational change
that causes the
operation to be
defined as a CAFO
would not have
caused it to be
defined as a CAFO
prior to April 14,
2003, the operation
must apply no later
than April 13, 2006
or 90 days after
becoming defined as
a CAFO, whichever
is later.
New sources................. 180 days prior to For example, a new
the time the CAFO Large CAFO that
commences operation. commences
construction after
April 14, 2003.
Designated CAFOs............ 90 days after
receiving notice of
designation.
------------------------------------------------------------------------

What did EPA propose? The Agency proposed to delay the effective
date of the revised definition of a CAFO until three years from the
date of publication of the final rule, and thereby delay the date by
which permits would be required for newly defined CAFOs until three
years after the date of the final rule. During that three-year interim
period, the Agency proposed that the existing CAFO definition would
remain in effect. For example, prior to the effective date of the
revised CAFO definition, the revised new source and new discharger
provisions would apply only to those facilities meeting the definition
of a CAFO under the existing regulatory definition. For designated
CAFOs, EPA proposed that the CAFO must apply for a permit within 90
days of being designated.
What were the key comments? Some commenters felt that extending the
time for compliance allowed too much time for implementation of the new
regulations, and would only result in further delays in addressing the
problems associated with discharges from CAFOs. Other commenters took
the view that three years is too little time for States or industry to
meet the new requirements, from either a technical or economic
standpoint. Most of those who commented on this issue sought clarity in
setting the effective dates for the regulations.
Rationale. In today's rule, EPA is establishing time frames for
seeking coverage under a permit that are appropriate to the various
categories of CAFOs, depending upon their status with respect to the
effective date of the rule.
For the reasons discussed in Section IX of the preamble to the
proposed rule, the Agency does not believe that it would be reasonable
to require permit coverage for all CAFOs immediately on the effective
date of this rule. Following issuance of today's rule, 40 CFR 123.62
provides authorized States with time to revise their State NPDES
programs (one year or two years if statutory changes are needed).
Further, most States will need approximately an additional year to
develop a general permit, publish a draft of the general permit for
public comment, and issue a final general permit for the many CAFOs
that EPA expects to be covered under a general permit. EPA believes
that a three-year time frame for newly defined CAFOs to obtain permit
coverage is reasonable and justified based on the requirements of 40
CFR 123.62, together with the need to develop and issue general
permits, and for the reasons stated below.
Today's rule is likely to result in fewer facilities being defined
as CAFOs than anticipated at the time of proposal. Because States will
not need to address concerns associated with identifying, permitting,
and ensuring compliance by the large number of medium-size facilities
anticipated as potential CAFOs at the time of proposal, EPA does not
believe that concerns that States would need more than three years to
meet the new requirements are justified.
The Agency is, however, changing its approach to achieve the
proposed time frame for requiring CAFOs to seek coverage under a
permit. Rather than delaying the effective date for the definition of a
CAFO, as was proposed, EPA is simply establishing a three-year time
frame for when newly defined CAFOs must seek coverage under a permit.
Today's approach is consistent with Congressional intent in the
1972 Clean Water Act. Today's rule marks the first time in many years,
except in the case of storm water sources, that the Agency is revising
the scope of the term point source to include additional facilities
under the definition. In the 1972 Clean Water Act, Congress provided
more than two years for point sources to obtain coverage under a permit
(Sec. 402(k)). Similarly, in this instance, EPA believes that Congress
would have intended for the Agency to provide additional time for these
newly covered sources to obtain permit coverage. This additional time
is necessary for States to revise their regulations and to develop and
issue permits, and it provides facilities some time to take the
necessary steps to comply with these new requirements.
Moreover, EPA believes that there will be other advantages as a
result of the approach taken in today's rule. The first is to avoid the
confusion that would be associated with having different and
conflicting definitions of a CAFO present simultaneously in the Code of
Federal Regulations, which would be the case if EPA were to promulgate
a revised definition of CAFO but delay the effective date of the
definition for three years. The second is to encourage States to issue
new permits and cover newly defined CAFOs as soon as possible within
the time period specified. CAFOs are encouraged to seek coverage under
a permit once general permits addressing those facilities are
available. A third reason is that this approach is consistent with
EPA's approach when the Agency promulgated the storm water phase II
regulations, although those regulations were based on a somewhat
different statutory foundation.
For all of the reasons stated above, the Agency is exercising its
discretion to define these newly regulated facilities as point sources,
while delaying their duty

[[Page 7205]]

to apply for a permit until three years from the effective date of
today's rule.
Today's rule does not extend the date by which operations that were
defined as CAFOs under the prior regulations should have applied for a
permit (see 40 CFR 122.21). In particular, EPA notes that those
operations that previously met the criteria for being a CAFO, but who
erroneously claimed the 25-year, 24-hour storm exemption and avoided
applying for an NPDES permit on that basis, continue to be in violation
of the regulations and need to immediately apply for NPDES permit
coverage. Today's rule also does not extend the date by which
operations that have previously been designated as a CAFO should have
applied for an NPDES permit.
The third category described in Table 4.2 pertains to a category of
permittees who become CAFOs subsequent to the effective date of today's
rule, but who are not defined as ``new sources'' in accordance with the
new source criteria. For example, a newly constructed Medium CAFO falls
in this category, since it is not subject to the new source performance
standards in Part 412. Newly constructed CAFOs in this category must
seek coverage under an NPDES permit 180 days prior to the time the CAFO
commences operation. This requirement is designed to parallel the time
for permit application for new sources. Other operations that become
CAFOs after the effective date of today's rule, including, for example,
operations that increase the number of animals in confinement to a
level that would result in the operation being defined as a CAFO, but
that are not new sources, are required to seek permit coverage as soon
as possible but no later than 90 days after being defined as a CAFO.
EPA is establishing this date by which such new dischargers must seek
coverage under an NPDES permit in consideration of the unique nature of
AFO operations. In other industries, a facility would typically require
significant capital improvements to become a newly discharging point
source. AFOs, on the other hand, may become a new discharger merely by
increasing the number of animals housed in confinement at the facility.
Moreover, the increase necessary to meet the threshold numbers
necessary to be defined as a CAFO could be relatively small. Such an
increase could be necessary in response to fast-changing market
conditions, in which case it would be an undue burden on the AFO to
encounter a delay of 180 days before being able to operate as a CAFO.
Inasmuch as CAFOs are not continuous dischargers, the Agency believes
that it is reasonable and sufficient for a CAFO that is a new
discharger (other than those that are newly constructed operations) to
seek coverage within 90 days after becoming defined as a CAFO.
EPA is establishing an additional permit application deadline in
this category of three years where the change that causes the operation
to be defined as a CAFO would not have caused it to be defined as a
CAFO if the change had occurred prior to the effective date of today's
rule. This would include, for example, a dry poultry operation that,
sometime after the effective date of today's rule, adds animals and
exceeds the threshold for becoming defined as a CAFO. The Agency is
establishing this permit application deadline since it is appropriate
to treat such facilities on an equal footing to dry poultry operations
that become defined as CAFOs as of the effective date of today's rule
and who therefore have three years to apply for a permit. It would have
been inequitable to have allowed a dry poultry operation that exists at
the time this rule becomes effective to have three years to apply but
to require a dry poultry operation that becomes a CAFO because it adds
a small number of animals shortly after this rule becomes effective to
apply within 90 days.
4. What Are the Different Types of Permits?
Today's final rule allows the permitting authority to determine the
most appropriate type of permit coverage for a CAFO. Under the NPDES
regulations, the two basic types of NPDES permits that can be used are
individual permits and general permits. Refer to section V.E. of this
preamble for further discussion about the different types of permits.
What did EPA propose? The proposed rule would have required States
to conduct a public process for determining which criteria, if any,
would require a CAFO owner or operator to apply for an individual
rather than a general permit. The proposed rule also would have added a
set of 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 permitting authority; and (4) significantly
expanding CAFOs. EPA noted in the preamble to the rule as well that it
had considered identifying a specific size threshold for individual
permits, such as 5,000AU or 10,000AU, and solicited comment and
information relating to such a threshold.
What were the key comments? Comments from industry and State
agencies by and large were both against setting criteria for individual
permits and against establishing a public process for developing such
criteria. States in particular felt that existing NPDES regulations
already adequately defined the process for developing individual and
general permits, and strongly advocated against being told at the
federal level what criteria to use in issuing permits. Environmental
groups commented that they wanted strict federal criteria for
individual permits out of concerns regarding the need for federal
oversight over large operations and because of their keen interest in
the public involvement afforded by individual permits. Many of these
commenters stated that all Large CAFOs (i.e., all with what was
formerly termed 1,000 AU) should be required to have an individual
permit.
Rationale. EPA elected not to set conditions for determining which
CAFOs must have individual rather than general permits or to require
the States to establish such conditions. The Agency determined that
selecting a set of specific thresholds fundamentally fails to recognize
the diversity of feeding operations in States across the nation. What
may be a ``large'' facility in one State is often not viewed as such in
another. This view was confirmed by the Agency's findings on this issue
that although many States set criteria for who must have individual
rather than general permits, these conditions vary greatly from State
to State and are generally dominated by regional environmental
concerns.
5. How Does a CAFO Apply for a Permit?
CAFO owners or operators must submit an application for an
individual permit or submit a NOI (or the State's comparable form) for
coverage under an applicable general permit. If a general permit is not
available, the CAFO does not meet the eligibility requirements for
coverage under the general permit, or the CAFO would otherwise prefer
to be covered by an individual permit, the CAFO owner or operator must
submit to the permitting authority an application (EPA's Form 2B for
CAFOs and Aquatic Animal Production Facilities or the State's
comparable form) for an individual permit. Today's final rule does not
make any changes in how a CAFO applies for a permit.

[[Page 7206]]

6. What Are the Minimum Required Elements of an NOI or Application for
an Individual Permit?
Today's final rule revises the information requirements for seeking
coverage under an NPDES permit for CAFOs. Today's rule revises the
NPDES individual permit application for CAFOs (Form 2B for CAFOs and
Aquatic Animal Production Facilities), and specifies the information
required in an NOI form for coverage under a CAFO general. EPA is
requiring applicants for coverage under either individual or general
CAFO permits to provide the same information:
(i) The name of the owner or operator;
(ii) The facility location and mailing addresses;
(iii) Latitude and longitude of the production area (entrance to
production area);
(iv) A topographic map of the geographic area in which the CAFO is
located showing the specific location of the production area, in lieu
of the requirements of paragraph (f)(7) of Sec. 122.21;
(v) Specific information about the number and type of animals,
whether in open confinement and housed under roof (beef cattle,
broilers, layers, swine weighing 55 pounds or more, swine weighing less
than 55 pounds, mature dairy cows, dairy heifers, veal calves, sheep
and lambs, horses, ducks, turkeys, other);
(vi) The type of containment and storage (anaerobic lagoon, roofed
storage shed, storage ponds, underfloor pits, above ground storage
tanks, below ground storage tanks, concrete pad, impervious soil pad,
other) and total capacity for manure, litter, and process wastewater
storage (tons/gallons);
(vii) The total number of acres under control of the applicant
available for land application of manure, litter, or process
wastewater;
(viii) Estimated amount of manure, litter, and process wastewater
generated per year (tons/gallons);
(ix) Estimated amount of manure, litter, and of process wastewater
transferred to other persons per year (tons/gallons); and
(x) For CAFOs that must seek coverage under a permit after December
31, 2006, certification that a nutrient management plan has been
completed and will be implemented upon the date of permit coverage.
The complete Form 2B application containing all of the amendments
to the application is included as an appendix to this preamble. The
required data elements of the NOI are the same as the minimum data
elements in the revised Form 2B. Where EPA is the permitting authority,
it is EPA's intent to use the National NOI Processing Center to process
NOIs.
What did EPA propose? EPA proposed to require applicants for
individual permits to submit the following information in addition to
the information required at 40 CFR 122.21(f) and 122.21(i):
? 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 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);
? If a new source, a copy of the draft Permit Nutrient Plan
(PNP);
? Information about whether buffers, setbacks, or
conservation tillage is being used to protect water quality; and
? A topographic map (required by Form 1) that identifies the
latitude and longitude of the production area and the depth to ground
water that may be hydrologically connected to surface water, if any.
EPA proposed that similar information be provided in a revised NOI
for coverage under an NPDES CAFO general permit.
What were the key comments? Most of the comments received on this
issue were from the States. Several citizens and associations also
submitted comments. Several commenters wanted EPA to delete the
requirement that the permittee submit the Permit Nutrient Plan with the
permit application. Some States would also like to continue to use
their forms and not the revised Form 2B. Some commenters argued that
the proposed requirements set an undesirable precedent that is both
unnecessary, (because NOI requirements are normally specified in the
relevant general permit) and that could negatively affect other
industries and reduce the flexibility of State permitting authorities.
The SBAR Panel did not specifically comment on the content of the
changes to Form 2B and the NOI, but the Panel noted the substantial
number of small entities in the medium range and recommended that EPA
carefully consider the burden of any additional certification or
application requirements. The Panel further noted that EPA had not
ruled out the option of requiring a full permit application from all
operations in the medium range. The Panel was concerned that such an
approach may impose a significant burden with limited environmental
benefits and therefore recommended that EPA carefully consider
appropriate streamlining options before considering a more burdensome
approach. Finally, the Panel recommended that before adding any new
application or certification requirements for operators in the medium
range, EPA should carefully weigh the burden and environmental benefits
of expanding the scope of the regulations in this way.
Rationale. To clarify the subsequent discussion, it is important to
point out that EPA is not adopting the term ``Permit Nutrient Plan'' in
this final rule. The Agency is referring to the nutrient management
planning requirements of today's rule simply as the nutrient management
plan. EPA is not requiring the nutrient management plan to be submitted
as part of the permit application for existing sources or new
dischargers. Instead, the permitting authority may establish within the
permit what information relative to the nutrient management plan must
be submitted. At a minimum, nutrient management plans must be
maintained on-site and be available upon request by EPA or the State
permitting authority. Regarding the changes to the individual permit
application form and the NOI for coverage under a general permit, EPA
believes that the minimum data elements adopted in today's rule will
provide permitting authorities with the essential information needed to
evaluate permit applications properly and will ensure national
consistency of information received by permit authorities. To the
extent that a permitting authority needs additional information to
support a permit application, it can use other Clean Water Act
information gathering authorities (e.g., section 308 of the Clean Water
Act) to obtain such information. The new data elements correspond with
the new rule requirements, including land application information.
In today's final rule, the Agency has revised the topographic map
requirements for a permit application for CAFOs, by specifying that the
CAFO must provide a topographic map of the geographic area in which the
CAFO is located showing the specific location of the production area.
In today's final rule, the Agency is consolidating all of the
information to be submitted as part of a CAFO's request to seek
coverage under an NPDES permit in 40 CFR 122.21(i). This information
must be submitted by a CAFO, whether the CAFO is seeking coverage under
an

[[Page 7207]]

individual permit or a general permit. In establishing the topographic
map requirement of Sec. 122.21(i)(iv), the Agency is requiring the
descriptive information necessary for permitting a CAFO, and not
including all of the elements specified in 40 CFR 122.21(f)(7), which
generally do not apply to a CAFO's operations.
In the future, EPA plans to allow the electronic submission of all
NPDES permit applications such as Forms 1, 2B, and Notices of Intent
for general permits (including attachments such as maps and diagrams).
EPA has proposed a separate rule dealing with electronic reporting and
recordkeeping (66 FR 46161; August 31, 2001) and is currently working
to address comments and resolve technical and legal issues. None of the
information collection requirements being promulgated in today's
rulemaking are intended to limit or conflict with the future use of
electronic reporting or recordkeeping.

C. What Are the Requirements and Conditions in an NPDES Permit?

All CAFO NPDES permits must contain a number of requirements and
conditions, including effluent limitations, special conditions,
standard conditions, and monitoring and reporting requirements. The
December 1996 U.S. EPA NPDES Permit Writers Manual, 40 CFR 122.41, and
40 CFR 122.42 provide a detailed discussion of all aspects of an NPDES
permit. This section focuses primarily on the major elements of a CAFO
NPDES permit that are affected by today's rule. Specifically, this
section describes the effluent limitations, special conditions
applicable to CAFOs, standard conditions included in all NPDES permits,
and monitoring and reporting requirements.
1. What Are the Different Types of Effluent Limitations That May Be in
a CAFO Permit?
When developing effluent limitations for a CAFO NPDES permit, the
permitting authority must consider limits based on applicable
technology-based requirements or any more stringent requirements
necessary to protect water quality. A water quality-based effluent
limitation is designed to protect the quality of the receiving water by
ensuring State or Tribal water quality standards are met. In cases
where a technology-based permit limit is not sufficiently stringent to
meet water quality standards, the permit must include appropriate water
quality-based standards. For example, a technology-based standard for a
CAFO might allow overflows from storage lagoons under certain
circumstances. In some cases, the overflows might have to be restricted
or further controlled to ensure that water quality standards are met.
EPA does not expect that water quality-based effluent limitations will
be established for CAFO discharges resulting from the land application
of manure, litter, or process wastewater. As explained in Section
IV.A.6 above, if a CAFO complies with the technical standards for
nutrient management established by the Director, any remaining
discharges of manure or process wastewater from the land application
area are considered agricultural storm water. However, EPA encourages
States to address water quality protection issues in their technical
standards for determining appropriate land application practices.
Today's rule does not change any aspects of water quality-based
effluent limitations in the NPDES regulations.
There are two general approaches to developing technology-based
limitations: (1) Using national effluent limitations guidelines (ELGs)
and (2) using BPJ on a case-by-case basis (in the absence of ELGs).
Today's rule revises the ELGs for Large CAFOs. Small and Medium CAFOs
are not subject to the ELGs; therefore, the permitting authority will
rely on BPJ to establish technology requirements for Small and Medium
CAFOs. Revisions to the ELGs are discussed in detail below.
2. Effluent Limitations Guidelines for Large CAFOs
The effluent limitations section in NPDES permits is the primary
mechanism for controlling discharges of pollutants to waters of the
U.S. This section of the permit describes the specific limitations, in
either a narrative or numeric form, that apply to the permittee. The
permit contains either technology-based effluent limits (those based on
a determination of the degree of pollutant reduction that can be
achieved by applying pollution control technologies or practices) or
water quality-based effluent limits (those based on the condition of
the receiving water body) or both, and it may contain additional BMPs,
as needed. This section discusses the ELGs established for Large CAFOs.
Today's final rule establishes new ELGs for Part 412, Subpart C,
which applies to beef cattle, dairy cattle, and heifers; and Part 412,
Subpart D, which applies to veal calves, swine, and poultry (chickens
and turkeys). Today's rule also revises the applicability of Part 412,
Subpart A to cover only horses and sheep.
Requirements for Large CAFOs are being established under the
authority of Best Practicable Control Technology Currently Available
(BPT), Best Available Technology Economically Achievable (BAT), Best
Conventional Pollutant Control Technology (BCT), and NSPS, consistent
with the factors for consideration under the Clean Water Act, as
discussed in Sections II.A.2 and IV.C.2.f of this preamble.
a. To which CAFOs do the effluent guidelines apply?. In today's
final rule, EPA is revising the 1974 ELGs for beef cattle, dairy
cattle, veal calves, swine, and poultry. Consistent with the 1974 ELG
regulation, EPA is continuing to apply technology-based ELGs only to
those operations which are defined as Large CAFOs at 40 CFR 122.23. In
the case of Medium or Small CAFOs, or CAFOs not otherwise subject to
Part 412, effluent limitations will be established on a case-by-case
basis by the permitting authority using BPJ.
This final rule removes language referring to the type of manure
handling or watering system employed at laying hen and broiler
operations; as a result, it expands the scope of the rule to also
address chicken operations with dry litter management systems. The term
``dry'' does not mean that no wastewaters are associated with these
types of operations. For example, poultry waste includes manure,
poultry mortalities, litter, spilled water, waste feed, water
associated with cleaning houses, runoff from litter stockpiles, and
runoff from land where manure has been applied. Today's rule adds
explicit references to veal operations and includes requirements for
Large veal CAFOs under Part 412, Subpart D. (Veal calves were included
in the 1974 ELGs as part of ``slaughters steers and heifers.'') Today's
rule further expands the applicability of the effluent guidelines to
cover Large heifer CAFOs and operations that confine immature swine
(i.e., swine weighing less than 55 pounds).
What did EPA propose? In the proposed rule, EPA applied the
technology-based ELGs to all Large CAFOs (the 1974 ELGs apply to only
Large CAFOs) and proposed to expand the scope of the rule to apply to
Medium CAFOs as well. Small CAFOs were excluded from the applicability
of the ELGs in the proposed rule, and the limits included in their
permits were to be based on BPJ. EPA also proposed to expand the scope
of the rule to include heifer operations, immature swine operations
(e.g., swine nurseries), and chicken operations with dry litter
management systems.

[[Page 7208]]

What were the key comments? EPA received a variety of comments
regarding the size of operation to which the ELGs should apply. A
number of comments favored retaining the framework of the 1974 ELGs,
limiting the applicability of the ELGs to Large CAFOs and relying on
the use of BPJ for Small and Medium CAFOs. Some commenters favored
allowing even broader use of BPJ, with the permitting authority
establishing BPJ-based permit limits for all CAFOs, regardless of size.
Conversely, other commenters suggested applying the ELG requirements to
all CAFOs, including Small and Medium CAFOs. In general, commenters
expressing support for applying ELG requirements to Small and Medium
CAFOs believe that basing permit requirements on BPJ will lead to a
lack of uniformity in permit development. They believe the permit
writers should not have an inappropriate amount of flexibility and
there should be consistent effluent limitations for all CAFOs.
The SBAR Panel provided comments to EPA on this topic during the
development of the proposed rule, suggesting that EPA consider less
stringent ELGs for Medium CAFOs or allow permits for Medium CAFOs to be
developed based on BPJ. The SBAR Panel stated that providing a
mechanism for permitting authorities to establish less stringent
guidelines for smaller facilities, based on consideration of economic
achievability, could result in permit conditions that are more
appropriately tailored to smaller operations and reduce the overall
financial burden on the industry.
Rationale. The ELGs being promulgated in today's rule apply only to
Large CAFOs, which is consistent with the approach used for the 1974
ELG regulation. EPA is not extending the ELG requirements being
codified at 40 CFR Part 412 to Small or Medium CAFOs because setting
the permit limitations for these facilities using BPJ allows for the
establishment of permit conditions that are more appropriately tailored
to and more directly address the site-specific conditions that led to
the facility being defined or designated as a CAFO. This approach is
consistent with the manner in which permit requirements for Small and
Medium CAFOs have been established prior to today's rule.
The ELGs promulgated in today's rule mimic the fundamental
structure embodied in the NPDES provisions. The NPDES provisions at
Part 122 establish a threshold (in terms of numbers of animals) above
which every AFO is defined as a CAFO (specifically, these are defined
as Large CAFOs). Similarly, EPA has determined that, because of the
nature of these Large CAFOs and the potential risk discharges from
these operations pose to the environment, the ELGs promulgated today
should apply to Large CAFOs. However, for the reasons discussed below
and consistent with the approach used in establishing the 1974 ELGs,
EPA is not establishing ELGs for Small or Medium CAFOs. EPA's analyses,
based on USDA data, show that small and medium AFOs are more likely
than Large CAFOs to have a sufficient land base for utilizing manure
nutrients at rates consistent with appropriate agricultural utilization
of nutrients. Small and medium AFOs are defined or designated as CAFOs
only when certain conditions that pose an environmental risk are
present at the operation. Since these smaller operations become CAFOs
only if certain conditions are present, and the highly site-specific
conditions that trigger any particular operation being defined or
designated as a Small or Medium CAFO will vary from facility to
facility, discharges from Small and Medium CAFOs are more appropriately
controlled through NPDES permit limitations on a BPJ basis. EPA expects
that, by tailoring the permit requirements for Small and Medium CAFOs
on a BPJ basis, these smaller facilities will be able to better and
more efficiently target their more limited resources to reducing their
environmental impacts. This increased flexibility for setting the
permit requirements for Small and Medium CAFOs will reduce the overall
financial burden on the industry. Consistent with the Unified National
AFO Strategy, EPA is focusing today's ELGs on those larger operations
that present the greatest potential risk to water quality.
EPA is extending the applicability of the ELGs to heifer operations
and operations that confine immature swine (i.e., swine weighing less
than 55 pounds). Increasingly, swine operations may specialize in a
production phase, such as a nursery that confines swine under 55
pounds. In the dairy sector, some operators prefer to obtain their
dairy cattle from heifer-raising operations. These heifer operations
specialize in raising immature dairy cattle until the cattle are ready
for their first calving. These operations for immature animals are
increasing in both size and number, and they operate similarly to other
CAFOs. Therefore, EPA is today including immature swine under Subpart D
(swine/poultry/veal) and heifer operations under Subpart C (beef/dairy/
heifer) of the ELGs.
In addition, EPA is expanding the scope of the ELGs to address
chicken operations with dry litter management systems to better address
water quality impacts associated with both storage and land application
of manure, litter, and process wastewaters. EPA believes that improper
storage, as well as improper land application rates that exceed the
appropriate agricultural utilization of nutrients, has contributed to
water quality problems, especially in areas with large concentrations
of poultry production. Nutrients from large poultry operations continue
to contaminate surface waters because of 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). Most poultry operations
are located on smaller parcels of land in comparison to other livestock
sectors, placing increased importance on the proper management of the
potentially large amounts of manure, litter, and process wastewaters
that they generate.
In the 1974 ELG regulations, EPA established requirements in a
manner that placed CAFOs into one of two groups, or subcategories,
based on the type of animals at the operation: One subcategory
established requirements for ducks only; the second subcategory
established identical ELG requirements for CAFOs with horses, sheep,
slaughter steers and heifers (including veal calves), dairy cattle,
chickens, turkeys, and swine.
Today's rule establishes ELGs based on segregating the animal
sectors into four different subcategories. The ELG regulations at Part
412, Subpart A now apply only to Large CAFOs with horses and sheep, but
the ELG requirements for these operations remain unchanged by today's
rule. Part 412, Subpart B continues to apply only to CAFOs with at
least 5,000 ducks and these requirements also remain unchanged by
today's rule. Today's rule segregates the remaining animal types
covered by the ELGs into two additional subcategories. Part 412,
Subpart C applies to Large CAFOs with dairy or beef cattle other than
veal (heifer operations are covered by this subpart), and Part 412,
Subpart D applies to Large CAFOs with swine, veal, or poultry. EPA
developed these subcategories to better reflect similarities in
production and waste management practices among the operations grouped
together.
The operations in Subpart C predominantly use production and waste
management practices that differ

[[Page 7209]]

substantially from those practices used at operations in Subpart D.
Large swine, poultry, and veal calf operations predominantly maintain
their animals in confinement housing as opposed to the open outdoor
lots used at the vast majority of large beef feedlots, heifer
operations, and dairies (while dairy cattle at many dairies spend much
of their time indoors either in the milking parlor or in barns, most
dairy cattle also have access to outdoor areas similar in many respects
to the outdoor areas at beef feedlots). The open outdoor lots present
at beef feedlots expose large areas to precipitation, necessitating the
ability to collect storm water runoff in retention ponds. Heifer
operations (other than those that are pasture-based) are configured and
operated in a manner very similar to beef feedlots, and thus have very
similar waste management practices. 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 runoff 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 and heifer operations, 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 precipitation.
Because swine, poultry, and veal calves are predominantly
maintained in confinement housing, the waste management practices at
Large CAFOs covered by Subpart D differ substantially from the
practices at Subpart C operations. These confinement operations are
able to manage manure largely in a relatively dry form, or contain
liquid wastes in storage structures such as lagoons, tanks, or
underhouse pits. Broiler and turkey operations generate a dry manure
which can be kept covered either under a shed or with tarps. Laying hen
operations with dry manure handling practices usually store manure
below the birds' cages and inside the confinement building. Nearly all
swine, veal, and poultry operations confine their animals under roof,
avoiding the use of open animal confinement areas that generate large
volumes of contaminated storm water runoff. These Subpart D operations
differ most notably from Subpart C operations in that they, in most
cases, do not have to manage the large volumes of storm water runoff
that must be collected at Subpart C operations. While Subpart D
operations that manage wastes in uncovered lagoons must be able to
accommodate precipitation, they are largely able to divert
uncontaminated storm water away from the lagoons and minimize the
volume of wastes they must manage.
The statutory factors considered as a basis for subcategorization
are discussed in Section IV.C.2.f of the preamble and in the Technical
Development Document.
b. What are the land application effluent guidelines for all Large
CAFOs covered by Subparts C and D (beef, dairy, heifer, swine, poultry,
and veal)? The ELGs described in this section apply to all Large CAFOs
covered by Part 412, Subpart C (beef, dairy, and heifer) and Subpart D
(swine, poultry, and veal). These BPT, BCT, BAT, and NSPS requirements
are being established for the reasons discussed below in this section,
and consistent with the factors for consideration under the Clean Water
Act, as discussed in Sections II.A.2 and IV.C.2.f of this preamble.
Today's final rule establishes requirements to ensure the proper
application of manure, litter, and other process wastes and wastewaters
to land under the control of Large CAFOs. The ELGs established by this
rule require Large CAFOs to prepare and implement a site-specific
nutrient management plan (described in detail in Section IV.C.3), for
manure, litter, and other process wastewater applied to land under
their ownership or operational control. In addition to preparing the
site-specific nutrient management plan, and the recordkeeping and
reporting requirements described in Section IV.D, Large CAFOs need to
conduct the following land application BMPs and can use other BMPs that
assist in complying with the ELGs:
? Land-apply manure, litter, and other process wastewaters in
accordance with a nutrient management plan that establishes application
rates for each field based on the technical standards for nutrient
management established by the Director.
? Collect and analyze manure, litter, and other process
wastewaters annually for nutrient content, including nitrogen and
phosphorus.
? At least once every five years, collect and analyze
representative soil samples for phosphorus content from all fields
where manure, litter, and other process wastewaters are applied.
? Maintain a setback area within 100 feet of any down-
gradient surface waters, open tile line intake structures, sinkholes,
agricultural well heads, or other conduits to surface waters where
manure, litter, and other process wastewaters are not applied. As a
compliance alternative, the CAFO may elect to establish a 35-foot
vegetated buffer where manure, litter, or other process wastewaters are
not applied. For further flexibility the CAFO may demonstrate to the
permitting authority that a setback or vegetated buffer is unnecessary
or may be reduced.
? Periodically conduct leak inspections of equipment used for
land application of manure, litter, or process wastewater.
? Maintain on-site the records specified in 40 CFR 412.37(c).
These records must be made available to the permitting authority and
the Regional Administrator, or his or her designee, for review upon
request. Records must be maintained for 5 years from the date they are
created.
Today's rule requires Large CAFOs to determine and implement site-
specific nutrient application rates that are consistent with the
technical standards for nutrient management established by the
permitting authority. Permitting authorities have discretion in setting
technical standards that minimize phosphorus and nitrogen transport to
surface water. Technical standards for nutrient management should
appropriately balance the nutrient needs of crops and potential adverse
water quality impacts in establishing methods and criteria for
determining appropriate application rates. The permitting authority may
use the USDA Natural Resource Conservation Service (NRCS) Nutrient
Management Conservation Practice Standard, Code 590, or other
appropriate technical standards, as guidance for development of the
applicable technical standard. The current NRCS Nutrient Management
technical standard describes three field-specific risk assessment
methods to determine whether the land application rate is to be based
on nitrogen or phosphorus, or whether land application is to be
avoided. These three methods are: (1) Phosphorus Index; (2) Soil
Phosphorus Threshold Level; and (3) Soil Test Phosphorus Level. The
permitting authority has the discretion to determine which of these
three methods, or other State-approved alternative method, is to be
used.
The field-specific risk assessment provides CAFOs with the
information needed to determine if manure nutrients should be applied
at a nitrogen or phosphorus application rate, or if no manure
application is appropriate. In today's rule, EPA clarifies that CAFOs
may apply conservation practices, best management practices, or
management activities to their land application areas, which in
aggregate may reduce field vulnerability to off-site phosphorus

[[Page 7210]]

transport to surface waters. This may reduce the field-specific risk
rating to a level consistent with manure application at a nitrogen rate
in accordance with the technical standard established by the Director.
When establishing technical standards for nutrient management, the
permitting authority also shall include appropriate flexibilities for
any CAFO to implement nutrient management practices to comply with the
standards. Flexibilities should include consideration of multi-year
phosphorus application (also called phosphorus banking) on fields that
do not have a high potential for phosphorus runoff to surface water,
implementation of phosphorus-based nutrient management phased-in over
time, and other components as determined appropriate by the Director.
EPA recognizes that, under some conditions, CAFOs may experience
practical difficulties in applying manure nutrients to fields at a low
phosphorus rate. Application equipment at some CAFOs may be unable to
deliver the small phosphorus amount needed by crops in a single year.
Thus, EPA is clarifying in this rule that CAFOs may elect to use a
multi-year phosphorus application rate in accordance with the technical
standards established by the Director. A multi-year approach allows a
single application of phosphorus applied as manure at a rate equal to
the recommended phosphorus application rate or estimated phosphorus
removal in harvested plant biomass for the crop rotation or multiple
years in the crop sequence. Crop rotations may vary in length depending
on the crops produced, geographic area, and other site-specific
conditions. For example, a two-year rotation may be common in some
areas, while a three-year rotation may be more common in others.
Rotations involving grains or hays, such as alfalfa, may run for five
or more years. In other instances, crops are produced in a continuous
cycle. Many wastewater spray fields are permanently in hay and grasses.
In practice, multi-year phosphorus applications typically would be
based on applying manure nutrients at a rate achievable with a CAFOs
application equipment, and determining the removal rate in order to
calculate the length of time until the next manure nutrient application
window. Thus, multi-year applications may provide the phosphorus needed
for a few to many years. The field would not receive additional
phosphorus applications until the amount applied in the single year had
been removed through plant uptake and harvest. However, under any
multi-year application, the rate at which manure nutrients are applied
would not exceed the annual nitrogen recommendation of the year of
application. Nor would application be made on sites determined
inappropriate based on a high potential for phosphorus runoff to
surface water. The appropriateness of multi-year phosphorus application
would be based on a field-specific risk assessment in accordance with
the technical standard established by the Director.
What did EPA propose? The proposed rule included ELGs that would
have required CAFOs to develop and submit a certified Permit Nutrient
Plan, which would be reviewed annually and recertified every five
years, and would have limited manure spreading on all land owned or
under the operational control of the CAFO to the nitrogen-based rate,
unless soil or other field conditions at the CAFO warranted limiting
the application rate to the more stringent phosphorus-based rate. EPA
also proposed to require a series of land application BMPs, including
those listed above in this section of the preamble.
What were the key comments? EPA received a number of comments
supporting the type and frequency of manure, litter, process
wastewater, and soil sampling. Some commenters were opposed to
establishing the proposed phosphorus-based standard in nutrient
management plans, while other commenters stated that EPA should
establish phosphorus-based standards for all CAFOs. In addition, some
commenters were opposed to the inclusion of specific manure, litter, or
wastewater application rates in NPDES permits, but supported the
development of site-specific rates in a nutrient management plan.
EPA received many comments on the requirement to prohibit land
application of manure, litter, and other process wastewaters within a
100-foot setback. Some commenters supported the 100-foot setback;
however, the majority of commenters expressed opposition to
establishment of a setback, in many cases stating that the setback
restriction will unnecessarily reduce the available acreage for manure
application and will be costly to implement because of its
inflexibility. The commenters also stated that it should be left to
States or a nutrient management planner to determine whether a setback
or vegetated buffer is warranted, and to determine the size of such
areas. The proposed rule considered allowing CAFOs to establish a 35-
foot vegetated buffer strip as an alternative to the 100-foot setback.
Many commenters were in favor of an approach that offers flexibility to
the CAFO and to the nutrient management planner to incorporate site-
specific considerations while utilizing the maximum amount of manure
nutrients on site. They suggested that in cases where the operation can
demonstrate that manure application will not affect surface water, such
as when application occurs down-gradient of the surface water, no
setback or buffer should be required.
The SBAR Panel noted the high cost of phosphorus-based application
relative to nitrogen-based application and supported EPA's intent to
require the use of a phosphorus-based application rates only where
determined necessary based on field-specific conditions. According to
the SBAR Panel, if the soil is not phosphorus-limited, then nitrogen-
based application should be allowed. The SBAR Panel recommended that
EPA consider leaving the determination of whether to require the use of
phosphorus-based rates to BPJ and that EPA work with USDA in exploring
such an approach.
Rationale. The nutrient-based limitations in this rule will reduce
the discharge of nitrogen, phosphorus, and other pollutants in field
runoff by restricting the amount of manure, litter, and other process
wastewaters that may be applied to the amount that is appropriate for
agricultural purposes, according to technical standards established by
the permitting authority. Application of manure, litter, and other
process wastewaters in excess of the crop's nutrient requirements
increases the pollutant runoff from fields because the crop does not
need these nutrients, increasing the likelihood of their being released
to the environment. In many cases, the application of manure at a
nitrogen-based rate is consistent with appropriate agricultural
utilization of nutrients. Soils are able to retain the amounts of
phosphorus that would be applied, or other site-specific conditions
(e.g., the types of conditions assessed through the phosphorus index
approach) are such that the runoff of phosphorus and other pollutants
or the likelihood of the pollutants reaching surface waters are
adequately controlled.
However, allowing all manure to be spread at the nitrogen-based
application rate may not always ensure appropriate agricultural
utilization of nutrients. In areas that have high to very high
phosphorus buildup in the soils, allowing continued application at a
nitrogen-based rate could allow for continued discharge of phosphorus
from the CAFO's cropland and consequently may not adequately control
phosphorus discharges from these areas. In addition,

[[Page 7211]]

EPA believes that in some instances phosphorus levels in soils are so
high, or site-specific conditions (e.g., highly erodible soils) are
such that any application of manure, litter, or other process
wastewaters would be inconsistent with appropriate agricultural
utilization of nutrients and would lead to excessive levels of
nutrients and other pollutants in runoff. EPA expects that these
factors will be taken into account as State permitting authorities
develop appropriate technical standards for the land application of
manure by CAFOs.
The trace metals present in animal wastes, when applied to fields
at either nitrogen- or phosphorus-based rates, are made available to
plants in sufficient quantities that they provide many of the
micronutrients necessary for proper plant growth. Excessively high
levels of these trace metals, however, can inhibit plant growth. By
limiting manure applications to the nitrogen- or phosphorus-based rate,
CAFOs will also be limiting the rate at which metals are applied to
fields and thus reduce the potential for applying excessive amounts of
the trace metals.
Nitrogen-based application rates are generally based on the
following factors: (1) The nitrogen requirement of the crop to be grown
based on 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 the same crop at
nearby farms or county records. Once the nitrogen requirement for the
crop is established, the manure application rate is generally
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 are based on the
nitrogen content in the manure and should also account for application
methods, such as incorporation, and other site-specific practices.
Phosphorus-based application rates generally take into account the
phosphorus requirements of the crop, as well as the amount of
phosphorus that will be removed from the field when the crop is
harvested. EPA expects that State standards will generally provide
CAFOs the flexibility to determine, separately for each field, whether
manure is to be applied at the nitrogen-or the phosphorus-based
application rate. Thus, EPA expects that as the ELG requirements are
implemented, some CAFOs will be able to apply manure at the nitrogen-
based rate for all of their fields; some CAFOs will be limited to the
phosphorus-based rate on all of their fields; and the remaining CAFOs
will have some fields that are limited to the phosphorus-based rate and
some fields where manure can be applied at the nitrogen-based rate. In
making these field-specific determinations, CAFOs must use the method
authorized by the permitting authority.
Today's rule specifies that manure, litter, or other process
wastewaters are not to be applied within 100 feet of any down-gradient
surface waters, open tile line intake structures, sinkholes,
agricultural well heads, or other conduits to surface waters. As a
compliance alternative to the 100-foot setback, the CAFO may elect to
establish a 35-foot vegetated buffer where application of manure,
litter, and other process wastewaters are not applied; or may
demonstrate to the permitting authority that a setback or vegetated
buffer is unnecessary or may be reduced because implementation of
alternative conservation practices or site-specific conditions will
provide pollutant reductions equivalent to or better than the
reductions that would be achieved by the 100-foot setback.
A setback is an area where manure, litter, or other process
wastewaters are not applied, but crops may continue to be grown. The
transport of nutrients and other pollutants in manure to surface waters
and the rate at which transport occurs is dependent on the land use,
geography, topography, climate, amount and method of manure
application, and the nature and density of vegetation in the area. The
setback achieves pollutant reductions by increasing the distance
pollutants from the land application of manure, litter, or other
process wastewaters have to travel to reach surface waters. The setback
requirements established by this rule will minimize the potential
runoff of pathogens, hormones such as estrogen, and metals and reduce
the nutrient and sediment runoff.
Because a setback may not be the most cost-effective practice to
control runoff in all cases, this rule includes a compliance
alternative that allows the CAFO to establish a 35-foot vegetated
buffer in lieu of the 100-foot setback A vegetated buffer is a
permanent strip of dense perennial vegetation, where no crops are
grown, that slows runoff, increases water infiltration, absorbs
nutrients, and traps pollutants bound to sediment. The vegetated buffer
is more effective (on a per-foot of width basis) than the setback at
reducing pollutant runoff, therefore the compliance alternative allows
the buffer width to be smaller than the setback. Both approaches are
expected to achieve comparable pollutant reductions. (EPA decided not
to require all fields receiving manure, litter, or other process
wastewaters to have a vegetated buffer because that would unnecessarily
require CAFOs to take that portion of the cropland out of production.)
The setback requirements included in today's rule contain an
additional compliance alternative that allows the CAFO to implement
alternative conservation practices that will provide pollutant
reductions equivalent to or better than the 100-foot setback. In some
cases, the CAFO may be able to demonstrate to the permitting authority
that no setback is necessary based on site-specific conditions, such as
when the surface water is located up-gradient from the area of manure
application.
Manure must be sampled at least once per year and analyzed for its
nutrient content, including nitrogen and phosphorus. EPA believes that
annual sampling of manure is the minimum frequency to provide the
necessary nutrient content on which to establish the appropriate
application rate. The nutrient composition of manure varies widely
among farms because of differences in animal species and management,
and manure storage and handling practices. The only method available
for determining the actual nutrient content of manure for a particular
operation is laboratory analysis. 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 exposed to air.
All CAFOs must collect and analyze soil samples for phosphorus at least
once every 5 years from all fields under their control that receive
manure. Soil tests are an important tool to determine the crop
phosphorus needs and to determine the optimum application rate. Crop
rotation cycles vary, and State programs require soil sampling at
varying frequencies that in many cases are tied to the soil type. EPA
requires soil sampling at least once every 5 years to correspond with
the permit cycle for CAFOs, although States may require more frequent
sampling. Without manure and soil analyses, CAFOs might apply more
commercial fertilizer than is needed or spread too much manure on their
fields. Either

[[Page 7212]]

practice can result in overfertilization, affecting crop yields and
increasing the pollutant runoff from fields.
Records of the application of manure and wastewater must be
maintained on site. These records are: (1) The expected crop yields;
(2) the date manure, litter, or process wastewater is applied to each
field; (3) the weather conditions at the time of application and 24
hours before and after application; (4) test methods used to sample and
analyze manure, litter, process wastewater, and soil; (5) results from
manure and soil sampling; (6) explanation of the basis for determining
manure application rates, as provided in the technical standards
established by the Director; (7) the calculations showing the total
nitrogen and phosphorus to be applied to each field, including sources
other than manure, litter, or process wastewater; (8) total amount of
nitrogen and phosphorus actually applied to each field, including
documentation of calculations of the total amount applied; (9) the
method used to apply the manure, litter, or process wastewater; and
(10) dates of manure application equipment inspection. Crop yields and
the manure and soil testing data, as well as records on applications
conducted in previous years, are used to determine whether to apply
manure on a nitrogen or phosphorus basis and the amount of nutrients to
be applied. The CAFO and the permitting authority will use the
remaining land application records to track the amount of nutrients
applied and to ensure that application occurs consistent with the
nutrient management plan.
EPA believes the land application rates, the 100-foot setback (or
the use of equivalent practices authorized by the compliance
alternative), and the other land application BMPs included in this rule
will ensure that manure, litter, and other process wastewaters are
applied in a manner consistent with appropriate agricultural
utilization of the nutrients in manure, litter, and other process
wastewaters. Effluent limitations in the form of BMPs are particularly
suited to the regulation of CAFOs. For many CAFOs, controlling
discharges to surface waters is largely associated with controlling
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 vary 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 are required to
apply their manure, litter, and other process wastewaters to land in
accordance with the site-specific nutrient management practices that
ensure appropriate agricultural utilization of the nutrients in the
manure, litter, and other process wastewaters. 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 that ensures appropriate
agricultural utilization of nutrients varies 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
(nitrogen and phosphorus), and the amount of other nutrient sources to
be applied. For these reasons, EPA has determined that relying
exclusively on numeric ELGs to control these discharges is infeasible.
EPA has determined that the BMPs specified in today's rule represent
the minimum elements of an effective BMP program and are necessary to
control point source discharges to surface water. In this rule, EPA is
promulgating only those BMPs that are appropriate on a nationwide
basis, while giving States and permittees the flexibility to determine
the appropriate practices at a local level to achieve the effluent
limitations. The BMPs included in this rule are necessary to ensure
appropriate agricultural utilization of nutrients in manure, litter,
and other process wastewater.
EPA rejected establishing national requirements in this rule that
would prohibit manure application to frozen, snow-covered, or saturated
ground. As envisioned, the prohibition considered (but also rejected)
at the time of proposal would have required CAFOs to install sufficient
storage capacity to hold manure for the period of time during which the
ground is frozen, snow-covered, or saturated. According to EPA's
analyses, to meet such a requirement CAFOs in some areas, such as
northern States, would need to be able to store manure, litter, and
other process wastewaters for up to 270 days, depending on the amount
of precipitation and severity of winter. In practice, such a
prohibition could result in some facilities needing storage to hold
manure and wastes for 12 months to allow for spreading manure at times
that coincide with crop growing periods.
EPA rejected establishing these requirements in the final ELGs
because pollutant runoff associated with the application of manure,
litter, or other process wastewaters on frozen, snow-covered, or
saturated ground is dependent on a number of highly site-specific
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
reasonable and does not impose unnecessary cost on CAFO operators.
Further, given the site-specific nature of the cropland and runoff
characteristics, quantifying the pollutant reduction associated with
these requirements is difficult and imposing such requirements through
a national regulation could divert resources from other technologies
and practices that are more effective. Therefore, EPA believes that
requirements limiting the application of manure, litter, or other
process wastewaters to frozen, snow-covered, or saturated ground are
more appropriately addressed through NPDES permit limits established by
the permitting authority. Although EPA has decided not to include
requirements limiting the application of manure, litter, or other
process wastewaters to frozen, snow-covered, or saturated ground in
today's rule, the permitting authority retains the authority and is
encouraged to include these types of requirements as technology-based
standards using BPJ in NPDES permits as appropriate.
EPA is establishing provisions at 40 CFR 122.42(e) for permitting
authorities to include in NPDES permits a requirement for the CAFO to
develop and implement a nutrient management plan. Under these
provisions, NPDES permits are to include prohibitions, practices, and
procedures to achieve compliance with 40 CFR part 412, when applicable,
or effluent limitations based on BPJ when 40 CFR part 412 does not
apply.
As discussed above in this section and in section IV.C.3, today's
rule requires CAFOs to develop and implement a nutrient management
plan. For Large CAFOs, this requirement is reflected in the effluent
guideline as the BPT/BCT/BAT/NSPS limitations on land application
discharges (see 40 CFR 412.4(c)). Other CAFOs are also subject to the
requirement to develop and implement a nutrient management plan (see 40
CFR 122.42(e)(1)), although the permitting authority would establish
precise elements of the plan, such as manure application rates, on a
BPJ basis.

[[Page 7213]]

For the reasons detailed below, EPA has concluded that there are
certain constraints, including currently insufficient infrastructure
capacity, that prevent Large CAFOs (except new sources) from being able
to develop and implement the land application BMPs, including the
nutrient management plan, by the date they will need to seek permit
coverage under the requirements of this rule. Therefore, the ELGs
promulgated today require Large CAFOs that are existing sources to
implement the land application requirements at 40 CFR 412.3(c) by
December 31, 2006 because that is the date when EPA is assured that the
required planning is in fact available to the large number of regulated
sources and, therefore, becomes BPT/BCT/BAT. (EPA has similarly
concluded that Small and Medium CAFOs subject to the NPDES provisions
for nutrient management plans also will be unable to develop and
implement a nutrient management plan by the date they will need to seek
NPDES permit coverage under the requirements of this rule, for reasons
of insufficient infrastructure. Therefore, EPA is requiring Small and
Medium CAFOs that are existing sources to develop and implement
nutrient management plans by December 31, 2006.) For all CAFOs that are
new sources (i.e., Large CAFOs constructed after the effective date of
this rule), the land application requirements at 40 CFR 412.4(c) apply
immediately, as discussed further below.
Nutrient management plans are complex documents and their
preparation requires knowledge in a number of areas. To adequately
address the requirements established by today's rule, the nutrient
management plan should be prepared by individuals (either CAFO owners
and operators, or their technical consultants) who are competent in or
have an understanding of a number of technical areas, including soil
science and soil fertility, nutrient application and management, crop
production, soil and manure testing and results interpretation,
fertilizer materials and their characteristics, BMPs for the management
of nutrients and water, and applicable laws and regulations. Because of
this, EPA believes it is reasonable to anticipate that many CAFOs will
choose to acquire the services of consultants with the technical
expertise to prepare nutrient management plans and make recommendations
regarding the implementation of the land application BMPs (e.g.,
whether to use one of the authorized compliance alternatives in lieu of
the setback requirements; options for reducing the nutrient content of
manure, such as treatment or alternative feeding strategies;
modifications to cropping strategies and land application practices).
Further, while the provisions of 122.42(e)(1) and 412.4(c)(1) do
not specifically require nutrient management plans to be prepared or
reviewed by certified experts, EPA recognizes that USDA, and other
organizations such as the American Society of Agronomy, Crop Science
Society of America, Soil Science Society of America, and a number of
land grant universities, recommend that nutrient management plans be
prepared by trained and certified specialists. USDA has published
technical guidance that calls for the development of CNMPs and details
the specific components and considerations that should be addressed
during CNMP development. The Unified AFO Strategy, developed jointly by
USDA and EPA, defines a national objective for all AFOs to develop
CNMPs to ensure appropriate agricultural utilization of nutrients. (The
vast majority of these CNMPs will be developed under voluntary
programs.) EPA is not requiring CAFOs to use certified experts in
preparing the nutrient management plans and is not requiring CAFOs to
develop CNMPs, but the regulatory requirements for nutrient management
plans are designed to dovetail with USDA standards for CNMPs so that
CAFOs can meet EPA's nutrient management plan requirements and USDA's
CNMP objectives in a single undertaking. It is therefore reasonable to
expect that many CAFOs will opt to have their nutrient management plans
prepared by certified specialists, an outcome that EPA encourages.
As discussed in more detail below, EPA interprets Section 301(b)(2)
of the CWA to require that, for any effluent guideline promulgated, or
any technology-based limitation established on a BPJ basis, after March
31, 1989, a discharger must achieve immediate compliance with the BPT/
BCT/BAT effluent limitations upon issuance of the discharger's NPDES
permit. With imposition of the nutrient management plan requirement,
there may be a large number of CAFOs that are all trying to develop
plans at the same time. Yet, there is a limited pool of certified
preparers and other technical experts that are available nationwide to
develop nutrient management plans and CNMPs. It is reasonable to
recognize that Large CAFOs (and Small and Medium CAFOs), along with
AFOs, could be competing for the services of the certified preparers
and other technical experts. EPA estimates there are approximately
15,500 CAFOs, including 11,000 Large CAFOs, and 222,000 AFOs. AFOs are
not required to prepare CNMPs, but their access to sources of public
funds, such as EQIP, may be contingent on their adherence to NRCS
technical standards, including preparation of a CNMP. Thus, additional
time is needed for development and implementation of the plan.
Another aspect that prevents CAFOs from immediately complying with
the land application BMPs is the need for States to ensure that they
have established appropriate technical standards that CAFOs will use to
determine the appropriate application rates for their fields. These
standards must be a part of the State NPDES permitting program
revisions discussed in Section V.C of this preamble. In addition, CAFOs
will need some time to determine whether they have sufficient cropland
for applying all of the nutrients contained in the manure, litter, and
other process wastewaters that they generate. If they determine that
they have excess nutrients, the CAFOs will need to identify
alternatives for reducing the nutrient content, or seek markets for the
excess nutrients such as off-site cropland, centralized processing
facilities (e.g., pelletizing plants, centralized anaerobic digester-
based power generation facilities), or other solutions. These
activities cannot logically commence until the CAFO has developed the
plan and knows what its allowable manure application rate is.
EPA considered whether CAFOs should be required to implement
certain elements of the land application BMPs in advance of preparing a
nutrient management plan, but rejected doing so because the elements of
the land application BMPs are inseparably linked together. The nutrient
management plan is the tool CAFOs must use to assess soil and other
field conditions at their operation, in conjunction with manure
characterization data and crop rotations and yield projections, to
determine the site-specific nitrogen or phosphorus-based rate at which
manure, litter, and other process wastewaters are to be applied. The
proper application rate can not be reasonably determined without first
preparing the nutrient management plan. CAFOs will also use their
nutrient management plan to inform their decision making on whether to
comply with the provisions at 412.4(c)(5) by establishing the 100-foot
setback on their fields or to instead select one of the compliance
alternatives authorized by those provisions. EPA has also

[[Page 7214]]

determined that requiring manure and soil sampling and the record-
keeping requirements included in 412.37(c) in advance of preparing and
implementing the nutrient management plan would impose an unnecessary
burden on CAFOs because, in the absence of a nutrient management plan
that determines the appropriate application rates, these elements will
not directly establish that manure will be applied in a manner that
ensures appropriate utilization of nutrients. (Some of these actions,
such as manure and soil sampling, may well be undertaken by the CAFOs
as they develop their nutrient management plans, but EPA determined it
was unnecessary for the regulation to impose these requirements in
advance of nutrient management plan development and implementation.)
The land application BMPs, including the requirement to develop and
implement a nutrient management plan, will immediately apply to all
Large CAFOs who commence construction after the effective date of this
rule (i.e., new sources). Section 306(b)(1)(B) specifies that new
source performance standards shall become effective upon promulgation.
New sources engage in extensive site selection, facility design, and
construction activities prior to commencing operations. Aspects
addressed during this phase include location considerations (e.g.,
climate and topographical factors), facility design variables to
optimize the production process, and waste management considerations
including the identification of optimal waste handling practices (e.g.,
waste collection methods, the use of topographical elevation changes to
facilitate waste handling) and disposal options (e.g., on-site
application on cropland, shipment to off-site markets). These
activities undertaken by new sources prior to commencing construction
are highly technical in nature, and CAFOs will typically engage the
services of a number of consultants. While CAFOs are expected to engage
the services of technical consultants to develop the nutrient
management plans required by this rule, the analyses embodied within
the nutrient management plan will not significantly add to the scope of
analyses new sources will engage in prior to commencing operations.
EPA has considerable discretion under CWA section 304(b)(2) to
determine whether and when a particular technology or process is BPT,
BCT, or BAT. EPA also has broad authority to interpret CWA section 301.
In E.I. du Pont de Nemours & Co. v. Train, 430 U.S. 112 (1977), the
Supreme Court accorded great deference to EPA in promulgating effluent
limitations guidelines as regulations under section 301, noting that
``[CWA Section]
101(d) requires us to resolve any ambiguity on this
score in favor of the Administrator.'' Id. at 128. The Supreme Court
also found that section 501(a) supports EPA's broad use of its
regulatory authority to implement section 301. Id. at 132. EPA believes
that its decision to promulgate the land application BMPs, including
the nutrient management plans, with a future date for implementation is
authorized by sections 301 and 304. Section 301(b)(2) in particular
directs EPA to promulgate ELGs that, within the constraints of economic
achievability, ``will result in reasonable further progress toward the
national goal of eliminating the discharge of all pollutants.'' Section
301(b)(2)(A).
EPA is aware that CWA sections 301(b)(2)(C) & (D) require ELGs to
be achieved ``in no case later than three years after the date such
limits are promulgated under section 304(b), and in no case later than
March 31, 1989.'' This language does not speak to the precise question
EPA confronts here: whether EPA can promulgate ELGs that are phased in
over time. In this case, for the reasons discussed above, while EPA
believes that the requirement to develop and implement a nutrient
management plan will be an ``available'' technology in the near future,
it is not now available for the large number of CAFOs subject to
today's rule. For this reason, EPA is, in essence, today promulgating
what will be the available technology for the future, similar to what
the Agency did for the pulp & paper effluent guideline. See 63 FR 18604
(Apr. 15, 1998). EPA is specifying the future date of December 31, 2006
because that is the date by which it predicts that sufficient capacity
and capability to develop and implement a nutrient management plan and
associated BMPs will be available to the great number of regulated
sources. The availability of technical experts, including certified
preparers, is a critically important component of the planning
requirement, and in a sense is itself the technology basis for that
BPT/BCT/BAT limitation. The Clean Water Act requires compliance with a
promulgated ELG--e.g., to develop a nutrient management plan--only once
the technology ripens as the basis for that ELG, in this case as an
available technology. While EPA is promulgating the nutrient management
plan requirement as BPT/BCT/BAT in this rulemaking, EPA's record
indicates that it may not truly be available for the subcategory as a
whole until December 31, 2006.
c. What are the production area requirements for all existing and
new Large beef, dairy, and heifer CAFOs (Part 412, Subpart C)? In
today's final rule, consistent with the 1974 ELG regulation, EPA is
continuing to establish BMPs for the CAFO production area, which
includes the animal confinement areas and the manure storage and
containment areas. These BPT, BCT, BAT, and NSPS requirements are being
established for the reasons discussed in this section, and consistent
with the factors for consideration under the Clean Water Act, as
discussed in Sections II.A.2 and IV.C.2.f of this preamble.
EPA is largely retaining the current effluent guidelines that apply
to beef and dairy operations, and adding language extending these
requirements to heifer-raising operations. These regulations, which are
codified at 40 CFR Part 412, Subpart C, prohibit the discharge of
manure, litter, and other process wastewaters, except for allowing
discharge when rainfall causes an overflow from a facility designed,
maintained, and operated to contain all manure, litter, and process
wastewaters, including storm water, plus runoff from the 25-year, 24-
hour rainfall event. In addition, today's rule requires Large CAFOs to
comply with the following BMPs:
? Perform weekly inspections of all storm water diversion
devices, runoff diversion structures, animal waste storage structures,
and devices channeling contaminated storm water to the wastewater and
manure storage and containment structure;
? Perform daily inspections of water lines, including
drinking water or cooling water lines;
? Install depth markers in all surface and liquid
impoundments (e.g., lagoons, ponds, tanks) to indicate the design
volume and to clearly indicate the minimum capacity necessary to
contain the 25-year, 24-hour rainfall event, including additional
freeboard requirements;
? Correct any deficiencies found as a result of daily and
weekly inspections as soon as possible;
? Do not dispose of mortalities in liquid manure or process
wastewater treatment systems, and mortalities must be handled in such a
way as to prevent discharge of pollutants to surface water, unless
alternative technologies implemented under alternative performance
standards are designed to handle mortalities; and
? Maintain on-site a complete copy of the records specified
in 40 CFR

[[Page 7215]]

412.37(b) and (c). These records must be available to the permitting
authority and the Regional Administrator, or his or her designee, for
review upon request. Records must be maintained for 5 years from the
date they are created.
What did EPA propose? EPA proposed to establish effluent guidelines
that include the requirements promulgated in today's rule, and that
would also have required all Large beef and dairy CAFOs (including
heifers) to prevent discharges to the ground water beneath the
production area (animal confinement areas, manure stockpiles, and
impoundments) where there is a direct hydrologic connection to surface
waters.
What were the key comments? EPA received numerous comments on the
proposed inclusion of ground water monitoring and protection
requirements for beef and dairy CAFOs. Many commenters opposed the
proposed ground water requirements, stating that EPA lacks the
authority to regulate ground water contamination in this rule and that
the cost to comply with the proposed requirements would threaten the
viability of these operations. The commenters also felt that EPA would
need to define the term ``direct hydrologic connection to surface
water'' if ground water requirements were to be implemented. EPA also
received comments supporting the inclusion of ground water requirements
in this rule, arguing that individual State programs are not always
protective of these types of discharges.
EPA received a number of comments suggesting the rule should allow
for less frequent inspections of the production area; should establish
effluent limitations that would allow CAFOs to discharge treated
manure, litter, and process wastewaters (as opposed to the requirements
in the 1974 ELGs based on the containment of these wastes); and should
allow CAFOs to dispose of mortalities in surface impoundments designed
for that purpose. Other commenters stated that EPA should retain the
existing zero discharge requirement established by the 1974 ELGs and
should not allow CAFOs to discharge the wastes they currently must
contain, even if the wastes are treated before being discharged.
Rationale. The production area requirements established today for
Large beef, dairy, and heifer CAFOs will provide effective control of
discharges of manure and other process wastewaters to surface water.
These requirements are widely demonstrated as achievable and are in use
at most beef, dairy, and heifer CAFOs and the containment requirements
included in this rule have been applicable to Large CAFOs since they
were promulgated in the 1974 ELGs. Furthermore, USDA and ASAE cite the
25-year, 24-hour rainfall event as part of the standard to which
storage structures should be constructed.
CAFOs must properly design, operate, and maintain storage
structures to contain all manure, litter, and process wastewater
including the runoff from a 25-year, 24-hour rainfall event. The
determination of the necessary storage volume should reflect the
maximum length of time anticipated between emptying events. The design
storage volume must reflect manure, wastewater, and other wastes
accumulated during the storage period; normal precipitation less
evaporation on the surface area during the entire storage period;
normal runoff from the facility's drainage area during the storage
period; 25-year, 24-hour precipitation on the surface (at the required
design storage volume level) of the facility; 25-year, 24-hour runoff
from the facility's drainage area; residual solids after liquids have
been removed; necessary freeboard (USDA's Natural Resources
Conservation Service (NRCS) recommends a minimum of 1 foot of
freeboard); and, in the case of treatment lagoons, a minimum treatment
volume necessary to allow anaerobic treatment to occur. Additional
storage may also be required to meet management goals or other
regulatory requirements. For example, if the permitting authority needs
further controls to assure compliance with site-specific water quality
standards. EPA encourages CAFOs to consider relevant ASAE and NRCS
standards as one method to ensure appropriate design and construction.
CAFOs should actively operate and maintain the manure storage
structure, including solids removal or dewatering when appropriate, to
retain the capacity for the 25-year, 24-hour rainfall event. Recent
studies suggest proper operation and maintenance will prevent most, if
not all, overflows and discharges from manure storage areas. One recent
study from Iowa State University suggested 76 percent of earthen manure
structures lacked appropriate accompanying management and maintenance
activities. Another study in North Carolina stated more than 90 percent
of violations were attributed to operation and management deficiencies.
Other studies also list typical shortcomings as including: careless
transfer of manure to application equipment; improper manure agitation
practices; inadequate controls to prevent burrowing animals and plants
from eroding the storage berms and sidewalls; lack of routine
inspection of land application and dewatering equipment during lagoon
drawdown; and infrequent visual confirmation of adequate freeboard.
Therefore, this rule establishes certain record keeping requirements
that document the design basis for the structures, inspection and other
maintenance activities related to the operation of the structures, and
any overflows that occur. These records will help the CAFO operator to
demonstrate that any overflows that do occur are consistent with the
proper operation and maintenance of storage structures designed to
contain all process wastewater, including the runoff from a 25-year,
24-hour rainfall event.
Although most CAFOs already have containment structures properly
sized to contain their process wastes and the contributions from
rainfall up to a 25-year, 24-hour rainfall event, many of these
operations are not properly maintaining their systems to retain the
capacity for such a rainfall event. Therefore, today's rule specifies
that surface and liquid impoundments (e.g., lagoons, ponds, and tanks)
are 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 rainfall event. Without such a depth marker, a CAFO
operator might allow lagoons and other impoundments to fill to a level
such that the capacity to contain the direct precipitation and runoff
from a 25-year, 24-hour rainfall event is not maintained, leading to
overflows that are inconsistent with the proper operation and
maintenance of the system. In addition, closed or covered liquid
impoundments are required to have depth markers installed to properly
maintain these storage systems, such that dry weather discharges do not
occur. Depth markers are necessary tools that allow operators to
actively manage (e.g., dewater, remove solids) the liquid levels in
their impoundments and ensure that adequate capacity is retained for
the 25-year, 24-hour rainfall event. Remote sensors can also be used to
monitor liquid levels in lagoons and impoundments. This sensor
technology can be used to monitor changes in liquid levels, either
rising or dropping levels. These sensors can also trigger an alarm when
the level is changing rapidly or when the liquid level has reached a
critical level. The alarm can transmit to a wireless receiver to alert
the CAFO owner or operator and can also alert the permitting authority.

[[Page 7216]]

The advantage of this type of system is the real-time warning it can
provide the CAFO owner or operator that a lagoon or impoundment is in
danger of overflowing. It can provide the CAFO operator an opportunity
to better manage operations and prevent catastrophic failures. These
sensors are more expensive than depth markers; however, the added
assurance they provide in preventing catastrophic failures might make
them attractive to some operations.
Today's rule prohibits the disposal of dead animals in any liquid
impoundments or lagoons and requires operations to handle dead animals
in ways that prevent contributing pollutants to waters of the United
States, except as provided for by alternative performance standards
using technologies designed to handle mortalities. Improper disposal of
mortalities can lead to surface or ground water contamination, or both,
as well as noxious odors and the potential for disease transmission by
scavengers and vermin. Historically, burial was the most common method
of carcass disposal, but it is now prohibited in many States. By
prohibiting the disposal of dead animals in liquid impoundments, this
rule will eliminate the discharge of pollutants from carcasses in
overflows and in the runoff from land application areas.
Weekly inspections ensure that any storm water diversions at the
production area, such as roof gutters or any devices that channel storm
water to the wastewater and manure storage and containment structure,
are free from debris. Daily inspections of the automated systems
providing water to the animals ensure they are not leaking or spilling,
which by increasing the rate at which process wastewater is generated
can lead to discharge of pollutants to surface water. The manure
storage or treatment facility must be inspected weekly to ensure
structural integrity. For surface and liquid impoundments, the berms
must be inspected for leaking, seepage, wind or water erosion,
excessive vegetation, unusually low or high liquid levels, reduced
freeboard, depth of the manure and process wastewater in the
impoundment as indicated by the depth marker, and other signs of
structural weakness. EPA believes these inspections are necessary to
ensure proper maintenance of the production area and prevent discharges
of manure, litter, and other process wastewater to surface waters.
Records of these inspections must be maintained on-site, as well as
records documenting any problems noted and corrective actions taken,
the design basis for the structures, and the estimated volume of any
overflows that occur. The depth of all liquid manure storage
impoundments must be noted during each week's inspection. Production
area inspection data allow operators to actively manage and maintain
their surface and liquid impoundments to ensure the structural
integrity of the system and avoid catastrophic failure of such systems.
These records also assist the CAFO operator to minimize discharges to
the extent possible and demonstrate that any overflows that do occur
are consistent with the proper operation and maintenance of storage
structures to contain all process wastewater including the runoff from
a 25-year, 24-hour rainfall event.
As with the land application requirements, effluent limitations in
the form of BMPs are particularly suited to the regulation of CAFOs.
For many CAFOs, controlling discharges to surface waters is largely
associated with controlling runoff and controlling overflows from
manure storage structures. CAFO runoff can be highly intermittent and
is usually characterized by very high flows occurring over relatively
short time intervals. Whether the runoff or overflow will lead to a
discharge, as well as the volume of any discharge that does occur and
the nature of the pollutants present in the discharge, can vary
substantially depending on the operating practices and physical
characteristics of the operation (e.g., paved vs. unpaved surfaces,
manure handling practices, climate, amount of area exposed to the
precipitation). For these reasons, EPA has determined that relying
exclusively on numeric ELGs to control these discharges is infeasible.
EPA believes the production area BMPs included in this rule are
necessary to ensure proper maintenance of the production area and
prevent discharges, except whenever precipitation causes an overflow of
process wastewater from a facility designed, constructed, and operated
to contain all manure, litter, and process wastewaters plus the runoff
from a 25-year, 24-hour rainfall event. There are numerous reports of
operations discharging pollutants from the production area during dry
weather; discharges from CAFOs that failed to maintain the required
storage capacity to contain the 25-year, 24-hour rainfall; and
instances of leakage and catastrophic failure of lagoons and other
manure storage structures. Information in the record for this rule
indicates that many of the discharges could have been avoided if CAFOs
had practiced the BMPs in this rule frequently enough to detect and
correct discrepancies before they led to discharges.
The proposed rule would have imposed explicit national requirements
for certain CAFOs to address possible discharges to surface water via
ground waters that have a direct hydrologic connection to surface
waters. These operations would have been required to sample
groundwaters to demonstrate that there is no discharge through a direct
hydrologic connection to surface waters, unless they determined to the
satisfaction of the permitting authority the absence of a direct
hydrologic connection. Where a direct hydrologic connection to surface
waters exists, controls on discharges to groundwater would have been
required.
In today's effluent limitation guidelines, EPA is rejecting
establishing requirements related to discharges to surface water that
occur via ground water with a direct hydrologic connection.
Pollutant discharges from CAFOs to surface water via a groundwater
pathway are highly dependent on site-specific variables, such as
topography, climate, distance to surface water, and geologic factors
such as depth of groundwater, soil porosity and permeability, and
subsurface structure. The factors affecting whether such discharges are
occurring at CAFOs are so variable from site to site that a national
technology-based standard is inappropriate. Further, given the site-
specific nature of these situations, quantifying the pollutant
reduction associated with nationally-established requirements would be
difficult. Imposing requirements through a national ELG could divert
resources from other technologies and practices that are more effective
at controlling CAFO discharges to surface waters. Therefore, EPA
believes that requirements limiting the discharge of pollutants to
surface water via groundwater that has a direct hydrologic connection
to surface water are beyond the scope of today's ELGs.
Furthermore, EPA recognizes there are scientific uncertainties and
site-specific considerations with respect to regulating discharges to
surface water via groundwater with a direct hydrologic connection to
surface water. EPA also recognizes there are conflicting legal
precedents on this issue. Nothing in this rule shall be construed to
expand, diminish, or otherwise affect the jurisdiction of the Clean
Water Act over discharges to surface water via groundwater that has

[[Page 7217]]

a direct hydrologic connection to surface water.
At the time of proposal, EPA considered, but rejected, requiring
CAFOs to sample surface waters adjacent to feedlots and/or land under
control of the feedlot to which manure is applied. This option would
have required CAFOs to sample surface waters both upstream and
downstream from the feedlot and land application areas following
significant rainfall. In this final rule, EPA is continuing to reject
imposing surface water monitoring requirements on CAFOs through the
effluent guidelines because of concerns regarding the difficulty of
designing and implementing through a national rule an effective surface
water monitoring program that would be capable of detecting, isolating,
and quantifying the pollutant contributions reaching surface waters
from individual CAFOs; and because the addition of in-stream monitoring
does not by itself achieve any better controls on the discharges from
CAFOs than the controls imposed by this rule. In-stream monitoring
could be an indicator of discharges occurring from the CAFO; however,
unless conditions are appropriate and a well-designed sampling protocol
is established, it is equally possible that the in-stream monitoring
considered at proposal would measure discharges occurring from adjacent
non-CAFO agricultural sources. These non-CAFO sources would likely be
contributing many of the same pollutants considered under the sampling
option. EPA considered alternative parameters that would isolate
constituents from CAFO manure and wastewater from other possible
sources contributing pollutants to a stream. Pathogens were considered
as potential indicator parameters that could be used if adjacent
operations do not also have livestock or are not using manure or
biosolids as fertilizer sources. As discussed in the preamble for the
proposed rule, however, there are concerns about the ability of CAFOs
to collect and analyze samples for these pollutants (unless the
sampling program is appropriately designed and tailored to the CAFO)
because of the technical difficulty in obtaining representative samples
and because of holding time constraints on collected samples associated
with the analytical methods for these parameters. Accordingly, EPA
believes that the imposition of in-stream monitoring requirements is
more appropriately addressed through NPDES permit conditions
established by the permitting authority. Although EPA has rejected the
inclusion of in-stream monitoring requirements in this rule, the
permitting authority retains the authority to include them in NPDES
permits as either technology-based requirements based on BPJ, or water
quality-based requirements, where the permitting authority determines
they are necessary.
Another option considered, and rejected, at proposal would have
required large dairy (and swine) operations to install anaerobic
digester systems to treat their manure. Requiring anaerobic digester
systems was not considered for beef and heifer operations because the
wastes from these facilities would not support the operation of
digester systems. (Refer to the Technical Development Document for more
information on the operation of digester systems.) As discussed at
proposal, anaerobic digesters offer certain benefits to CAFOs (e.g.,
energy recovery, control of methane emissions), but they would not
necessarily lead to significant reductions for many of the pollutants
discharged to surface waters from CAFOs. Mandating the use of anaerobic
digesters could divert resources from or complicate the installation of
other technologies that can achieve even better performance. Further,
use of an anaerobic digester does not eliminate the need for liquid
impoundments to store dairy parlor water and barn flush water and to
capture storm water runoff from the open areas at the dairy. Digesters
do not necessarily reduce the nutrients in animal wastes. Most of the
phosphorus removed from the effluent is concentrated in the digested
solids, which are still subject to land application requirements.
Similarly, metals present in the animal waste are not reduced and
remain in the digester effluent and solids.
Although the ELG requirements in this rule are not specifically
designed to reduce the pathogens in animal wastes, today's rule may
achieve some reductions of pathogens in CAFO discharges by applying
manure at rates that ensure appropriate agricultural utilization of
nutrient and establishing setbacks or buffers where manure, litter, and
other process wastewater are not applied. Pathogen die-off can also
occur during the period manure is stored prior to land application, and
further die-off of pathogens is expected to occur when the animal waste
is exposed to sunlight following application to land. Because of the
presence of pathogens in animal wastes and the potential risk they pose
to human health and the environment, EPA continues to be concerned
about the potential for transmission of pathogenic disease from CAFOs.
This concern is substantiated by information in the rulemaking record
regarding instances of foodborne and waterborne disease outbreaks.
However, based on the current state of the science, a quantified link
has not been established between pathogenic diseases outbreaks and CAFO
discharges and runoff. EPA has a number of research efforts underway to
better understand and reduce the environmental impact resulting from
the discharge and runoff of manure from these facilities. This research
will help inform future decisions to address pathogens in CAFO
discharges.
d. What are the production area requirements for Large swine,
poultry, and veal CAFOs (Part 412, Subpart D)? (1) Existing Large
swine, poultry and veal CAFOs. Today's final rule establishes ELGs for
existing swine, poultry, and veal operations that are the same as those
described above in Section IV.C.2.c. for beef and dairy operations.
Consistent with the 1974 ELG regulation, EPA is continuing to establish
BMPs for the CAFO production area, which includes the animal
confinement areas and the manure storage and containment areas. These
BPT, BCT, and BAT requirements are being established for the reasons
discussed in this section, and consistent with the factors for
consideration under the Clean Water Act, as discussed in Sections
II.A.2 and IV.C.2.f of this preamble.
EPA is retaining the current effluent guidelines that apply to
swine, poultry, and veal operations, and adding language extending
these requirements to immature swine, and to chicken operations with
dry litter management practices. These regulations, which are codified
at 40 CFR Part 412, Subpart D, prohibit the discharge of manure,
litter, and other process wastewater, except for allowing discharge
when rainfall causes an overflow from a facility designed, maintained,
and operated to contain all manure, litter, and process wastewaters,
including storm water, plus runoff from the 25-year, 24-hour rainfall
event. In addition, today's rule requires Large CAFOs to comply with
certain BMPs described above in Section IV.C.2.c.
What did EPA propose? EPA proposed to establish production area
effluent guidelines for existing swine, poultry, and veal operations
that would prohibit all discharges from CAFO production areas. Under
the proposed rule, existing operations subject to the requirements of
Part 412, Subpart D, would not have been allowed to discharge any
manure, litter, or other process wastewaters, including the overflow of
manure and other process

[[Page 7218]]

wastewaters from their containment systems.
What were the key comments? EPA received comments both opposing and
supporting the proposed requirements that would have eliminated the
allowance for overflows for swine, poultry, and veal CAFOs. Many
commenters opposed to eliminating the overflow allowance argued that
the cost to comply with such requirements would threaten the viability
of their operations. Some stakeholders also stated that the use of
impermeable lagoon covers (as a means for achieving compliance with the
proposed requirements) would pose a number of operational challenges:
freezing, biogas collection, clean storm water management, wind shear,
cover repair, and disposal of spent covers. For these reasons, these
stakeholders concluded the proposed zero discharge standard was
technologically infeasible.
Rationale. The production area requirements established today for
existing Large swine, poultry, and veal CAFOs will provide effective
control of discharges of manure and other process wastewaters to
surface water, consistent with the statutory factors the Clean Water
Act requires EPA to consider in establishing effluent guidelines for
existing sources (BPT, BCT, and BAT). These requirements are widely
demonstrated as technologically achievable for these operations, and
the containment requirements included in this rule have been applicable
to Large CAFOs since they were promulgated in the 1974 ELGs. Further,
USDA and ASAE cite the 25-year, 24-hour rainfall event as part of the
standard to which storage structures should be constructed.
CAFOs must properly design, operate, and maintain storage
structures to contain all manure, litter, and process wastewater
including the runoff from a 25-year, 24-hour rainfall event. The
determination of the necessary storage volume should reflect the
maximum length of time anticipated between emptying events. The design
storage volume must reflect manure, wastewater, and other wastes
accumulated during the storage period; normal precipitation less
evaporation on the surface area during the entire storage period;
normal runoff from the facility's drainage area during the storage
period; 25-year, 24-hour precipitation on the surface (at the required
design storage volume level) of the facility; 25-year, 24-hour runoff
from the facility's drainage area; residual solids after liquids have
been removed; necessary freeboard (NRCS recommends a minimum of 1 foot
of freeboard); and, in the case of treatment lagoons, a minimum
treatment volume necessary to allow anaerobic treatment to occur.
Additional storage may also be required to meet management goals or
other regulatory requirements. EPA encourages CAFOs to use relevant
ASAE and NRCS standards as one method to ensure appropriate design and
construction. This is also consistent with EPA's approach to estimating
the costs of compliance with today's rule.
CAFOs should actively operate and maintain the manure storage
structure, including solids removal or dewatering when appropriate, to
retain the capacity for the 25-year, 24-hour rainfall event. Recent
studies suggest proper operation and maintenance will prevent most, if
not all, overflows and discharges from manure storage areas. One recent
study from Iowa State University suggested 76 percent of earthen manure
structures lacked appropriate accompanying management and maintenance
activities. Another study in North Carolina stated more than 90 percent
of violations were attributed to operation and management deficiencies.
Other studies also list typical shortcomings as including: careless
transfer of manure to application equipment; improper manure agitation
practices; inadequate controls to prevent burrowing animals and plants
from eroding the storage berms and sidewalls; lack of routine
inspection of land application and dewatering equipment during lagoon
drawdown; and infrequent visual confirmation of adequate freeboard.
Therefore this rule establishes certain recordkeeping requirements that
document the design basis for the structures, inspection and other
maintenance activities related to the operation of the structures, and
any overflows that occur. These records will help the CAFO operator to
demonstrate that any overflows that do occur are consistent with the
proper operation and maintenance of storage structures designed to
contain all manure, litter, and process wastewater, including the
runoff from a 25-year, 24-hour rainfall event.
As with the land application requirements, effluent limitations in
the form of BMPs are particularly suited to the regulation of CAFOs.
For many CAFOs, controlling discharges to surface waters is largely
associated with controlling runoff and controlling overflows from
manure storage structures. CAFO runoff can be highly intermittent and
is usually characterized by very high flows occurring over relatively
short time intervals. Whether the runoff or overflow will lead to a
discharge, as well as the volume of any discharge that does occur and
the nature of the pollutants present in the discharge, can vary
substantially depending on the operating practices and physical
characteristics of the operation (e.g., paved vs unpaved surfaces,
manure handling practices, climate, amount of area exposed to the
precipitation).
EPA believes the production area BMPs included in this rule are
necessary to ensure proper maintenance of the production area and
prevent discharges except whenever precipitation causes an overflow of
process wastewater from a facility designed, constructed, and operated
to contain all manure, litter, and process wastewaters plus the runoff
from a 25-year, 24-hour rainfall event. There are numerous reports of
operations discharging pollutants from the production area during dry
weather, discharges from CAFOs that failed to maintain the required
storage capacity to contain the 25-year, 24-hour rainfall, and
instances of leakage and catastrophic failure of lagoons and other
manure storage structures. Information in the record for this rule
indicates that many of the discharges could have been avoided if CAFOs
had practiced the BMPs in this rule frequently enough to detect and
correct discrepancies before they led to discharges.
For today's rule, EPA has determined that the cost to retrofit the
many manure storage structures with covers, or to convert wet manure
systems to dry manure systems, or to install other control techniques
to achieve total containment of manure, litter, and other process
wastewaters is not economically achievable for this subcategory.
According to EPA's cost and economic impact analyses, requiring
existing Large CAFOs subject to Part 412, Subpart D to comply with
requirements for total containment (with no allowance for overflows)
would result in facility closures at 11 percent of the CAFOs in Subpart
D. (See the Economic Analysis.) EPA disagrees, however, with the
comments that lagoon covers are technologically infeasible. EPA does
agree that retrofitting existing lagoon systems with covers can pose
substantial design challenges and some existing lagoons might need to
be redesigned to accommodate a cover, substantially increasing the
retrofit cost for existing sources. In spite of these design challenges
and the operational challenges that covering lagoons can pose, EPA
believes the record information on the demonstration status of
impermeable lagoon covers adequately addresses these feasibility
concerns. EPA has data from several

[[Page 7219]]

vendors; one such vendor has developed more than a dozen such systems
ranging in size from 3 acres to almost 20 acres. Covered lagoon systems
have been successfully implemented in areas with cold climates such as
northern Illinois, South Dakota, and Wisconsin, and in high-rainfall
areas such as South Carolina, North Carolina, and Georgia. These
systems are routinely exposed to and resist freezing, high winds, and
other extreme weather events. EPA believes the information in the
record demonstrates the technological feasibility of covering lagoons,
but is rejecting BPT/BCT/BAT requirements based on such technology
because they are not economically achievable.
EPA is not including ground water controls and monitoring
requirements, or surface water monitoring requirements for Subpart D
facilities for the same reasons described in Section IV.C.2.c for beef
and dairy operations. EPA also rejected basing the effluent guidelines
for swine operations on anaerobic digesters for the same reasons given
above for dairies, and as discussed in the preamble for the proposed
rule.
(2) New Large swine, poultry and veal CAFOs. In today's rule, EPA
is establishing effluent guidelines for new swine, poultry, and veal
operations based on zero discharge from CAFO production areas, subject
to the provision that if a new source's waste management and storage
facilities are designed, constructed, operated, and maintained to
contain all manure, litter, and process wastewater including the runoff
and direct precipitation from a 100-year, 24-hour rainfall event, it
will satisfy the requirements of the NSPS. In addition, today's rule
requires Large CAFOs to comply with certain BMPs described above in
Section IV.C.2.c for the reasons given in Section IV.C. The NSPS
requirements are being established for the reasons discussed in this
section, and consistent with the factors for consideration under the
Clean Water Act, as discussed in Sections II.A.2 and IV.C.2.f of this
preamble.
What did EPA propose? EPA proposed to establish production area
requirements for new sources that would have required zero discharge,
and that would also have required all new Large swine, poultry, and
veal CAFOs with a direct hydrologic connection to surface waters to
prevent discharges to the ground water beneath the production area
(animal confinement areas, manure stockpiles, and impoundments).
What were the key comments? Most comments received focused on the
technological feasibility of total containment and the appropriateness
of establishing ground water controls as part of the effluent
guidelines. EPA received numerous comments in opposition to the
proposed ground water requirements, stating that EPA lacks the
authority to regulate ground water contamination in this rule and that
the cost to comply with the proposed requirements would threaten the
viability of these operations. The commenters also felt that EPA would
need to define the term ``direct hydrologic connection to surface
water'' if ground water requirements were to be implemented. EPA also
received comments supporting the inclusion of ground water requirements
in this rule, arguing that individual State programs are not always
protective of these types of discharges.
Many commenters were also opposed to the proposed requirement that
eliminates the allowance for overflows for swine, poultry, and veal
CAFOs. Many commenters argued that the cost to comply with these
requirements would threaten the viability of their operations. Some
stakeholders felt impermeable lagoon covers in particular posed a
number of operational challenges: Freezing, biogas collection, clean
storm water management, wind shear, cover repair, and disposal of spent
covers. For these reasons, these stakeholders concluded the proposed
zero discharge standard was technologically infeasible.
Rationale. EPA has determined that the NSPS requirements included
in this rule for the production area at new swine, poultry, and veal
sources are technologically feasible and will not pose a barrier to
entry, for the reasons discussed below and in the Technical Development
Document.
A number of the comments opposed to establishing zero discharge
limitations (with no allowance for the discharge of overflows) were
related to concerns that unforeseeable events could eventually lead to
a discharge from a facility and result, in the commenters' view, in a
situation of noncompliance that the CAFO would be unable to prevent.
EPA disagrees with these comments and believes the NPDES permitting
regulations already address this concern. Consistent with existing
provisions included in the NPDES regulations at 40 CFR 122.41, upset
and bypass provisions are included as standard conditions in NPDES
permits to address the potential for unforeseen circumstances and
provide CAFOs with a reasonable defense. In other words, even though
the NSPS for Subpart D operations prohibits discharges from the
production area, a CAFO can claim an upset/bypass defense for events
that are beyond reasonable control, including extreme weather events as
well as other uncontrollable or unforeseen conditions.
An upset is an unintentional noncompliance event occurring for
reasons beyond the reasonable control of the permittee. The upset
provision in the NPDES permit operates as an affirmative defense to
prosecution for violation of technology-based effluent limitations,
provided certain specified criteria are met. See 40 CFR 122.41(n). For
example, flood damage or other severe weather damage to containment
structures that cannot reasonably be avoided or controlled by the
permittee could be a basis for an affirmative defense for an upset. A
bypass, on the other hand, is an act of intentional noncompliance
during which waste treatment facilities are circumvented under certain
specified circumstances, including emergency situations. The bypass
provision authorizes bypassing to prevent loss of life, personal
injury, or severe property damage where there are no feasible
alternatives to the bypass and where the permitting authority is
properly notified. See 40 CFR 122.41(m).
EPA has added a reference at 40 CFR 412.46(3) to the existing
regulatory provisions at 40 CFR 122.41(m) and (n) for upset and bypass.
The upset and bypass provisions apply by existing regulation to all
NPDES permits. In light of the more stringent requirements for new
sources subject to Subpart D, EPA added this cross-reference to ensure
that CAFO operators and permit writers were aware that the upset and
bypass provisions are available. Upset and bypass conditions are
applicable to all NPDES permits, for new and existing sources.
EPA has determined that total containment for the production area
for new swine, poultry, and veal sources is technologically feasible
and should not pose a barrier to entry for new sources subject to
Subpart D. It is common for new poultry, veal, and swine operations to
construct facilities that keep the animals in total confinement
(covered housing) that is not exposed to rainfall or storm water
runoff. In addition, many new operations are based on manure handling
systems that greatly reduce or eliminate water use, such as hog and
poultry high-rise houses, or that contain manure in covered or indoor
facilities, such as underhouse pit storage systems and litter storage
sheds. Other new facilities may choose flush systems with

[[Page 7220]]

lagoons that are covered or sited and designed to achieve total
containment.
EPA recognizes that CAFOs may use different technologies to meet
the zero discharge standard and that these technologies may have
slightly different vulnerabilities to extreme weather events.
Therefore, EPA is clarifying in today's rule that a CAFO may meet the
zero discharge standard by designing, constructing, operating, and
maintaining its waste management and storage facilities to contain all
manure, litter, and process wastewater including the direct
precipitation and runoff from a 100-year, 24-hour rainfall event.
By definition, a 100-year, 24-hour storm is an event which occurs
on average once every 100 years. EPA believes that the 100-year, 24-
hour rainfall event criteria provides the protection of the resource
that the Agency intended under the zero discharge limitation, while
providing clarity for the regulated community. The principle of tying
regulatory or program requirements to precipitation-related events that
happen with a frequency of once every 100 years is also used in other
federal programs. For example, the Federal Emergency Management Agency
uses the 100-year flood as the standard for floodplain management and
to determine the need for flood insurance in the National Flood
Insurance Program. The USDA Natural Resources Conservation Service
(NRCS) uses the 100-year design criteria for flood protection
structures. For instance, if the potential failure of a water control
structure is likely to cause loss of life or extensive high value crop
or property damage, NRCS uses the 100-year frequency storm as the basis
for design.
CAFOs may choose to meet the zero discharge requirement through any
technology designed to achieve this threshold. If a facility is
designed, constructed, operated, and maintained to meet the 100-year,
24-hour rainfall criterion, and it nonetheless has a discharge due to
extreme weather, this would not be considered a violation of its permit
conditions. This provision is separate from an upset defense discussed
above.
EPA has carefully evaluated the concerns raised in comments
regarding the technical feasibility of total containment at swine,
poultry, and veal operations. The concerns raised by commenters are
primarily associated with operational factors and the effect of climate
on the use of lagoon covers. Although the effluent guideline does not
require the use of any specific technology, EPA concludes that the
total containment requirements of this rule could be met at new sources
through the use of lagoon covers or other appropriate technologies. New
sources will avoid the design challenges and retrofit costs that
existing sources would face with the use of lagoon covers, should they
choose that technology to comply. Based on the information in the
record, and as discussed above in this section, EPA has received data
to demonstrate that each of these factors has been successfully handled
at CAFOs and other facilities. Furthermore, by retaining all manure,
litter, and other process wastewaters within the building (for example,
by using underhouse pits) and not using an outdoor liquid impoundment,
or by using other appropriate technologies, such as a lagoon designed
to contain the precipitation and runoff from a 100-year, 24-hour
rainfall event, new sources can avoid the operational challenges posed
by covers.
In many instances, CAFOs are expected to construct swine and
poultry housing that maintains the manure in dry form and stores the
dry manure under cover until it is hauled off-site or land applied. Dry
manures are generally more marketable and easier to transport,
important considerations for facilities with insufficient land for
agronomic use of the manures. The majority of poultry operations use
total confinement housing practices, generating a dry manure that is
collected within the poultry houses. The manure/litter is removed
periodically from the poultry houses and is either taken directly to
the land application area, transported to off-site fields or
centralized processing facilities (e.g., pelletizing operations),
stored on-site within a roofed facility, or stored in temporary field
stacks which can be covered and configured to prevent contact with
precipitation. There has also been a great deal of interest in dry
manure systems for swine operations in recent years, as evidenced by
the current use of hoop structures and other designs described in the
Technical Development Document. Dry manure systems are widely used at
swine operations in Europe and are also being used at some operations
in Canada. Some operations in the U.S. already use dry manure systems
and EPA expects that the U.S. swine industry will choose to construct
dry manure systems at new operations with greater frequency as they
gain greater experience with these designs.
In other instances, new swine operations will likely choose
underhouse deep pit systems to comply. Contrary to standard practice 30
years ago, closed buildings with underhouse deep pits are currently the
predominant production technology used at swine operations. By 1995,
approximately half of all large swine operations were using under floor
pits with slotted floors. In 2000, more than 2,200 large swine
operations nationwide utilized under floor pits, with several hundred
additional operations using slurry storage. EPA has learned through
site visits, as supported by meetings with the National Pork Producers
Council (a trade association) that, because of further technological
advancements, newly constructed systems rarely include lagoons, and
that closed buildings with under floor pits are now the predominant
production technology. Given the widespread use of this design, EPA
anticipates that a number of new operations constructed in the next
five to ten years will choose to use deep pit systems.
Some new swine operations may choose to use lagoon-based or other
wet systems, depending on the factors specific to their situation. For
example, some new operations may choose to rely on covered lagoon
systems (with gas flaring or energy recovery). Another alternative
technology that may be selected would be to install an anaerobic
digester followed by a covered lagoon for storing the digester
effluent. Benefits to operators using anaerobic digesters include the
cost savings (or even revenue, in some cases) from electricity
generation, a better-stabilized waste, significant odor reduction, and
improved marketability of the digester solids. During site visits
conducted during the rulemaking EPA has observed the use of aboveground
fiberglass-lined steel tanks to store swine wastes. When configured to
exclude direct precipitation or to contain all direct precipitation and
runoff from a 100-year, 24-hour rainfall event, these tanks are able to
meet the zero discharge requirement. As noted below in section
IV.C.2.e, in order to provide appropriate flexibility to CAFOs,
alternative technologies that achieve overall environmental performance
across all media equal or superior to the reductions that would be
achieved under the zero discharge standard may also be authorized by
the Director.
EPA is aware of some interest by the swine industry in achieving
total containment by using uncovered lagoons that would not be expected
to discharge to surface waters based upon siting and lagoon design. For
example, by providing additional freeboard in the design, a facility
with sufficient containment to retain all manure, litter, and process
wastewater plus the direct precipitation and runoff from a 100-year,
24-hour rainfall event would

[[Page 7221]]

be able to demonstrate that it complies with the rule requirements,
assuming proper operation and management. Such facilities would be
considered to achieve zero discharge. As discussed above, an upset
defense could also apply when unforeseen and uncontrollable conditions
result in a discharge.
The production area BMPs established today for Large swine,
poultry, and veal CAFOs are necessary to ensure proper operation and
maintenance of the production area and provide effective control of
discharges of manure, litter, and other process wastewaters to surface
water. There are numerous reports of operations discharging pollutants
from the production area during dry weather, discharges from CAFOs that
failed to maintain the required storage capacity, and instances of
leakage and catastrophic failure of lagoons and other manure storage
structures. CAFOs should actively operate and maintain the manure
storage structure, including solids removal or dewatering when
appropriate, to retain the capacity to accommodate continued generation
of process wastewater. Information in the record for this rule
indicates that many of the discharges could have been avoided if CAFOs
had practiced the BMPs in this rule frequently enough to detect and
correct discrepancies before they led to discharges.
EPA is not including ground water controls and monitoring
requirements, or surface water monitoring requirements for Subpart D
facilities for the same reasons described in Section IV.C.2.c for beef
and dairy operations. EPA also rejected basing the effluent guidelines
for swine operations on anaerobic digesters for the same reasons
described above for dairies, and as discussed in the preamble for the
proposed rule.
e. Voluntary alternative performance standards to encourage
innovative technologies. EPA's long-term environmental vision for CAFOs
includes continuing research and progress toward environmental
improvement. The Agency believes that certain individual CAFOs will
voluntarily develop and install new technologies and management
practices equal to or better than those required by baseline
technology-based effluent guidelines (BPT, BCT, and BAT) and standards
(NSPS) promulgated in today's rule. Furthermore, EPA recognizes that
some CAFOs, as well as land grant universities, State agencies,
equipment vendors, and agricultural organizations, are working to
develop new technologies that achieve reductions in nutrient and
pathogen losses to surface water, ammonia and other air emissions, and
ground water contamination. The development of new technologies offers
the potential to match or surpass the pollutant reduction that would be
achieved by compliance with the baseline production area effluent
guidelines and standards (discussed above in Section IV.C.2.c for Large
CAFOs subject to Part 412, Subpart C, and Section IV.C.2.d for Large
CAFOs subject to Part 412, Subpart D). The term ``baseline effluent
guidelines'' as used here is defined below in the following section of
this preamble.
In addition to the production area effluent guidelines promulgated
by today's rule (the ``baseline effluent guidelines''), EPA is
establishing provisions for the development of alternative performance
standards for discharges from the production area of Large CAFOs. The
effluent guidelines promulgated today also establish BMPs that apply to
the production area and land application areas at Large CAFOs. These
BMP requirements are applicable to all Large CAFOs (both existing and
new sources), regardless of whether their NPDES permit limitations are
based on the baseline effluent guidelines or the alternative
performance standards.
In establishing the ELG provisions for alternative performance
standards, this rule creates a framework that enables new and existing
Large CAFOs in Subpart C and existing Large CAFOs in Subpart D to
develop and implement new technologies and management practices that
perform as well as or better than the baseline effluent guidelines at
reducing pollutant discharges to surface waters from the production
area. For new Large CAFOs in Subpart D, the rule allows for alternative
permit limitations based upon site-specific innovative technologies
that achieve environmental performance across all media which is equal
or superior to the baseline standards. An added benefit of providing
for alternative performance standards is the potential for new or
alternative technologies and practices to help address the multimedia
environmental issues confronting CAFOs. A key tenet of these programs
is that CAFOs will now have the option to either accept NPDES permit
limitations based on the baseline effluent guidelines or voluntarily
request the permitting authority to establish an alternative BPT/BCT/
BAT/NSPS performance standard as the basis for their technology-based
NPDES permit limits (e.g., inclusion of effluent limitations in their
NPDES permits that are different from those based on the baseline
effluent guidelines).
EPA received suggestions from a number of stakeholders on the
merits of creating a framework for alternative performance standards.
Several stakeholders believe that the effluent guidelines established
by the 1974 ELG regulation, as well as the baseline effluent guidelines
promulgated in today's rule, discourage the use of innovative treatment
and pollution prevention technologies because they are based on
containment rather than treating the wastes to particular targets of
effluent quality. A number of commenters expressed support for
alternative wastewater treatment technologies that are equivalent to or
better than baseline effluent guidelines, and they specifically
requested that EPA establish provisions in the rule to allow CAFOs to
discharge treated process wastewater generated from the production area
of the CAFO.
Commenters also suggested that EPA's regulatory framework should
provide incentives encouraging CAFOs to use technologies that would
protect all environmental media, including air, ground water, and
surface water. Commenters suggested that adding flexibility in the rule
to allow for the discharge of treated process wastewater could lead to
better approaches for addressing multimedia environmental concerns. On
a related note, a number of stakeholders commented that EPA should
include controls for pathogens or antibiotics, as well as atmospheric
emissions of ammonia, methane, and hydrogen sulfide.
In view of these comments and recognizing the potential
environmental gains presented by the ongoing research and development
of new treatment technologies for CAFO wastes, today's rule establishes
provisions providing for the development of alternative performance
standards for discharges from Large CAFOs. As noted above, CAFOs retain
the option to either accept NPDES permit limitations based on the
baseline effluent guidelines or voluntarily request the permitting
authority to establish an alternative performance standard as the basis
for their technology-based NPDES permit limits. The specific
requirements imposed by the alternative performance standard would be
established by the NPDES permitting authority based on the technical
analysis and other information submitted by the CAFO, as required under
the alternative performance standards provisions included in Part 412.
CAFOs would not be required to enter the alternative

[[Page 7222]]

performance standards program. A Large CAFO choosing not to participate
in the alternative performance standards program would instead be
subject to the baseline effluent guidelines discussed above in Section
IV.C.2.c (for Subpart C) or Section IV.C.2.d (for Subpart D). EPA
previously used a similar approach in establishing the effluent
guidelines regulations for the Pesticide Formulating, Packaging, and
Repackaging (PFPR) industry. In that rule, PFPR facilities are subject
to effluent guidelines requirements that prohibit all discharges, but
they may voluntarily elect to instead adopt certain regulatory
requirements (mandatory BMPs and treatment of discharged wastes) and be
allowed to discharge a ``pollution prevention allowable discharge.''
(See 40 CFR Part 455. See also 61 FR 57518; November 6, 1996.) In
another rulemaking, EPA established effluent guidelines for the pulp,
paper, and paperboard (Pulp & Paper) industry that provide incentives
for mills to voluntarily implement advanced process technologies. For
the Pulp & Paper effluent guidelines, mills accepting more stringent
NPDES permit limitations based on the performance of the advanced
technologies and other process improvements are granted incentives such
as public recognition and substantially extended compliance periods.
(See 40 CFR Part 430. Also see 63 FR 18504, 18593-18611; April 15,
1998).
(1) Baseline effluent guidelines. The effluent guidelines
regulations promulgated in today's rule for all existing Large CAFOs,
and for new source Large beef, dairy and heifer CAFOs, prohibit the
discharge of process wastewaters, except when rainfall events cause an
overflow from a facility designed, constructed, and operated to contain
all manure, litter, and process wastewaters plus the runoff from a 25-
year, 24-hour rainfall event. These limitations are based on the use of
storage ponds and lagoons to contain the process wastes and runoff,
although they do not preclude CAFOs from using alternative
technologies. The NSPS requirements for new source Large swine,
poultry, and veal CAFOs require zero discharge from the production
area, subject to a provision that compliance with the standard can be
met if the waste management and storage facilities are designed,
constructed, operated, and maintained to contain all manure, litter,
and process wastewater including the runoff and direct precipitation
from a 100-year, 24-hour rainfall event. The ELGs were established on
the basis of factors specified in CWA sections 304(b) and 306,
including the cost of achieving the effluent reductions and any non-
water quality environmental impacts. These limitations are referred to
in this preamble as the ``baseline effluent guidelines'' for the
purpose of clarifying which effluent guidelines requirements may be
replaced by the alternative performance standards provisions included
in today's rule.
The effluent guidelines promulgated today also establish BMPs that
apply to the production area and land application areas at Large CAFOs.
These BMP requirements are applicable to all Large CAFOs (both existing
and new sources), regardless of whether their NPDES permit limitations
are based on the baseline effluent guidelines or the alternative
performance standards. As discussed in Sections IV.C.2.c and IV.C.2.d,
the production area BMPs are necessary to ensure that manure storage
structures and other production area components associated with
controlling process wastewaters (e.g., storm water diversions) are
properly designed, operated, and maintained to prevent overflows or
catastrophic failure of the system.
(2) Voluntary alternative performance standards for all Large beef/
dairy/heifer CAFOs and existing Large swine/poultry/veal CAFOs. The
alternative performance standards promulgated today for new and
existing sources in Subpart C and existing sources in Subpart D, apply
to discharges of manure, litter, and other process wastewaters from the
CAFO production area. Under the provisions included in the final rule,
these Large CAFOs will be allowed to discharge process wastewater that
has been treated by technologies that the CAFO demonstrates will result
in equivalent or better pollutant removals than would otherwise be
achieved by the baseline effluent guidelines. These regulatory
provisions are targeted toward the CAFO's wastewater discharges, but
EPA encourages operations electing to participate in the alternative
performance standards program to consider environmental releases
holistically, including opportunities for achieving improvement in
multiple environmental media.
As discussed above, the baseline effluent guidelines, though
nominally zero discharge, allow for untreated overflow discharges if
the system is designed, constructed, and operated to contain manure,
litter, and process wastewater plus the runoff from a 25-year, 24-hour
rainfall. (Large swine, poultry, and veal CAFOs that are new sources
are subject to a different performance standard.) To demonstrate that
an alternative control technology would achieve equivalent or better
pollutant reductions than the baseline effluent guidelines, the CAFO
must submit a technical analysis, which includes calculating the
pollutant reductions based on the site-specific modeled performance of
a system designed to comply with the baseline effluent guidelines
(e.g., a storage lagoon designed, constructed, and operated to contain
all manure, litter, and process wastewaters plus the runoff from a 25-
year, 24-hour rainfall event). For many pollutants (e.g., nitrogen,
phosphorus, BOD, metals), the mass of pollutants discharged will
usually be the most appropriate measure for assessing treatment system
performance and determining whether the alternative control technology
will achieve equal or better pollutant reductions. For some pollutants
such as pathogens, however, pollutant mass may not be the most
appropriate measure of pollutant reductions and alternative measures
will need to be used.
One approach for making such a demonstration is to use a computer
simulation model to evaluate site-specific or region-specific climate
data, along with wastewater characterization data, to determine the
pollutant discharge that would be projected for a system designed,
constructed, and operated to achieve compliance with the baseline
effluent guidelines. The model would evaluate the daily inputs to the
storage system, including all process wastes, direct precipitation, and
runoff. It would also evaluate the daily outputs from the storage
system, including losses due to evaporation, sludge removal, and the
removal of wastewater for use on cropland at the CAFO or transport off
site. The model would be used to predict the overflow from the storage
system that would occur over a 25-year period, and these overflow
predictions would be used to determine the median annual predicted
overflow over the 25 years evaluated by the model.
Precipitation patterns for a given location are inherently variable
from year-to-year. As a result, the volume of water entering the
storage system, either through direct precipitation or as collected
runoff, will vary substantially from one year to another. The potential
for the storage system to overflow and the volume of the overflow is a
function of site-specific variables, including the rate and total
volume of wastes entering and leaving the storage system. To enable the
development of alternative performance standards that achieve pollutant
reductions comparable to those that would be achieved by the

[[Page 7223]]

baseline effluent guidelines, CAFOs must perform a technical analysis
that includes a prediction of the volume of overflows from the storage
system. If the technical analysis were to be performed using climate
data from a period of unusually high precipitation, then the CAFO's
analysis would tend to overestimate the overflow volume and result in
alternative performance standards that do not achieve pollutant
reductions equal to the baseline effluent guidelines. Conversely, if
the technical analysis were to be performed using climate data from a
period of unusually low precipitation (e.g., drought periods), then the
CAFO's analysis would tend to underestimate the overflow volume. By
requiring the CAFO to use precipitation data for a 25-year period, the
technical analysis will minimize the bias introduced by short-term
variations in climate patterns.
The site-specific or other appropriate pollutant characterization
data for the wastewater from the waste storage system (i.e., the
overflow) would be coupled with the overflow volume output from the
model described above to predict the quantity of pollutant discharge
that would occur from a system designed to comply with the baseline
effluent guidelines. CAFOs would be required to meet NPDES permit
conditions that result in equivalent or improved pollutant reductions,
as compared to the predicted quantity of pollutant discharge from
overflow of the baseline system. If a CAFO elected to use this
approach, it would be meeting the same limitations as a CAFO under the
baseline effluent guidelines, but expressed in a different fashion
(e.g., numeric limits on a continuous discharge versus a limit of zero
discharge with an allowance for discontinuous overflows). To illustrate
this type of analysis, EPA prepared an example evaluation using model
farm characteristics. This example is available in the Technical
Development Document and in section 19.6.2 of the rulemaking record.
(3) Voluntary superior environmental performance standards for new
Large swine/poultry/veal CAFOs. The NSPS requirements that apply to
production area discharges at new Large swine, poultry, and veal CAFOs
are more stringent than the NSPS established for other new sources and
the BAT requirements for existing sources. EPA is endeavoring to ensure
that this rule does not inadvertently discourage approaches that are
superior from a multimedia environmental perspective. Therefore, for
new sources subject to Subpart D (Large swine, poultry, and veal
CAFOs), EPA is establishing alternative performance standards that
provide additional compliance flexibilities specifically designed to
encourage CAFOs to adopt innovative technologies for managing and/or
treating manure, litter, and process wastewater. Specifically, the NSPS
includes a provision that allows for the CAFO to request the Director
to establish alternative NPDES permit limitations based upon a
demonstration that site-specific innovative technologies will achieve
overall environmental performance across all media which is equal to or
superior to the reductions achieved by baseline standards. The quantity
of pollutants discharged from the production area must be accompanied
by an equivalent or greater reduction in the quantity of pollutants
released to other media from the production area (e.g., air emissions
from housing and storage), the land application areas for all manure,
litter, and process wastewater at on-site and off-site locations, or
both. In making the demonstration that the innovative technologies will
achieve an equivalent or greater reduction, the comparison of quantity
of pollutants is to be made on a mass basis where appropriate.
In general, EPA expects CAFOs will conduct a whole-farm audit to
evaluate releases that occur at the point of generation to minimize or
eliminate waste production and air emissions, followed by an evaluation
of the waste handling and management systems, and ending with an
evaluation of land application and off-site transfer operations. The
specific technologies that CAFOs will select and adopt to achieve the
pollutant reductions are expected to be most effective for the
particular operation. As part of the demonstration the CAFO will need
to present information that describes how the innovative technologies
will generate improvement across multiple environmental media. The
Director has the discretion to request additional supporting
information to supplement such a request where necessary. Such
information could include criteria and data that demonstrate effective
performance of the technologies and that could be used to establish the
alternative NPDES permit limitations.
(4) Process and incentives for participating in alternative
performance standards. CAFOs interested in pursuing the alternative
performance standards should have a good compliance history, e.g., no
ongoing violations of existing permit performance standards or history
of significant noncompliance. These facilities must conduct an analysis
of their operation (as described above in Sections IV.C.2.e.(2) and
IV.C.2.e.(3)) and prepare a proposed alternative program plan including
the results of the analysis; the proposed method for implementing new
technologies and practices, including an approach for monitoring
performance; and the results demonstrating that these technologies and
practices perform equivalent to or better than the baseline effluent
guidelines. This plan must be included with the CAFO's NPDES permit
application or renewal, and it will be incorporated into the permit
upon approval by the permitting authority.
CAFOs are expected to derive substantial benefits from
participation in the alternative standards approach, through greater
flexibility in operation, increased good will of neighbors, reduced
odor emissions, and potentially lower costs. EPA is considering future
opportunities for other possible incentives to encourage participation
in this program.
f. How did EPA consider the Clean Water Act statutory factors in
establishing the ELGs? (1) BPT. In establishing BPT effluent guidelines
for an industry category, EPA looks at a number of factors in
determining the appropriate effluent limits for conventional, toxic,
and non-conventional pollutants. 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. 33 U.S.C. 304(b)(1)(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. EPA's
consideration of these factors and how they affected this rulemaking is
presented in the Technical Development Document.
One way that EPA takes these factors into account is by breaking
down categories of industries into separate classes of similar
characteristics. The division of a point source category into groups
called ``subcategories'' provides a mechanism for addressing variations
among products, raw materials, processes, and other parameters that can
result in distinct effluent characteristics. This provides each
subcategory with a uniform set of ELGs that take into account
technology achievability and

[[Page 7224]]

economic impacts unique to that subcategory. In this rule, EPA has
addressed such considerations by establishing two new subcategories,
codified at Subpart C (beef, dairy, and heifers) and Subpart D (swine,
poultry, and veal) of 40 CFR 412. See Section IV.C.2.a of the preamble
for a discussion of these subcategories.
The requirements established in this rule for BPT effluent
guidelines reflect consideration of the total cost of applying these
technologies (including BMPs) in relation to the effluent reduction
benefits that will be achieved. The ELGs promulgated today are expected
to cost Large CAFOs $283 million per year (pre-tax). The ELGs will
reduce discharges of sediment by 2.1 billion pounds, nutrients by 155
million pounds, and metals by one million pounds annually. This results
in an overall ratio of $0.12 per pound of pollutant removed (using
reductions of sediment, nutrients, and metals). Excluding sediment
reductions, the rule achieves an overall ratio of $1.75 per pound of
pollutant removed (nutrients and metals).
The technologies upon which BPT is based are ones that are readily
applicable to all CAFOs and will provide effective control of
discharges of manure, litter, and other process wastewaters to surface
water. These requirements are widely demonstrated as achievable and
represent the level of control achieved by the majority of Large CAFOs.
The containment requirements included in this rule have been applicable
to Large CAFOs since they were promulgated in the 1974 ELGs, and most
existing lagoons and other containment structures are built to these
standards. Furthermore, USDA and ASAE cite the 25-year, 24-hour
rainfall event as part of the standard to which containment structures
should be constructed.
As described in Section IV.C.2.b of this preamble, the land
application requirements included in this rule represent practices that
will ensure that CAFOs apply manure, litter, and other process
wastewaters at a rate and in a manner consistent with the appropriate
agricultural utilization of nutrients. Limits on the rate at which
manure can be applied and certain other constraints on application
practices, such as setbacks and vegetated buffers, are widely
demonstrated as achievable and have been imposed by a number of States
and through NPDES permits.
(2) BCT. In evaluating the possible BCT standards in this
rulemaking, EPA first considered whether there are any candidate
technologies (i.e., technology options) that are technologically
feasible and achieve greater reductions in conventional pollutants than
are achieved by the BPT requirements promulgated today. (Conventional
pollutants are defined as TSS, BOD, pH, fecal coliform, and oil and
grease.) EPA's analyses of pollutant reductions that can be achieved by
the candidate options (including the BPT, BAT, and NSPS options) has
focused largely on the control of nutrients, sediments, metals, and
pathogens, but to the extent possible have also assessed the
effectiveness of the control options at reducing discharges of
conventional pollutants. Although animal wastes contain BOD because of
the organic material present in these wastes, the data available for
estimating reductions of BOD from application of the candidate
technologies are limited. Therefore, EPA based its estimates of
conventional pollutant reductions on TSS, using estimated reductions in
sediment discharges as a surrogate for TSS. Following this approach,
EPA identified no BCT technology option that achieves greater TSS
removals than the BPT requirements promulgated today, and EPA does not
believe the candidate BCT options would substantially reduce discharges
of BOD. EPA therefore concluded that there are no candidate BCT
technologies for establishing limits on conventional pollutants that
are more stringent than BPT, and is establishing BCT requirements in
this rule equal to BPT. If EPA had identified technology options
appropriate for a national rule that achieve greater reductions of
conventional pollutants than are achieved by BPT, then 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.)
(3) BAT. In general, BAT represents the best available economically
achievable performance of direct discharging facilities in the
industrial subcategory or category. The Clean Water Act requires EPA to
consider a number of different factors when developing ELGs that
represent the BAT level of control for discharges of toxic and
nonconventional pollutants by a particular industry category. These
factors include the cost of achieving 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
other factors as the Administrator deems appropriate. EPA's
consideration of these factors and how they affected this rulemaking is
presented in the Technical Development Document.
An additional statutory factor considered in setting the BAT
requirements 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.
The BAT requirements promulgated today are economically achievable and
represent the best available technology for Large CAFOs. As was
discussed above for BPT, EPA estimates the cost for Large CAFOs to
comply with the ELGs at $283 million per year (pre-tax, $2001). The
ELGs will reduce discharges of sediment by 2.1 billion pounds,
nutrients by 155 million pounds, and metals by one million pounds
annually. (These costs and pollutant reductions are not additional
costs beyond that of BPT. Because the BPT and BAT requirements
promulgated today are identical, the costs and pollutant reductions for
each level of control are presented incremental to the baseline of
current practices and current regulatory requirements.)
The technologies upon which BAT is based are ones that are readily
applicable to all CAFOs and will provide effective control of
discharges of manure, litter, and other process wastewaters to surface
water. The containment requirements, in conjunction with the production
area BMPs included in this rule, are widely demonstrated as achievable
and represent the level of control demonstrated to be achievable by
well-performing Large CAFOs. The containment requirements included in
this rule have been applicable to Large CAFOs since they were
promulgated in the 1974 ELGs, and most existing lagoons and other
containment structures are built to these standards. Furthermore, USDA
and ASAE cite the 25-year, 24-hour rainfall event as part of the
standard to which storage structures should be constructed.
As described in Section IV.C.2.b of this preamble, the land
application requirements included in this rule are consistent with
appropriate agricultural utilization of nutrients and will ensure that
CAFOs apply manure, litter, and other process wastewaters at a rate and
in a manner necessary to meet the requirements of the crops grown and
not exceed the ability of the soil and crop to absorb nutrients. Limits
on the rate at which manure can be applied and certain other
constraints on application practices, such as setbacks and vegetated
buffers, are widely

[[Page 7225]]

demonstrated as achievable and have been imposed by a number of States
and through NPDES permits.
To determine economic achievability, EPA analyzed how many
facilities affected by this rule would experience financial stress
severe enough to make them vulnerable to closure. As explained in more
detail in Section VIII of this preamble and in the Economic Analysis,
the number of facilities experiencing stress might indicate whether
certain regulatory options considered during the rulemaking are
economically achievable, subject to other considerations.
For the veal, dairy, turkey, and egg laying sectors, the final
regulations are not expected to result in any CAFO-level business
closures. In the beef cattle, heifer, swine and broiler sectors,
however, the final rule is expected to cause some existing CAFOs to
experience financial stress. These operations may be vulnerable to
closure as a result of complying with the final rule. Across all
sectors, an estimated 285 existing Large CAFOs may be vulnerable to
facility closure. This accounts for approximately 3 percent of all
Large CAFOs. By sector, EPA estimates that 49 beef operations (3
percent of affected beef CAFOs), 204 hog operations (5 percent of
affected hog CAFOs), 10 broiler operations (1 percent), and 22 heifer
operations (9 percent) may close as a result of complying with the
final rule.
(3) NSPS. 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 represents 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). In 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. In addition, EPA evaluates whether the requirements would
impose a barrier to entry to new operations.
The technologies upon which the production area NSPS for Large
beef, dairy, and heifer CAFOs are ones that are readily applicable to
all CAFOs in that subcategory and will provide effective control of
discharges of manure, litter, and other process wastewaters to surface
water. The containment requirements, in conjunction with the production
area BMPs included in this rule, are widely demonstrated as achievable
and represent the level of control demonstrated to be achievable by
well-performing Large CAFOs covered by Part 412, Subpart C. The
containment requirements included in this rule have been applicable to
Large CAFOs since they were promulgated in the 1974 ELGs, and most
existing lagoons and other containment structures are built to these
standards. Furthermore, USDA and ASAE cite the 25-year, 24-hour
rainfall event as part of the standard to which containment structures
should be constructed.
EPA has determined that total containment (with a compliance option
to design, operate, and maintain the facility to contain the runoff
from a 100-year, 24-hour rainfall event) for the production area for
new swine, poultry, and veal sources (and the production area BMPs) is
technologically feasible and will not pose a barrier to entry for new
sources subject to Subpart D. It is common for new poultry, veal, and
swine operations to construct facilities that keep the animals in total
confinement. In addition, many new operations are based on manure
handling systems that greatly reduce or eliminate water use, such as
hog and poultry high-rise houses, or that contain manure in covered or
indoor facilities, such as underpit storage systems and litter storage
sheds. EPA has carefully evaluated the concerns raised in comments
regarding the technical feasibility of total containment at swine,
poultry, and veal operations. The concerns raised by commenters are
primarily associated with operational factors and the effect of climate
on the use of lagoon covers. New sources will avoid the design
challenges and retrofit costs that existing sources would face with
these requirements. Based on the information in the record, and as
discussed above, EPA has received data to demonstrate that each of
these factors has been successfully handled at CAFOs and other
facilities. Therefore, EPA concludes that the total containment
requirements of this rule could be met through the use of lagoon covers
if facilities choose to do so. However, by retaining all manure and
process wastewater within the building (for example, by using
underhouse pits) and not using an outdoor liquid impoundment, these
operations will avoid the operational challenges posed by covers.
Additional compliance flexibility is provided by the provision that
allows the zero discharge standard to be met by designing,
constructing, operating, and maintaining waste management and storage
facilities to contain all manure, litter, and process wastewater
including the runoff and the direct precipitation from a 100-year, 24-
hour rainfall event.
The land application requirements included in this rule for all
Large CAFOs that are new sources are identical to those established
under BAT for existing sources and are consistent with appropriate
agricultural utilization of nutrients. These land application
requirements will ensure that CAFOs apply manure, litter, and other
process wastewaters at a rate and in the manner necessary to meet the
requirements of the crops grown and not exceed the ability of the soil
and crop to absorb nutrients. Limits on the rate at which manure can be
applied and certain other constraints on application practices, such as
setbacks and vegetated buffers, are widely demonstrated as achievable
and as the best available demonstrated control technology, and have
been imposed by a number of States and through NPDES permits.
EPA evaluated economic impacts to new source CAFOs by comparing the
costs borne by new source CAFOs to those estimated for existing
sources. That is, if the expected cost to new sources is similar to or
less than the expected cost borne by existing sources (and that cost
was considered economically achievable for existing sources), then EPA
considers the regulations for new sources do not impose requirements
that might grant existing operators a cost advantage over new CAFO
operators and further determines that the NSPS is affordable and does
not present a barrier to entry for new facilities. In general, costs to
new sources for complying with a given set of regulatory requirements
are lower than the costs for existing sources to comply with the same
requirements since new sources are able to apply control technologies
more efficiently than existing sources that may incur high retrofit
cost. New source CAFOs will be able to avoid the retrofit costs that
will be incurred by existing sources. For example, the cost of a model
total containment system for swine that would meet the no discharge
requirement (e.g., incremental cost of deep pit swine house, including
land application) typically is less than the cost for an existing
source to retrofit water intensive lagoon-based systems that are
exposed to precipitation. Among the primary reasons for the capital
cost difference for a new source with total containment is that it does
not include an impoundment lagoon,

[[Page 7226]]

and it experiences reduced operating costs because it handles less
waste with substantially lower water and higher solids content than a
water-intensive lagoon-based system. New sources may be able to avoid
many of the other control costs facing some existing producers through
careful site selection, such as choosing to locate at a site with
sufficient available land nearby for applying manure. Furthermore,
other technologies are available to new sources, that have been
implemented by existing sources, that are also capable of achieving the
no discharge standard. See section IV C above for further discussion of
other technologies. Since the new source requirements for Subpart C are
the same as the corresponding existing source requirements, EPA
concludes that the NSPS requirements promulgated today do not present a
barrier to entry for new facilities. For Subpart D facilities, where
the new source requirements are more stringent than the existing source
requirements, EPA concludes that the NSPS requirements do not pose a
barrier to entry because of the currently widespread use of animal
confinement practices and waste management technologies that can comply
with the zero discharge standard, and because these total containment
technologies and practices are less costly to implement than water-
intensive systems (e.g., such as water flush waste management) that are
exposed to precipitation. EPA costed for zero discharge technologies
and showed that these would pose no barrier to entry. Now that
operations can choose an alternative option that might be cheaper to
implement, EPA believes that there is even less likelihood that there
is a barrier to entry. More information is provided in the Technical
Development Document and the Economic Analysis supporting the final
regulations.
3. What Technology-Based Limitations Apply to Small and Medium CAFOs?
In today's final rule, small and medium-size AFOs that have been
defined or designated as CAFOs by the permitting authority would not be
subject to the effluent limitations guidelines and standards specified
in part 412. (Refer to section IV.C.2.a. of this preamble for a
discussion of the key public comments and EPA's final analysis for
applying the effluent limitations guidelines only to Large CAFOs.)
Rather, for Small and Medium CAFOs the permit writer would use BPJ to
establish, case by case, the appropriate technology-based requirements
for each permit. The technology-based requirements must address the
production area and the land application area(s). Establishing permit
limits for these facilities on a BPJ basis, using 40 CFR 125.3 as a
guide for the types of factors to consider, allows for the
establishment of permit conditions that are tailored to and more
directly address the site-specific conditions that led to the facility
being defined or designated as a CAFO. In instances where technology-
based requirements are not protective of water quality, the permit
writer will also establish water quality-based effluent limits.
For the production area, the permitting authority must establish
the technology-based limitations on the discharge of manure, litter,
and process wastewater, including limitations where applicable based on
the minimum duration and intensity rainfall event for which the CAFO
can design and construct a system to contain all manure, litter, and
process wastewater and storm water. Technical references from USDA and
the American Society of Agricultural Engineers should be consulted for
appropriate design factors to consider for containment structures.
Typical design factors are: (1) Sludge volume, (2) treatment volume,
(3) volume of manure and wastewater between drawdown events, (4) total
volume for runoff and precipitation, and (5) the minimum duration and
intensity rainfall event portion of (4).
For the land application area, the permitting authority must
consider permit requirements that place technology-based limits on
discharges resulting from the application of manure, litter, and
process wastewater to land under the control of the CAFO owner or
operator, including restrictions on the rates of application to ensure
appropriate agricultural utilization of nutrients. In today's final
rule, all CAFOs must develop and implement a nutrient management plan
(as described in the next section).
4. Will CAFOs Be Required To Develop and Implement a Nutrient
Management Plan?
Under today's final rule, NPDES permits for all CAFOs will require
the development and implementation of a nutrient management plan. At a
minimum, a nutrient management plan must include BMPs and procedures
necessary to achieve effluent limitations and standards. The plan must,
to the extent applicable, address the following minimum elements:
? Ensure adequate storage of manure, litter, and process
wastewater, including procedures to ensure proper operation and
maintenance of the storage facilities;
? Ensure proper management of animal mortalities (i.e., dead
animals) to ensure that they are not disposed of in any liquid manure,
storm water, or process wastewater storage or treatment system that is
not specifically designed to treat animal mortalities;
? Ensure that clean water is diverted, as appropriate, from
the production area;
? Prevent direct contact of confined animals with waters of
the United States;
? Ensure that chemicals and other contaminants handled on-
site are not disposed of in any manure, litter, or process wastewater,
or storm water storage or treatment system, unless specifically
designed to treat such chemicals and other contaminants;
? Identify appropriate site specific conservation practices
to be implemented, including as appropriate buffers or equivalent
practices, to control runoff of pollutants to waters of the United
States;
? Identify protocols for appropriate testing of manure,
litter, process wastewater, and soil;
? Establish protocols to land apply manure, litter, or
process wastewater in accordance with site specific nutrient management
practices that ensure appropriate agricultural utilization of the
nutrients in the manure, litter, or process wastewater; and
? Identify specific records that will be maintained to
document the implementation and management of the minimum elements
described above.
For Large CAFOs these minimum elements of a nutrient management
plan must also meet the more detailed requirements in the part 412
effluent guidelines. For Small and Medium CAFOs, or other operations
not otherwise subject to part 412 requirements for land application,
the minimum elements of a nutrient management plan will be further
specified in the permit, on a site specific basis, based on the best
professional judgment of the permitting authority.
What did EPA propose? In the proposed rule, EPA introduced the
concept of a ``Permit Nutrient Plan'' (``PNP''), and proposed that
permits for all CAFOs would require the development and implementation
of a PNP. For CAFOs not subject to the ELGs, the proposal called for
the permitting authority to consider the need for a PNP.
The concept of a PNP, as opposed to the use of the term CNMP, was
used by EPA to identify those specific aspects of a CNMP that would be
required under

[[Page 7227]]

the proposed regulatory program. In the proposal EPA included a
discussion documenting the relationship between a CNMP and a PNP. EPA
also prepared, and made available for public review as a supporting
document, a draft guidance document entitled Managing Manure Nutrients
at Concentrated Animal Feeding Operations which provided information
concerning the content of a PNP. The PNP was considered to be the
subset of activities in a USDA defined CNMP that relate to compliance
with the effluent discharge limitations and other requirements of the
NPDES permit. EPA also proposed that it be developed, or reviewed and
modified, by a certified specialist. The proposal would have required
the PNP to be developed within 3 months of submitting either an NOI for
coverage under an NPDES general permit or an application for an NPDES
individual permit. CAFO operators would be required to notify the
permitting authority when the PNP had been developed. EPA's position
was that the content of a PNP was consistent with that of a CNMP and
could be addressed in a single plan for a given operation.
What were the key comments? In general, commenters supported the
concept of requiring the development and implementation of nutrient
management plans by CAFOs. Although commenters generally supported the
overall concept, many did not endorse the specific approach taken by
EPA in the proposed rule. There was significant comment from
stakeholders that the PNP would require the development of a separate
plan in addition to a CNMP. Although EPA had intended the PNP to be a
subset of information contained within a typical CNMP, not an
independent or separate plan, a number of commenters misunderstood that
point, and otherwise felt that the proposal would result in confusion
in the regulated community.
The SBAR Panel noted the concerns of some small business
representatives regarding the practical difficulties of ensuring that
manure is always applied at agronomic rates. The Panel recommended that
EPA continue to work with USDA to explore ways to limit permitting
requirements to the minimum necessary to deal with such threats and to
define what is ``appropriate'' land application consistent with the
agricultural storm water exemption. The Panel agreed that if manure and
wastewater are applied to land at agronomic rates and a facility is
designed to contain the discharge from a 25-year, 24-hour storm, that
facility would have minimal potential to discharge or adversely affect
water quality. However, it is also possible that an operation might
land apply in excess of agronomic rates but still not discharge,
depending on such factors as annual rainfall, local topography, and
distance to the nearest stream. The Panel recommended that EPA consider
such factors as it develops requirements related to land application.
The SBAR Panel also raised concerns related to the development and
implementation of CNMPs, as well as specific requirements for applying
nutrients at a phosphorous-based rather than a nitrogen-based rate in
certain circumstances. Small business representatives expressed
concerns about application of manure at phosphorus-based rates. The
Panel noted the high cost of phosphorus-based application relative to
nitrogen-based application and supported EPA's intent to require the
use of phosphorus-based application rates only where necessary to
protect water quality, if at all, keeping in mind its legal obligations
under the Clean Water Act. If the soil is not phosphorus-limited,
nitrogen-based application should be allowed. The Panel recommended
that EPA consider leaving the determination of whether to require the
use of phosphorus-based rates to BPJ, and continue to work with USDA in
exploring such an option.
Rationale. In the March 1999 USDA/EPA Unified National Strategy for
Animal Feeding Operations EPA and USDA endorsed the concept of CNMPs
for all AFOs. The Strategy acknowledged that the vast majority of these
plans would be developed under voluntary programs while a limited
number would be prepared under the regulatory program. In today's final
rule, CAFOs, which represent only a small proportion of all AFOs, are
required to have a nutrient management plan, and the nutrient
management plan represents a subset of activities within a CNMP that
are necessary for CWA regulatory purposes. EPA believes that this
approach is consistent with the concepts in the Strategy.
EPA explained in section IV.C.2.b above that the BMPs specified in
today's regulation, including the requirement to develop and implement
a nutrient management plan, represent the minimum elements of an
effective BMP program and are necessary to control the discharges of
pollutants to surface waters. As discussed there, non-numeric effluent
limitations consisting of BMPs are particularly suited to the
regulation of CAFOs. In particular, EPA believes that it is generally
infeasible to establish a numeric effluent limitation for discharges of
land-applied CAFO waste. The factors that make a numeric limitation
infeasible include, among other things, that 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 vary according to geography and
local land use. Accordingly, the final regulations at section 122.42(e)
specify the need for a nutrient management plan for all CAFOs and the
general elements that the plan must address.
For Large CAFOs, EPA has specified the need for a nutrient
management plan as a non-numeric effluent limitation in the form of a
BMP requirement under the final ELGs. For Small and Medium CAFOs, and
other operations that are not subject to the CAFO effluent guidelines,
authority to require a nutrient management plan exists under Clean
Water Act sections 402(a)(1) and (2) and 40 CFR 122.44(k). EPA believes
that a nutrient management plan requirement for the Small and Medium
CAFOs is necessary in order to appropriately control discharges of
pollutants and otherwise carry out the purposes and intent of the CWA.
For these operations, EPA found it was appropriate for the final rule
to specify, on a national basis, the requirement for a nutrient
management plan and the general elements that the plan must address. In
turn, the final rule allows the permitting authority to include, on a
best professional judgment basis in light of more localized factors,
more specific nutrient management plan requirements as necessary to
ensure appropriate agricultural utilization of nutrients at the
operation.
EPA has addressed the SBAR panel concerns by defining the scope of
a nutrient management plan with reference to those elements necessary
to ensure that manure is managed effectively insofar as they are
related to possible discharges to surface water. Further, today's final
rule requires land application rates based on the site-specific
technical standards established by the Director.
EPA agrees that the use of the term PNP created unintended
confusion. While EPA remains a strong advocate of the development of
CNMPs the Agency recognized the need to address this confusion. In
response to comments, EPA is relying on the more generic term,
``nutrient management plan'' in today's rule. By way of clarification,
the nutrient management plan is a separate and distinct term that
applies to the subset of activities in a USDA-defined CNMP that are
required by the CAFO effluent guidelines or NPDES permit regulations.
These requirements are

[[Page 7228]]

defined in today's rule as the minimum elements that all nutrient
management plans, developed as a special condition of an NPDES permit,
must meet. EPA expects that many CAFOs will satisfy the requirement to
develop a nutrient management plan by developing a full CNMP, although
a full CNMP is not required in today's regulations. The minimum
measures of a nutrient management plan in today's final rule are
consistent with the content of both the PNP as proposed by EPA and the
CNMP as defined by USDA. EPA's position remains that the development
and implementation of a full CNMP is one of the most effective methods
for a permitted operation to demonstrate compliance with the nutrient
management plan requirements required by this rule.
In today's rule, EPA is requiring all CAFOs to develop and
implement a nutrient management plan by December 31, 2006, except that
CAFOs seeking to obtain coverage under a permit subsequent to that date
must have a nutrient management plan developed and implemented upon the
date of permit coverage. This is consistent with the dates being
established for the ELG. As discussed in section IV.C.2.b of this
preamble, the ELGs promulgated today require Large CAFOs that are
existing sources to implement the land application requirements at 40
CFR 412.4(c) by December 31, 2006 because that is the date when EPA is
assured that the required planning is in fact available to the great
number of regulated sources. For Large CAFOs that are new sources
(i.e., those commencing construction after the effective date of this
rule), the land application requirements at 40 CFR 412.4(c) apply
immediately.
EPA has similarly concluded that Small and Medium CAFOs subject to
the NPDES provisions for nutrient management plans also, in general,
will be unable to develop and implement a nutrient management plan by
the date they will need to seek permit coverage under the requirements
of this rule, for reasons of insufficient infrastructure. Therefore,
EPA is requiring Small and Medium CAFOs to develop and implement NMP
plans by December 31, 2006. As discussed in section IV.C.2.b, among
other things, this time frame allows reasonable time for States to
update their NPDES programs and issue permits to reflect the nutrient
management plan requirements of today's rule and provides flexibility
for permit authorities to establish permit schedules based on specific
circumstances, including prioritization of nutrient management plan
development and implementation based on site-specific water quality
risks and the available infrastructure for development of nutrient
management plans. Refer to section IV.C.2.b for additional discussion
on the time frame by which CAFOs must implement the land application
requirements of 40 CFR 412.4(c).
Through the permit application process (every five years), a
nutrient management plan will have to be reviewed and updated by the
CAFO owner or operator. EPA recognizes that the nutrient management
plan will be a dynamic document that might require updates more
frequently than every five years. A site-specific nutrient management
plan that reflects the current CAFO operation must be maintained on-
site by the CAFO owner/operator. The most obvious factor that would
necessitate an update to the nutrient management plan is a substantial
change in the number of animals at the CAFO. A substantial increase in
animal numbers (for example an increase of greater than 20 percent)
would significantly increase the volume of manure and total nitrogen
and phosphorus produced on the CAFO. As a result, the CAFO would need
to reevaluate animal waste storage facilities to ensure adequate
capacity and may need to reexamine the land application sites and
rates. Another example of a reason for updating the nutrient management
plan is a change in a CAFO's cropping program, which could
significantly alter land application of animal waste. Changes in crop
rotation or crop acreage, for instance, could significantly alter land
application rates for fields receiving animal waste.
5. Does EPA Require Nutrient Management Plans To Be Developed or
Reviewed by a Certified Planner?
Although EPA promotes and supports the use of certified specialists
to help ensure the quality of nutrient management plans, the Agency is
not requiring such plans to be developed or reviewed by a certified
planner as part of this final rule.
What did EPA propose? EPA proposed the Permit Nutrient Plans be
developed, or reviewed and modified, by a certified specialist. A
certified planner was defined as someone who has been certified to
prepare CNMPs by USDA or a USDA sanctioned organization.
What were the key comments? EPA received a number of comments on
this provision. Many States support a State certification program where
they would have the flexibility to develop their own program. Some
producers and environmental groups supported certified plans as
outlined in the proposal. Many comments related to the cost of having a
specialist develop or review a plan and whether there are enough
specialists across the country to handle the volume of work. Some said
that a certified plan would not achieve the goal of improved water
quality. Others said that operators should be able to develop their own
plan, noting that USDA tools and other resources are available to
operators and a specialist is not needed. There was also concern that
EPA was limiting the type of specialist by listing, in the proposal,
examples of who might be a specialist.
Rationale. EPA agrees that certification programs are more
appropriately developed by USDA or at the State level. State resources,
coordination with local stakeholders, and State requirements relating
to nutrient management are some of the factors that may influence State
specific certification programs. EPA shares the concerns regarding the
current capacity to develop up to 15,500 certified plans for CAFOs and
meet the demands from a universe of 222,000 other AFOs requesting CNMPs
through USDA's voluntary program. Currently, EPA does not have a
reliable estimate on the number of certified specialists available for
developing and implementing nutrient management plans. However, 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 specialists for nutrient
management planning. When all of these State certification programs are
in place, EPA expects that there will be sufficient capacity to develop
and implement the required nutrient management plans by the required
regulation implementation date of December 31, 2006.
Although not required, EPA encourages CAFOs to make use of
certified specialists with the expertise to develop high quality
nutrient management plans. The purpose of using certified specialists
is to ensure that effective nutrient management plans are developed
and/or reviewed and modified by persons who have the requisite
knowledge and expertise to develop nutrient management plans that meet
the regulatory requirements and that are appropriately tailored to the
site-specific needs and conditions at each CAFO. Interested parties
should

[[Page 7229]]

consult with USDA, State Agricultural Departments, and their NPDES
permitting authority regarding the availability of certified
specialists and opportunities to be certified.
Under today's final rule operators may develop and implement their
own nutrient management plan, and may themselves become certified
nutrient management planners. In fact, EPA indicated in the SBAR Panel
Report that it expected that many operators could become certified
through USDA or land grant universities to prepare their own nutrient
management plans. While no definitive number is currently available,
results from preliminary draft studies indicate that the average CNMP
cost per farm was $7,276 per year. The list of sources in the proposal
of who can provide CNMP certified specialists is there only as a sample
list. It in no way precludes or prevents an operator from obtaining a
CNMP from an alternate source.
6. What Are the Special Conditions Applicable to All NPDES CAFO
Permits?
In today's rule EPA is defining two special conditions that are to
be required in all NPDES CAFO permits: (1) CAFO owners or operators
must develop and implement a nutrient management plan that addresses
specific minimum elements and (2) the CAFO owner or operator must
maintain permit coverage for the CAFO until there is no remaining
potential for a discharge of manure, litter, or associated process
wastewater other than agricultural storm water from land application
areas, that was generated while the operation was a CAFO (i.e. proper
closure). The special conditions in an NPDES permit are used primarily
to supplement effluent limitations and ensure compliance with the Clean
Water Act.
A discussion of the specific nutrient management plan requirements
of today's rule, the key public comments and EPA rationale for
requiring nutrient management plans is included in section IV.C.4 of
this preamble.
In today's rule, EPA is adopting as final the proposal to require
permitted CAFOs that lose their status as CAFOs (e.g., they cease
operations, or reduce their number of animals below the regulatory
thresholds) to retain an NPDES permit until there is no remaining
potential for a CAFO-generated discharge other than agricultural storm
water from the land application areas. Should the facility's permit
expire, the owner/operator would be required to reapply for an NPDES
permit if the facility has not been properly closed (i.e., the facility
still has a potential to discharge). Proper facility closure includes
but is not limited to removal of water from lagoons and proper disposal
or reuse of manure removed from storage areas such as pens, lagoons,
and stockpiles. For CAFO facilities that down-size to become AFOs,
proper closure of the CAFO is achieved when there is no longer a
potential to discharge any manure, litter, or process wastewater
generated while the operation was a CAFO.
What did EPA propose? In the proposal, the Agency discussed a
variety of options for ensuring proper closure of CAFOs, including
applying financial instruments, preparing closure plans, and, as
adopted today, retaining an NPDES permit until the facility is properly
closed.
EPA proposed two additional special conditions that are not being
included in today's final rule. EPA proposed that the permit writer
must consider whether to include special conditions to address (1)
Timing restrictions on land application of manure or litter and
wastewater to frozen, snow-covered, or saturated ground, and (2)
conditions to control discharges to ground water with a direct
hydrologic connection to surface water. Although today's rule does not
include a national requirement for either of these issues to be
regulated in the permit, the permitting authority may impose permit
terms and conditions that address either of these issues on a case-by-
case basis as appropriate. See section IV.C.2.b above for a discussion
of the key comments on these two issues and EPA's reasons for not
including either of them as national requirements in today's rule.
What were the key comments? Industry comments largely supported the
proposal to require facilities to retain an NPDES permit until properly
closed. Some environmental groups, U.S. Fish and Wildlife Service, some
States and citizens preferred a closure plan with financial assurance,
expressing concern that taxpayers end up paying to clean up abandoned
lagoons, whereas this should be the responsibility of the CAFO
operator. Some commenters opposed the closure requirement, stating that
it was inconsistent with and more restrictive than NPDES requirements
for other industry sectors. Others questioned the practical meaning of
closure, as well as the practical ability of permit authorities to
track such closed facilities.
Rationale. EPA's establishment of a minimum national standard for
closure will help ensure the environmental risks associated with CAFO
manure and wastewater are minimized upon closure. Although EPA is not
establishing financial surety measures, States may want to implement
them as appropriate under their own authorities to prevent the
environmental damage caused by facilities that are no longer in
business. EPA concluded that requiring retention of an NPDES permit
provides a far more effective tool for environmental protection than
would simply requiring a closure plan that might, or might not, be
effectively implemented.
In practical terms, how clean a facility must be to meet closure
requirements that the operation no longer has a potential to discharge
will be left to the permitting authority. EPA is not requiring CAFO
facilities to post bonds to obtain an NPDES permit, nor does EPA
calculate that closure costs are necessarily high. EPA assumes that
disposal methods normal to the operation will be used to close out the
facility.
The need to maintain NPDES coverage until proper closure of the
CAFO is a result of the unique nature of CAFO facilities. As a part of
their normal operation CAFOs may, among other things, have manure and
litter storage structures, lagoons, and feed storage areas. The
abandonment of any one of these has the potential for catastrophic
environmental damage to waters of the U.S. As a result, to protect
against unauthorized discharges, there is a need to maintain coverage
of the facility under the NPDES permit until the facility is properly
closed. Upon verification of the proper closure of the facility by the
permitting authority there will be no need to retain the NPDES permit.
The NPDES permit can then be terminated and there would be no longer
any need to track the facility. EPA expects that the State permitting
authority will cease to issue a permit based on evidence that the
facility is properly closed. It is not expected that this will be a
major burden to the States.
7. Standard Conditions Applicable to All NPDES CAFO Permits
Standard conditions in an NPDES permit are preestablished
conditions that apply to all NPDES permits, as specified in 40 CFR
122.41. They include Duty to Comply, Duty to Reapply, Need to Halt or
Reduce Activity Not a Defense, Duty to Mitigate, Proper Operation and
Maintenance, Permit Actions, Property Rights, Duty to Provide
Information, Inspection and Entry, Monitoring and Records, Signatory
Requirement, Reporting Requirements, Bypass and Upset. Today's action
does not make any changes to the standard permit

[[Page 7230]]

conditions, with respect to NPDES permits issued to CAFOs.

D. What Records and Reports Must Be Kept On-Site or Submitted?

Today's rule specifies the types of records to be kept on-site at
the CAFO in accordance with the recordkeeping requirements section of
the permit. Today's rule also specifies 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
permitting authority in accordance with the monitoring and reporting
section of the permit.
The specific recordkeeping, monitoring, and reporting requirements
in today's rule balance the need for information documenting permit
compliance and minimizing the burden on the permittee to collect and
record data. State permit authorities have the option to include more
stringent requirements if they find such an action necessary. The
minimum recordkeeping, monitoring, and reporting requirements that must
be included in each NPDES permit are as follows:
Recordkeeping requirements. All CAFO operators must maintain a copy
of the site specific nutrient management plan on site, and records
documenting the implementation of the best management practices and
procedures identified in the nutrient management plan.
In addition, Large CAFOs must maintain operation and maintenance
records that document (a) visual inspections, inspection findings, and
preventive maintenance needed or undertaken in response to the
findings; (b) the date, rate, location, and methods used to apply
manure or litter and wastewater to land under the control of the CAFO
operator; (c) the results of annual manure or litter and wastewater
sampling and analysis to determine the nutrient content; and (d) the
results of representative soil sampling and analyses conducted at least
every five years to determine nutrient content.
Large CAFOs must also maintain records of manure transferred to
other persons that demonstrate the amount of manure and/or wastewater
that leaves the operation and record the date, name, and address of the
recipient(s);
Today's rule requires all CAFOs to submit an annual report that
includes the following information:
? Number and type of animals confined (open confinement and
housed under roof).
? Estimated amount of total manure, litter, and process
wastewater generated by the CAFO in the previous 12 months (tons/
gallons);
? Estimated amount of total manure, litter, and process
wastewater transferred to other persons by the CAFO in the previous 12
months (tons/gallons);
? Total number of acres for land application covered by the
nutrient management plan;
? Total number of acres under control of the CAFO that were
used for land application of manure, litter, and process wastewater in
the previous 12 months;
? Summary of all manure and wastewater discharges from the
production area that have occurred in the previous 12 months, including
date, time, and approximate volume; and
? A statement indicating whether the current version of the
CAFO's nutrient management plan was developed or approved by a
certified nutrient management planner.
What did EPA propose? EPA proposed requirements to keep, maintain
for five years, and make available to the Director or the Regional
Administrator, records of inspections and manure sampling and analysis,
records related to the development and implementation of a PNP, and
records of off-site transfers of manure. EPA proposed that CAFO
operators maintain records of off-site transfer and provide the
recipient with a brochure on proper land application practices. EPA
also proposed a small quantity exemption limit below which an operator
would not have to keep records of manure transfers. EPA proposed
operators submit a cover sheet and executive summary of their permit
nutrient plans to the permitting authority. In addition, the Agency
proposed to require operators to submit a written notification to the
permitting authority, signed by a certified planner, that the PNP has
been developed or amended and is being implemented. The proposal
required annual review of the PNP and re-submission of the executive
summary if there were any changes to the PNP.
Today's final rule changes the recordkeeping and reporting
requirements that were proposed in the following ways: EPA is not
requiring the CAFO owner or operator to provide the recipient of the
manure with a brochure that describes the recipient's responsibilities
for appropriate manure management, and EPA is not adopting the proposal
to set a minimum quantity exemption, such that records of manure
transfer would not be required below a certain quantity. In addition,
EPA is no longer requiring CAFO operators to submit with the NOI a copy
of the cover sheet and executive summary of the CAFO operator's current
Permit Nutrient Plan (PNP).
What were the key comments? EPA received a number of comments on
the proposed recordkeeping, monitoring, and reporting requirements. The
operators commented that monitoring and reporting programs are
difficult to establish, expensive, and burdensome on the operator. They
also claimed that these requirements would necessitate a significant
amount of operator time and labor, and would provide opportunities for
``technical'' permit violations, with no benefit to water quality.
Environmental groups and a majority of citizen commenters stated that
these provisions are long overdue and any records submitted should be
made available for public review.
The SBAR Panel recommended that EPA give careful consideration to
all proposed recordkeeping requirements and explore options to
streamline these requirements for small entities. Regarding the
requirement to provide nutrient content information to manure
recipients, the Panel believed that this would be minimally burdensome
if analysis of this content is already required as part of the CNMP to
ensure proper land application. The Panel suggested that EPA consider
limiting any requirement to provide nutrient content analysis to
situations where such analysis is required as part of the CNMP to
ensure proper on-site land application, or possibly where the operator
transfers manure to multiple recipients. Finally, the Panel noted that
under the Paperwork Reduction Act and its implementing regulations, all
reporting and recordkeeping requirements must be certified by the
issuing agency to have practical utility and to reduce, to the extent
practicable and appropriate, the burden on those required to comply,
including small entities (5 CFR 1320.9).
Rationale. The recordkeeping, reporting, and monitoring
requirements adopted today are necessary to demonstrate compliance with
the requirements of today's rule and assure protection of water
quality.
EPA is not requiring Small and Medium CAFOs to maintain records of
the of the manure transferred off-site, or provide the recipient with
an analysis of the nutrient content of the manure. As a result, these
categories of CAFOs are relieved of the burden of keeping records of
off-site transfer. EPA chose to provide regulatory relief for the
Medium CAFOs by not requiring them to keep records of their manure
transferred to third parties. EPA believes these CAFOs have more land
and therefore ship less

[[Page 7231]]

manure off-site. EPA's goal is to track the majority of the manure that
is transferred to third parties. This information kept by the large
operations is sufficient for EPA needs.
EPA decided not to include a small quantity exemption for off-site
transfer of manure in the final rule. The reason for the proposed
exemption was to provide record keeping relief to small operators.
However, EPA determined that effective implementation of the small-
quantity exemption would itself have required considerable
recordkeeping by the operator. Practically, then, including this
exemption would not have significantly reduced the record keeping
burden to small operators.
The annual report, which includes seven elements that are readily
available to the CAFO owner/operator in the nutrient management plan,
is being required in today's rule rather than the proposed PNP written
notification, cover sheet and executive summary. The annual report
gives the permitting authority information on the number of overflows
occurring in a year (in order to verify compliance with the production
area design requirements), the amount of manure generated, the amount
of manure transferred off-site, and the number of acres available for
land application. The annual report also provides information, such as
the degree to which CAFOs are expanding and accounting for increased
manure production, which is important to evaluate changes that might be
needed to comply with permitting requirements. The final rule requires
the permittee to indicate whether its plan was either written or
reviewed by a certified CNMP planner. EPA is not requiring that a
certified planner be used to develop or review the plan required under
this rule. However, EPA believes that certified planners provide a
valuable service in plan development such as consistency and improved
plan quality. Knowledge of which plans were developed by a certified
planner will help EPA focus its compliance assistance efforts and help
States determine level of permit review needed for each facility. EPA
has concluded that the annual report is a more effective method for
ensuring permitting authorities and EPA have basic information
documenting CAFO performance relative to permit requirements.
EPA disagrees with the public comments suggesting that the
monitoring and reporting requirements do not provide any benefit to
water quality. Monitoring and reporting provide the basis for CAFO
operators and permitting authorities to evaluate compliance with the
requirements of today's rule and the associated environmental
implications. Monitoring provides valuable benchmark information and
subsequent data that a permittee can use to adjust its activities,
better comply with the requirements of the permit, and thereby better
control its runoff or potential runoff. Monitoring also provides
documentation of the operation's activities, which is essential to
determine whether regulatory requirements are being implemented
effectively and the success of those activities in protecting water
quality. Monitoring allows the permittee and the permitting authority
to know what, if any, contribution the permittee is making to the
degradation of water quality. Such information is also helpful in
determining the improvements in water quality as a result of permit
compliance activities.
In this final rule, EPA has made great efforts to reduce burden
beyond what is noted above. EPA has eliminated all certifications that
were proposed, which include middle category certification that a
facility is not a CAFO, certification of off-site manure recipients,
and the use of certified CNMP planners. In addition, EPA is not
including a national requirement for operators to document that there
is no direct hydrological connection from groundwater beneath their
production area to surface waters (or add controls where there is such
a connection).

V. States' Roles and Responsibilities

A. What Are the Key Roles of the States?

State regulatory agencies with authorized NPDES programs are
principally responsible for implementing and enforcing today's rule.
This final rule obligates NPDES permit authorities to revise their
NPDES programs expeditiously and to issue new or revised NPDES permits
to include the revised effluent guidelines and other permit
requirements adopted today. In authorized States, their role would also
include determinations for no potential to discharge (see section
IV.B.2 of this preamble) and CAFO designation (see section IV.A.7 of
this preamble) of AFOs as CAFOs.
Various State organizations, such as environmental agencies,
agricultural agencies, conservation districts, play a central role in
implementing voluntary and other programs (e.g., technical assistance,
funding, public involvement, legal access to information, and setting
protocols) that support the goal of protecting water quality through
proper management of animal manure. EPA fully expects and promotes
effective cooperation between voluntary and regulatory programs to
achieve this goal. In designing this final rule, EPA has placed the
principal emphasis on Large CAFOs which are part of the base NPDES
program. With this in mind, EPA is promoting and encouraging States to
use the full range of voluntary and regulatory tools to address medium
and small operations.

B. Who Will Implement These New Regulations?

The requirements of today's rule will be implemented by issuing
NPDES permits. Today's rule will be implemented by States with
authorized NPDES permit programs for CAFOs. As of the date of this
final rule, there are 45 States and 1 Territory with authorized NPDES
permit programs for CAFOs. In States without an authorized NPDES
program for CAFOs and in Indian Country, EPA will implement the rule.

C. When and How Must a State Revise Its NPDES Permit Program?

NPDES regulations require State NPDES permitting programs to be
revised to reflect today's changes within one year of the date of
promulgation of final changes to the Federal CAFO regulations (see 40
CFR 123.62(e)). In 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 promulgation of today's regulations. States
that do not have an existing authorized 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.
Today's regulation requires States to have technical standards for
nutrient management consistent with 40 CFR 412.4(c)(3). If the State
already has nutrient management standards in place, it is sufficient to
provide those to EPA along with the State's submission of regulatory
revisions to conform to today's changes. If the State has not already
established technical standards for nutrient management, the Director
shall establish such standards by the date specified in Sec. 123.62(e)
and provide those to EPA along with the State's submission of
regulatory revisions.
The NPDES program modification process is described at 40 CFR
123.62. Opportunities for public input into the process of review and
approval of State program revisions and approvals is

[[Page 7232]]

described in section V.C of this preamble.

D. When Must States Issue New CAFO NPDES Permits?

EPA does not typically establish requirements for when States must
develop and issue NPDES permits. However, today's regulations require
CAFOs to seek NPDES permit coverage under general permits within
certain time frames, and CAFOs may not discharge any pollutants to
waters of the United States without a permit. Thus, it is in States'
interests to issue new or revised NPDES permits in a timely manner. It
is EPA's expectation that new general permits will be available no
later than the date on which CAFOs have a duty to apply for an NPDES
permit. See section IV.B.3 for a full description of when CAFOs must
seek permit coverage.

E. What Types of NPDES Permits Are Appropriate for CAFOs?

The NPDES regulations provide the permitting authority with the
discretion to determine the most appropriate type of permit for a CAFO.
The two basic types of NPDES permits are individual and general
permits. An individual permit is a permit specifically tailored for a
specific facility, while a general permit is developed and issued by a
permitting authority to cover multiple facilities with similar
characteristics.
EPA recognizes that most CAFOs will likely be covered by NPDES
general permits; however, there are some circumstances where an
individual permit might be appropriate (e.g., exceptionally large
facilities, facilities that have a history of noncompliance, or
facilities applying for approval to use an alternative performance
standard in lieu of baseline technology-based effluent guidelines). The
decision whether to issue a general or individual permit lies with the
NPDES permitting authority. Section VI of the preamble discusses
opportunity for public involvement in the NPDES permitting process.
As permit authorities explore innovative permitting approaches, the
use of ``watershed-based NPDES permits'' might become more prevalent.
For example, a watershed-based permit could be issued to CAFOs within a
specific watershed. EPA is currently promoting pilot projects to help
evaluate the benefits of watershed-based permitting and encourages
States to use such a flexible tool to address the varied needs of
specific watersheds.

F. What Flexibility Exists for States To Use Other Programs To Support
the Achievement of the Goals of This Regulation?

In designing this final rule, EPA has striven to maximize the
flexibility for States to implement appropriate and effective programs
to protect water quality and public health by ensuring proper
management of manure and related wastewater. This rule establishes
binding legal requirements for Large CAFOs and maintains substantial
flexibility for States to set other site-specific requirements for
CAFOs as needed to achieve State program objectives. EPA encourages
States to maximize use of voluntary and other non-NPDES programs to
support efforts by medium and small operations to implement appropriate
measures and correct problems that might otherwise cause them to be
defined or designated as a CAFO. EPA encourages States to use the
flexibility available under the rule so that their State non-NPDES
programs complement the required regulatory program. The following
examples can illustrate opportunities for this State flexibility:
? States are encouraged to work with State agriculture
agencies, conservation districts, USDA and other stakeholders to create
proactive programs to fix the problems of small and medium operations
in advance of compelling the facilities to apply for NPDES permits.
? Where a small or medium facility has been covered by an
NPDES permit, the permitting authority may allow the facility to exit
the permit program at the end of the 5-year permit term if the problems
that caused the facility to be defined or designated as a CAFO have
been corrected to the satisfaction of the permitting authority.
? A small or medium AFO might be taking early voluntary
action in good faith to develop and implement a comprehensive nutrient
management plan, yet might have an unexpected situation that could be
the basis for the facility's being defined or designated as a CAFO. EPA
encourages the permitting authority to provide an opportunity to
address the cause of the discharge before defining or designating the
operation a CAFO.
These examples are intended to illustrate the flexibility that EPA
is promoting with regard to medium and small operations. They are not
applicable to Large CAFOs.
What did EPA propose? EPA's proposed rule included an option to
expand substantially the criteria for when medium and small AFOs could
be defined or designated as CAFOs. The effect of these proposed changes
to the structure and definition of a CAFO was to require a
substantially larger number of medium and small operations to be
brought into the NPDES regulatory program. EPA estimated that as many
as 30,000 medium and small AFOs could be brought into the regulatory
program under this option. Another option presented in the proposal was
to structure the permitting requirements to build in inherent
flexibility for the medium facilities. In addition, the proposal and
the subsequent 2001 Notice introduced a variety of more specific
options for State flexibility, including one under which a State with
an effective non-NPDES program could request to operate under a
simplified permitting structure.
What were the key comments? The proposed expansion of the NPDES
program for medium and small operations caused great concern,
particularly among the States. Many comments from both States and
facility operators centered on the desire that EPA recognize the
effectiveness of existing State CAFO programs. More specifically, many
States wanted EPA to allow effective State non-NPDES programs to
operate in lieu of a State-run NPDES program, particularly in the event
that EPA in the final rule expanded the criteria for defining medium
facilities as CAFOs.
In general, comments from environmental groups expressed opposition
to most types of flexibility because of concerns regarding potential
loss of accountability at facilities and reduced public participation.
Industry commenters generally supported State flexibility as necessary
to address factors such as soil, climate, and site and regional
characteristics that vary within and among States. Commenters
maintained that State flexibility promotes those program elements
States have found to be most effective and allows States and industry
to achieve workable solutions to water quality issues. States also
supported maintaining a high degree of flexibility both to accommodate
State-specific characteristics and priorities and to preserve their
investment in existing good quality programs. Some State and industry
commenters asserted that EPA's options for flexibility were too
limited.
Rationale. EPA recognizes that EPA's proposed expansion of the
criteria for when medium and small AFOs would be defined or designated
as CAFOs would have had the effect of eliminating the flexibility for
States to use voluntary and other programs. EPA is also aware that many
of the States authorized to

[[Page 7233]]

implement the NPDES program supplement their NPDES CAFO requirements
with additional State requirements. Some States currently regulate or
manage CAFOs predominantly under State non-NPDES programs, or in
conjunction with other water quality protection programs through
participation in the CWA section 401 certification process (for
permits) as well as through other means (e.g., development of water
quality standards, development of TMDLs, and coordination with EPA).
Several States have effective alternative or voluntary programs that
are intended to help small and medium operations fix potential problems
that could cause them to be defined or designated as a CAFO.
EPA is encouraging States to use their non-NPDES programs to help
small and medium AFOs to reduce water quality impacts and to ensure
that they do not become point sources under this regulation. To the
extent the voluntary program eliminates the practice that results in
the AFO's being defined or designated a CAFO, the AFO may not be
required to obtain NPDES permit coverage. Given that EPA has not
expanded the criteria for when AFOs would be defined as CAFOs, the
Agency believes that States will have the flexibility necessary to
leverage effective non-NPDES programs for medium and small AFOs. EPA
has also offered specific examples of flexibility that permitting
authorities can exercise.
Once a facility is determined to be a CAFO, however, coverage under
a permit issued by a non-NPDES program will not satisfy the NPDES
permit requirement. EPA is committed to work with States to modify
existing non-NPDES State programs that currently regulate CAFOs to gain
EPA's approval as NPDES-authorized programs. Such a change would
require a formal modification of the State's authorized 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 five
years, procedures for public participation, and provisions for
enforcement, including third party lawsuits and federal enforceability.

VI. Public Role and Involvement

The public has an important role in the entire implementation of
the NPDES Program, including the implementation of NPDES permitting of
CAFOs. The NPDES regulations in 40 CFR parts 122, 123, and 124
establish public participation in EPA and State permit issuance, in
enforcement, and in the approval and modification of State NPDES
Programs. The purpose of this section is to provide a brief review of
the key areas where the public has opportunities for substantial
involvement. These opportunities for public involvement are long-
standing elements of the NPDES Program. Nothing in today's final rule
is intended to inhibit public involvement in the NPDES Program.

A. How Can the Public Get Involved in the Revision and Approval of
State NPDES Programs?

Sections 123.61 and 123.62 of the NPDES regulations specify
procedures for review and approval of State NPDES Programs. In the case
of State authorization or a substantial program modification, EPA is
required to issue a public notice, provide an opportunity for public
comment, and provide for a public hearing if there is deemed to be
significant public interest. To the extent that these final regulations
require a substantial modification to a State's existing NPDES Program
authorization, the public will have an opportunity to comment on the
proposed modifications.

B. How Can the Public Get Involved if a State Fails To Implement Its
CAFO NPDES Permit Program?

Section 123.64 of the NPDES regulations provides that any
individual or organization having an interest may petition EPA to
withdraw a State NPDES Program for alleged failure of the State to
implement the NPDES permit program, including failure to implement the
CAFO permit program.

C. How Can the Public Get Involved in NPDES Permitting of CAFOs?

Section 124.10 establishes public notice requirements for NPDES
permits, including those issued to CAFOs. Under these existing
regulations, the public may submit comments on draft individual and
general permits and may request a public hearing on such a permit.
Various sections of part 122 and Sec. 124.52 allow the Director to
determine on a case-by-case basis that certain operations may be
required to obtain an individual permit rather than coverage under a
general permit. Section 124.52 specifically lists CAFOs as an example
point source where such a decision may be made. Furthermore, Sec.
122.28(b)(3) authorizes any interested person to petition the Director
to require an entity authorized by a general permit to apply for and
obtain an individual permit. Section 122.28(b)(3) also provides example
cases where an individual permit may be required, including where the
discharge is a significant contributor of pollutants. See Sec.
122.23(f)(3) for opportunities for public involvement in the process
for making a ``no potential to discharge'' determination (refer to
section IV.B.2 of this preamble for further discussion). Nothing in
today's final rule is intended to change these provisions.

D. What Information About CAFOs Is Available to the Public?

Today's rule requires that all CAFOs, Large, Medium, and Small, and
whether covered by a general or an individual permit, report annually
to the permitting authority the following information:
? The number and type of animals, whether in open confinement
or housed under roof;
? The estimated amount of total manure, litter and process
wastewater generated by the CAFO in the previous 12 months;
? The estimated amount of total manure, litter and process
wastewater transferred to other person by the CAFO in the previous 12
months;
? The total number of acres for land application covered by
the nutrient management plan;
? The total number of acres under control of the CAFO that
were used for land application of manure, litter and process wastewater
in the previous 12 months;
? A summary of all manure, litter and process wastewater
discharges from the production area that have occurred in the previous
12 months, including date, time, and approximate volume; and
? A statement indicating whether the current version of the
CAFO's nutrient management plan was developed or approved by a
certified nutrient management planner.
EPA expects that the permitting authority will make this
information available to the public upon request. This should foster
public confidence that CAFOs are complying with the requirements of the
rule. In particular, the information in the annual report will confirm
that CAFOs have obtained coverage under an NPDES permit, are
appropriately controlling discharges from the production area, and have
developed and are implementing a nutrient management plan. The annual
report will also provide summary information on discharges from the
production area and the extent of manure production and available land
application area. This will help foster public confidence that the
manure is being land applied at rates that ensure

[[Page 7234]]

appropriate agricultural utilization of nutrients.
Today's rule makes no changes to the existing regulations
concerning how CAFOs may make Confidential Business Information (CBI)
claims with respect to information they must submit to the permitting
authority and how those claims will be evaluated. Under the existing
regulations at 40 CFR Part 2, Subpart B, a facility may make a claim of
confidentiality for information it must submit and EPA must evaluate
this claim if it receives a request for the information from the
public. Among the factors that EPA considers in evaluating such a claim
are:
? Must the information be legally provided to the public
under the Clean Water Act, its implementing regulations, or other
authorities? If so, a claim of confidentiality will be denied.
? Has the facility adequately shown that the information
satisfies the requirements for treatment as CBI? If yes, the claim of
confidentiality will be upheld.
Claims of confidentiality with respect to information submitted to
the State will be processed and evaluated under State regulations.
What was proposed? In the proposal, EPA discussed submission of the
PNP to the permitting authority and its availability to the public. The
proposed regulations would have required the cover sheet and executive
summary of each CAFO's PNP to be made publicly available. EPA proposed
that the information contained in these items could not be claimed as
CBI. The proposed regulations indicated that anything else in the PNP
could be claimed as confidential by the CAFO, and any such claim would
be subject to EPA's normal CBI procedures in 40 CFR Part 2. See Sec.
122.23(l) of the proposal.
Key comments. Industry commenters claimed that the PNP would
contain proprietary information. They stated that EPA should protect
these plans as CBI where requested by the CAFO. They claimed that
making the PNP publicly available would discourage innovation in
developing waste management technologies and could make CAFOs
vulnerable to unwarranted lawsuits. Environmental groups stated that
the PNP must be publicly available, or citizens would have no way of
ensuring that CAFOs are adequately developing and implementing the
PNPs. They also expressed concerns about the burden of traveling to the
permitting authority's offices to gain access to the plans. They stated
that the plans should be made more accessible to them by the permitting
authority, either by mail or by posting on the internet.
Rationale. The final CAFO regulations require that various types of
information on the operation and waste management practices of the
facility be made available to the permitting authority, either
routinely or upon request. The permitting authority has discretion,
subject to applicable regulations, to determine how much of this
information to make available to the public and in what manner. The
Annual Report that all CAFOs must submit is designed to provide the
permitting authority with summary information about the implementation
of the nutrient management plan. EPA believes that the information the
public is most interested in seeing is contained in the Annual Reports.
With respect to the contents of the nutrient management plan,
specifically, today's rule requires that the nutrient management plan
be maintained on-site at the CAFO and submitted only at the request of
the permitting authority. Upon submission of the nutrient management
plan to the permitting authority, the CAFO operator can assert a
confidential business information claim over the plan, in accordance
with applicable regulations. If the permitting authority receives a
request for the information, it will determine the validity of the
claim and provide the requester with information in accordance with the
findings of the determination and applicable regulations.
As noted, today's rule makes no changes to the existing regulations
concerning how facilities may make CBI claims with respect to
information they must submit to the permitting authority and how those
claims will be evaluated. Any changes to how the Agency handles the
issue of confidential business information are beyond the scope of
today's rule and would have broad implications across a number of EPA
programs. Instead EPA will evaluate future CBI claims based on the
applicable laws and regulations (see, e.g., CWA Section 402(j), 40 CFR
Part 2, Subpart B, and 40 CFR 122.7.

VII. Environmental Benefits of the Final Rule

A. Summary of the Environmental Benefits

This section presents EPA's estimates of the environmental and
human health benefits, including pollutant reductions, that will occur
from this rule. Table 7.1 shows the annualized benefits EPA projects
will result from the revised ELG requirements for Large CAFOs.
(Monetized values for benefits associated with the revised NPDES
requirements for Small and Medium CAFOs are not included in the table.)
The total monetized benefits associated with the ELG requirements for
Large CAFOs range from $204 to $355 million annually. The values
presented in the range represent those benefits for which EPA is able
to quantify and determine an economic value. These benefit value
estimates reflect only those pollutant reductions and water quality
improvements attributable to Large CAFOs. EPA also developed estimates
of the pollutant reductions that will occur due to the revised
requirements for Small and Medium CAFOs, but analysis of the monetized
value of the associated water quality improvements was not completed in
time for benefits estimates to be presented here. As discussed later in
this section, EPA has also identified additional environmental benefits
that will result from this rule but is unable to attribute a specific
economic value to these additional nonmonetized or nonquantified
benefits.
Detailed information on the estimated pollutant reductions is
provided in the Technical Development Document, which is in the docket
for today's rule. EPA's detailed assessment of the environmental
benefits that will be gained by this rule, as well as the benefits
estimates for other regulatory options considered during this
rulemaking, is presented in the Benefits Analysis, which is also
available in the rulemaking docket.

Table 7.1.--Annualized Benefits of ELG Requirements for Large CAFOs
[Millions of 2001$]
----------------------------------------------------------------------------------------------------------------
Types of benefits Total for all CAFOs
----------------------------------------------------------------------------------------------------------------
Recreational and non-use benefits from improved $166.2 to $298.6.
water quality in freshwater rivers, streams, and
lakes.
Reduced fish kills................................ $0.1.
Improved shellfish harvests....................... $0.3 to $3.4.

[[Page 7235]]

Reduced nitrate contamination of private wells.... $30.9 to $45.7.
Reduced eutrophication & pathogen contamination of Not monetized [$0.2].
coastal & estuarine waters (Case study of
potential fishing benefits to the Albemarle-
Pamlico estuary).
Reduced public water treatment costs.............. $1.1 to $1.7.
Reduced livestock mortality from nitrate and $5.3.
pathogen contamination of livestock drinking
water.
Reduced pathogen contamination of private & public Not monetized.
underground sources of drinking water.
Reduced human & ecological risks from antibiotics, Not monetized.
hormones, metals, salts.
Improved soil properties.......................... Not monetized.
Reduced cost of commercial fertilizers for non- Not monetized.
CAFO operations.
Total benefits................................ $204.1 + [B]
to $355.0 + [B].
----------------------------------------------------------------------------------------------------------------
[B]
represents non-monetized benefits of the rule.

B. What Pollutants Are Present in Manure and Other CAFO Wastes, and How
Do They Affect Human Health and the Environment?

1. What Pollutants Are Present in Animal Waste?
The primary pollutants associated with animal wastes 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. The composition of manure at a
particular operation depends on the animal species, size, maturity, and
health, as well as on the composition (e.g., protein content) of animal
feed. The sections below introduce the main constituents in animal
manure and include information from the National Water Quality
Inventory: 2000 Report (hereinafter the ``2000 Inventory''). This
report is prepared every 2 years under section 305(b) of the Clean
Water Act, and it summarizes State reports of impairment to their water
bodies and the suspected sources of those impairments.
a. Nutrients. Animal wastes contain significant quantities of
nutrients, particularly nitrogen and phosphorus. The 2000 Inventory
lists nutrients as the leading stressor of impaired lakes, ponds, and
reservoirs. Nutrients are also ranked as the fifth leading stressor for
impaired rivers and streams, are among the top 10 stressors of impaired
estuaries, and are the second leading stressor reported for the Great
Lakes. Manure nitrogen occurs in several forms, including ammonia and
nitrate. Ammonia and nitrate have fertilizer value for crop growth, but
these forms of nitrogen can also produce adverse environmental impacts
when they are transported in excess quantities to the environment.
Ammonia is of environmental concern because it is toxic to aquatic life
and it exerts a direct BOD on the receiving water, thereby reducing
dissolved oxygen levels and the ability of a water body to support
aquatic life. Excessive amounts of ammonia can lead to eutrophication,
or nutrient overenrichment, of surface waters. Nitrate is a valuable
fertilizer because it is biologically available to plants. Excessive
levels of nitrate in drinking water, however, can produce adverse human
health impacts.
Phosphorus is of concern in surface waters because it is a nutrient
that can lead to eutrophication and the resulting adverse impacts--fish
kills, reduced biodiversity, objectionable tastes and odors, increased
drinking water treatment costs, and growth of toxic organisms. At
concentrations greater than 1.0 milligrams per liter, phosphorus can
interfere with the coagulation process in drinking water treatment
plants thus reducing treatment efficiency. Phosphorus is of particular
concern in fresh waters, where plant growth is typically limited by
phosphorus levels. Under high pollutant loads, however, fresh water may
become nitrogen-limited. Thus, both nitrogen and phosphorus loads can
contribute to eutrophication.
b. 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 2000 Inventory
indicates that low dissolved oxygen levels caused by organic enrichment
(oxygen-depleting substances) are the third leading stressor in
impaired estuaries. They are the fourth greatest stressor in impaired
rivers and streams, and the fifth leading stressor in impaired lakes,
ponds, and reservoirs. Severe reductions in dissolved oxygen levels can
lead to fish kills. Even moderate decreases in oxygen levels can
adversely affect water bodies through decreases in biodiversity
characterized by the loss of fish and other aquatic animal populations,
and a dominance of species that can tolerate low levels of dissolved
oxygen.
c. Solids. The 2000 Inventory indicates that dissolved solids are
the fourth leading stressor in impaired lakes, ponds, and reservoirs.
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, and feathers. In
general, the impacts of solids include increasing the turbidity of
surface waters, physically hindering the functioning of aquatic plants
and animals, and providing a protected environment for pathogens.
Increased turbidity reduces penetration of light through the water
column, thereby limiting the growth of desirable aquatic plants that
serve as a critical habitat for fish, shellfish, and other aquatic
organisms. Solids that settle out as bottom deposits can alter or
destroy habitat for fish and benthic organisms. Solids also provide a
medium for the accumulation, transport, and storage of other
pollutants, including nutrients, pathogens, and trace elements.
d. Pathogens. Pathogens are defined as disease-causing
microorganisms. A subset of microorganisms, including species of
bacteria, viruses, and parasites, can cause sickness and disease in
humans and are known as human pathogens. The 2000 Inventory indicates
that pathogens (specifically bacteria) are the leading stressor in
impaired rivers and streams and the fourth leading stressor in impaired
estuaries. Livestock manure may contain a variety of microorganism
species, some of which are human pathogens. Multiple species of
pathogens can be transmitted directly from a host animal's manure to
surface

[[Page 7236]]

water, and pathogens already in surface water can increase in number
because of loadings of animal manure nutrients and organic matter.
More than 150 pathogens found in livestock manure are associated
with risks to humans, including the six human pathogens that account
for more than 90% of food and waterborne diseases in humans. These
organisms are: Campylobacter spp., Salmonella spp. (non-typhoid),
Listeria monocytogenes, Escherichia coli O157:H7, Cryptosporidium
parvum, and Giardia lamblia. All of these organisms may be rapidly
transmitted from one animal to another in CAFO settings. An important
feature relating to the potential for disease transmission for each of
these organisms is the relatively low infectious dose in humans. The
protozoan species Cryptosporidium parvum and Giardia lamblia are
frequently found in animal manure. Bacteria such as Escherichia coli
O157:H7 and Salmonella spp. are also often found in livestock manure
and have been associated with waterborne disease. The bacteria Listeria
monocytogenes is ubiquitous in nature and is commonly found in the
intestines of wild and domestic animals.
e. Other potential contaminants. Animal wastes can contain other
chemical constituents that could adversely affect the environment.
These constituents include salts, trace elements, and pharmaceuticals,
including antibiotics and hormones. Although salts are usually present
in waste regardless of animal or feed type, trace elements and
pharmaceuticals are typically the result of feed additives to help
prevent disease or promote growth. Accordingly, concentrations of these
constituents vary with operation type and from facility to facility.
The other constituents present in animal wastes are summarized below.
Additional information on animal wastes is presented in the preamble
for the proposed rule (see 66 FR 2976-2979) and the Technical
Development Document.
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 constituents contributing to manure salinity are calcium,
magnesium, chloride, sulfate, bicarbonate, carbonate, and nitrate. Salt
buildup may deteriorate soil structure, reduce permeability,
contaminate ground water, and reduce crop yields. In fresh waters,
increasing salinity can disrupt the balance of the ecosystem, making it
difficult for resident species to remain. Salts may also contribute to
degradation of drinking water supplies.
Trace elements. The 2000 Inventory indicates that metals are the
leading stressor in impaired estuaries and the second leading stressor
in impaired lakes. 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 or biocides. Trace elements can 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 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. Trace elements in agronomically applied
manures are generally expected to pose little risk to human health and
the environment. However, repeated application of manures above
agronomic rates could result in cumulative metal loadings to levels
that potentially affect 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.
Antibiotics. Antibiotics are used in AFOs and can be expected to
appear in animal wastes. Antibiotics are used both to treat illness and
as feed additives to promote growth or to improve feed conversion
efficiency. 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, so 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. One concern regarding the widespread use
of antibiotics in animal manure is the development of antibiotic-
resistant pathogens. Use of antibiotics, especially broad-spectrum
antibiotics, in raising animals is increasing. This could be
contributing to the emergence of more strains of antibiotic-resistant
pathogens, along with strains that are growing more resistant.
Pesticides and hormones. Pesticides and hormones are compounds used
at AFOs and they can be expected to appear in animal wastes. These
types of pollutants may be linked with endocrine disruption. The 2000
Inventory indicates that pesticides are the second leading stressor in
impaired estuaries. 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 and litter 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.
2. How Do These Pollutants Reach Surface Waters?
Pollutants in animal waste and manure can enter the environment
through a number of pathways, including surface runoff and erosion,
direct discharges to surface water, spills and other dry-weather
discharges, leaching into soil and ground water, and volatilization of
compounds (e.g., ammonia) and subsequent redeposition to the landscape.
These discharges of manure pollutants can originate from animal
confinement areas, manure handling and containment systems, manure
stockpiles, and cropland where manure is spread.
Runoff and erosion occur during rainfall when rainwater fails to be
absorbed into the ground and when the soil surface is worn away by
water or wind. Runoff of animal wastes is more likely when rainfall
occurs soon after application (particularly if the manure was not
injected or incorporated) and when manure is overapplied or misapplied.
Erosion can be a significant transport mechanism for land applied
pollutants, such as phosphorus, that are strongly bonded to soils.
Pollutants are directly discharged to surface water when animals
are allowed access to water bodies and when manure storage areas
overflow. Dry weather discharges to surface waters associated with
CAFOs have been reported to occur through spills or other

[[Page 7237]]

accidental discharges from lagoons and irrigation systems, or through
intentional releases. Other reported causes of discharge to surface
waters are overflows from containment systems following rainfall,
catastrophic spills from failure of manure containment systems, and
washouts from floodwaters when lagoons are sited on floodplains or from
equipment malfunction, such as pump or irrigation gun failure, and
breakage of pipes or retaining walls.
It is well established that in many agricultural areas shallow
ground water can become contaminated with manure pollutants. This
occurs as a result of water traveling through the soil to the ground
water and taking with it pollutants such as nitrate from livestock and
poultry wastes on the surface. Leaking lagoons are also a potential
source of manure pollutants in ground water, based on findings reported
in the scientific and technical literature.
Pollutants from CAFO wastes are released to air through
volatilization of manure constituents and the products of manure
decomposition. Other ways that manure pollutants can enter the air is
from spray irrigation systems and as wind-borne particulates in dust.
Once airborne, these pollutants can find their way into nearby streams,
rivers, and lakes as they are subsequently redeposited on the
landscape. More detailed information on the transport of animal wastes
is presented in the Benefits Analysis and the record.
3. How Is Water Quality Impaired by Animal Wastes?
EPA has made significant progress in implementing Clean Water Act
programs and in reducing water pollution. Despite such progress,
however, serious water quality problems persist throughout the country.
Sources of information on these problems include reports from States to
EPA, documented in the 2000 Inventory, and the U.S. Geological Survey's
National Water Quality Assessment (NAWQA) Program.
a. EPA's national water quality inventory. Agricultural operations,
including CAFOs, are a significant contributor to the remaining water
pollution problems in the United States, as reported by the 2000
Inventory. EPA's 2000 Inventory data indicate 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 streams, lakes, ponds, and reservoirs.
Agriculture is also identified as the fifth leading contributor to
identified water quality impairments in the nation's estuaries. While
the 2000 Inventory does not generally separate effects of CAFOs from
agriculture generally, EPA's data indicate that water quality concerns
tend to be greatest in regions where crops are intensively cultivated
and where livestock operations are concentrated.
The 2000 Inventory data indicate that the agricultural sector
contributes to the impairment of at least 129,000 river miles, 3.2
million lake acres, and more than 2,800 estuarine square miles. Forty-
eight States and tribes identified agricultural sector activities
contributing to water quality impacts on rivers; 40 States identified
such impacts to lakes, ponds, and reservoirs; and 14 States reported
such impacts on estuaries. AFOs are only a subset of the agriculture
category, but 29 States specifically identified them as contributing to
water quality impairment.
The leading pollutants impairing surface water quality in the
United States as identified in the 2000 Inventory data include
nutrients, pathogens, sediment/siltation, and oxygen-depleting
substances. These pollutants can originate from various sources,
including the animal production industry. Animal production facilities
may also discharge other pollutants, such as metals and pesticides, and
can contribute to the growth of noxious aquatic plants due to the
discharge of excess nutrients.
These data provide a general indication of national surface water
quality, highlighting the magnitude of water quality impairment from
agriculture and the relative contribution compared to other sources.
Moreover, the findings of this report are corroborated by numerous
reports and studies conducted by government and independent researchers
that identify agriculture's predominance as an important contributor of
surface water pollution, as summarized in the Environmental Assessment
of Revisions to the National Pollutant Discharge Elimination System
Regulation and the Effluent Guidelines for Concentrated Animal Feeding
Operations, which is available in EPA's rulemaking record.
b. Other documented impacts on water quality. Data collected by
NAWQA also identify agriculture among the leading contributor of
nutrients to U.S. watersheds. A national water quality assessment
program conducted by the U.S. Geologic Survey found that agricultural
use of fertilizers, manure, and pesticides has degraded stream and
shallow ground water quality in agricultural areas and has resulted in
high concentrations of nitrogen. Subsequent measurements in specific
major river basins suggest that animal feeding operations may play a
significant role in observed water quality degradation in those basins
(e.g., Kalkhoff et al., 2000; Groschen et al., 2000). Finally, a 1997
study by Smith et al. characterizing spatial and temporal patterns in
water quality identified animal waste as a significant source of in-
stream nutrient concentrations in many watershed outlets, relative to
other local sources, particularly in the central and eastern United
States. The findings of this report suggest that livestock waste
contributes more than commercial fertilizer use to local total
phosphorus yield, whereas the use of commercial fertilizer is the
leading source of local total nitrogen yield.
Numerous local, regional, and national evaluations also indicate
that animal manure can be a significant source of pollutants that
contribute to water quality degradation. A literature survey conducted
for the proposed rule identified more than 150 reports of discharges to
surface waters from hog, poultry, dairy, and cattle operations. Over 30
separate incidents of discharges from swine operations between the
years 1992 and 1997 in Iowa alone were reported by that State's
Department of Natural Resources. The incidents resulted in fish kills
ranging from about 500 to more than 500,000 fish killed per event. Fish
kills or other environmental impacts have also been reported by
agencies in other States, including Nebraska, Maryland, Ohio, Michigan,
and North Carolina.
Runoff of nutrients and other contaminants in animal manure and
wastewater also contributes to degradation of U.S. waters. For example,
nutrients originating from livestock and poultry operations in the
Mississippi River Basin have been identified as contributing to the
largest hypoxic zone in U.S. coastal waters in the northern Gulf of
Mexico. (Hypoxia is the condition in which dissolved oxygen is below
the level necessary to sustain most animal life.) According to a report
conducted by the National Science and Technology Council in 2000,
adverse impacts of eutrophication might be of concern for ecologically
and commercially important species in the Gulf, whose fishery resources
generate $2.8 billion annually. Animal manure also contributes to
eutrophication, or nutrient overenrichment, which is also a serious
concern for the Nation's coastal and estuarine resources.
More detailed information is presented in the 2001 proposal (66 FR

[[Page 7238]]

2972-2974) and in the record for this rulemaking.
4. What Ecological and Human Health Impacts Have Been Caused by CAFO
Wastes?
Among the reported environmental problems associated with animal
manure are surface and ground water quality degradation, adverse
effects on estuarine water quality and resources in coastal areas, and
effects on soil and air quality. The scientific literature, which spans
more than 30 years, documents how these problems can contribute to
increased risk to aquatic and wildlife ecosystems, for example, the
large number of fish kills in recent years. Human health might also be
affected, for example, by high nitrate levels in drinking water and
exposure to waterborne human pathogens and other pollutants in manure.
The record for this rule provides more detailed information on the
scientific and technical research to support these findings.
a. Ecological impacts. Manure pollutants in surface waters
contribute to eutrophication, the disruption of a water body due to
overenrichment. Eutrophication is the most documented impact of
nutrient pollution and is a serious concern for coastal and estuarine
resources. Another negative impact generated by excess nutrients in
surface water is algae blooms, which also result from overenrichment
from nutrients. Such blooms depress oxygen levels and contribute
further to eutrophication. Many lake and coastal problems are linked to
eutrophication, including red tides, fish kills, outbreaks of shellfish
poisonings, loss of habitat, coral reef destruction, and hypoxia.
Many of the constituents in manure, especially organic matter, also
decrease the oxygen concentrations in surface waters, sometimes below
the levels fish and invertebrates require to survive. Nitrites and
pathogens in manure can also pose risks to aquatic life. If sediments
are enriched by nutrients, the concentrations of nitrites in the
overlying water may be raised enough to cause nitrite poisoning in
fish. There is substantial information in the record for this rule that
describes local, regional, and national evaluations indicating that
animal manure is a significant source of pollutants that contribute to
water quality degradation. Many of these evaluations note a high
incidence of fish kills. EPA's analysis shows that between 1981 and
1999, 19 States reported 4 million fish killed from both runoff and
spills at CAFOs.
In addition, excess nitrogen can contribute to water quality
decline by increasing the acidity of surface waters. Pathogens can
accumulate in fish and shellfish, resulting in a pathway for
transmission to higher trophic organisms; they can also contribute to
avian botulism and avian cholera. Additional information on fish kills
and other adverse impacts is presented in the 2001 proposal (66 FR
2972-2974) and in the record for this rulemaking.
b. Human health impacts from affected drinking water. Pollution
originating from an animal production facility can have multiple
impacts on drinking water. Nitrogen in manure is easily transformed
into the nitrate form, which can be transported to drinking water
sources and present a range of health risks. These health risks include
methemoglobinemia in infants, spontaneous abortions, and increased
incidence of stomach and esophageal cancers. Nitrate is not removed by
conventional drinking water treatment processes but requires
additional, relatively expensive treatment units. California's Chino
Basin estimates a cost of more than $1 million per year to remove
nitrates from drinking water due to loadings from local dairies.
Generally, people drawing water from domestic wells are at greater risk
of nitrate poisoning than those drawing from public water sources,
because domestic wells are typically shallower and not subject to
wellhead protection monitoring or treatment requirements.
Salts in animal wastes can also pose a health hazard. At low
levels, salts can increase blood pressure in salt-sensitive
individuals, increasing their risk of stroke and heart attacks. The
salt load into the Chino Basin from local dairies is more than 1,500
tons per year, which costs the drinking water treatment system between
$320 and $690 per ton to remove.
To the extent that nutrients contribute to algae blooms in surface
water through accelerated eutrophication, algae can affect drinking
water by clogging treatment plant intakes, producing objectionable
tastes and odors, and increasing production of harmful chlorinated by-
products (e.g., trihalomethanes) by reacting with chlorine used to
disinfect drinking water. In Wisconsin, the City of Oshkosh has spent
an extra $30,000 per year on copper sulfate treatment to kill the algae
in the waters from Lake Winnebago, which is attributed to excess
nutrients from animal manure, commercial fertilizers, and soil. In
Tulsa, Oklahoma, excessive algae growth in Lake Eucha, associated with
poultry farming, costs the city $100,000 per year to address taste and
odor problems in the drinking water.
c. Other human health impacts. In addition to threats to human
health through drinking water exposures, pathogens from animal manure
can also threaten human health through shellfish consumption and
recreational contact such as swimming in contaminated waters.
Relatively low-dose exposures to Cryptosporidium parvum and Giardia
spp. can cause infection in humans. Other bacteria found in livestock
manure have also been associated with waterborne disease. Pathogens
from animal wastes can readily enter water sources, resulting in
contamination of surface waters. Some pathogens are able to survive and
remain infectious in the environment for relatively long periods of
time. U.S. federal agencies and other independent researchers have
recognized the potential public health risks from pathogens originating
from CAFOs. At this time, however, the magnitude of the human health
risk from pathogenic organisms that directly originate from CAFOs and
are transported through U.S. waters has not been established.
According to a United Nations report, the use of antibiotics in
food-producing animals has the potential to affect human health because
of the presence of drug residues in foods and also because of the
selection of resistant bacteria in animals. However, the impact of
antimicrobial metabolic products and nonmetabolized drugs in animal
wastes that are released into the environment remains unclear. The
emergence of resistant bacteria is of particular concern because such
infections are more difficult to treat and require drugs that are often
less readily available, more expensive, and more toxic. In the U.S.,
pilot studies coordinated by EPA, USDA, and the Centers for Disease
Control have been initiated to assess the extent of environmental
contamination by antimicrobial drug residues and drug-resistant
organisms that enter the soil or water from human and animal waste.

C. How Will Water Quality and Human Health Be Improved by This Rule?

1. What Reductions in Pollutant Discharges Will Result From This Rule?
EPA's pollutant reductions for this rule focus to a large degree on
estimating the amount of pollutants in the runoff from land where
manure has been applied. These estimates of pollutant discharges,
referred to as the ``edge-of-field'' loadings, were made for nutrients,
metals, pathogens, and sediment for both pre-rule conditions (baseline)
and post-rule conditions. The reductions in pollutant discharges were

[[Page 7239]]

estimated using an environmental model (Groundwater Loading Effects of
Agricultural Management Systems, or GLEAMS) that simulates hydrologic
transport, erosion, and biochemical processes such as chemical
transformation and plant uptake. The GLEAMS model uses information on
soil characteristics and climate, along with characteristics of the
applied manure and commercial fertilizers, to model losses of
nutrients, metals, pathogens, and sediment in surface runoff, sediment,
and ground water leachate. EPA's analysis also developed estimates of
changes in pollutant discharges occurring at the production area.
The pollutant reduction estimates were developed for each type of
model farm included in EPA's cost models. The model farms were
developed to represent the various animal types, farm sizes, and
geographic regions. Model farms were developed for each animal type
across a range of size classes, and model farms were located in each
geographic region. The pollutant estimates for the model farms were
combined with published data from USDA's 1997 Census of Agriculture and
then refined into national, regional, State, and county level pollutant
loading estimates that were used to determine in-stream surface water
and ground water concentrations. These values were then used in the
water quality models and other environmental benefits assessment models
to estimate the human health and environmental benefits accruing from
this rule.
EPA quantified the reduction of nitrogen and phosphorus loads
associated with this rule. Reductions of discharges of the metals zinc,
copper, cadmium, nickel, lead, and arsenic were also analyzed for the
final rule. Fecal coliform and fecal streptococcus were used as
surrogates to estimate pathogen reductions that would be achieved by
this rule. Other pathogens would likely be reduced to a similar degree.
Table 7.2 presents the pollutant reductions expected to result from
this rule.

Table 7.2.--Pollutant Reductions: Combined Total for All Animal Sectors
----------------------------------------------------------------------------------------------------------------
Baseline Post-
pollutant regulation Pollutant
Parameter loading (Pre- pollutant reduction
regulation) loading
----------------------------------------------------------------------------------------------------------------
Large CAFOs:
Nutrients (million lb)...................................... 658 503 155 (24%)
Metals (million lb)......................................... 20 19 1 (5%)
Pathogens (10\19\ cfu)...................................... 5,784 3,129 2,655 (46%)
Sediment (million lb)....................................... 35,493 33,434 2,059 (6%)
Medium CAFOs:
Nutrients (million lb)...................................... 65 54 11 (17%)
Metals (million lb)......................................... 2.0 1.9 0.1 (5%)
Pathogens (10\19\ cfu)...................................... 1,456 779 677 (46%)
Sediment (million lb)....................................... 3,119 3,015 104 (3%)
----------------------------------------------------------------------------------------------------------------

2. Approach for Determining the Benefits of This Rule
EPA has analyzed the water quality improvements expected to result
from the new requirements being promulgated today and has estimated the
environmental and human health benefits of the pollutant reductions
that will result. The benefits described in this section are primarily
associated with direct improvements in water quality (both surface
water and ground water), but this new rule will also create certain
non-water quality environmental effects, such as improved soil
conditions, changes in energy consumption, and changes in emissions of
air pollutants.
For this rule, EPA conducted seven benefit studies to estimate the
impacts of reductions in pollutant discharges from CAFOs. The first
study used a national water quality model (National Water Pollution
Control Assessment Model, or NWPCAM) that estimates runoff from land
application areas to rivers, streams, and, to a lesser extent, lakes in
the U.S. This study estimated the value society places on improvements
in surface water quality associated with today's rule. The second study
examined the expected improvements in shellfish harvesting resulting
from the new CAFO rule. A third study looked at incidences of fish
kills that are attributed to AFOs and estimated the cost of replacing
the lost fish stocks. The fourth study estimated the benefits
associated with reduced ground water contamination. Reduced public
water treatment costs were evaluated in the fifth study, and reduced
livestock mortality from nitrate and pathogen contamination of
livestock drinking water was evaluated in the sixth study. In the
seventh study, a case study of potential fishing benefits for the
Albemarle-Pamlico estuary is presented to provide some insight to the
potential benefits for estuaries and coastal waters. Each of the seven
studies, as well as benefits results, are briefly described in the
following sections. Benefits results associated with reduced pollutant
discharges from Large CAFOs are also summarized in Table 7.1. The
benefit value estimates presented in this section reflect only those
pollutant reductions and water quality improvements attributable to
Large CAFOs. EPA also developed estimates of the pollutant reductions
that will occur due to the revised requirements for Small and Medium
CAFOs, but analysis of the monetized value of the associated water
quality improvements was not completed in time for benefits estimates
to be presented here.
In this analysis, EPA estimates the effect of pollutant reductions
and other environmental improvements on human health and the ecosystem
and assigns a monetary value to these benefits to the extent possible.
In some cases, EPA was able to identify certain types of improvements
that will result from this rule, but was unable to either estimate the
monetary value of the improvement or quantify the amount of improvement
that will occur. These non-monetized and non-quantified benefits are
included in the discussion below. Given the limitations in assigning
monetary values to some of the improvements, the economic benefit
values described below and in the Benefits Analysis should be
considered a subset of the total benefits of this rule. These monetized
benefits should be evaluated along with descriptive qualitative
assessments of the non-monetized benefits. For example, the economic
valuation used for this rule assigns monetary values to the water
quality improvements due to reductions of the

[[Page 7240]]

most significant pollutants originating from CAFOs (e.g., nitrogen,
phosphorus, pathogens, and sediment), but it does not include values
for potential water quality improvements expected due to reduced
discharges of certain other pollutants discharged in lesser amounts,
such as metals or hormones.
Research documented in the record and summarized in the Benefits
Analysis shows that CAFO wastes may affect the environment and human
health in a variety of ways beyond those for which benefits have been
monetized. The following are examples of other types of potential
impacts or potential benefits:
? Human health and ecological effects of metals, antibiotics,
hormones, salts, and other pollutants associated with CAFO manure.
? Eutrophication of coastal and estuarine waters due to both
nutrients in runoff and deposition of ammonia volatilized from CAFOs.
? Reduced human illness due to pathogen exposure during
recreational activities in estuaries and coastal waters.
? Improvements to soil properties due to reduced
overapplication of manure, together with increased acreage receiving
manure applications at agronomic rates.
? Reduced pathogen contamination in private drinking water
wells.
? Reduced cost of commercial fertilizers for non-CAFO
operations.
EPA's Benefits Analysis does not include monetary values for these
other areas of environmental improvements because data limitations
preclude quantifiable estimates of the magnitude of improvement or it
is difficult to ascribe an economic value to these benefits.
Nevertheless, these environmental benefits may result in improved
ecological conditions and reduced risk to human health.
3. Benefits From Improved Surface Water Quality
a. Freshwater recreational benefits. EPA used NWPCAM to estimate
the national economic benefits to surface water quality that will
result as CAFOs implement the requirements of this rule. NWPCAM is a
national-scale water quality model that simulates the water quality and
benefits for various water pollution control approaches. NWPCAM is
designed to characterize water quality for the Nation's network of
rivers and streams, and, to a more limited extent, its lakes. NWPCAM
can translate spatially varying water quality changes (improvements or
degradation) resulting from different pollution control policies into
terms that reflect the value individuals place on water quality
improvements. In this way, NWPCAM is able to derive the economic
benefit of the water quality improvements that will result from
reducing CAFO discharges.
For this rule, EPA used NWPCAM to simulate impacts due to
reductions in pollutant loadings from Large CAFOs (nitrogen,
phosphorus, pathogen indicators, BOD5, and TSS) on water quality in the
Nation's surface waters. NWPCAM's national-scale framework allows
hydraulic transport, routing, and connectivity of surface waters to be
simulated for the entire continental United States with the exception
of coastal and estuarine waters. Pollutant loadings from the CAFOs were
used as inputs to NWPCAM. The CAFO loadings were processed through the
NWPCAM water quality modeling system to estimate in-stream pollutant
concentrations on a detailed spatial scale to provide estimates of
changes in water quality that will result as CAFOs implement this new
rule. The NWPCAM modeling output, simulating the improved water quality
in the Nation's surface waters, was used as the basis for monetizing
improvements to water quality, and as input to several of the other
benefits analyses described later in this section.
The monetary value of the benefits associated with the changes in
water quality are estimated using two valuation techniques. The first
technique relates water quality changes to changes in the category of
use the water quality can support (e.g., boatable uses versus fishable
uses, or fishable uses versus swimmable uses), also referred to as the
``water quality ladder'' approach, and also considers the size of
population benefitting from the changes in the types of use the water
quality can support. The second method is similar to the first, but it
uses a composite measure of water quality that is calculated from six
water quality parameters (referred to as the ``water quality index''
approach). A key difference in the two approaches is that the water
quality ladder approach assesses improvements using a step-function
that attributes a monetary value to the water quality improvement only
when changing from one use category to another (e.g., a change from
boatable use to fishable use), while the water quality index method
assigns values along a continuum of water quality improvement (e.g.,
the water use may remain designated as ``boatable use,'' but
improvements within that use category are assigned a monetary value).
For both valuation approaches, the monetary value assigned to the
benefits is based on what the public is willing to pay for improvements
to water quality.
Based on the NWPCAM analysis using the water quality ladder
approach, the benefits of improved surface water quality resulting from
reduced pollutant discharges from Large CAFOs are estimated to be $166
million annually (2001 dollars). Using the water quality index
approach, the benefits of improved surface water quality are estimated
at $298 million annually (2001 dollars).
b. Shellfish beds. Pathogen contamination of coastal waters is a
leading cause of shellfish bed harvest restrictions and closures.
Sources of pathogens include runoff from agricultural land and
activities. Using The 1995 National Shellfish Register of Classified
Growing Waters published by the National Oceanic and Atmospheric
Administration, EPA estimated the improvements to shellfish bed
harvesting that will result as CAFO discharges of pathogens are reduced
by this rule. These data were used to determine the average per-acre
yield of shellfish from harvested waters and to estimate the area of
shellfish-growing waters that are currently unharvested as a result of
pollution from AFOs. By combining the per-acre yield data with
estimates of the acreage of currently unharvested shellfish beds that
will become available for harvesting as discharges of pathogens from
Large CAFOs are reduced, EPA calculates the value of improved shellfish
harvests at $0.3 to $3.4 million annually.
c. Fish kills. Episodic fish kill events resulting from spills,
manure runoff, and other discharges of manure from AFOs continue to
remain a serious problem in the United States. The impacts from these
incidents range from immediate and dramatic kill events to less
dramatic but more widespread events. Manure dumped into and along the
West Branch of the Pecatonica River in Wisconsin resulted in a complete
kill of smallmouth bass, catfish, forage fish, and all but the hardiest
insects in a 13-mile stretch of the river. Less immediate, but equally
important, catastrophic impacts on water quality from manure runoff are
increased algae growth or algae blooms, which remove oxygen from the
water and can result in the death of fish. Manure runoff into a shallow
lake in Arkansas resulted in a heavy algae bloom that depleted the lake
of oxygen, killing many fish.
While the modeled estimates of surface water quality improvements
have been used to monetize benefits associated with freshwater bodies,
water quality modeling (i.e., NWPCAM) does

[[Page 7241]]

not include estuaries, coastal areas or other marine water bodies, and
fish kills are noted to occur in these areas as well. Parts of the
Eastern Shore of the United States have been plagued with problems
related to Pfiesteria, a dinoflagellate algae that exist in rivers at
all times, but is known to cause fish kills in estuarine and coastal
environments under certain conditions. Fish attacked by Pfiesteria have
lesions or large, gaping holes on them as their skin tissue is broken
down; the lesions often result in death. The conditions under which
Pfiesteria can harm fish are believed to be related to high levels of
nutrients. Fish kills related to Pfiesteria in the Neuse River in North
Carolina have been blamed on the booming hog industry and the
associated waste spills and runoff from the hog farms. Preliminary
evidence suggests that human health problems might also be associated
with exposure to Pfiesteria. As a result, people most likely would
limit or avoid recreational activities in coastal waters with
Pfiesteria-related fish kills. The town of New Bern, a popular summer
vacation spot along the Neuse River in North Carolina, experienced
several major fish kills in the summer of 1995. During this event,
people became ill after swimming and fishing in the impacted areas, and
there were reports that people swimming in the waters reported welts
and sores on their bodies. Summer camps canceled boating classes,
children were urged to stay out of the water, and warnings were issued
about swimming and eating fish that were diseased. Many blame the heavy
rainfall, which pumped pollutants from overflowing sewage plants and
hog lagoons into the river, creating algae blooms, low oxygen, and
Pfiesteria outbreaks as the cause of the fish kills.
EPA obtained reports on fish kill events in the United States, with
data for nineteen States showing historical and current fish kills.
Using these data, EPA estimates the benefits of reducing fish kills
through implementation of the ELG requirements in today's rule for
Large CAFOs at $0.1 million annually.
d. Reduced public water treatment costs. Total suspended solids
(TSS) entering the surface waters from CAFOs can hinder effective
drinking water treatment by interfering with coagulation, filtration,
and disinfection processes. EPA used the NWPCAM model to predict how
pollutant reductions from Large CAFOs would affect the ambient
concentration of TSS in the source waters of public water supply
systems. To measure the value of reductions in TSS concentrations, EPA
estimated the extent to which lower TSS concentrations reduce the
operation and maintenance (O&M) costs associated with the conventional
treatment technique of gravity filtration. EPA estimates reduced
drinking water treatment costs of $1.1 to $1.7 million annually due to
reduced discharges of pollutants at Large CAFOs.
4. Benefits From Improved Ground Water Quality
a. Human health benefits. CAFO wastes can contaminate ground water
and thereby cause health risks and welfare losses to people relying on
ground water sources for their potable supplies or other uses. Of
particular concern are nitrogen and other constituents that leach
through the soils and the unsaturated zone and ultimately reach ground
waters. Nitrogen loadings convert to elevated nitrate concentrations at
household and community system wells, and elevated nitrate levels in
turn pose a risk to human health in households with private wells.
(Nitrate levels in community wells are regulated to protect human
health.)
This rule is expected to reduce nitrate levels in private drinking
wells by reducing the rate at which manure is spread on cropland, thus
reducing the rate at which pollutants will leach through soils and
reach ground water. The federal health-based National Primary Drinking
Water Standard for nitrate is 10 milligrams per liter (mg/L), and this
Maximum Contaminant Level (MCL) applies to all community water supply
systems. Households relying on private wells are not subject to the
federal MCL for nitrate, but levels above 10 mg/L are considered unsafe
for sensitive subpopulations (e.g., infants). Several economic studies
indicate a considerable willingness-to-pay by households to reduce the
likelihood of nitrate levels exceeding 10 mg/L, and to reduce nitrate
levels even when baseline concentrations are considerably below the
MCL.
EPA used U.S. Geological Survey data on nitrate levels in wells
throughout the country to predict how nitrate concentrations in private
drinking wells would be reduced by this rule. Based on these data, EPA
estimates that 9.2 percent of households that currently rely on private
wells with nitrate concentrations exceeding the MCL will have these
concentrations reduced to levels below the MCL because of the ELG
requirements for Large CAFOs. EPA estimates the value of these
reductions based on willingness-to-pay studies to be $583 annually per
household (2001$) resulting in benefit estimates of $30.2 to $44.6
million nationally on an annual basis for this component of ground
water improvements. Another 5.8 million households that currently have
nitrate levels in their private wells below the MCL will experience
further reductions in nitrate levels because of the ELG requirements
for Large CAFOs. Studies also show that people are willing to pay $2.09
per mg/L reduced annually (2001$) to get these additional reductions
once they are already below the MCL for nitrate. This gives benefits
estimates of $0.7 million to $1.1 million annually for the nation for
this component of ground water improvements. The total benefits of
reduced nitrate contamination of private drinking wells as a result of
reducing pollutant discharges at Large CAFOs are estimated to range
from approximately $30.9 to $45.7 million annually (2001$).
Research documented in the record and summarized in the Benefits
Analysis shows that CAFO wastes affect the environment and human health
in ways beyond those for which benefits have been monetized. Additional
ground water benefits that may result from this rule include reduced
pathogen contamination of private drinking water wells and community
drinking water supplies. EPA's Benefits Analysis does not include
monetary values for these additional ground water improvements because
data limitations preclude quantifiable estimates of the magnitude of
improvement or because it is difficult to ascribe an economic value to
these benefits. EPA also recognizes that CAFO operators have strong
private incentives to avoid contaminating their own private drinking
water sources.
b. Animal health benefits. Land application of manure can result in
leaching of nitrates and enteric pathogens to ground water, which in
many cases is used as the source of drinking water for livestock in
rural communities. Excessive nitrate in livestock watering sources,
particularly in conjunction with feeds containing nitrogen such as
alfalfa, can contribute to increased morbidity and mortality due to
acute and chronic nitrate poisoning in cattle which would have the
ability to convert nitrate to toxic nitrite. In addition, studies have
found that nearly 20% of rural water wells are contaminated with
enteric pathogens such as fecal coliform and fecal streptococcus,
common indicators of enteric pathogens, at ratios which suggest the
source of contamination may be animal waste. Consumption of water by
livestock contaminated with enteric pathogens could result in increased
morbidity and mortality due to waterborne illness, particularly
gastrointestinal disorders.

[[Page 7242]]

EPA used data from scientific literature, USDA data on beef and
dairy mortality from poisoning and gastrointestinal illness, EPA data
on rural groundwater quality, and published recommendations for
livestock drinking water quality, to estimate the potential to reduce
on-farm beef and dairy cattle mortality associated with pathogens and
nitrates in ground water. From this, EPA estimated the avoided cost of
replacing cattle mortalities. The ELG requirements are expected to
reduce nitrate and pathogen contamination of ground water at Large
CAFOs and, as a result, reduce annual cattle mortality from nitrate
poisoning and pathogens at Large CAFOs by approximately 4,300 mature
cattle and 3,900 calves. Using a replacement value of $1,185 for mature
cattle and $54 for day-old calves (2002 dollars), the monetary benefit
of reduced on-farm beef and dairy cattle mortality at Large CAFOs is
estimated at $5.3 million annually.

D. Other (Non-Water Quality) Environmental Impacts and Benefits

In analyzing the effects of this rule, EPA also considered how the
requirements promulgated today would affect the amount and form of
compounds released to air, as well as the energy that is required to
operate the CAFO. In addition to the water quality impacts and benefits
discussed above, EPA's analyses for this rule have also evaluated these
other types of environmental impacts, often referred to as non-water
quality environmental impacts. These non-water quality environmental
impacts include changes in air emissions from CAFO production areas and
land where CAFO-generated manure is spread, changes in energy use, and
improvements in soil properties. EPA's estimates of changes in air
emissions and energy use are described in more detail in the Technical
Development Document.
To assess the potential changes in air emissions resulting from
this rule, EPA quantified the releases from the production area,
including animal housing and animal waste storage and treatment areas;
land application activities; and emissions from vehicles, including the
off-site transport of waste and on-site composting operations.
EPA projects increased emissions of criteria air pollutants
(particulate matter, volatile organic compounds, nitrogen oxides, and
carbon monoxide) related to increased fuel consumption as excess manure
is transported away from the CAFO. The contribution of these projected
increases is limited compared to the national criteria pollutant
inventory. For example, for the year 2000, the total national inventory
for nitrogen oxides was 25 million tons. The contribution of the
projected increase in CAFO emissions of nitrogen oxides is less than
0.01 percent of that amount. The national inventory values for other
criteria pollutants are also much larger than the projected changes in
emissions from CAFOs.
CAFOs are a source of ammonia, which is a contributor to the
formation of fine particulate matter. This rule is not expected to
significantly alter ammonia emissions from CAFOs. During the
rulemaking, EPA evaluated a number of regulatory options and, as part
of those analyses, considered the potential air quality benefits
associated with changes in ammonia emissions. For further discussion of
those analyses, refer to Chapter 13 of the Technical Development
Document and Section 22 of the rulemaking record.
CAFOs are also a source of hydrogen sulfide emissions. EPA's
calculations indicate that today's rule will reduce hydrogen sulfide
emissions from Large CAFOs by 12 percent nationally. Reductions in
hydrogen sulfide emissions are expected to lead to human health
benefits, but EPA has not been able to calculate the economic value of
these reductions.
Finally, CAFOs are a source of greenhouse gases. Emissions of
nitrous oxide at CAFOs arise mainly from the feedlot area during
denitrification of nitrogen compounds during waste storage on the
drylot and from fields where animal wastes are land applied. Emissions
of methane also mainly arise during waste storage, created during the
anaerobic decomposition of carbon compounds. CAFOs currently contribute
approximately 3 percent of all U.S. nitrous oxide emissions and a
similar percentage of U.S. methane emissions. EPA estimates that
emissions of nitrous oxide at Large CAFOs will increase by 4 percent as
the requirements of today's rule are implemented, and emissions of
methane will decrease by 11 percent.
EPA also expects that the properties of the soil at a number of
land application areas might improve because of reduced overapplication
of manure. The soil properties of cropland that does not currently
receive manure, but becomes a recipient as additional manure is hauled
away from CAFOs that have excess manure are also expected to benefit
from the organic matter content (improving tilth) and the
micronutrients present in manure.

VIII. Costs and Economic Impacts

This section presents EPA's estimate of the total annual costs and
the economic impacts that would be incurred by the livestock and
poultry industry as a result of today's rule. This section also
discusses EPA's estimated effects on small businesses and presents the
results of the Agency's cost-effectiveness and cost-benefit analysis.
All costs presented in this section are reported in pre-tax 2001
dollars (unless otherwise indicated).
EPA estimates the total monetized social costs of the final
regulations at about $335 million annually. These costs include
compliance costs borne by CAFOs and also administrative costs to
federal and State governments. EPA estimates the total compliance cost
for Large CAFOs at $283 million per year (pre-tax, $2001). Costs to
Medium CAFOs are estimated at $39 million per year. Costs to Medium and
Small operations that are designated as CAFOs are estimated at $4
million per year. EPA estimates that the administrative cost to federal
and State governments to implement this rule is $9 million per year.
For the veal, dairy, turkey, and egg laying sectors, the final
regulations are not expected to result in any CAFO level business
closures. In the beef cattle, heifer, hog, and broiler sectors,
however, the final rule is expected to cause some existing CAFOs to
experience financial stress. These operations might be vulnerable to
closure as a result of complying with the final regulations. Across all
sectors, an estimated 285 existing Large CAFOs might be vulnerable to
facility closure. This accounts for approximately 3 percent of all
Large CAFOs. By sector, EPA estimates that 49 beef operations (3
percent of affected beef CAFOs), 22 heifer operations (9 percent), 204
hog operations (5 percent of affected hog CAFOs), and 10 broiler
operations (1 percent) might close as a result of complying with the
final regulations. These results are based on an analysis that does not
consider the longer-term effects on market adjustment and also
available cost share assistance from federal and State governments.
Detailed information on estimated compliance costs are provided in
the Technical Development Document and the Cost Support Document, which
are in the administrative record for today's rule. EPA's detailed
economic assessment can be found in Economic Analysis which is also in
the administrative record.

[[Page 7243]]

A. Costs of the Final Rule

1. Method for Estimating the Costs of This Rule
For the purpose of estimating the total costs and economic impacts
CAFOs will bear in complying with this rule, 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, and plan development. Facility
upgrades reflect costs for additional or improved manure storage,
mortality handling, runoff controls, reduction of fresh water use where
appropriate, and additional farm management practices. Land application
costs address agricultural application of nutrients, including hauling
of excess manure off-site and adjusting for changes in commercial
fertilizer needs, and reflect differences among operations based on
cropland availability for manure application.
EPA evaluated compliance costs using a representative facility
approach based on approximately 1,600 farm level cost models 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-cage layers, and hog grow-finish and farrow-
finish facilities.
Another key distinguishing factor incorporated into EPA's cost
models is information on the availability of cropland and pastureland
for land application of manure nutrients. For this analysis, nitrogen
and phosphorus rates of land application were evaluated for three
categories of cropland availability: (1) CAFOs with sufficient cropland
for all manure generated on-site; (2) CAFOs with some, but not enough,
cropland to accommodate all of the manure produced at the facility; and
(3) CAFOs with no cropland. EPA used USDA data to determine the number
of CAFOs within each of these categories. This information takes into
account which nutrient (nitrogen or phosphorus) is used as the basis to
assess land application and nutrient management costs.
The data and information used to develop EPA's cost estimates 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 cost
estimates is provided in the Technical Development Document. Refer to
the preamble for the proposed rule for a summary of EPA's data
collection activities and the sources of data that the Agency used to
estimate compliance costs (66 FR 3079-3080).
For the purpose of estimating costs and financial effects to Medium
CAFOs, EPA assumes that costs that will be incurred by those sized
operations to comply with BPJ-based limitations under the revised NPDES
regulations are similar to the estimated costs that would be incurred
if Medium CAFOs had to comply with the ELG.
2. Estimated Annual Costs of the Final CAFO Regulations
a. Costs borne by CAFOs. Table 8.1 summarizes the total annualized
compliance costs to CAFOs. The table shows these costs broken out by
sector and broad facility size category. As shown in the table, EPA
estimates the total cost of the final rule to CAFOs at $326 million
annually. (Total monetized estimated social costs of the rule include
an additional $9 million to federal and State governments.) Roughly
one-half of this cost is incurred by the dairy sector, with another
roughly 30 percent incurred within the cattle sectors (including the
beef, veal, and heifer sectors).
Of this total, EPA estimates that Large CAFOs will incur costs of
$283 million per year. Total annualized costs to facilities defined as
Medium CAFOs are estimated at $39 million annually. Table 8.1 also
shows estimated total cost to Small and Medium AFOs that might incur
costs if designated as CAFOs, which EPA estimates at about $4 million
annually. More information on these costs and how they were calculated
is provided in the Economic Analysis.
EPA has estimated the cost of land application based on nitrogen-
based application rates, except in those instances where EPA believes
that phosphorus-based rates are likely to be appropriate. The final
rule specifies that the determination of application rates is to be
based on the technical standards established by the Director and EPA
expects that these standards will require phosphorus-based application,
where appropriate. The rule also provides for these standards to
include appropriate flexibilities in the use of phosphorus-based rates,
such as multi-year phosphorus application, but the potential costs
savings resulting from these flexibilities are not reflected in the
analysis. As a result, the cost and economic impacts of this rule may
have been overestimated.

Table 8.1.--Annual Pre-tax Cost of the Rule, $2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
No. operations Aggregate incremental costs
-----------------------------------------------------------------------------------------------
Sector Designated
Large CAFOs Medium CAFOs Total Large CAFOs Medium CAFOs CAFOs
--------------------------------------------------------------------------------------------------------------------------------------------------------
(number)
($2001, millions, pre-tax)
---------------------------------------------------------
Fed Cattle.............................................. 1,766 174 $88.2 $85.8 $1.9 $0.5
Veal.................................................... 12 230 0.0 <0.1 <0.1 0.0
Heifer.................................................. 242 7 6.3 3.8 2.4 0.1
Dairy................................................... 1,450 1,949 151.1 128.2 22.0 0.9
Hogs.................................................... 3,924 1,485 34.8 24.9 9.5 0.4
Broilers................................................ 1,632 520 20.5 16.8 2.4 1.3
Layers: Dry \1\......................................... 729 26 7.5 7.2 0.1 0.2
Layers: Wet \1\......................................... 383 24 8.9 8.4 0.5 <0.1
Turkeys................................................. 388 37 8.7 8.1 0.3 0.3
-----------------

[[Page 7244]]

Total............................................. 10,526 4,452 326.0 283.2 39.1 3.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USEPA. May not add due to rounding. Number of operations do not include designated facilities. Assumes that the estimated costs for Medium CAFOs
to comply with BPJ-based limitations under the revised NPDES regulations are similar to the costs that would be incurred by those sized operations if
they had to comply with the ELG.
\1\ ``Layers: dry'' are operations with dry manure systems. ``Layers: wet'' are operations with liquid manure systems.

b. Costs to the NPDES permitting authority. The NPDES permitting
authority will incur additional costs to alter existing State programs
and obtain EPA approval to develop new permits, review new permit
applications, and issue revised permits that meet the final regulatory
requirements. EPA expects that NPDES permitting authorities will incur
administrative costs related to the development, issuance, and tracking
of general or individual permits.
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 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 might also be necessary.
EPA assumes that under the final regulations an estimated 15,500
CAFOs would be permitted. This estimate consists of about 15,000 CAFOs
covered by State permits and about 500 CAFOs covered by federal
permits. Administrative costs incurred by State permitting authorities
are expected to be $8.7 million. EPA permitting authorities will incur
the remaining $0.3 million. EPA has expressed these costs in 2001
dollars, annualized over the 5-year permit term using a 7 percent
discount rate. A summary of this analysis is available in section X.D
of this preamble. More detailed information is in the Technical
Development Document.

B. Economic Effects

1. Effects on the CAFO Operation
To estimate the impacts of the final regulations, EPA examined the
economic effects on regulated CAFOs and national markets. This section
presents EPA's analysis of financial impacts on both existing and new
CAFOs that will be affected by the final regulations. Results presented
here focus on economic effects from the CAFO regulations affecting
Large CAFOs because only large facilities will be subject to the
effluent guidelines and NSPS. This section also presents EPA's analysis
of the economic effects on existing operations that are small
businesses. More detailed information on those effects are presented in
the Economic Analysis.
The preamble to the proposed rule summarizes EPA's data collection
activities and the sources of data that the Agency used to estimate
economic effects for the final regulations (66 FR 3079-3080). Both the
2001 Notice (66 FR 58556) and the 2002 Notice (67 FR 48099) describe
the public comments received by EPA on the baseline financial data and
the methodological approach developed by the Agency to evaluate
financial effects. More detailed information on these comments and how
EPA addressed them is in section 2 of the final Economic Analysis.
EPA's detailed responses to these public comments, and the comments
themselves, are contained in the Comment Response Document in the
administrative record for today's rule. Both Notices also present new
data received following proposal that EPA used in conducting its final
analysis.
a. Methodology used to assess impacts to the CAFO operation. EPA
assessed financial effects on regulated CAFOs based on predicted
changes to select financial criteria. The economic model that EPA used
to evaluate financial impacts on CAFOs uses a representative farm
approach. Under this general framework, EPA constructed a series of
model facilities (``model CAFOs'') that reflect EPA's estimated
compliance costs and readily available financial data. EPA used these
model CAFOs to develop an average characterization for a group of
operations based on certain distinguishing characteristics for each
sector, such as facility size and production region, that can be shared
across a broad range of facilities.
EPA evaluated the economic achievability of the rule at existing
operations based on changes in representative financial conditions
across three financial criteria: (1) An initial screening comparing
incremental post-tax costs to total gross revenue (``sales test''), (2)
projected post-compliance cash flow over a 10-year period (``discounted
cash flow analysis''), and (3) an assessment of an operation's debt-to-
asset ratio under a post-compliance scenario (``debt-asset test''). EPA
notes that its discounted cash flow analysis likely understates impacts
because it does not include any allowance for depreciation or
replacement of capital in its definition of cash flow. However, EPA has
conducted a sensitivity analysis that shows that the number of
estimated CAFO closures would not be different if allowances for
replacement of capital are made (see section 3.3 of the Economic
Analysis).
EPA used the results from these analyses to divide affected CAFOs
into three financial impact categories: Affordable, Moderate, and
Stress. CAFOs experiencing affordable or moderate impacts are
considered to have some financial impact on operations, but EPA does
not expect the costs of complying with this rule to make these
operations vulnerable to closure. EPA considers that for CAFOs in both
the ``Affordable'' and ``Moderate'' impact categories the final
requirements are likely to be economically achievable. Operations
experiencing financial stress, however, are considered to be vulnerable
to closure because of the costs of this rule. EPA considers that for
CAFOs in the ``Stress'' impact category, the final requirements are
likely not economically achievable. EPA notes, as discussed below, that
there may be mitigating factors that could reduce the number of
facilities experiencing financial stress, such as the availability of
cost-share assistance and long-run market adjustment.
EPA conducted its analysis first at the farm level based on data
reflecting financial conditions for the entire farm

[[Page 7245]]

operation (e.g., reflecting income and cost information spanning the
entire operation, thus considering the operation's primary livestock
production, along with other income sources such as secondary livestock
and crop production, government payments, and other farm-related
income). Based on the farm level results, EPA also assessed the
financial effects on CAFOs at the enterprise level (e.g., limiting the
scope of the assessment to the operation's livestock or poultry
enterprise, and excluding other non CAFO-related sources of income from
the analysis). By evaluating the financial criteria at both the farm
level and the enterprise level, EPA's analyses address comments
expressed by many commenters, including FAPRI, other land grant
university researchers, and industry, as well as USDA.
Starting with the farm level analysis, EPA considers the
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, a positive post-compliance cash flow over a
10-year period, and a post-compliance debt-to-asset ratio not exceeding
a benchmark value. Specifically, 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 a benchmark (depending on the baseline data) and
compliance costs are less than 5 percent of sales, EPA considers the
options to be ``Affordable'' for the representative CAFO group.
(Although a sales test result of less than 3 percent does indicate
``Affordable'' in the farm level analysis, further analysis is
conducted to determine the effects at the operation's livestock or
poultry enterprise.) The benchmark values assumed for the debt-asset
test are sector-specific. EPA assumes a 70 percent benchmark value for
the debt-asset test to indicate financial stress in the hog and dairy
sectors, and an 80 percent benchmark for the debt-asset test to
indicate financial stress in the beef cattle sector. These benchmark
values address public comment received and alternative debt and asset
data submitted for the livestock sectors. For the poultry sectors,
however, EPA did not obtain alternative debt and asset data and
continues to evaluate data used for proposal against a 40 percent
benchmark value. See the Economic Analysis and EPA response to comment
on this issue for more information.
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
these sector-specific debt-asset benchmark values is considered
indicative of some impact at the CAFO level, but at a level 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, subject to
the enterprise analysis (see below). 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 these sector-specific debt-asset
benchmarks, or if the sales test shows costs equal to or exceeding 10
percent of sales, EPA considers the final regulations to be associated
with potential financial stress for the entire representative CAFO
group. In such cases, each of the operations represented by that group
might be vulnerable to closure. For operations that are determined to
experience financial ``Stress'' at the farm level, the final
requirements are likely not economically achievable.
The enterprise level analysis builds on the farm level analysis,
evaluating effects at a farm's livestock or poultry enterprise. If the
farm level analysis shows that the regulations impose ``Affordable'' or
``Moderate'' effects on the operation, the enterprise level analysis is
conducted to determine whether the enterprise's cash flow is able to
cover the cost of regulations. This analysis uses a discounted cash
flow approach similar to that used to assess the farm level effects, in
which the net present value of cash flow is compared to the net present
value of the total cost of the regulatory options over the 10-year time
frame of the analysis. Over the analysis period, if an operation's
livestock or poultry enterprise maintains a cash flow stream that both
exceeds the cash costs of the rule (operating and maintenance costs
plus interest) and covers the net present value of the principal
payments on the capital, EPA concludes that the enterprise will likely
not close because of the CAFO rule. This analysis is conducted on a
pass/fail basis. If the net present value of cash flow minus the net
present value of the rule's costs is greater than zero, the enterprise
passes the test and the enterprise is assumed to continue to operate.
EPA considers these results to indicate that the final requirements are
economically achievable. If the net present value of cash flow is not
sufficient to cover the net present value of the cost of the rule, EPA
assumes that the CAFO operator would consider shutting down the
livestock or poultry enterprise. That is, if an operation fails the
enterprise level analysis, these operations are determined to
experience financial ``Stress'' and the final requirements are likely
not economically achievable.
In response to comments, EPA conducted additional supplemental
analysis to determine the effects of the regulation under two different
scenarios. One scenario takes into consideration the effects of long-
run market adjustment following implementation of the final
regulations. This analysis is conducted using simulated changes in
producer revenue given changes in market prices as depicted by EPA's
market model, which uses estimates of price and quantity response in
these markets. A second scenario takes into consideration potential
cost share assistance under federal and State conservation programs,
assuming that a portion of costs are covered by cost sharing subject to
programmatic constraints. Given the uncertainty of whether CAFO income
will rise in response to long-run market adjustment or whether
available cost share dollars will effectively offset compliance costs
at regulated CAFOs, EPA's analysis to determine whether the regulation
is ``economically achievable'' does not rely on such assumptions as
part of its regulatory analysis and therefore reflects the highest
level of impacts projected. However, EPA presents the results of this
analysis assuming both some degree of cost passthrough and no cost
passthrough, as well as some degree of cost share assistance and no
cost share assistance, along with the results of its lead analysis.
Additional detailed information on this decision framework is provided
in section 2 of the Economic Analysis.
b. Economic effects on existing CAFOs affected by the Effluent
Guidelines. Table 8.2 presents the results of EPA's analysis of the
estimated CAFO financial effects in terms of the number of operations
that will experience affordable, moderate, or stress impact because of
this rule. Results are shown by sector for Large CAFOs.
EPA's analysis indicates that, for all Large CAFOs in the veal,
dairy, turkey, and egg laying sectors, the impacts due to this rule are
characterized as ``Affordable'' or ``Moderate'' and no facility
closures are projected for these facilities. Therefore, EPA determined
the rule being promulgated today is economically achievable for
existing facilities in these animal sectors. In the beef cattle,
heifer, hog and broiler sectors, however, EPA's analysis

[[Page 7246]]

indicates that the final rule will cause some existing CAFOs to
experience financial stress, making these operations vulnerable to
facility closure. Across all sectors, an estimated 285 existing Large
CAFOs might be vulnerable to facility closure. This accounts for
approximately 3 percent of all Large CAFOs. By sector, EPA estimates
that 49 beef operations (3 percent of affected beef CAFOs), 22 heifer
operations (9 percent), 204 hog operations (5 percent of affected hog
CAFOs), and 10 broiler operations (1 percent) might close as a result
of complying with the final regulations. These estimates of the number
of potential CAFO closures are cumulative and reflect the results of
both the farm level analysis and the enterprise level analysis. These
estimated closure rates are generally consistent with the findings of
economic achievability of previous effluent guidelines for other
industrial point source categories. Based on the results of this
analysis, EPA concludes that the final rule is economically achievable
for existing CAFOs. More detailed information is provided in the
Economic Analysis.
The results described above do not reflect long-run market
adjustment and cost share assistance through federal and State
conservation programs due to uncertainties associated with these
considerations, for reasons discussed in the Economic Analysis.
Although EPA concluded, based on the results in Table 8.2, that the
final regulation is economically achievable, the Economic Analysis
presents the results of alternative analyses under varying assumptions
of long-run market adjustment and potential cost share assistance.
Under assumptions of long run market adjustment, as reflected in
eventual increases in CAFO revenue and producer prices, the number of
potential facility closures is reduced from 285 closures to a single
facility closure in the beef sector. All operations in the heifer, hog,
and broiler sectors are expected to be able to absorb the estimated
compliance costs under an assumption that incorporates long run market
adjustment. Under assumptions of partial cost share assistance, assumed
for this analysis to cover 50 percent of the capital expenditure to
comply with the revised regulations, the number of potential closures
is reduced only somewhat from 285 closures to 261 closures (comprised
of 43 beef, 11 heifer, 204 hog, and 3 broiler operations). EPA
conducted these analyses only for the beef, heifer, hog and broiler
sectors since all Large CAFOs in the other sectors are estimated to be
able to absorb costs associated with the final rule.

Table 8.2.--Financial Effects on Large CAFOs: Final Regulations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number Percent of total operations
Sector Number -----------------------------------------------------------------------------
large CAFOs Affordable Moderate Stress Affordable Moderate Stress
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fed Cattle................................................... 1,766 1,717 ........... 49 97 0 3
Veal......................................................... 12 12 0 0 100 0 0
Heifer....................................................... 242 220 0 22 91 0 9
Dairy........................................................ 1,450 1,019 431 0 70 30 0
Hogs......................................................... 3,924 3,249 470 204 83 12 5
Broilers..................................................... 1,632 1,032 590 10 63 36 1
Layers: Dry \1\.............................................. 729 729 0 0 100 0 0
Layers: Wet \1\.............................................. 383 383 0 0 100 0 0
Turkeys...................................................... 388 388 0 0 100 0 0
--------------
Total.................................................. 10,526 8,749 1,491 285 83 14 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USEPA. See Economic Analysis. May not add due to rounding.
\1\ ``Layers: dry'' are operations with dry manure systems. ``Layers: wet'' are operations with liquid manure systems.

c. Economic effects to existing CAFOs that are small businesses.
(1) Number of affected small businesses. This section presents EPA's
analysis of the economic effects on CAFOs that are small businesses. It
summarizes the estimated number of small entities to which the rule
will apply and describes the potential effects of the final rule on
these businesses.
The SBA defines a ``small business'' in the livestock and poultry
sectors in terms of average annual receipts (or gross revenue). SBA
size standards for these industries define a ``small business'' as one
with average annual revenues over a 3-year period of less than $0.75
million for dairy, hog, broiler, and turkey operations; $1.5 million
for beef feedlots; and $9.0 million for egg operations. EPA defines a
``small'' egg laying operation for purposes of its regulatory
flexibility assessments as an operation that generates less than $1.5
million in annual revenue. EPA consulted with SBA on the use of this
alternative definition. A summary of EPA's rationale and supporting
analyses pertaining to this alternative definition is provided in the
administrative record and in Section 4 of the Economic Analysis.
Given these considerations, EPA defines a ``small business'' for
this rule as an operation that houses or confines less than 1,400 fed
beef cattle (includes fed beef, veal, and heifers); 300 mature dairy
cattle; 2,100 market hogs; 37,500 turkeys; 61,000 layers; or 375,000
broilers. The approach used to derive these estimates is described in
the Economic Analysis and the administrative record.
EPA estimates that of the approximately 238,000 animal confinement
facilities in 1997, roughly 95 percent are small businesses. Not all of
these operations will be affected by the final rule. Table 8.3 shows
EPA's estimates of the number of ``small business CAFOs that are
expected to be affected by this rule. For this analysis, EPA estimates
that about 6,200 affected CAFOs across all size categories are small
businesses, accounting for more than 40 percent of the estimated 14,515
affected facilities. EPA estimates that among Large CAFOs about 2,330
operations are small businesses (accounting for about one-fourth of all
Large CAFOs). Most affected small businesses are in the broiler sector.
Among Medium CAFOs, EPA estimates about 3,870 operations are small
businesses (accounting for the majority of operations in this size
category), and most of the affected small businesses are in the hog,
dairy, and broiler sectors.
For reasons noted in the administrative record, EPA believes that
the number of small broiler operations

[[Page 7247]]

is overestimated and might actually include a number of medium and
large broiler operations that should not be considered small
businesses.
(2) Estimated financial effects on small businesses. For the 2001
proposal, EPA conducted a preliminary assessment of the potential
impacts on small business CAFOs based on the results of a costs-to-
sales test (66 FR 3101). This screen test indicated the need for
additional analysis to characterize the nature and extent of impacts on
small entities. Based on the results of this initial assessment, EPA
projected that it would likely not certify that the proposal, if
promulgated, would not impose a significant economic impact on a
substantial number of entities. Therefore, EPA convened a SBAR Panel
and prepared an Initial Regulatory Flexibility Analysis (IRFA) pursuant
to sections 609(b) and 603 of the RFA, respectively. The 2001 proposal
provides more information on EPA's small business outreach and the
Panel activities during the development of this rulemaking (66 FR
3121). Section XI of this preamble presents EPA's Final Regulatory
Flexibility Analysis (FRFA), as required under section 604 of the RFA.
More detailed information on this analysis is provided in section 4 of
the Economic Analysis.
In examining the effects on small businesses for the final rule,
EPA followed the same approach used to evaluate the impacts on other
existing CAFOs, described in section VIII.B.1(a). For the purposes of
this analysis, EPA assumes that the costs that will be incurred by
those sized operations to comply with BPJ-based limitations under the
revised NPDES regulations are similar to the estimated costs that would
be incurred if Medium CAFOs had to comply with the ELG.
For past regulations, EPA has often analyzed the potential impacts
to small businesses by evaluating the results of a costs-to-sales test,
measuring the number of operations that will incur compliance costs at
varying threshold levels (including ratios where costs are less than 1
percent, between 1 and 3 percent, and greater than 3 percent of gross
income). EPA conducted such an analysis at the time of the 2001
proposal, indicating that about 80 percent of the estimated number of
small businesses directly subject to the rule as CAFOs might incur
costs in excess of three percent of sales.
EPA believes that its more refined analysis used for its general
analysis (presented here) better reflects the potential impacts to
regulated small businesses. Using this approach, EPA's analysis
indicates that the final rule could cause financial stress to some
small businesses, making these businesses vulnerable to closure. Among
the estimated 6,200 small businesses, EPA estimates that 262 Large and
Medium CAFOs might be vulnerable to facility closure (Table 8.3). Thus,
EPA estimates that potential facility closures associated with this
rule constitutes about 4 percent of all affected small business CAFOs.
Medium CAFOs comprise the majority (about 85 percent) of these
estimated number of closures. These results do not consider long-run
market adjustment or cost share assistance through federal and State
conservation programs. More detailed information is provided in the
Economic Analysis.

Table 8.3.--Financial Effects on Small Business CAFOs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Number Percent of total operations
Sector small -----------------------------------------------------------------------------
businesses Affordable Moderate Stress Affordable Moderate Stress
--------------------------------------------------------------------------------------------------------------------------------------------------------
CAFOs £1,000 AU:
Fed Cattle............................................... 538 522 0 16 97 0 3
Veal..................................................... 5 5 0 0 100 0 0
Heifer................................................... 97 88 0 9 91 0 9
Dairy.................................................... 0 -- -- -- -- -- --
Hogs..................................................... 0 -- -- -- -- -- --
Broilers................................................. 1,303 763 532 9 58 41 1
Layers: Dry \1\.......................................... 0 -- -- -- -- -- --
Layers: Wet \1\.......................................... 383 383 0 0 100 0 0
Turkeys.................................................. 0 -- -- -- -- -- --
--------------
Total.............................................. 2,326 1,795 532 34 76 23 1
--------------
Operations 300-1,000 AU (Defined as CAFOs):
Fed Cattle............................................... 174 7 0 167 4 0 96
Veal..................................................... 7 7 0 0 100 0 0
Heifer................................................... 230 189 0 41 82 0 18
Dairy.................................................... 1,330 1,306 24 0 98 2 0
Hogs..................................................... 1,485 1,483 2 0 100 0 0
Broilers................................................. 520 263 248 10 51 48 1
Layers: Dry \1\.......................................... 24 24 0 0 100 0 0
Layers: Wet \1\.......................................... 24 24 0 0 100 0 0
Turkeys.................................................. 31 31 0 0 100 0 0
--------------
Total.............................................. 3,825 3,334 274 228 87 7 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USEPA. See Economic Analysis. May not add due to rounding. Assumes that the costs that will be incurred by those sized operations to comply with
BPJ-based limitations under the revised NPDES regulations are similar to the estimated costs that would be incurred if Medium CAFOs had to comply with
the ELG.
\1\ ``Layers: dry'' are operations with dry manure systems. ``Layers: wet'' are operations with liquid manure systems.

d. Economic effects to new CAFOs. EPA evaluated impacts on new
source CAFOs by comparing the costs borne by new source CAFOs to those
estimated for existing sources. That is, if the expected cost to new
sources is similar to or less than the expected cost borne by existing
sources (and that cost was considered economically achievable for

[[Page 7248]]

existing sources), EPA considers that the regulations for new sources
do not impose requirements that might grant existing operators a cost
advantage over new CAFO operators and further determines that the NSPS
requirements are affordable and do not present a barrier to entry for
new facilities. In general, costs to new sources from NSPS requirements
are lower than the costs for retrofitting the same technologies at
existing sources since new sources are able to apply control
technologies more efficiently than existing sources that might incur
high retrofit cost. New sources will be able to avoid the retrofit
costs that will be incurred by existing sources. Furthermore, new
sources might be able to avoid the other various control costs facing
some existing producers through careful site selection. The
requirements promulgated in today's rule do not give existing operators
a cost advantage over new CAFO operators; therefore, the NSPS do not
present a barrier to entry for new facilities. Examples of avoided
retrofit costs and costs of total containment systems and waste
management, including land application, for both existing and new
sources are provided in Section IV.C of this preamble. More detailed
information is provided in the Cost Report and the Economic Analysis
supporting the final regulations.
2. Market Analysis
EPA's market analysis evaluates the effects of the final
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
final 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.
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
Modeling System (RIMS II) from the U.S. Department of Commerce. The
details of the market analysis are described in the Economic Analysis.
a. Commodity prices and quantities. EPA's market model predicts
that the final rule will not result in significant industry-level
changes in production and prices for most sectors. Predicted changes in
animal production might raise producer prices as the market adjusts to
the final regulatory requirements. For most sectors, EPA estimates that
producer price changes will rise by less than one percent of the pre-
regulation baseline price. 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 final rule 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 this rule will be
less than one percent of baseline prices in all sectors, averaging
below the rate of general price inflation for all foods. 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.
b. Aggregate employment and national economic output. EPA does not
expect the final rule to cause 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 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 might be stimulated as a
result of the final rule, such as the construction and farm services
sectors.
Employment losses are measured in full-time equivalents (FTEs) per
year, including both direct and indirect employment. EPA estimates that
the reduction in total direct employment is about 1,600 FTEs. This
projected change is compared to total national employment of about
129.6 million jobs in 1997. More detailed information on these results
is presented in the Economic Analysis.
c. Regional and community impacts. EPA considered whether the final
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 reduction in farm
production (in- or out-migration) in different regions and communities.
Ongoing structural and technological changes in these industries have
influenced where farmers operate and have contributed to locational
shifts between the traditional production regions and the emergent,
nontraditional regions. Production is growing rapidly in the emergent
regions because of competitive pressures and because specialized
producers tend to have the advantage of 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 also
evaluated whether the final requirements could result in substantial
changes in volume of production, given predicted facility closures,
within a particular production region. EPA concludes from these
analyses that regional and community level effects are estimated to be
modest, but do tend to be concentrated within the more traditional
agricultural regions. This analysis is discussed in the Economic
Analysis.
EPA does not expect that this rule 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 final rule, could
accelerate recent shifts in production to more nontraditional regions
as higher-cost producers in some regions exit the market to avoid the
relatively high retrofitting costs associated with bringing existing
facilities into compliance. On the other hand, the final regulations
might 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 less specialized and, generally,
smaller in size. Long-standing farm services and input supply
industries in these areas could likewise benefit from the final rule,
given the need to support on-site improvements in manure management and
disposal. Local and regional governments, as well as other
nonagricultural enterprises, would also benefit.
d. Foreign trade impacts. Foreign trade impacts are difficult to
predict because 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 final rule will be minor given the
relatively small projected changes in overall supply and demand for
these products and the slight increase in

[[Page 7249]]

market prices, as described in section VIII.B.2(a). Measured as
potential for changes in traded volumes, such as increases in imports
and decreases in exports, EPA estimates that increases in imports and
decreases in exports will each total less than 1 percent compared to
baseline (pre-regulation) levels in each of the commodity sectors.
Based on these results, EPA believes that any quantity and price
changes resulting from the final rule will not significantly alter the
competitiveness of U.S. export markets for meat, dairy foods, and
poultry products.

C. Cost-Benefit and Cost-Effectiveness Analyses

1. Cost-Benefit Analysis
This section presents a comparison of the costs and benefits
attributable to the final rule. As Table 8.4 shows, the economic value
of the environmental benefits EPA is able to monetize (i.e., evaluate
in dollar terms) is comparable to the estimated costs of the rule. As
discussed in section VII, EPA estimates that the monetized benefits of
the final rule range from $204 million to $355 million annually.
Monetized benefit categories are primarily in the areas of improved
surface water quality (measured in terms of enhanced recreational
value), reduced nitrates in private wells, reduced shellfish bed
closures from pathogen contamination, and reduced fish kills from
episodic events. As discussed in Section VII of this preamble, EPA also
identified a number of benefits categories that could not be monetized.
These benefits are described in more detail in Section VII of this
preamble and in the Benefits Analysis and other supporting
documentation provided in the administrative record.
This compares to EPA's estimate of the total social costs of the
final regulations of about $335 million annually. These costs cover
compliance costs to all CAFOs (Large, Medium, and Small), and
administrative costs to States and federal governments. Costs to all
CAFOs are estimated at $326 million per year (pre-tax, $2001). EPA
estimates the administrative cost to State and federal governments to
implement this rule is $9 million per year. There may be additional
social costs that have not been monetized. For a detailed discussion of
these costs, see the Technical Development Document and the Economic
Analysis. A comparison of the total costs and benefits for other
regulatory options considered and analyzed by EPA can be found in the
Economic Analysis.

Table 8.4.--Total Annual Monetized Social Costs and Benefits
[Millions of 2001 dollars]
----------------------------------------------------------------------------------------------------------------
Category Large CAFOs All CAFOs
----------------------------------------------------------------------------------------------------------------
Social Costs:
Industry Compliance Costs (pre-tax)....................................... $298 $352
State/Federal Administrative Costs........................................ 6 9
------------------
Total............................................................... 304 360
------------------
Benefits (Total for all CAFOs)...................................... $204 to $355 (\**\)
----------------------------------------------------------------------------------------------------------------
\**\Benefits analysis does not reflect monetized benefits for Medium CAFOs. May not add due to rounding.
See Table 7.1 for information on benefit categories that EPA was not able to monetize.

2. Cost-Effectiveness Analysis
As part of the process of developing effluent limitations
guidelines and standards, EPA typically conducts a cost-effectiveness
(C-E) analysis to compare the efficiencies of regulatory options for
removing pollutants. This analysis defines cost-effectiveness as the
incremental annualized cost of a regulatory control option per
incremental pound of pollutant removed annually by that option.
The American Society of Agricultural Engineers 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, TSS, and pathogens. Of these pollutants, EPA's
standard C-E analysis is suitable to analyze only the removals of
metals and metallic compounds. EPA's standard C-E analysis does not
adequately address removals of nutrients, TSS, and pathogens. To
account for the estimated removal of nutrients and sediments under the
final rule, the Agency developed an alternative approach to evaluate
the pollutant removal effectiveness for nutrients and sediment relative
to the cost of these pollutant removals.
The C-E analysis conducted for this rule evaluates the cost-
effectiveness of removing select non-conventional and conventional
pollutants, including nitrogen, phosphorus, and sediments. For this
analysis, sediments are used as a proxy for TSS. This analysis compares
the estimated compliance cost per pound of pollutant removed to a
recognized benchmark, such as EPA's benchmark for conventional
pollutants or other criteria for existing treatment, as reported in
available cost-effectiveness studies. The research in this area has
mostly been conducted at municipal facilities, including publicly owned
treatment works (POTWs) and wastewater treatment plants (WWTPs).
Additional information is available based on the effectiveness of
various nonpoint source controls and BMPs and other pollutant control
technologies that are commonly used to control runoff from agricultural
lands. A summary of this literature is provided in the Economic
Analysis. Benchmark estimates were used to evaluate the efficiency of
the final rule in removing a range of pollutants. This approach also
allowed for an assessment of the types of management practices that
will be implemented to comply with the final regulations.
For this analysis, EPA estimated average cost-effectiveness values
that reflect the increment between no revisions to the current
regulations and the final regulatory requirements promulgated today.
All costs are expressed in pre-tax 2001 dollars. Estimated compliance
costs used to calculate the cost-effectiveness of the final regulations
include total estimated costs to CAFOs and costs to the permitting
authority.
EPA estimates an average cost-effectiveness of nutrient removal at
about $3 per pound of nitrogen removed (pre-tax, 2001 dollars). For
phosphorus removal, removal costs are estimated at about $7 per pound
of phosphorus removed. For nitrogen, EPA used a cost-effectiveness
benchmark established by

[[Page 7250]]

its Chesapeake Bay Program to assess the costs to WWTPs to implement
system retrofits to achieve biological nutrient removal. This nitrogen
benchmark estimate is approximately $4 per pound of nitrogen removed,
based on a range of costs of $0.80 to $5.90 per pound of nitrogen
removed. EPA's estimated cost-effectiveness to remove nitrogen falls
within the estimated range of removal costs and is less than this
average benchmark value assumed for this rule. For phosphorus, EPA
assumed a cost-effectiveness benchmark of roughly $10 per pound based
on a review of values reported in the agricultural research of the
costs to remove phosphorus using various nonpoint source controls and
management practices. EPA's estimated cost-effectiveness to remove
phosphorus under this rule also falls below this $10 per pound
benchmark value, indicating that the requirements are cost-effective.
This is particularly true when compared to the reported cost to remove
phosphorus at other industrial point source dischargers, where reported
average costs are twice that for agricultural sources and often exceed
$100 per pound of phosphorus removed. Based on these results, EPA
concludes that these values are cost-effective.
EPA also examined the cost-effectiveness of removing sediments
under the regulations. EPA estimates a cost of less than $0.30 per
pound of sediment removal in this rule (pre-tax, 2001 dollars). This
estimated per-pound removal cost is low compared to EPA's POTW
benchmark for conventional pollutants. That benchmark measures the
potential costs per pound of TSS and BOD removed for an ``average''
POTW (see 51 FR 24982). Indexed to 2001 dollars, EPA's benchmark costs
are about $0.73 per pound of TSS and BOD removed. For information on
EPA's cost-effectiveness, see the Economic Analysis.

IX. Coordination With Other Federal Programs

A. How Does Today's Rule Function in Relation to Other EPA Programs?

The relationship between animal agriculture and water quality is
affected by existing programs other than the CAFO regulations. This
section of the preamble presents today's action in the context of some
of these other programs.
1. Water Quality Trading
EPA proposed a water quality trading policy on May 15, 2002, for
public review and comment. The proposed policy lays out guidelines for
States and local governments/municipalities to consider when
implementing a water quality trading program to maintain or reduce
pollutant loading and achieve the goals of the Clean Water Act. Water
quality trading is considered by some to be a more efficient and
quicker pollution reduction process to meet water quality standards
than conventional Clean Water Act methods. The proposed trading policy
encourages currently regulated and nonregulated sources of pollution to
interact more and make mutually beneficial agreements to reduce
pollutant loading they might otherwise not be motivated to make. CAFOs
may find mutually beneficial opportunities for water quality pollutant
trading with other point and nonpoint sources in their watershed. For
CAFOs interested in more details about Water Quality Trading, please go
http://www.epa.gov/ow. The trading policy includes a general EPA water
quality trading policy statement and identifies elements that define a
successful trading program and provisions that should ensure
consistency with the Clean Water Act.
2. Total Maximum Daily Load (TMDL)
The TMDL provisions of the Clean Water Act are intended to be the
second line of defense for protecting the quality of surface water
resources. When technology-based controls on point sources are
inadequate for water to meet State water quality standards, section
303(d) of the Clean Water Act requires States to identify those waters
and to develop TMDLs. A TMDL study must be conducted for each pollutant
that causes a water body to fail to meet State water quality standards.
More than 20,000 waters are identified nationally as being impaired and
possibly requiring a TMDL. The top impairments in 1998 were sediment,
nutrients, and pathogens. AFOs and CAFOs can be sources of all three
pollutants.
A TMDL is a calculation of the greatest amount of a pollutant that
a water body can receive without exceeding water quality standards. A
TMDL allocates the amount of pollution that can be contributed by the
pollutant sources. A TMDL study identifies both point and nonpoint
sources of each pollutant that cause a water to fail to meet water
quality standards. Water quality sampling, biological and habitat
monitoring, and computer modeling help the TMDL writer determine how
much each pollutant source must reduce its contribution to ensure that
the water quality standard is met. Through the TMDL process, pollutant
loads are allocated to all sources. Wasteload allocations for point
sources are enforced through NPDES discharge permits. Load allocations
for nonpoint sources are not federally enforceable, but can be met
through voluntary approaches. In some impaired watersheds, AFOs and
CAFOs may be affected by TMDLs since improved management practices may
be necessary to restore water quality. In the case of CAFOs, any
necessary pollutant loading reductions would be achieved through the
use of NPDES permits issued in accordance with the requirements
contained in today's final rule.
3. Watershed Permitting
Watershed-based permits are NPDES permits that are issued to point
sources on a geographic or watershed basis. They focus on watershed
goals and consider multiple pollutant sources and stressors, including
the level of nonpoint source control needed. A watershed approach
provides a framework for addressing all stressors within a
hydrologically defined drainage basin instead of viewing individual
pollutant sources in isolation. More than 20 States have implemented
some form of the watershed approach and manage their resources on a
rotating basin cycle.
Because of the recent emphasis on water quality-based permits and
development of TMDLs that focus on water quality impacts, EPA is
looking at ways to use watershed-based permits to achieve watershed
goals. The watershed-based permit is a tool that can assist with
implementation of a watershed approach. The utility of this tool relies
heavily on a detailed, integrated, and inclusive watershed planning
process. Many of the actions necessary for a successful TMDL are also
needed for a successful watershed approach. The process and data needs
for developing a watershed-based permit and for developing a TMDL are
very similar. In places where TMDLs have been developed, watershed
permits may be useful tools for implementing TMDLs. For example, North
Carolina's nutrient management strategy for the Neuse River Basin
includes a watershed-based permit approach for TMDL implementation. The
strategy recognizes the need for all groups to work together and
includes an approach for permitted dischargers to work collectively to
meet a combined nitrogen allocation, rather than be subject to
individual allocations. The implementation of the approach is being
developed (NC DWQ, 1998, 2002). A watershed permit approach was also
used for municipal discharges in Connecticut contributing nutrients to
the Long Island Sound (CTDEP, 2001).

[[Page 7251]]

An approach similar to those used in North Carolina and Connecticut can
be used for permitting CAFOs within a specific watershed.
4. 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 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. 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
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 and 299 head; a large dairy contains 70 head or
more, a small dairy between 20 and 69 head; a large layer or broiler
contains 15,000 head or more, a small layer or broiler between 5,000
and 14,999 head; a large turkey facility contains 13,750 head or more,
a small turkey facility between 5,000 and 13,749 head; and a large
swine facility contains 200 head or more, a small swine facility
between 100 and 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 today's rules. Thus, in coastal States the CZARA
management measures potentially apply to a greater number of small
facilities than today's 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. CZARA applies to nonpoint source
dischargers. Any CAFO facility, as defined by 40 CFR Part 122, that has
an NPDES CAFO permit, is a point source discharger and thus not subject
to CZARA. Similarly, if a facility subject to CZARA management measures
is later designated a CAFO by an NPDES permitting authority, the
facility is no longer subject to CZARA. With respect to AFOs, some of
these facilities may be subject to both NPDES and CZARA requirements,
if they have both point and nonpoint source discharges. 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 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 wastewater and in runoff
caused by storms up to and including a 25-year, 24-hour 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. In
addition to the confined animal facility management measures, the CZARA
guidance includes a nutrient management measure 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 also provide for the development,
implementation, and periodic updating of a nutrient management plan.
5. Clean Water Act Sec. 319 Program
Congress amended the Clean Water Act in 1987 to establish the
section 319 Nonpoint Source Management Program because it recognized
the need for greater federal leadership to help focus State and local
nonpoint source efforts. Under section 319, States, Territories, and
Indian Tribes receive grants to implement their approved management
programs for controlling non-point source pollution, which may include
a wide variety of activities, including technical assistance, financial
assistance, education, training, technology transfer, demonstration
projects, and monitoring to assess the success of specific nonpoint
source implementation projects. More than 40 percent of section 319
Clean Water Act grants have been used for activities to control and
reduce agricultural nonpoint source pollution. Also, several USDA and
State-funded programs provide cost-share, technical assistance, and
economic incentives to implement NPS pollution management practices.
6. Source Water Protection Program
Although many States, water systems, and localities have
established watershed and wellhead protection programs, the 1996 Safe
Drinking Water Act Amendments placed a new focus on source water
quality. States have been given access to funding and required to
develop Source Water Assessment Programs to assess the areas serving as
public sources of drinking water in order to identify potential threats
and initiate protection efforts.
The Source Water Assessment Programs created by States differ
because they are tailored to each State's water resources and drinking
water priorities. However, each assessment must include four major
elements: delineating (or mapping) the source water assessment area,
conducting an inventory of potential sources of contamination in the
delineated area, determining the susceptibility of the water supply to
those contamination sources, and releasing the results of the
determinations to the public.
Although a number of measures are in place to protect and retain
the high quality of the Nation's drinking water, drinking water sources
are subject to a number of threats, including growing population,
chemical use, and animal wastes. Improper disposal of chemicals, animal
wastes, pesticides, and human wastes, as well as the persistence of
naturally occurring minerals, can contaminate drinking water sources.
Like human wastes, animal wastes contain pathogens, such as E. coli,
that can sicken hundreds of people and kill the very young and old and
people with weakened immune systems. These wastes can enter drinking
water supplies in runoff from feedlots and pastures.
In addition to these State efforts, EPA is working with a broad
spectrum of stakeholders to develop a national strategy to prevent
source water contamination. When it is complete, the strategy will
reflect what EPA's Water Program can do to further source water
contamination prevention nationwide.

[[Page 7252]]

7. What Is EPA's Position Regarding Environmental Management Systems?
The Agency supports the voluntary adoption of environmental
management systems (EMSs) by CAFOs. On May 15, 2002, the Administrator
announced the Agency's Position Statement on Environmental Management
Systems. This statement outlines the policy and principles by which the
Agency will work with industry to promote the use of EMSs to improve
environmental protection. EPA promotes the wide-spread use of EMSs
across a range of organizations and settings, with particular emphasis
on adoption of EMSs to achieve improved environmental performance and
compliance, and pollution prevention through source reduction. The
Agency encourages organizations to implement EMSs based on the plan-do-
check-act framework, with the goal of continual improvement. An
organization's EMS should address its entire environmental footprint
(everywhere it interacts with the environment both negatively and
positively), including both regulated and unregulated impacts, such as
energy and water consumption, dust, noise, and odor. EPA supports EMSs
that are appropriate to the needs and characteristics of specific
sectors and facilities.
An operation could choose to implement an EMS that could include a
CNMP, but would also include policies and practices designed to address
other significant environmental problems. EPA, as part of its overall
policy on EMSs, supports adoption of these systems in a variety of
sectors, including agriculture. EPA has worked with specific
agricultural producer groups like the United Egg Producers to develop a
voluntary EMS program. USDA is also funding a major effort through the
University of Wisconsin called Partnerships for Livestock Environmental
Assessment Management Systems. This project is designed to provide
information and other guidance on ways to use EMSs effectively in a
variety of agricultural settings. EPA serves on the Advisory Committee
for this effort, along with USDA and other federal agencies.
In the 2001 Notice, EPA outlined options for how an EMS program may
be incorporated into the rule. These options were based on ISO 14000
criteria, an international standard. EPA received a number of comments
on these options. Industry was split in support of EMS: some groups
thought that use of EMSs in the proposal exceeded authorities provided
under the Clean Water Act, whereas others welcomed EMSs as an
alternative to co-permitting. Environmental groups were concerned that
reliance on EMS constituted a roll-back of rule requirements.
EPA is not including an EMS as an option in this final rule. EPA
recognizes, based on comments, that offering an EMS alternative made
the rule more complex and was not entirely consistent with the Agency's
goal to keep the rule simple, easy to understand and easy to implement.
However, EPA supports the use of EMS by States, as appropriate. In
today's rule, EPA is requiring that CAFOs develop and implement
nutrient management plans that can help CAFOs manage manure and protect
water quality. CAFOs may want to consider implementation of nutrient
management plans as part of a broader EMS to manage the specific
impacts of excess nutrients. The CAFO's EMS would be broader than just
a nutrient management plan, however, and would cover all media and both
regulated and unregulated aspects.
More information on EPA's EMS policy, along with sector-specific
EMS templates and guidance is provided at www.epa.gov/ems.

B. How Is EPA Coordinating With Other Federal Agencies?

EPA and USDA are committed to working together to provide
coordinated assistance to animal agriculture for the betterment of
animal agriculture and the environment. The agencies are working
together to educate farmers, suppliers, USDA field representatives,
consultants, and others on these new regulations. Both EPA and USDA
believe in the importance of providing education, training and
technical assistance to all involved in animal agriculture that can
play a role in helping farmers understand the new requirements and how
they can meet them. EPA and USDA have different roles and different
constituencies. EPA sets the requirements, works toward compliance by
industry, and enforces against noncompliance. USDA provides technical
assistance, education, and training to farmers, growers, and allied
industries. This education, training, and technical assistance will be
vitally important to CAFO operators as they work to come into
compliance with the new regulations. The Natural Resource Conservation
Service and the Cooperative State Research, Education, and Extension
Service are the key USDA agencies that will work with farmers to
educate them on the requirements of the EPA CAFO rule. USDA will
continue to educate EPA personnel on the intricacies of animal
agriculture so that the Agency can improve its communication with this
vital sector.
There was significant comment on the proposed rule on how EPA and
USDA should work together with farmers to implement this rule. Some
thought the implementation should be left to USDA NRCS and CSREES.
Others thought EPA and USDA should work together in the field in a
coordinated effort to educate, regulate and assist AFOs and CAFOs. One
commenter suggested that EPA monitor water quality and NRCS provide
technical assistance. A few comments asked that EPA join other federal
agencies and conduct a comprehensive examination of the problems
generated by CAFOs.
EPA and USDA believe that only by working in close partnership will
the federal government provide the best service to farmers and the rest
of the American public. It is EPA's intent and commitment to
communicate and coordinate effectively across Agencies and Departments.
Animal agriculture is important to this country, as is a sound, healthy
environment. EPA and USDA believe these two goals can be jointly
achieved.

X. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether a regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The Order defines a ``significant regulatory action''
as one that is likely to result in a rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
It has been determined that this rule is a ``significant regulatory
action'' under the terms of Executive Order 12866. As such, this action
was submitted to OMB for review. Changes

[[Page 7253]]

made in response to OMB suggestions or recommendations will be
documented in the public record.

B. Paperwork Reduction Act

The Office of Management and Budget (OMB) has approved the
information collection requirements contained in this rule under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2040-0250.
The information collection requirements affect operations that are
defined or designated as CAFOs under the final rule and, therefore, are
subject to the record keeping, data collection, and reporting
requirements associated with applying for and complying with an NPDES
permit. They also affect the 43 States with approved NPDES programs
that administer NPDES permits for CAFOs (``approved States''). EPA and
approved States use the information routinely collected through NPDES
permit applications and compliance evaluations in the following ways:
to issue NPDES permits with appropriate limitations and conditions that
comply with the Clean Water Act; to update information in EPA's
databases that permitting authorities use to determine permit
conditions; to calculate national permit issuance, backlog, and
compliance statistics; to evaluate national water quality; to assist
EPA in program management and other activities that ensure national
consistency in permitting; to assist EPA in prioritizing permit
issuance activities; to assist EPA in policy development and budgeting;
to assist EPA in responding to Congressional and public inquiries; and
to ensure compliance with the terms and conditions of the permit.
The responses to the information collection requirements are
mandatory for CAFOs. CAFOs are defined as point sources under the NPDES
program (33 U.S.C. 1362). Under 33 U.S.C. 1311 and 1342, a CAFO must
obtain an NPDES permit and comply with the terms of that permit, which
include appropriate record keeping and reporting requirements.
Furthermore, 33 U.S.C. 1318 provides authority for information
collection (i.e., record keeping, reporting, monitoring, sampling, and
other information as needed), which applies to point sources. Approved
States will also incur burden for record keeping, data collection, and
reporting requirements when they revise and implement any program
changes necessitated by the final rule. Under 40 CFR 123.62(e), State
NPDES programs must at all times be in compliance with federal
regulations.
CAFOs must develop their nutrient management plans, retain them
onsite, and make them available to the permitting authority on request.
These plans may contain confidential business information. When this is
the case, the respondent can request that such information be treated
as confidential. All confidential data will be handled in accordance
with 40 CFR 122.7, 40 CFR Part 2 (40 CFR 2.201 et seq.), and EPA's
Security Manual Part III, Chapter 9, dated August 9, 1976.
EPA estimates that the average annual public burden for this rule
making will be 1.9 million hours. This estimate includes 0.3 million
hours for State respondents and 1.6 million hours for CAFO respondents.
It includes the time required to review instructions, search existing
data sources, gather and maintain all necessary data, and complete and
review the information collection. Table 10.1 provides the breakdown of
these estimates by type of response. Average annual capital and O&M
costs will total $5.9 million. This estimate includes $1.3 million in
CAFO capital costs to purchase sampling equipment, install depth
markers, and purchase services for the engineering portion of the
nutrient management plan. Average annual CAFO O&M costs of $2.9 million
include laboratory analyses of soil and manure samples, tractor rental,
and record keeping costs. Average annual State O&M costs of $1.7
million pay for public notifications.

Table 10.1.--Burden Estimates per Response
----------------------------------------------------------------------------------------------------------------
Average Average
annual annual Labor cost
Activities Response frequency burden responses ($
(hours) \1\ millions)
----------------------------------------------------------------------------------------------------------------
CAFO Respondents
----------------------------------------------------------------------------------------------------------------
Start-up Activities................... One time......................... 14,493 4,831 $0.32
Permit Application Activities and NOIs Every 5 years.................... 43,479 4,831 0.95
ELG and NPDES Data Collection and
Record Keeping Activities:
Visual inspections................ Annual........................... 152,260 11,712 1.67
Equipment inspection.............. Annual........................... 32,238 8,060 0.35
Manure sampling................... Annual........................... 26,088 11,712 0.29
Soil sampling..................... Every 5 years.................... 31,057 3,613 0.34
ELG and NPDES record keeping...... Annual........................... 936,982 11,712 10.31
Additional NPDES Record Keeping and
Reporting Activities:
Nutrient management plan.......... Every 5 years.................... 250,168 4,831 9.06
Manure transfer record keeping.... Annual........................... 102,858 7,347 1.13
Annual report..................... Annual........................... 11,712 11,712 0.26
Compliance inspections............ Per inspection................... 9,370 2,342 0.20
---------------------------------------
State Respondents
----------------------------------------------------------------------------------------------------------------
NPDES Program Modification Activities. One time......................... 3,583 14 0.11
General Permit Activities............. Annual........................... 31,598 3,277 0.94
Individual Permit Activities.......... Annual........................... 174,143 1,573 5.19
Compliance Evaluation:
Inspections....................... Annual........................... 36,317 2,270 1.08
Annual Reports.................... Annual........................... 45,397 11,349 1.35
----------------------------------------------------------------------------------------------------------------
\1\ For CAFOs, the number of respondents for each type of response equals the number of responses. For approved
States, these estimates differ. There are 43 approved States responding to the information collection
requirements, but the number of responses for some activities can be greater because the estimate depends on
the number of CAFOs submitting information or undergoing inspections. EPA is the permitting authority for some
CAFOs, so the response estimates for CAFOs and States will differ.

[[Page 7254]]

These burden and cost estimates have been updated since the
proposed rule to reflect changes in the final rule. The Agency received
only a few comments on the PRA section of the preamble for the proposed
rule. Most commenters believed that the number of affected operations
was underestimated. EPA revised its estimate of total AFO operations
and its estimate of affected CAFO operations. The final rule
requirements results in fewer CAFOs compared to the proposed rule
estimates.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15. EPA is
amending the table in 40 CFR Part 9 of currently approved ICR control
numbers issued by OMB for various regulations to list the information
requirements contained in this final rule.

C. Regulatory Flexibility Act

1. Background
The RFA generally requires an agency to prepare a regulatory
flexibility analysis for any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
For purposes of assessing the impacts of today's rule on small
entities, small entity is defined as (1) A small business based on
annual revenue standards established by the Small Business
Administration (SBA), with the exception of one of the six industry
sectors where an alternative definition to SBA's is used; (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field.
For purposes of assessing the impacts of today's rule on small
entities in the egg-laying sector, EPA considered small entities in
this sector as an operation that generates less than $1.5 million in
annual revenue. A summary of EPA's rationale and supporting analyses
pertaining to this alternative definition is provided in the record and
in section 4 of the Economic Analysis. See discussion under ``Use of
Alternative Definition'' later in this section. Because this definition
of small business is not the definition established under the RFA, EPA
proposed using this alternative definition in the Federal Register and
sought public comment. See 66 FR 3099. EPA also consulted with SBA
Chief Counsel for Advocacy on the use of this alternative definition.
In accordance with section 603 of the RFA, EPA prepared an initial
regulatory flexibility analysis (IRFA) for the proposed rule and
convened a Small Business Advocacy Review (SBAR) Panel to obtain advice
and recommendations of representatives of affected small entities in
accordance with section 609(b) of the RFA. See 66 FR 3121-3124; 3126-
3128 (January 12, 2001). A detailed discussion of the SBAR Panel's
advice and recommendations can be found in the Final Report of the
Small Business Advocacy Review Panel on EPA's Planned Proposed Rule on
National Pollutant Discharge Elimination System and Effluent
Limitations Guideline Regulations for Concentrated Animal Feeding
Operations, April 7, 2000. This document is included in the public
record (DCN 93001). The 2001 proposal provides a summary of the Panel's
recommendations. (See 66 FR 3121-3124).
As required by section 604 of the RFA, EPA prepared a final
regulatory flexibility analysis (FRFA) for today's final rule. The FRFA
addresses the issues raised by public comments on the IRFA, which was
part of the proposal for this rule. The FRFA is available for review in
the docket and is summarized below.
2. Summary of Final Regulatory Flexibility Analysis
As required by section 604 of the RFA, EPA also prepared a final
regulatory flexibility analysis (FRFA) for today's rule. The FRFA
addresses the issues raised by public comments on the IRFA, which was
part of the proposal of this rule. The FRFA is available for review in
the docket (in section 4 of the final Economic Analysis). A summary is
provided below.
a. Need for and objectives of the regulations. A detailed
discussion of the need for the regulations is presented in section IV
of the 2001 preamble (66 FR 2972-2976). A summary is also provided in
section 4 of the final Economic Analysis. In summary, EPA's rationale
for revising the existing regulations include the following: address
reports of continued discharge and runoff from livestock and poultry
operations in spite of the existing requirements; update the existing
regulations to reflect structural changes in these industries over the
past few decades; and improve the effectiveness of the existing
regulations. A detailed discussion of the objectives and legal basis
for the rule is presented in sections I and III of the proposal
preamble (66 FR 2959).
b. Significant Comments on the IRFA. The significant issues raised
by public comments on the IRFA address exemptions for small businesses,
disagreement with SBA definitions and guidance on how to define small
businesses for these sectors, and general concerns about EPA's
financial analysis and whether it adequately captures potential
financial effects on small businesses.
Commenters generally recommend that EPA exempt all small businesses
from regulation, arguing in some cases that regulating small businesses
could affect competition in the marketplace, discourage innovation,
restrict improvements in productivity, create entry barriers, and
discourage potential entrepreneurs from introducing beneficial products
and processes. Several commenters claimed that EPA had misrepresented
the number of small businesses. In particular, several commenters
objected to SBA's small business definition for dairy operations,
claiming it understates the number of small businesses in this sector.
One commenter claimed that EPA's estimate of the total number of
operations is understated and therefore must understate the number of
small businesses. Some commenters objected to the consideration of
total farm-level revenue to determine the number of

[[Page 7255]]

small businesses since this understates the number of small businesses
(despite SBA guidance, which bases its definitions on total entity
revenue for purposes of defining a small business). However, other
commenters claimed that EPA's approach to its small business analysis
does not only capture operations that are, in fact, small businesses
but also larger corporate operations. Another commenter recommended
that EPA simply consider any operation with fewer than 1,000 animal
units a small business. EPA also received comments requesting that EPA
consider use of regional-specific definitions of small business because
of concerns that the revenue-based SBA definition might not be
applicable to operations in Hawaii since producers in that State
generally face higher cost of production and also higher producer
prices relative to revenue and cost conditions at farms in the
contiguous 48 States. Comments from SBA recommended that EPA adopt the
Panel's recommendation not to consider changing the designation
criteria for operations with fewer than 300 animal units as a means to
provide relief to small businesses. SBA also recommended that EPA adopt
the SBAR Panel's approach and allow permitting authorities to focus
resources where there is greatest need. Finally, some commenters
generally questioned the results of EPA's financial analysis, giving
similarly stated concerns about EPA's financial data and models used
for its main analysis.
In response, EPA notes that the projected impacts of today's final
regulations on small businesses are lower than the projected impacts of
the proposed rule. For example, the final rule does not extend the
effluent guideline regulations to Medium CAFOs, as was proposed in the
2001 proposal. Instead, EPA is retaining the existing regulatory
threshold, applying the effluent guideline to Large CAFOs only.
Requirements for Medium CAFOs will continue to be subject to the BPJ
requirements as determined by the permitting authority, thus requiring
that fewer small businesses adopt the effluent guideline standards.
More information on this topic is available in section IV of this
preamble. Section IV discusses other regulatory changes since the 2001
proposal, indicating greater alignment with SBAR Panel recommendations.
Refer to section IV of this preamble for more information on the
comments and EPA's responses to those comments, as well as EPA's
justification for final decisions on these options.
Regarding EPA's estimate of the number of small businesses, the
Agency continues to follow SBA guidance and SBA definitions on how to
define small businesses for these sectors. However, EPA has made
substantial changes to the financial data and models used for its main
analysis, which is also used to evaluate financial effects on small
businesses. Both the 2001 Notice (66 FR 58556) and the 2002 Notice (67
FR 48099) describe the public comments received by EPA on the baseline
financial data and the methodological approach developed by EPA to
evaluate financial effects. These comments and how EPA has addressed
them are discussed more fully in section 4 of the final Economic
Analysis. EPA's detailed responses to comments, and the comments
themselves, are contained in the Comment Response Document in response
categories SBREFA and Small Business.
c. Description and estimation of number of small entities to which
the regulations will apply. The small entities subject to this rule are
small businesses. No nonprofit organizations or small governmental
operations operate CAFOs. As discussed in section VIII.B.1(c) of this
preamble, to estimate the number of small businesses affected by this
final rule, EPA relied on the SBA size standards for these sectors,
with the exception of size definitions for the egg sector. SBA defines
a ``small business'' in these sectors as an operation with average
annual revenues of less than $0.75 million for dairy, hog, broiler, and
turkey operations; $1.5 million in revenue for beef feedlots; and $9.0
million for egg operations. The definitions of small business for the
livestock and poultry industries are in SBA's regulations at 13 CFR
121.201. For this rule, EPA proposed and solicited public comment on
and is using an alternative definition for small business for egg-
laying operations. EPA defines a ``small'' egg laying operation for
purposes of its regulatory flexibility assessments as an operation that
generates less than $1.5 million in annual revenue. EPA consulted with
SBA on the use of this alternative definition, as documented in the
rulemaking record for the 2001 proposal. Given these definitions, EPA
evaluates ``small business'' for this rule as an operation that houses
or confines fewer than 1,400 fed beef cattle (includes fed beef, veal,
and heifers); 300 mature dairy cattle; 2,100 market hogs; 37,500
turkeys; 61,000 layers; or 375,000 broilers. The approach used to
derive these estimates is described in the Economic Analysis and in the
record.
Using these definitions and available data from USDA and industry,
EPA estimates that 6,200 of affected CAFOs across all size categories
are small businesses. Among Large CAFOs, EPA estimates that about 2,330
operations are small businesses. Among Medium CAFOs, EPA estimates that
about 3,870 operations are small businesses. Table 8.3 in section VIII
of this preamble shows EPA's estimates of the number of regulated small
businesses across all industry sectors. Section VIII.B.1(c) provides
more detail on the estimated financial effects on small businesses
under the final rule.
d. Description of the reporting, record-keeping, and other
compliance requirements. Today's rule would require all AFOs that meet
the CAFO definition to apply for a permit, develop and implement a
nutrient management plan, collect and maintain records required by
applicable technology-based effluent discharge standards, and submit an
annual report to the responsible NPDES permitting authority. (No
nonprofit organizations or small governmental operations operate
CAFOs.) All CAFOs would also be required to maintain records of off-
site transfers of manure. Record-keeping and reporting burdens include
the time to record and report animal inventories, manure generation,
field application of manure (amount, method, date, weather conditions),
manure and soil analysis results, crop yield goals, findings from
visual inspections of feedlot areas, and corrective measures. Records
may include manure spreader calibration worksheets, manure application
worksheets, maintenance logs, and soil and manure test results. EPA
believes the owner/operator has the skills necessary to keep these
records and make reports to the permitting authority.
Section X.B further summarizes the expected reporting and record-
keeping requirements under the final regulations based on information
compiled as part of the ICR for the Final NPDES and ELG Regulatory
Revisions for Concentrated Animal Feeding Operations (EPA ICR No.
1989.01) prepared by EPA.
e. Steps taken to minimize significant impacts on small entities.
In today's final rulemaking, EPA has adopted an approach for a
regulatory program that mitigates impacts on small business, recognizes
and promotes effective non-NPDES State programs, and works in
partnership with USDA to promote environmental stewardship through
voluntary programs, and financial and technical assistance. EPA's
proposal

[[Page 7256]]

included many options that were not finally adopted in deference to
these principles.
Because of the estimated impacts on small entities EPA is not
certifying that this rule will not impose a significant impact on a
substantial number of small entities. EPA has complied with all RFA
provisions and conducted outreach to small businesses, convened a SBAR
panel, prepared an Initial Regulatory Flexibility Analysis (IRFA) and a
Final Regulatory Flexibility Analysis (FRFA), and also prepared an
economic analysis. The Agency's actions include the following efforts
to minimize impacts on small businesses:
? Retained structure of existing regulations, which allows
EPA and states to focus on the largest producers;
? Retained applicability of effluent guidelines for Large
CAFOs only;
? Retained existing designation criteria and process;
? Retained existing definition of an AFO;
? Retained conditions for being defined as a Medium CAFO;
? Eliminated the ``mixed'' animal calculation for operations
with more than a single animal type for determining which AFOs are
CAFOs;
? Raised the duck threshold for dry manure handling duck
operations; and
? Adopted a dry-litter chicken threshold higher than
proposed.
EPA went to some length to explore and analyze a variety of ELG
regulatory alternatives to minimize impacts on small businesses. The
record for today's rule includes extensive discussions of the
alternatives, EPA's analysis of those alternatives, and the rationale
for the Agency's decisions. In large part, the Agency incorporated most
of the alternative considerations to reduce the burden to small
businesses. By way of example, today's regulations will affect fewer
small businesses at significantly reduced costs, as compared to the
estimates of the number of small businesses and expected costs to those
businesses based on the requirements set forth in the 2001 proposal.
For more information on EPA's option selection rationale, see section
IV of this preamble.
3. Compliance Guide
As required by section 212 of SBREFA, EPA is also preparing a small
entity compliance guide to help small businesses comply with this rule.
To request a copy, contact one of the persons identified in the FOR
FURTHER INFORMATION CONTACT section at the beginning of this preamble.
EPA expects that the guide will be available in March 2003.
4. Use of Alternative Definition
The RFA defines small entities as including small businesses, small
governmental jurisdictions, and small organizations. The statute
provides default definitions for each type of small entity. It also
authorizes an agency to use alternative definitions for each category
of small entity, ``which are appropriate to the activities of the
agency'' after proposing the alternative definition(s) in the Federal
Register and taking comment. 5 U.S.C. 601(3)-(5). In addition to the
above, to establish an alternative small business definition, agencies
must consult with SBA's Chief Counsel for Advocacy.
As stated above, EPA proposed defining ``small entity'' for
purposes of its regulatory flexibility assessments under the RFA as an
operation that generates less than $1.5 million in annual revenue. The
Agency also consulted with SBA Chief Counsel for Advocacy. See 66 FR
2959, (January 12, 2001).
EPA received two comments from the same commenter requesting that
EPA not use the alternative definition for egg-laying operations but
instead consider regional-specific conditions for determining the
number of small businesses. The commenter expressed concern that SBA's
revenue-based definition might not be applicable to operations in
Hawaii since producers in that State generally face higher cost of
production and also higher producer prices relative to revenue and cost
conditions at farms in the contiguous 48 States. There are a number of
reasons why EPA did not use a regional-specific definition of small
business for egg operations. First, consistent with the RFA, EPA uses
small business definitions as defined by the SBA except in cases where
EPA consults with the SBA Chief Counsel for Advocacy. Since size
standards set by the SBA do not vary by region, EPA follows SBA's lead.
Second, the regulations set requirements by the number of animal units
at a farm, not the revenues associated with those animal units. An
82,000 bird egg-laying operation in the Midwest will be subject to the
same effluent limitations guidelines as a 82,000 bird egg-laying
operation in Hawaii and the territories. Third, the economic analysis,
uses a representative farm approach. Only the broadest regional
information could be obtained through USDA and other sources. Although
some small subregions or localities might face unique issues, without
performing a Section 308 survey of all regulated entities EPA must rely
on the representative farm approach. (See also response to comment DCN
CAFO201246-C-6 regarding EPA's use of a representative farm approach,
which is consistent with longstanding practices at USDA and the land
grant universities.) Note however, that although EPA uses a single
definition of small business across all regions, EPA's representative
farm analysis of small business impacts does account for some regional
variation in costs and revenues. Fourth, very few impacts are seen in
the egg-laying sector, regardless of size. Even if EPA had classified
the majority of egg-laying operations with less than 1,000 AU as small
businesses, this would not have changed the outcome of the Agency's
small business analysis in any material way. Finally, even if EPA were
to classify all operations as small businesses in areas outside the
contiguous 48 States (including Hawaii and Alaska), this would only
raise the total number of small business by less than 10 operations.
See response to comment DCN CAFO NODA 600053-5 regarding EPA's
consideration of regional-specific definition of small business for the
regulated sectors.
Today, EPA is establishing this alternative definition of ``small
entity'' for the egg-laying sector for purposes of the regulatory
flexibility analysis for this rule.

D. Unfunded Mandates Reform Act

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

[[Page 7257]]

was not adopted. Before EPA establishes any regulatory requirements
that may significantly or uniquely affect small governments, including
Tribal governments, it must have developed under section 203 of the
UMRA a small government agency plan. The plan must provide for
notifying potentially affected small governments, enabling officials of
affected small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with regulatory requirements.
EPA has determined that this rule contains a federal mandate that
may result in expenditures of $100 million or more for State, local,
and tribal governments, in the aggregate, or the private sector in any
one year. EPA revised the unfunded mandates analysis for State costs
based on comments received. EPA expanded the categories of costs and
increased the unit costs and hour burden while the final rule
significantly decreased the number of potential permittees. Because the
revisions were largely offsetting, there is little change in the
overall burden estimated ($8 million annually at proposal and $9
million annually for the final rule). Accordingly, EPA has prepared
under section 202 of the UMRA a written statement, which is summarized
below. See section 5 of the Economic Analysis for the complete section
202 statement.
1. Private Costs
This statement provides quantitative cost-benefit assessment of the
federal requirements imposed by today's final rules. In large part, the
private sector, not other governments, will incur the costs. EPA
estimates total compliance costs to industry of $326 million per year
(pre-tax, 2001 dollars). EPA estimates that the monetized benefits of
the final regulations range from $204 million to $355 million annually.
Section VIII.C.1 of this preamble provides additional information on
EPA's analysis. The analysis is provided in section 5 of the Economic
Analysis and other supporting information is provided in the Benefits
Analysis supporting the final regulations. Both of these support
documents are available in the administrative record for this
rulemaking. A summary of these analyses is provided in section's VII
and VIII of today's preamble.
2. State Local and Tribal Government Costs
Authorized States are expected to incur costs to update their State
NPDES programs to conform to the final rule and implement the revised
standards through issuing NPDES permits and inspecting CAFOs to ensure
compliance. The total average annual State administrative cost to
implement the permit program, approximately $9 million, will not exceed
the thresholds established by the UMRA. The analysis underlying this
cost estimate is in the NPDES Technical Support Document found in the
rule record. EPA has determined that this rule contains no regulatory
requirements that might significantly or uniquely affect local or
Tribal governments. There are no local or Tribal governments authorized
to implement the NPDES permit program and the Agency is unaware of any
local or Tribal governments who are owners or operators of CAFOs. Thus
today's rule is not subject to the requirements of Section 203 of UMRA.
3. Funding and Technical Assistance Available to CAFOs
The 2002 Farm Bill authorized cost-share funding for six years
(2002 through 2007) for EQIP. Funding starts at $400 million in 2002
and continually increases to $1.3 billion in the last year. Sixty
percent of this funding is to be targeted to animal agriculture,
including large and small feedlots, as well as pasture and grazing
operations. An operation is eligible for a total of up to $450,000 over
the six year time frame. This funding is open to both CAFOs and AFOs.
Being defined as a CAFO does not make you ineligible for this funding.
4. Funding Available to States
States may be able to use existing sources of financial assistance
to revise and implement the final rule. Section 106 of the Clean Water
Act authorizes EPA to award grants to States, Tribes, intertribal
consortia, and interstate agencies for administering programs for the
prevention, reduction, and elimination of water pollution. These grants
may be used for various activities to develop and carry out a water
pollution control program, including permitting, monitoring, and
enforcement. Thus, State and Tribal NPDES permit programs represent one
type of State program that can be funded by section 106 grants.
Key comments received on Unfunded Mandates relate to the increased
cost to farmers and States and the need for funds for CAFO compliance
and State permitting. In the discussion above, EPA outlines the funding
available to CAFO owners (EQIP) and to States (CWA section 106 grants)
to help meet this rule's mandates.

E. Executive Order 13132: Federalism

Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
19, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This rule does not have Federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. EPA does not consider an annual
impact of approximately $9 million on States a substantial effect. In
addition, EPA does not expect this rule to have any impact on local
governments.
Further, the revised regulations would not alter the basic State-
federal scheme established in the Clean Water Act under which EPA
authorizes States to carry out the NPDES permitting program. EPA
expects the revised regulations to have little effect on the
relationship between, or the distribution of power and responsibilities
among, the federal and State governments. Thus, Executive Order 13132
does not apply to this rule.
In the spirit of Executive Order 13132, and consistent with EPA's
policy to promote communications between EPA and State and local
governments, EPA specifically solicited comment on the proposed rule
from State and local officials.
During public comment, EPA received comments on its analysis
required under the Federalism Executive Order. The comments were that
the Agency had underestimated the cost impacts of the rule on States.
In response to these comments, EPA reanalyzed the impacts on States.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

Executive Order 13175, entitled ``Consultation and Coordination
with

[[Page 7258]]

Indian Tribal Governments'' (59 FR 22951, November 9, 2000), requires
EPA to develop an accountable process to ensure ``meaningful and timely
input by tribal officials in the development of regulatory policies
that have tribal implications.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian tribes, on
the relationship between the federal government and Indian tribes, or
on the distribution of power and responsibilities between the federal
government and Indian tribes.''
This final rule does not have Tribal implications. It will not have
substantial direct effects on Tribal governments, on the relationship
between the federal government and Indian Tribes, or on the
distribution of power and responsibilities between the federal
government and Indian Tribes, as specified in Executive Order 13175.
First, no Tribal governments have been authorized to issue NPDES
permits. Second, few CAFO operations are located on Tribal lands.
Accordingly, the requirements of Executive Order 13175 do not apply to
this rule.
Although Executive Order 13175 does not apply to this rule, EPA has
briefed Tribal communities about this rulemaking at the National
Environmental Justice Advisory Committee meeting in Atlanta, Georgia in
June, 2000 and through notices in Tribal publications. In addition, EPA
Regional Offices discussed this rulemaking with the Tribes in their
regions.
During the public comment period, the Agency received no comments
from Tribes or comments relating to tribal issues.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
This final rule is subject to Executive Order 13045 because it is
an economically regulatory action as defined by Executive Order 12866,
and we believe that the environmental health or safety risk addressed
by this action may have a disproportionate effect on children.
Accordingly, we have evaluated the environmental health or safety
effects of increased nutrients, pathogens, and metals in surface water
on children. The results of this evaluation are contained in the
proposed Environmental Assessment, which is part of the public record
for this final rule.
EPA has established a maximum contaminate level for nitrates in
drinking water at 10 micrograms/liter. There is some evidence that
infants under the age of six months may be at risk from
methemoglobinemia caused by nitrates in private drinking water wells
when ingesting water at nitrate levels higher than 10 micrograms/liter.
The Agency has estimated the reduction in the number of households that
will be exposed to drinking water with nitrate levels above 10
micrograms/liter in Chapter 8 of the Benefits Assessment (noting that
the Agency does not have information on the number of households
exposed to nitrates that also have infants). The Agency estimates that
there are approximately 13.5 million households with drinking water
wells in counties with animal feeding operations. Of these, the Agency
estimates that approximately 1.3 million households are exposed to
nitrate levels above 10 micrograms/liter. The Agency further estimates
that approximately 112,000 households would have their nitrate levels
brought below 10 micrograms/liter under the requirements of this final
rule. The Agency estimates that options more stringent than these would
provide only small incremental changes in pollutant loadings to
groundwater (see the Technical Development Document). The Agency
therefore does not believe that requirements more stringent than these
in the rule would provide meaningful additional protection of
children's health risks from methemoglobinemia.
The Agency received no comments on the impacts to children's
health.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

The rule is not a ``significant energy action'' as defined in
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355, May 22, 2001) because it is not likely to have a significant
adverse effect on the supply, distribution, or use of energy. EPA has
concluded that this rule is not likely to have any adverse energy
effects. While there will be a minor increase in energy use from
increased hauling of manure to offsite locations, EPA has estimated the
increased fuel usage associated with transporting manure, litter, and
other process wastewaters off site is approximately 423,000 barrels
annually for all CAFOs. EPA does not believe that this will have a
significant impact on the energy supply.

I. National Technology Transfer and Advancement Act

As noted in the proposed rule, section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (NTTAA), (Pub L. 104-
113 section 12(d), 15 U.S.C. 272 note) directs EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards are technical standards (e.g., materials
specifications, test methods, sampling procedures, and business
practices) that are developed or adopted by voluntary consensus
standards bodies. The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards.
This rulemaking does involve the use of technical standards. In
this rulemaking, EPA has developed regulatory standards for controlling
pollutant discharges from permitted CAFOs based on its expertise,
professional judgment, and the extensive record developed, in part,
through the APA's notice and comment process. While we identified the
American National Standards for Good Environmental Livestock Production
Practices, developed by the National Pork Producers Council and
certified by ANSI as an American National Standard on February 20, 2002
(GELPP 0001-2002; 0002-2002; 0003-2002; 0004-2002; 0005-2002), and a
commenter has identified ANSI/ASCE 7-98, a separate voluntary consensus
standard, as being potentially applicable, we have decided not to use
them in this rulemaking. The use of these voluntary consensus standard
would have been impractical because EPA's rule establishes a regulatory
framework in which decisions as to what specific best management
practices must be applied at individual animal feeding operations is
generally left to the State in the exercise of its authority to issue
NPDES permits. In issuing permits, States may consider these ANSI-
certified standards and include, or not include, various elements as
they may deem appropriate. It would not have been consistent with

[[Page 7259]]

EPA's design for this rule to adopt these ANSI-certified standards as
national minimum requirements for all States to incorporate into all
permits for covered animal feeding operations. EPA received a number of
comments suggesting that EPA should specifically include the GELPPs and
ANSI/ASCE 7-98 as authorized alternative management standards in the
final CAFO rule. EPA decided not to do so for the reasons discussed
above.
In any event, it is important to note that the standards set out in
this rule may be better characterized as representing regulatory
decisions EPA is directed to make by the Clean Water Act, rather than
as ``technical standards''. Consistent with Section 6(c) of OMB
Circular A-119, EPA would not be obliged to consider the use of
voluntary consensus standards as possible alternatives to the
regulatory standards being adopted.
It should be noted that the effluent guideline rule (40 CFR 412)
provides for voluntary alternative performance standards developed and
applied in NPDES permits on a site-specific basis. CAFOs that
voluntarily develop and adopt such performance standards in their NPDES
permits may need to use previously approved technical standards to
analyze for some or all of the following pollutants: nitrogen,
phosphorus, BOD, and TSS. Consensus standards have already been
promulgated in tables at 40 CFR 136.3 for measurement of all of these
analytes.
Further, the rule specifically provides that the determination of
land application rates for manure is to be done in accordance with
technical standards established by the State. In establishing such
standards, States may rely on standards already established by USDA or
other existing standards or may develop new standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

In implementing the requirements of the Environmental Justice
Executive Order, EPA reviews the environmental effects of major federal
actions significantly affecting the quality of the human environment.
For such actions, EPA reviewers focus on the spatial distribution of
human health, social and economic effects to ensure that agency
decisionmakers are aware of the extent to which those impacts fall
disproportionately on covered communities. EPA has determined that this
rulemaking is a major federal action. However, the Agency does not
believe this rulemaking will have a disproportionate effect on minority
or low-income communities. The proposed regulations will reduce the
negative effects of CAFO waste in the nation's waters to benefit all of
society, including minority communities.

K. Congressional Review Act

The Congressional Review Act, 5. U.S.C. 801 et seq., as added by
the Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996, generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
can not take affect until 60 days after it is published in the Federal
Register. This will be effective April 14, 2003. This action is a
``major rule'' as defined by 5 U.S.C. 804(2).

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List of Subjects

40 CFR Part 9

Environmental protection, Reporting and recordkeeping requirements.

40 CFR Parts 122 and 123

Administrative practice and procedure, Hazardous substances,
Reporting and recordkeeping requirements, Water pollution control.

40 CFR Part 412

Feedlots, Livestock, Waste treatment and disposal, Water pollution
control.

Dated: December 15, 2002.
Christine Todd Whitman,
Administrator.

For the reasons set out in the preamble title 40, chapter I of the
Code of Federal Regulations is amended as follows:

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

1. The authority for part 9 continues to read as follows:

Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003,
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330,
1342, 1344, 1345(d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR,
1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g-1,
300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3,
300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-
9657, 11023, 11048.

2. In Sec. 9.1 the table is amended by adding entries in numerical
order under the indicated heading and a new heading and entries to read
as follows:

Sec. 9.1 OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
OMB control
40 CFR citation No.
------------------------------------------------------------------------
* * * * *
EPA Administered Permit Programs: The National Pollutant Discharge
Elimination System
2040-0250
122.23(i).................................................. 2040-0250
* * * * *
122.28(b).................................................. 2040-0250
* * * * *
122.42(e).................................................. 2040-0250
* * * * *
------------------------------------------------------------
Feedlots Point Source Category
------------------------------------------------------------
412.31-412.37.............................................. 2040-0250
412.41-412.47.............................................. 2040-0250
------------------------------------------------------------------------

PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT
DISCHARGE ELIMINATION SYSTEM

1. The authority citation for part 122 continues to read as
follows:

Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

2. Amend Sec. 122.21 by adding a sentence to the end of paragraph
(a)(1) and revising paragraph (i)(1) to read as follows:

Sec. 122.21 Application for a permit (applicable to State programs,
see Sec. 123.25).

(a) * * *
(1) * * * All concentrated animal feeding operations have a duty to
seek coverage under an NPDES permit, as described in Sec. 122.23(d).
* * * * *
(i) * * *
(1) For concentrated animal feeding operations:
(i) The name of the owner or operator;
(ii) The facility location and mailing addresses;
(iii) Latitude and longitude of the production area (entrance to
production area);
(iv) A topographic map of the geographic area in which the CAFO is
located showing the specific location of the production area, in lieu
of the requirements of paragraph (f)(7) of this section;
(v) Specific information about the number and type of animals,
whether in open confinement or housed under roof (beef cattle,
broilers, layers, swine weighing 55 pounds or more, swine weighing less
than 55 pounds, mature dairy cows, dairy heifers, veal calves, sheep
and lambs, horses, ducks, turkeys, other);
(vi) The type of containment and storage (anaerobic lagoon, roofed
storage shed, storage ponds, underfloor pits, above ground storage
tanks, below ground storage tanks, concrete pad, impervious soil pad,
other) and total capacity for manure, litter, and process wastewater
storage(tons/gallons);
(vii) The total number of acres under control of the applicant
available for land application of manure, litter, or process
wastewater;
(viii) Estimated amounts of manure, litter, and process wastewater
generated per year (tons/gallons);
(ix) Estimated amounts of manure, litter and process wastewater
transferred to other persons per year (tons/gallons); and
(x) For CAFOs that must seek coverage under a permit after December
31, 2006, certification that a nutrient management plan has been
completed and will be implemented upon the date of permit coverage.
* * * * *

3. Section 122.23 is revised to read as follows:

Sec. 122.23 Concentrated animal feeding operations (applicable to
State NPDES programs, see Sec. 123.25).

(a) Permit requirement for CAFOs. Concentrated animal feeding
operations, as defined in paragraph (b) of this section, are point
sources that require NPDES permits for discharges or potential
discharges. Once an operation is defined as a CAFO, the NPDES
requirements for CAFOs apply with respect to all animals in confinement
at the operation and all manure, litter and process wastewater
generated by those animals or the production of those animals,
regardless of the type of animal.
(b) Definitions applicable to this section:
(1) Animal feeding operation (``AFO'') means a lot or facility
(other than an aquatic animal production facility) where the following
conditions are met:
(i) 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, and
(ii) Crops, vegetation, forage growth, or post-harvest residues are
not sustained in the normal growing season over any portion of the lot
or facility.
(2) Concentrated animal feeding operation (``CAFO'') means an AFO
that is defined as a Large CAFO or as a Medium CAFO by the terms of
this paragraph, or that is designated as a CAFO in accordance with
paragraph (c) of this section. Two or more AFOs under common ownership
are considered to be a single AFO for the purposes of determining the
number of animals at an operation, if they adjoin each other or if they
use a common area or system for the disposal of wastes.
(3) The term land application area means land under the control of
an AFO owner or operator, whether it is owned, rented, or leased, to
which manure, litter or process wastewater from the production area is
or may be applied.
(4) Large concentrated animal feeding operation (``Large CAFO'').
An AFO is defined as a Large CAFO if it stables or confines as many as
or more than the numbers of animals specified in any of the following
categories:
(i) 700 mature dairy cows, whether milked or dry;
(ii) 1,000 veal calves;
(iii) 1,000 cattle other than mature dairy cows or veal calves.
Cattle

[[Page 7266]]

includes but is not limited to heifers, steers, bulls and cow/calf
pairs;
(iv) 2,500 swine each weighing 55 pounds or more;
(v) 10,000 swine each weighing less than 55 pounds;
(vi) 500 horses;
(vii) 10,000 sheep or lambs;
(viii) 55,000 turkeys;
(ix) 30,000 laying hens or broilers, if the AFO uses a liquid
manure handling system;
(x) 125,000 chickens (other than laying hens), if the AFO uses
other than a liquid manure handling system;
(xi) 82,000 laying hens, if the AFO uses other than a liquid manure
handling system;
(xii) 30,000 ducks (if the AFO uses other than a liquid manure
handling system); or
(xiii) 5,000 ducks (if the AFO uses a liquid manure handling
system).
(5) The term manure is defined to include manure, bedding, compost
and raw materials or other materials commingled with manure or set
aside for disposal.
(6) Medium concentrated animal feeding operation (``Medium CAFO'').
The term Medium CAFO includes any AFO with the type and number of
animals that fall within any of the ranges listed in paragraph
(b)(6)(i) of this section and which has been defined or designated as a
CAFO. An AFO is defined as a Medium CAFO if:
(i) The type and number of animals that it stables or confines
falls within any of the following ranges:
(A) 200 to 699 mature dairy cows, whether milked or dry;
(B) 300 to 999 veal calves;
(C) 300 to 999 cattle other than mature dairy cows or veal calves.
Cattle includes but is not limited to heifers, steers, bulls and cow/
calf pairs;
(D) 750 to 2,499 swine each weighing 55 pounds or more;
(E) 3,000 to 9,999 swine each weighing less than 55 pounds;
(F) 150 to 499 horses;
(G) 3,000 to 9,999 sheep or lambs;
(H) 16,500 to 54,999 turkeys;
(I) 9,000 to 29,999 laying hens or broilers, if the AFO uses a
liquid manure handling system;
(J) 37,500 to 124,999 chickens (other than laying hens), if the AFO
uses other than a liquid manure handling system;
(K) 25,000 to 81,999 laying hens, if the AFO uses other than a
liquid manure handling system;
(L) 10,000 to 29,999 ducks (if the AFO uses other than a liquid
manure handling system); or
(M) 1,500 to 4,999 ducks (if the AFO uses a liquid manure handling
system); and
(ii) Either one of the following conditions are met:
(A) Pollutants are discharged into waters of the United States
through a man-made ditch, flushing system, or other similar man-made
device; or
(B) Pollutants are discharged directly into waters of the United
States which originate outside of and pass over, across, or through the
facility or otherwise come into direct contact with the animals
confined in the operation.
(7) Process wastewater means water directly or indirectly used in
the operation of the AFO for any or all of the following: spillage or
overflow from animal or poultry watering systems; washing, cleaning, or
flushing pens, barns, manure pits, or other AFO facilities; direct
contact swimming, washing, or spray cooling of animals; or dust
control. Process wastewater also includes any water which comes into
contact with any raw materials, products, or byproducts including
manure, litter, feed, milk, eggs or bedding.
(8) Production area means that part of an AFO that includes the
animal confinement area, the manure storage area, the raw materials
storage area, and the waste containment areas. The animal confinement
area includes but is not limited to open lots, housed lots, feedlots,
confinement houses, stall barns, free stall barns, milkrooms, milking
centers, cowyards, barnyards, medication pens, walkers, animal
walkways, and stables. The manure storage area includes but is not
limited to lagoons, runoff ponds, storage sheds, stockpiles, under
house or pit storages, liquid impoundments, static piles, and
composting piles. The raw materials storage area includes but is not
limited to feed silos, silage bunkers, and bedding materials. The waste
containment area includes but is not limited to settling basins, and
areas within berms and diversions which separate uncontaminated storm
water. Also included in the definition of production area is any egg
washing or egg processing facility, and any area used in the storage,
handling, treatment, or disposal of mortalities.
(9) Small concentrated animal feeding operation (``Small CAFO'').
An AFO that is designated as a CAFO and is not a Medium CAFO.
(c) How may an AFO be designated as a CAFO? The appropriate
authority (i.e., State Director or Regional Administrator, or both, as
specified in paragraph (c)(1) of this section) may designate any AFO as
a CAFO upon determining that it is a significant contributor of
pollutants to waters of the United States.
(1) Who may designate?
(i) Approved States. In States that are approved or authorized by
EPA under Part 123, CAFO designations may be made by the State
Director. The Regional Administrator may also designate CAFOs in
approved States, but only where the Regional Administrator has
determined that one or more pollutants in the AFO's discharge
contributes to an impairment in a downstream or adjacent State or
Indian country water that is impaired for that pollutant.
(ii) States with no approved program. The Regional Administrator
may designate CAFOs in States that do not have an approved program and
in Indian country where no entity has expressly demonstrated authority
and has been expressly authorized by EPA to implement the NPDES
program.
(2) In making this designation, the State Director or the Regional
Administrator shall consider the following factors:
(i) The size of the AFO and the amount of wastes reaching waters of
the United States;
(ii) The location of the AFO relative to waters of the United
States;
(iii) The means of conveyance of animal wastes and process waste
waters into waters of the United States;
(iv) The slope, vegetation, rainfall, and other factors affecting
the likelihood or frequency of discharge of animal wastes manure and
process waste waters into waters of the United States; and
(v) Other relevant factors.
(3) No AFO shall be designated under this paragraph unless the
State Director or the Regional Administrator has conducted an on-site
inspection of the operation and determined that the operation should
and could be regulated under the permit program. In addition, no AFO
with numbers of animals below those established in paragraph (b)(6) of
this section may be designated as a CAFO unless:
(i) Pollutants are discharged into waters of the United States
through a manmade ditch, flushing system, or other similar manmade
device; or
(ii) Pollutants are discharged directly into waters of the United
States 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.
(d) Who must seek coverage under an NPDES permit?
(1) All CAFO owners or operators must apply for a permit. All CAFO
owners or operators must seek coverage under an NPDES permit, except as
provided in paragraph (d)(2) of this

[[Page 7267]]

section. Specifically, the CAFO owner or operator must either apply for
an individual NPDES permit or submit a notice of intent for coverage
under an NPDES general permit. If the Director has not made a general
permit available to the CAFO, the CAFO owner or operator must submit an
application for an individual permit to the Director.
(2) Exception. An owner or operator of a Large CAFO does not need
to seek coverage under an NPDES permit otherwise required by this
section once the owner or operator has received from the Director
notification of a determination under paragraph (f) of this section
that the CAFO has ``no potential to discharge'' manure, litter or
process wastewater.
(3) Information to submit with permit application. A permit
application for an individual permit must include the information
specified in Sec. 122.21. A notice of intent for a general permit must
include the information specified in Sec. Sec. 122.21 and 122.28.
(e) Land application discharges from a CAFO are subject to NPDES
requirements. The discharge of manure, litter or process wastewater to
waters of the United States from a CAFO as a result of the application
of that manure, litter or process wastewater by the CAFO to land areas
under its control is a discharge from that CAFO subject to NPDES permit
requirements, except where it is an agricultural storm water discharge
as provided in 33 U.S.C. 1362(14). For purposes of this paragraph,
where the manure, litter or process wastewater has been applied in
accordance with site specific nutrient management practices that ensure
appropriate agricultural utilization of the nutrients in the manure,
litter or process wastewater, as specified in Sec. 122.42(e)(1)(vi)-
(ix), a precipitation-related discharge of manure, litter or process
wastewater from land areas under the control of a CAFO is an
agricultural stormwater discharge.
(f) ``No potential to discharge'' determinations for Large CAFOs.
(1) Determination by the Director. The Director, upon request, may
make a case-specific determination that a Large CAFO has ``no potential
to discharge'' pollutants to waters of the United States. In making
this determination, the Director must consider the potential for
discharges from both the production area and any land application
areas. The Director must also consider any record of prior discharges
by the CAFO. In no case may the CAFO be determined to have ``no
potential to discharge'' if it has had a discharge within the 5 years
prior to the date of the request submitted under paragraph (f)(2) of
this section. For purposes of this section, the term ``no potential to
discharge'' means that there is no potential for any CAFO manure,
litter or process wastewater to be added to waters of the United States
under any circumstance or climatic condition. A determination that
there is ``no potential to discharge'' for purposes of this section
only relates to discharges of manure, litter and process wastewater
covered by this section.
(2) Information to support a ``no potential to discharge'' request.
In requesting a determination of ``no potential to discharge,'' the
CAFO owner or operator must submit any information that would support
such a determination, within the time frame provided by the Director
and in accordance with paragraphs (g) and (h) of this section. Such
information must include all of the information specified in Sec.
122.21(f) and (i)(1)(i) through (ix). The Director has discretion to
require additional information to supplement the request, and may also
gather additional information through on-site inspection of the CAFO.
(3) Process for making a ``no potential to discharge''
determination. Before making a final decision to grant a ``no potential
to discharge'' determination, the Director must issue a notice to the
public stating that a ``no potential to discharge'' request has been
received. This notice must be accompanied by a fact sheet which
includes, when applicable: a brief description of the type of facility
or activity which is the subject of the ``no potential to discharge''
determination; a brief summary of the factual basis, upon which the
request is based, for granting the ``no potential to discharge''
determination; and a description of the procedures for reaching a final
decision on the ``no potential to discharge'' determination. The
Director must base the decision to grant a ``no potential to
discharge'' determination on the administrative record, which includes
all information submitted in support of a ``no potential to discharge''
determination and any other supporting data gathered by the permitting
authority. The Director must notify any CAFO seeking a ``no potential
to discharge'' determination of its final determination within 90 days
of receiving the request.
(4) What is the deadline for requesting a ``no potential to
discharge'' determination? The owner or operator must request a ``no
potential to discharge'' determination by the applicable permit
application date specified in paragraph (g) of this section. If the
Director's final decision is to deny the ``no potential to discharge''
determination, the owner or operator must seek coverage under a permit
within 30 days after the denial.
(5) The ``no potential to discharge'' determination does not
relieve the CAFO from the consequences of an actual discharge. Any
unpermitted CAFO that discharges pollutants into the waters of the
United States is in violation of the Clean Water Act even if it has
received a ``no potential to discharge'' determination from the
Director. Any CAFO that has received a determination of ``no potential
to discharge,'' but who anticipates changes in circumstances that could
create the potential for a discharge, should contact the Director, and
apply for and obtain permit authorization prior to the change of
circumstances.
(6) The Director retains authority to require a permit. Where the
Director has issued a determination of ``no potential to discharge,''
the Director retains the authority to subsequently require NPDES permit
coverage if circumstances at the facility change, if new information
becomes available, or if there is another reason for the Director to
determine that the CAFO has a potential to discharge.
(g) When must a CAFO seek coverage under an NPDES permit?
(1) Operations defined as CAFOs prior to April 14, 2003. For
operations that are defined as CAFOs under regulations that are in
effect prior to April 14, 2003, the owner or operator must have or seek
to obtain coverage under an NPDES permit as of April 14, 2003, and
comply with all applicable NPDES requirements, including the duty to
maintain permit coverage in accordance with paragraph (h) of this
section.
(2) Operations defined as CAFOs as of April 14, 2003, who were not
defined as CAFOs prior to that date. For all CAFOs, the owner or
operator of the CAFO must seek to obtain coverage under an NPDES permit
by a date specified by the Director, but no later than February 13,
2006.
(3) Operations that become defined as CAFOs after April 14, 2003,
but which are not new sources. For newly constructed AFOs and AFOs that
make changes to their operations that result in becoming defined as
CAFOs for the first time, after April 14, 2003, but are not new
sources, the owner or operator must seek to obtain coverage under an
NPDES permit, as follows:
(i) For newly constructed operations not subject to effluent
limitations guidelines, 180 days prior to the time CAFO commences
operation; or
(ii) For other operations (e.g., resulting from an increase in the
number of animals), as soon as possible,

[[Page 7268]]

but no later than 90 days after becoming defined as a CAFO; except that
(iii) If an operational change that makes the operation a CAFO
would not have made it a CAFO prior to April 14, 2003, the operation
has until April 13, 2006, or 90 days after becoming defined as a CAFO,
whichever is later.
(4) New sources. New sources must seek to obtain coverage under a
permit at least 180 days prior to the time that the CAFO commences
operation.
(5) Operations that are designated as CAFOs. For operations
designated as a CAFO in accordance with paragraph (c) of this section,
the owner or operator must seek to obtain coverage under a permit no
later than 90 days after receiving notice of the designation.
(6) No potential to discharge. Notwithstanding any other provision
of this section, a CAFO that has received a ``no potential to
discharge'' determination in accordance with paragraph (f) of this
section is not required to seek coverage under an NPDES permit that
would otherwise be required by this section. If circumstances
materially change at a CAFO that has received a NPTD determination,
such that the CAFO has a potential for a discharge, the CAFO has a duty
to immediately notify the Director, and seek coverage under an NPDES
permit within 30 days after the change in circumstances.
(h) Duty to Maintain Permit Coverage. No later than 180 days before
the expiration of the permit, the permittee must submit an application
to renew its permit, in accordance with Sec. 122.21(g). However, the
permittee need not continue to seek continued permit coverage or
reapply for a permit if:
(1) The facility has ceased operation or is no longer a CAFO; and
(2) The permittee has demonstrated to the satisfaction of the
Director that there is no remaining potential for a discharge of
manure, litter or associated process wastewater that was generated
while the operation was a CAFO, other than agricultural stormwater from
land application areas.

4. Section 122.28 is amended by adding one sentence to the end of
paragraph (b)(2)(ii) to read as follows:

Sec. 122.28 General permits (applicable to State NPDES programs, see
Sec. 123.25).

* * * * *
(b) * * *
(2) * * *
(ii) * * * Notices of intent for coverage under a general permit
for concentrated animal feeding operations must include the information
specified in Sec. 122.21(i)(1), including a topographic map.
* * * * *
5. Section 122.42 is amended by adding paragraph (e) to read as
follows:

Sec. 122.42 Additional conditions applicable to specified categories
of NPDES permits (applicable to State NPDES programs, see Sec.
123.25).

* * * * *
(e) Concentrated animal feeding operations (CAFOs). Any permit
issued to a CAFO must include:
(1) Requirements to develop and implement a nutrient management
plan. At a minimum, a nutrient management plan must include best
management practices and procedures necessary to implement applicable
effluent limitations and standards. Permitted CAFOs must have their
nutrient management plans developed and implemented by December 31,
2006. CAFOs that seek to obtain coverage under a permit after December
31, 2006 must have a nutrient management plan developed and implemented
upon the date of permit coverage. The nutrient management plan must, to
the extent applicable:
(i) Ensure adequate storage of manure, litter, and process
wastewater, including procedures to ensure proper operation and
maintenance of the storage facilities;
(ii) Ensure proper management of mortalities (i.e., dead animals)
to ensure that they are not disposed of in a liquid manure, storm
water, or process wastewater storage or treatment system that is not
specifically designed to treat animal mortalities;
(iii) Ensure that clean water is diverted, as appropriate, from the
production area;
(iv) Prevent direct contact of confined animals with waters of the
United States;
(v) Ensure that chemicals and other contaminants handled on-site
are not disposed of in any manure, litter, process wastewater, or storm
water storage or treatment system unless specifically designed to treat
such chemicals and other contaminants;
(vi) Identify appropriate site specific conservation practices to
be implemented, including as appropriate buffers or equivalent
practices, to control runoff of pollutants to waters of the United
States;
(vii) Identify protocols for appropriate testing of manure, litter,
process wastewater, and soil;
(viii) Establish protocols to land apply manure, litter or process
wastewater in accordance with site specific nutrient management
practices that ensure appropriate agricultural utilization of the
nutrients in the manure, litter or process wastewater; and
(ix) Identify specific records that will be maintained to document
the implementation and management of the minimum elements described in
paragraphs (e)(1)(i) through (e)(1)(viii) of this section.
(2) Recordkeeping requirements.
(i) The permittee must create, maintain for five years, and make
available to the Director, upon request, the following records:
(A) All applicable records identified pursuant paragraph (e)(1)(ix)
of this section;
(B) In addition, all CAFOs subject to 40 CFR part 412 must comply
with record keeping requirements as specified in Sec. 412.37(b) and
(c) and Sec. 412.47(b) and (c).
(ii) A copy of the CAFO's site-specific nutrient management plan
must be maintained on site and made available to the Director upon
request.
(3) Requirements relating to transfer of manure or process
wastewater to other persons. Prior to transferring manure, litter or
process wastewater to other persons, Large CAFOs must provide the
recipient of the manure, litter or process wastewater with the most
current nutrient analysis. The analysis provided must be consistent
with the requirements of 40 CFR part 412. Large CAFOs must retain for
five years records of the date, recipient name and address, and
approximate amount of manure, litter or process wastewater transferred
to another person.
(4) Annual reporting requirements for CAFOs. The permittee must
submit an annual report to the Director. The annual report must
include:
(i) The number and type of animals, whether in open confinement or
housed under roof (beef cattle, broilers, layers, swine weighing 55
pounds or more, swine weighing less than 55 pounds, mature dairy cows,
dairy heifers, veal calves, sheep and lambs, horses, ducks, turkeys,
other);
(ii) Estimated amount of total manure, litter and process
wastewater generated by the CAFO in the previous 12 months (tons/
gallons);
(iii) Estimated amount of total manure, litter and process
wastewater transferred to other person by the CAFO in the previous 12
months (tons/gallons);
(iv) Total number of acres for land application covered by the
nutrient management plan developed in accordance with paragraph (e)(1)
of this section;
(v) Total number of acres under control of the CAFO that were used
for

[[Page 7269]]

land application of manure, litter and process wastewater in the
previous 12 months;
(vi) Summary of all manure, litter and process wastewater
discharges from the production area that have occurred in the previous
12 months, including date, time, and approximate volume; and
(vii) A statement indicating whether the current version of the
CAFO's nutrient management plan was developed or approved by a
certified nutrient management planner.

Appendix B to Part 122 [Removed and Reserved]

6. Remove and reserve Appendix B to part 122.

PART 123--STATE PROGRAM REQUIREMENTS

1. The authority citation for part 123 continues to read as
follows:

Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

2. Add a new Sec. 123.36 to read as follows:

Sec. 123.36 Establishment of technical standards for concentrated
animal feeding operations.

If the State has not already established technical standards for
nutrient management that are consistent with 40 CFR 412.4(c)(2), the
Director shall establish such standards by the date specified in Sec.
123.62(e).
Part 412 is revised to read as follows:

PART 412--CONCENTRATED ANIMAL FEEDING OPERATIONS (CAFO) POINT
SOURCE CATEGORY

Sec.
412.1 General applicability.
412.2 General definitions.
412.3 General pretreatment standards.
412.4 Best management practices (BMPs) for land application of
manure.
Subpart A--Horses and Sheep
412.10 Applicability.
412.11 [Reserved]
412.12 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).
412.13 Effluent limitations attainable by the application of the
best available control technology economically achievable (BAT).
412.14 [Reserved]
412.15 New source performance standards (NSPS).
Subpart B--Ducks
412.20 Applicability.
412.21 Special definitions.
412.22 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).
412.23-412.24 [Reserved]
412.25 New source performance standards (NSPS).
412.26 Pretreatment standards for new sources (PSNS).
Subpart C--Dairy Cows and Cattle Other Than Veal Calves
412.30 Applicability.
412.31 Specialized definitions.
412.32 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).
412.33 Effluent limitations attainable by the application of the
best control technology for conventional pollutants (BCT).
412.34 [Reserved]
412.35 New source performance standards (NSPS).
412.36 [Reserved]
412.37 Additional measures.
Subpart D--Swine, Poultry, and Veal Calves
412.40 Applicability.
412.41-412.42 [Reserved]
412.43 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).
412.44 Effluent limitations attainable by the application of the
best control technology for conventional pollutants (BCT).
412.45 Effluent limitations attainable by the application of the
best available control technology economically achievable (BAT).
412.46 New source performance standards (NSPS).
412.47 Additional measures.

Authority: 33 U.S.C. 1311, 1314, 1316, 1317, 1318, 1342, 1361.

Sec. 412.1 General applicability.

This part applies to manure, litter, and/or process wastewater
discharges resulting from concentrated animal feeding operations
(CAFOs). Manufacturing and/or agricultural activities which may be
subject to this part are generally reported under one or more of the
following Standard Industrial Classification (SIC) codes: SIC 0211, SIC
0213, SIC 0214, SIC 0241, SIC 0251, SIC 0252, SIC 0253, SIC 0254, SIC
0259, or SIC 0272 (1987 SIC Manual).

Sec. 412.2 General definitions.

As used in this part:
(a) The general definitions and abbreviations at 40 CFR part 401
apply.
(b) Animal Feeding Operation (AFO) and Concentrated Animal Feeding
Operation (CAFO) are defined at 40 CFR 122.23.
(c) Fecal coliform means the bacterial count (Parameter 1) at 40
CFR 136.3 in Table 1A, which also cites the approved methods of
analysis.
(d) Process wastewater means water directly or indirectly used in
the operation of the CAFO for any or all of the following: spillage or
overflow from animal or poultry watering systems; washing, cleaning, or
flushing pens, barns, manure pits, or other CAFO facilities; direct
contact swimming, washing, or spray cooling of animals; or dust
control. Process wastewater also includes any water which comes into
contact with any raw materials, products, or byproducts including
manure, litter, feed, milk, eggs, or bedding.
(e) Land application area means land under the control of an AFO
owner or operator, whether it is owned, rented, or leased, to which
manure, litter, or process wastewater from the production area is or
may be applied.
(f) New source is defined at 40 CFR 122.2. New source criteria are
defined at 40 CFR 122.29(b).
(g) Overflow means the discharge of manure or process wastewater
resulting from the filling of wastewater or manure storage structures
beyond the point at which no more manure, process wastewater, or storm
water can be contained by the structure.
(h) Production area means that part of an AFO that includes the
animal confinement area, the manure storage area, the raw materials
storage area, and the waste containment areas. The animal confinement
area includes but is not limited to open lots, housed lots, feedlots,
confinement houses, stall barns, free stall barns, milkrooms, milking
centers, cowyards, barnyards, medication pens, walkers, animal
walkways, and stables. The manure storage area includes but is not
limited to lagoons, runoff ponds, storage sheds, stockpiles, under
house or pit storages, liquid impoundments, static piles, and
composting piles. The raw materials storage area includes but is not
limited to feed silos, silage bunkers, and bedding materials. The waste
containment area includes but is not limited to settling basins, and
areas within berms and diversions which separate uncontaminated storm
water. Also included in the definition of production area is any egg
washing or egg processing facility, and any area used in the storage,
handling, treatment, or disposal of mortalities.
(i) Ten (10)-year, 24-hour rainfall event, 25-year, 24-hour
rainfall event, and 100-year, 24-hour rainfall event mean precipitation
events with a probable recurrence interval of once in ten years, or
twenty five years, or one hundred years, respectively, as defined by
the National Weather Service in Technical Paper No. 40, ``Rainfall
Frequency Atlas of the United States,'' May, 1961, or equivalent
regional or

[[Page 7270]]

State rainfall probability information developed from this source.
(j) Analytical methods. The parameters that are regulated or
referenced in this part and listed with approved methods of analysis in
Table 1B at 40 CFR 136.3 are defined as follows:
(1) Ammonia (as N) means ammonia reported as nitrogen.
(2) BOD5 means 5-day biochemical oxygen demand.
(3) Nitrate (as N) means nitrate reported as nitrogen.
(4) Total dissolved solids means nonfilterable residue.
(k) The parameters that are regulated or referenced in this part
and listed with approved methods of analysis in Table 1A at 40 CFR
136.3 are defined as follows:
(1) Fecal coliform means fecal coliform bacteria.
(2) Total coliform means all coliform bacteria.

Sec. 412.3 General pretreatment standards.

Any source subject to this part that introduces process wastewater
pollutants into a publicly owned treatment works (POTW) must comply
with 40 CFR part 403.

Sec. 412.4 Best Management Practices (BMPs) for Land Application of
Manure, Litter, and Process Wastewater.

(a) Applicability. This section applies to any CAFO subject to
subpart C of this part (Dairy and Beef Cattle other than Veal Calves)
or subpart D of this part (Swine, Poultry, and Veal Calves).
(b) Specialized definitions.
(1) Setback means a specified distance from surface waters or
potential conduits to surface waters where manure, litter, and process
wastewater may not be land applied. Examples of conduits to surface
waters include but are not limited to: Open tile line intake
structures, sinkholes, and agricultural well heads.
(2) Vegetated buffer means a narrow, permanent strip of dense
perennial vegetation established parallel to the contours of and
perpendicular to the dominant slope of the field for the purposes of
slowing water runoff, enhancing water infiltration, and minimizing the
risk of any potential nutrients or pollutants from leaving the field
and reaching surface waters.
(3) Multi-year phosphorus application means phosphorus applied to a
field in excess of the crop needs for that year. In multi-year
phosphorus applications, no additional manure, litter, or process
wastewater is applied to the same land in subsequent years until the
applied phosphorus has been removed from the field via harvest and crop
removal.
(c) Requirement to develop and implement best management practices.
Each CAFO subject to this section that land applies manure, litter, or
process wastewater, must do so in accordance with the following
practices:
(1) Nutrient Management Plan. The CAFO must develop and implement a
nutrient management plan that incorporates the requirements of
paragraphs (c)(2) through (c)(5) of this section based on a field-
specific assessment of the potential for nitrogen and phosphorus
transport from the field and that addresses the form, source, amount,
timing, and method of application of nutrients on each field to achieve
realistic production goals, while minimizing nitrogen and phosphorus
movement to surface waters.
(2) Determination of application rates. Application rates for
manure, litter, and other process wastewater applied to land under the
ownership or operational control of the CAFO must minimize phosphorus
and nitrogen transport from the field to surface waters in compliance
with the technical standards for nutrient management established by the
Director. Such technical standards for nutrient management shall:
(i) Include a field-specific assessment of the potential for
nitrogen and phosphorus transport from the field to surface waters, and
address the form, source, amount, timing, and method of application of
nutrients on each field to achieve realistic production goals, while
minimizing nitrogen and phosphorus movement to surface waters; and
(ii) Include appropriate flexibilities for any CAFO to implement
nutrient management practices to comply with the technical standards,
including consideration of multi-year phosphorus application on fields
that do not have a high potential for phosphorus runoff to surface
water, phased implementation of phosphorus-based nutrient management,
and other components, as determined appropriate by the Director.
(3) Manure and soil sampling. Manure must be analyzed a minimum of
once annually for nitrogen and phosphorus content, and soil analyzed a
minimum of once every five years for phosphorus content. The results of
these analyses are to be used in determining application rates for
manure, litter, and other process wastewater.
(4) Inspect land application equipment for leaks. The operator must
periodically inspect equipment used for land application of manure,
litter, or process wastewater.
(5) Setback requirements. Unless the CAFO exercises one of the
compliance alternatives provided for in paragraph (c)(5)(i) or
(c)(5)(ii) of this section, manure, litter, and process wastewater may
not be applied closer than 100 feet to any down-gradient surface
waters, open tile line intake structures, sinkholes, agricultural well
heads, or other conduits to surface waters.
(i) Vegetated buffer compliance alternative. As a compliance
alternative, the CAFO may substitute the 100-foot setback with a 35-
foot wide vegetated buffer where applications of manure, litter, or
process wastewater are prohibited.
(ii) Alternative practices compliance alternative. As a compliance
alternative, the CAFO may demonstrate that a setback or buffer is not
necessary because implementation of alternative conservation practices
or field-specific conditions will provide pollutant reductions
equivalent or better than the reductions that would be achieved by the
100-foot setback.

Subpart A--Horses and Sheep

Sec. 412.10 Applicability.

This subpart applies to discharges resulting from the production
areas at horse and sheep CAFOs. This subpart does not apply to such
CAFOs with less than the following capacities: 10,000 sheep or 500
horses.

Sec. 412.11 [Reserved]

Sec. 412.12 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).

(a) Except as provided in 40 CFR 125.30 through 125.32, and subject
to the provisions of paragraph (b) of this section, any existing point
source subject to this subpart must achieve the following effluent
limitations representing the application of BPT: There shall be no
discharge of process waste water pollutants to navigable waters.
(b) Process waste pollutants in the overflow may be discharged to
navigable waters whenever rainfall events, either chronic or
catastrophic, cause an overflow of process waste water from a facility
designed, constructed and operated to contain all process generated
waste waters plus the runoff from a 10-year, 24-hour rainfall event for
the location of the point source.

Sec. 412.13 Effluent limitations attainable by the application of the
best available technology economically achievable (BAT).

(a) Except as provided in 40 CFR 125.30 through 125.32 and when the
provisions of paragraph (b) of this section apply, any existing point
source subject to this subpart must achieve the

[[Page 7271]]

following effluent limitations representing the application of BAT:
There shall be no discharge of process waste water pollutants into U.S.
waters.
(b) Whenever rainfall events cause an overflow of process
wastewater from a facility designed, constructed, operated, and
maintained to contain all process-generated wastewaters plus the runoff
from a 25-year, 24-hour rainfall event at the location of the point
source, any process wastewater pollutants in the overflow may be
discharged into U.S. waters.

Sec. 412.14 [Reserved]

Sec. 412.15 Standards of performance for new sources (NSPS)

(a) Except as provided in paragraph (b) of this section, any new
source subject to this subpart must achieve the following performance
standards: There must be no discharge of process wastewater pollutants
into U.S. waters.
(b) Whenever rainfall events cause an overflow of process
wastewater from a facility designed, constructed, operated, and
maintained to contain all process-generated wastewaters plus the runoff
from a 25-year, 24-hour rainfall event at the location of the point
source, any process wastewater pollutants in the overflow may be
discharged into U.S. waters.

Subpart B--Ducks

Sec. 412.20 Applicability.

This subpart applies to discharges resulting from the production
areas at dry lot and wet lot duck CAFOs. This subpart does not apply to
such CAFOs with less than the following capacities: 5,000 ducks.

Sec. 412.21 Special definitions.

For the purposes of this subpart:
(a) Dry lot means a facility for growing ducks in confinement with
a dry litter floor cover and no access to swimming areas.
(b) Wet lot means a confinement facility for raising ducks which is
open to the environment, has a small number of sheltered areas, and
with open water runs and swimming areas to which ducks have free
access.

Sec. 412.22 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).

(a) Except as provided in 40 CFR 125.30 through 125.32, any
existing point source subject to this subpart shall achieve the
following effluent limitations representing the degree of effluent
reduction attainable by the application of the (BPT):

----------------------------------------------------------------------------------------------------------------
Maximum Maximum
Regulated parameter Maximum daily monthly Maximum daily monthly
\1\ average \1\ \2\ average \2\
----------------------------------------------------------------------------------------------------------------
BOD₅............................................ 3.66 2.0 1.66 0.91
Fecal coliform.................................. (\3\) (\3\) (\3\) (\3\)
----------------------------------------------------------------------------------------------------------------
\1\ Pounds per 1000 ducks.
\2\ Kilograms per 1000 ducks.
\3\ Not to exceed MPN of 400 per 100 ml at any time.

(b) [Reserved]

Sec. Sec. 412.23-412.24 [Reserved]

Sec. 412.25 New source performance standards (NSPS).

(a) Except as provided in paragraph (b) of this section, any new
source subject to this subpart must achieve the following performance
standards: There must be no discharge of process waste water pollutants
into U.S. waters.
(b) Whenever rainfall events cause an overflow of process
wastewater from a facility designed, constructed, operated, and
maintained to contain all process-generated wastewaters plus the runoff
from a 25-year, 24-hour rainfall event at the location of the point
source, any process wastewater pollutants in the overflow may be
discharged into U.S. waters.

Sec. 412.26 Pretreatment standards for new sources (PSNS).

(a) Except as provided in 40 CFR 403.7 and in paragraph (b) of this
section, any new source subject to this subpart must achieve the
following performance standards: There must be no introduction of
process waste water pollutants to a POTW.
(b) Whenever rainfall events cause an overflow of process
wastewater from a facility designed, constructed, operated, and
maintained to contain all process-generated wastewaters plus the runoff
from a 25-year, 24-hour rainfall event at the location of the point
source, any process wastewater pollutants in the overflow may be
introduced to a POTW.

Subpart C--Dairy Cows and Cattle Other Than Veal Calves

Sec. 412.30 Applicability.

This subpart applies to operations defined as concentrated animal
feeding operations (CAFOs) under 40 CFR 122.23 and includes the
following animals: mature dairy cows, either milking or dry; cattle
other than mature dairy cows or veal calves. Cattle other than mature
dairy cows includes but is not limited to heifers, steers, and bulls.
This subpart does not apply to such CAFOs with less than the following
capacities: 700 mature dairy cows whether milked or dry; 1,000 cattle
other than mature dairy cows or veal calves.

Sec. 412.31 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BPT:
(a) For CAFO production areas. Except as provided in paragraphs
(a)(1) through (a)(2) of this section, there must be no discharge of
manure, litter, or process wastewater pollutants into waters of the
U.S. from the production area.
(1) Whenever precipitation causes an overflow of manure, litter, or
process wastewater, pollutants in the overflow may be discharged into
U.S. waters provided:
(i) The production area is designed, constructed, operated and
maintained to contain all manure, litter, and process wastewater
including the runoff and the direct precipitation from a 25-year, 24-
hour rainfall event;
(ii) The production area is operated in accordance with the
additional measures and records required by Sec. 412.37(a) and (b).
(2) Voluntary alternative performance standards. Any CAFO subject
to this subpart may request the Director to establish NPDES permit
effluent limitations based upon site-specific alternative technologies
that achieve a quantity of pollutants discharged from the production
area equal to or less than the quantity of pollutants that would be
discharged under the baseline

[[Page 7272]]

performance standards as provided by paragraph (a)(1) of this section.
(i) Supporting information. In requesting site-specific effluent
limitations to be included in the NPDES permit, the CAFO owner or
operator must submit a supporting technical analysis and any other
relevant information and data that would support such site-specific
effluent limitations within the time frame provided by the Director.
The supporting technical analysis must include calculation of the
quantity of pollutants discharged, on a mass basis where appropriate,
based on a site-specific analysis of a system designed, constructed,
operated, and maintained to contain all manure, litter, and process
wastewater, including the runoff from a 25-year, 24-hour rainfall
event. The technical analysis of the discharge of pollutants must
include:
(A) All daily inputs to the storage system, including manure,
litter, all process waste waters, direct precipitation, and runoff.
(B) All daily outputs from the storage system, including losses due
to evaporation, sludge removal, and the removal of waste water for use
on cropland at the CAFO or transport off site.
(C) A calculation determining the predicted median annual overflow
volume based on a 25-year period of actual rainfall data applicable to
the site.
(D) Site-specific pollutant data, including N, P, BOD₅,
TSS, for the CAFO from representative sampling and analysis of all
sources of input to the storage system, or other appropriate pollutant
data.
(E) Predicted annual average discharge of pollutants, expressed
where appropriate as a mass discharge on a daily basis (lbs/day), and
calculated considering paragraphs (a)(2)(i)(A) through (a)(2)(i)(D) of
this section.
(ii) The Director has the discretion to request additional
information to supplement the supporting technical analysis, including
inspection of the CAFO.
(3) The CAFO shall attain the limitations and requirements of this
paragraph as of the date of permit coverage.
(b) For CAFO land application areas. Discharges from land
application areas are subject to the following requirements:
(1) Develop and implement the best management practices specified
in Sec. 412.4;
(2) Maintain the records specified at Sec. 412.37 (c);
(3) The CAFO shall attain the limitations and requirements of this
paragraph by December 31, 2006.

Sec. 412.32 Effluent limitations attainable by the application of the
best conventional pollutant control technology (BCT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BCT:
(a) For CAFO production areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.31(a).
(b) For CAFO land application areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.31(b).

Sec. 412.33 Effluent limitations attainable by the application of the
best available technology economically achievable (BAT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BAT:
(a) For CAFO production areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.31(a).
(b) For CAFO land application areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.31(b).

Sec. 412.34 [Reserved]

Sec. 412.35 New source performance standards (NSPS).

Any new point source subject to this subpart must achieve the
following effluent limitations representing the application of NSPS:
(a) For CAFO production areas. The CAFO shall attain the same
limitations and requirements as Sec. 412.31(a)(1) and Sec.
412.31(a)(2).
(b) For CAFO land application areas: The CAFO shall attain the same
limitations and requirements as Sec. 412.31(b)(1) and Sec.
412.31(b)(2).
(c) The CAFO shall attain the limitations and requirements of this
paragraph as of the date of permit coverage.
(d) Any source subject to this subpart that commenced discharging
after April 14, 1993, and prior to April 14, 2003, which was a new
source subject to the standards specified in Sec. 412.15, revised as
of July 1, 2002, must continue to achieve those standards for the
applicable time period specified in 40 CFR 122.29(d)(1). Thereafter,
the source must achieve the standards specified in Sec. 412.31(a) and
(b).

Sec. 412.36 [Reserved]

Sec. 412.37 Additional measures.

(a) Each CAFO subject to this subpart must implement the following
requirements:
(1) Visual inspections. There must be routine visual inspections of
the CAFO production area. At a minimum, the following must be visually
inspected:
(i) Weekly inspections of all storm water diversion devices, runoff
diversion structures, and devices channelling contaminated storm water
to the wastewater and manure storage and containment structure;
(ii) Daily inspection of water lines, including drinking water or
cooling water lines;
(iii) Weekly inspections of the manure, litter, and process
wastewater impoundments; the inspection will note the level in liquid
impoundments as indicated by the depth marker in paragraph (a)(2) of
this section.
(2) Depth marker. All open surface liquid impoundments must have a
depth marker which clearly indicates the minimum capacity necessary to
contain the runoff and direct precipitation of the 25-year, 24-hour
rainfall event, or, in the case of new sources subject to the
requirements in Sec. 412.46 of this part, the runoff and direct
precipitation from a 100-year, 24-hour rainfall event.
(3) Corrective actions. Any deficiencies found as a result of these
inspections must be corrected as soon as possible.
(4) Mortality handling. Mortalities must not be disposed of in any
liquid manure or process wastewater system, and must be handled in such
a way as to prevent the discharge of pollutants to surface water,
unless alternative technologies pursuant to Sec. 412.31(a)(2) and
approved by the Director are designed to handle mortalities.
(b) Record keeping requirements for the production area. Each CAFO
must maintain on-site for a period of five years from the date they are
created a complete copy of the information required by 40 CFR
122.21(i)(1) and 40 CFR 122.42(e)(1)(ix) and the records specified in
paragraphs (b)(1) through (b)(6) of this section. The CAFO must make
these records available to the Director and, in an authorized State,
the Regional Administrator, or his or her designee, for review upon
request.
(1) Records documenting the inspections required under paragraph
(a)(1) of this section;
(2) Weekly records of the depth of the manure and process
wastewater in the liquid impoundment as indicated by the

[[Page 7273]]

depth marker under paragraph (a)(2) of this section;
(3) Records documenting any actions taken to correct deficiencies
required under paragraph (a)(3) of this section. Deficiencies not
corrected within 30 days must be accompanied by an explanation of the
factors preventing immediate correction;
(4) Records of mortalities management and practices used by the
CAFO to meet the requirements of paragraph (a)(4) of this section.
(5) Records documenting the current design of any manure or litter
storage structures, including volume for solids accumulation, design
treatment volume, total design volume, and approximate number of days
of storage capacity;
(6) Records of the date, time, and estimated volume of any
overflow.
(c) Recordkeeping requirements for the land application areas. Each
CAFO must maintain on-site a copy of its site-specific nutrient
management plan. Each CAFO must maintain on-site for a period of five
years from the date they are created a complete copy of the information
required by Sec. 412.4 and 40 CFR 122.42(e)(1)(ix) and the records
specified in paragraphs (c)(1) through (c)(10) of this section. The
CAFO must make these records available to the Director and, in an
authorized State, the Regional Administrator, or his or her designee,
for review upon request.
(1) Expected crop yields;
(2) The date(s) manure, litter, or process waste water is applied
to each field;
(3) Weather conditions at time of application and for 24 hours
prior to and following application;
(4) Test methods used to sample and analyze manure, litter, process
waste water, and soil;
(5) Results from manure, litter, process waste water, and soil
sampling;
(6) Explanation of the basis for determining manure application
rates, as provided in the technical standards established by the
Director.
(7) Calculations showing the total nitrogen and phosphorus to be
applied to each field, including sources other than manure, litter, or
process wastewater;
(8) Total amount of nitrogen and phosphorus actually applied to
each field, including documentation of calculations for the total
amount applied;
(9) The method used to apply the manure, litter, or process
wastewater;
(10) Date(s) of manure application equipment inspection.

Subpart D--Swine, Poultry, and Veal Calves

Sec. 412.40 Applicability.

This subpart applies to operations defined as concentrated animal
feeding operations (CAFOs) under 40 CFR 122.23 and includes the
following animals: swine; chickens; turkeys; and veal calves. This
subpart does not apply to such CAFOs with less than the following
capacities: 2,500 swine each weighing 55 lbs. or more; 10,000 swine
each weighing less than 55 lbs.; 30,000 laying hens or broilers if the
facility uses a liquid manure handling system; 82,000 laying hens if
the facility uses other than a liquid manure handling system; 125,000
chickens other than laying hens if the facility uses other than a
liquid manure handling system; 55,000 turkeys; and 1,000 veal calves.

Sec. Sec. 412.41-412.42 [Reserved]

Sec. 412.43 Effluent limitations attainable by the application of the
best practicable control technology currently available (BPT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BPT:
(a) For CAFO production areas.
(1) The CAFO shall attain the same limitations and requirements as
Sec. 412.31(a)(1) through (a)(2).
(2) The CAFO shall attain the limitations and requirements of this
paragraph as of the date of permit coverage.
(b) For CAFO land application areas.
(1) The CAFO shall attain the same limitations and requirements as
Sec. 412.31(b)(1) and (b)(2).
(2) The CAFO shall attain the limitations and requirements of this
paragraph by December 31, 2006.

Sec. 412.44 Effluent limitations attainable by the application of the
best conventional pollutant control technology (BCT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BCT:
(a) For CAFO production areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.43(a).
(b) For CAFO land application areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.43(b).

Sec. 412.45 Effluent limitations attainable by the application of the
best available technology economically achievable (BAT).

Except as provided in 40 CFR 125.30 through 125.32, any existing
point source subject to this subpart must achieve the following
effluent limitations representing the application of BAT:
(a) For CAFO production areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.43(a).
(b) For CAFO land application areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.43(b).

Sec. 412.46 New source performance standards (NSPS).

Any new source subject to this subpart must achieve the following
effluent limitations representing the application of NSPS:
(a) For CAFO production areas. There must be no discharge of
manure, litter, or process wastewater pollutants into waters of the
U.S. from the production area, subject to paragraphs (a)(1) through
(a)(3) of this section.
(1) Waste management and storage facilities designed, constructed,
operated, and maintained to contain all manure, litter, and process
wastewater including the runoff and the direct precipitation from a
100-year, 24-hour rainfall event and operated in accordance with the
additional measures and records required by Sec. 412.47(a) and (b),
will fulfill the requirements of this section.
(2) The production area must be operated in accordance with the
additional measures required by Sec. 412.47(a) and (b).
(3) Provisions for upset/bypass, as provided in 40 CFR 122.41(m)-
(n), apply to a new source subject to this provision.
(b) For CAFO land application areas: the CAFO shall attain the same
limitations and requirements as Sec. 412.43(b)(1).
(c) The CAFO shall attain the limitations and requirements of this
paragraph as of the date of permit coverage.
(d) Voluntary superior environmental performance standards. Any new
source CAFO subject to this subpart may request the Director to
establish alternative NPDES permit limitations based upon a
demonstration that site-specific innovative technologies will achieve
overall environmental performance across all media which is equal to or
superior to the reductions achieved by baseline standards as provided
by Sec. 412.46(a). The quantity of pollutants discharged from the

[[Page 7274]]

production area must be accompanied by an equivalent or greater
reduction in the quantity of pollutants released to other media from
the production area (e.g., air emissions from housing and storage) and/
or land application areas for all manure, litter, and process
wastewater at on-site and off-site locations. The comparison of
quantity of pollutants must be made on a mass basis where appropriate.
The Director has the discretion to request supporting information to
supplement such a request.
(e) Any source subject to this subpart that commenced discharging
after April 14, 1993, and prior to April 14, 2003, which was a new
source subject to the standards specified in Sec. 412.15, revised as
of July 1, 2002, must continue to achieve those standards for the
applicable time period specified in 40 CFR 122.29(d)(1). Thereafter,
the source must achieve the standards specified in Sec. 412.43(a) and (b).

Sec. 412.47 Additional measures.

(a) Each CAFO subject to this subpart must implement the
requirements of Sec. 412.37(a).
(b) Each CAFO subject to this subpart must comply with the record-
keeping requirements of Sec. 412.37(b).
(c) Each CAFO subject to this subpart must comply with the record-
keeping requirements of Sec. 412.37(c).

[FR Doc. 03-3074 Filed 2-11-03; 8:45 am]
BILLING CODE 6560-50-P

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