Water pollution control; and water pollution; effluent guidelines for point source categories: National Pollutant Discharge Elimination System— Concentrated animal feeding operations,

[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]

[[Page 7175]]

Part II

Environmental Protection Agency

40 CFR Parts 9, 122, 123, and 412

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

[[Page 7176]]

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.

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

   1. What is the context for this rule?

   2. Why is EPA revising the existing effluent guidelines and NPDES regulations for CAFOs?

   3. 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?

   4. 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.

   5. What principles have guided EPA's decisions embodied in this rule?

   6. 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?

   1. 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

   2. 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

   3. USDA-EPA Unified National Strategy for Animal Feeding Operations III. How Was This Final Rule Developed?

   1. Small Business Advocacy Review (SBAR) Panel

   2. Proposed Rule

   3. 2001 Notice of Data Availability

   4. 2002 Notice of Data Availability

   5. Public Comments

   6. Public outreach

1. Pre-proposal activities

2. Post-proposal activities IV. CAFO Roles and Responsibilities

   1. 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?

    2. 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?

   3. 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

   4. What records and reports must be kept on-site or submitted? V. States' Roles and Responsibilities

   1. What are the key roles of the States?

   2. Who will implement these new regulations?

   3. When and how must a State revise its NPDES permit program?

   4. When must States issue new CAFO NPDES permits?

   5. What types of NPDES permits are appropriate for CAFOs?

   6. What flexibility exists for States to use other programs to support the achievement of the goals of this regulation? VI. Public Role and Involvement

   1. How can the public get involved in the revision and approval of State NPDES Programs?

   2. How can the public get involved if a State fails to implement its CAFO NPDES permit program?

   3. How can the public get involved in NPDES permitting of CAFOs?

   4. What information about CAFOs is available to the public? VII. Environmental Benefits of the Final Rule

   1. Summary of the environmental benefits

   2. 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?

   3. 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

   4. Other (non-water quality) environmental impacts and benefits VIII. Costs and Economic Impacts

   1. Costs of the final rule

1. Method for estimating the costs of this rule

2. Estimated annual costs of the final CAFO regulations

   2. Economic Effects

1. Effects on the CAFO operation

2. Market analysis

   3. Cost-Benefit and Cost-Effectiveness Analyses

1. Cost-Benefit Analysis

2. Cost-Effectiveness Analysis IX. Coordination With Other Federal Programs

   1. 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?

   2. How is EPA coordinating with other federal agencies? X. Statutory and Executive Order Reviews

   1. Executive Order 12866: Regulatory Planning and Review

   2. Paperwork Reduction Act

   3. Regulatory Flexibility Act

1. Background

2. Summary of Final Regulatory Flexibility Analysis

3. Compliance guide

4. Use of Alternative Definition

   4. 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

   5. Executive Order 13132: Federalism

   6. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments

   7. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks

   8. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use

      1. National Technology Transfer and Advancement Act

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

   11. Congressional Review Act Appendix--Form 2B

   1. 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

   Examples of regulated North American industry Standard industrial Category

   entities

   code (NAIC)

   classification code

   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.

2. How Can I Get Copies of This Document and Other Related Information?

   1. 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.

   2. 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).

      2. 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.

      3. 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

      4. 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.

      5. 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.

         [sbull] ``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.

         [sbull] ``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.

         [sbull] ``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.

         [sbull] ``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.

         [sbull] ``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.

         [sbull] ``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.

         1. Background Information

      1. 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.

      2. 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.

      3. 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.

      4. 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.

      5. 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.

      6. 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

   1. 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.

   2. 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.

      2. 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.

      1. 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.

   1. 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)).

   2. 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.

   3. 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).

   4. 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).

   1. 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.

      2. 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.

      3. 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.

         3. 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.

      1. 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.

      2. 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).

      3. 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).

      4. 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.

      5. 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.

      6. 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

   1. 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).

   2. 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.

   3. 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.

      4. CAFO Roles and Responsibilities

      1. 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.

   1. 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.......................... 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.

   4. 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.

   1. 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.

   2. 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.

   3. 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.

   4. 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.

      3. 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.

   9. Coordination With Other Federal Programs

   1. 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.

   2. 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.

      10. Statutory and Executive Order Reviews

   1. 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.

   2. 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.

   3. 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.

   1. 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).

   2. 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.

   3. 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.

   4. 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.

   5. 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:

      [sbull] Retained structure of existing regulations, which allows EPA and states to focus on the largest producers;

      [sbull] Retained applicability of effluent guidelines for Large CAFOs only;

      [sbull] Retained existing designation criteria and process;

      [sbull] Retained existing definition of an AFO;

      [sbull] Retained conditions for being defined as a Medium CAFO;

      [sbull] Eliminated the ``mixed'' animal calculation for operations with more than a single animal type for determining which AFOs are CAFOs;

      [sbull] Raised the duck threshold for dry manure handling duck operations; and

      [sbull] 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.

      4. 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.

      5. 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.

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

         Executive Order 13175, entitled ``Consultation and Coordination with

         [[Page 7258]]

         Indian Tribal Governments'' (65 FR 67249, 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.

      7. 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.

      8. 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.

         1. 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.

      10. 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.

      11. 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).

          BILLING CODE 6560-50-P

          [[Page 7260]]

          [GRAPHIC] [TIFF OMITTED] TR12FE03.000

          [[Page 7261]]

          [GRAPHIC] [TIFF OMITTED] TR12FE03.001

          [[Page 7262]]

          [GRAPHIC] [TIFF OMITTED] TR12FE03.002

          [[Page 7263]]

          [GRAPHIC] [TIFF OMITTED] TR12FE03.003

          [[Page 7264]]

          [GRAPHIC] [TIFF OMITTED] TR12FE03.004

          BILLING CODE 6560-50-C

          [[Page 7265]]

          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