April 7, 2000 SBAR Panel Report on CAFO Final Report of the Small Business Advocacy Review Panel on EPA's Planned Proposed Rule On National Pollutant Discharge Elimination System (NPDES) And Effluent Limitation Guideline (ELG) Regulations For Concentrated Animal Feeding Operations ("CAFO Rule") Report Date: April 7, 2000 TABLE OF CONTENTS 1.0 INTRODUCTION 2.0 BACKGROUND AND REGULATORY HISTORY 2.1 CAFOs Subject to the CWA NPDES Program 2.2 Overview of the NPDES Regulations for CAFOs (40 C.F.R. 122.23) 2.3 Overview of Feedlot Effluent Limitation Guidelines (40 C.F.R. 412) 2.4 How the ELG and the NPDES Permit Program are Related 2.5 Why EPA is Revising the Regulations for CAFOs and the ELG for Feedlots 3.0 OVERVIEW OF THE REGULATORY CHANGES UNDER CONSIDERATION 3.1 Potential Regulatory Changes to the Regulations for CAFOs 3.2 Potential Regulatory Changes to the ELG for Feedlots (Beef & Dairy, Pork & Swine) 3.3. Regulatory Flexibility Alternatives 3.3.1 NPDES 3.3.2 ELG 3.3.3 Additional Regulatory Flexibility Alternatives 4.0 DEFINITIONS OF A SMALL BUSINESS 5.0 SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED REGULATION 5.1 Estimated Number of AFO "Small Businesses" Affected by the Regulations 5.2 Number of CAFOs (300-1,000 AU) by NPDES Regulatory Option 6.0 SUMMARY OF SMALL BUSINESS OUTREACH 6.1 EPA Outreach Prior to Convening the Panel 6.1.1Joint USDA/EPA Unified AFO Strategy Listening Sessions 6.1.2 Advisory Committee Meeting 6.1.3 Site Visits 6.1.4 Industry Associations 6.1.5 CAFO Regulation Workgroup 6.1.6 Small Business Conference Call 7.0 SMALL ENTITY REPRESENTATIVES 8.0 SUMMARY OF COMMENTS FROM SERS 8.1 Number and Type of Small Entities Affected 8.2 Potential Reporting, Record Keeping, and Compliance Requirements 8.2.1 General Requirements 8.2.2 Offsite Transfer of Manure 8.2.3 Manure and Soil Testing Requirements 8.3 Related Rules 8.3.1 Total Maximum Daily Loads 8.3.2 Related State Programs 8.4 Regulatory Alternatives 8.4.1 Revising the Thresholds 8.4.2 Revising Criteria for Defining or Designating a CAFO with 300-1,000 AUs 8.4.3 Certification for AFOs with between 300-1,000 AUs 8.4.4 Immature Animals 8.4.6 Dry Poultry Operations 8.4.7Removal of the 25-Year, 24-Hour Storm Event Permit Exemption 8.4.9 Comprehensive Nutrient Management Plans 8.4.9.1. General Issues 8.4.9.2 CNMP Development 8.4.10 Offsite Transfer of Manure 8.4.11 General and Individual Permits 8.4.12 Land Application 8.4.13 Manure and Wastewater Storage and Best Management Practices (BMPs) 8.5 Regulatory Flexibility Alternatives 8.5.1 Additional Regulatory Flexibility Alternatives 8.5.2 Exit Provision 8.5.3 Good Faith Incentive 8.6 Other Issues 8.6.1 Costs Analysis 8.6.2 Imposing Burden on Small Farms 8.6.3 Sound Science 8.6.4 Regional & Industry Variation 8.6.5 Definition of "Animal Unit" 8.6.6 Research Needs 8.6.7 Financial and Technical Assistance 8.6.8 Legal Authority 8.6.9 Air Emissions 8.6.10 Facility Closure 8.6.11 100 Foot Buffer Zone 8.6.12 Additional Recommendations 8.6.13 Comments on the SBREFA Process 8.6.14 Confusing Regulations 9.0 PANEL FINDINGS AND DISCUSSION 9.1 Number and Types of Entities Affected 9.2 Potential Reporting, Record Keeping, and Compliance Requirements 9.2.1Record Keeping Related to Off-Site Transfer of Manure 9.2.2 Permit Application and Certification Requirements 9.2.3 Frequency of Testing 9.2.4Groundwater Requirements Where Linked to Surface Water 9.3 Related Federal Rules 9.4 Regulatory Alternatives 9.4.1 Revised Applicability Thresholds 9.4.2 25-year, 24-hour Storm Event 9.4.3 Manure and Wastewater Storage Capacity 9.4.4 Land Application 9.4.5 Co-permitting 9.4.6 CNMP Preparer Requirements 9.4.7 General vs. Individual Permits 9.4.8 Immature Animals 9.5 Other Issues 9.5.1 Additional Analysis 9.5.2 Public Availability of CNMPs 9.5.3 Dry Manure 9.5.4 Coordination with State Programs LIST OF TABLES Table 4.1. SBA Size Definitions for "Small" Livestock and Poultry Operations Table 4.2. Number of Animals On-site at "Small" Livestock and Poultry Farms Table 5.1 Total Number of AFOs and Number of "Small" AFOs, 1997 Table 5.2. Number of Small Entities (301-1,000 AU) that may require an NPDES Permit Table 8.1 List of SER Written Comments LIST OF APPENDICES APPENDIX A: LIST OF ITEMS DISTRIBUTED TO SMALL BUSINESS STAKEHOLDERS FOR THE SEPTEMBER 17, 1999CONFERENCE CALL APPENDIX B: SUMMARY OF SMALL BUSINESS CONSULTATION CONFERENCE CALL ON CONCENTRATED ANIMAL FEEDING OPERATIONS PERMIT RULE AND EFFLUENT LIMITATION GUIDELINES REVISIONS: SEPTEMBER 17, 1999 APPENDIX C: WRITTEN COMMENTS RESPONDING TO THE SEPTEMBER 17, 1999 SMALL BUSINESS CONSULTATION CONFERENCE CALL ON CONCENTRATED ANIMAL FEEDING OPERATIONS PERMIT RULE AND EFFLUENT LIMITATION GUIDELINES REVISIONS APPENDIX D: LIST OF ITEMS DISTRIBUTED TO SMALL ENTITY REPRESENTATIVES FOR THE JANUARY 5, 2000 AND JANUARY 11, 2000 CONFERENCE CALLS APPENDIX E: COMBINED SUMMARY OF SMALL ENTITY REPRESENTATIVE CONFERENCE CALLS ON THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) AND EFFLUENT LIMITATION GUIDELINE (ELG) REGULATIONS FOR CONCENTRATED ANIMAL FEEDING OPERATIONS: JANUARY 5, 2000 AND JANUARY 11, 2000 APPENDIX F: WRITTEN COMMENTS FROM SMALL ENTITY REPRESENTATIVESSOLICITED BY THE PANEL AT THE JANUARY 5 AND JANUARY 11, 2000 CONFERENCE CALLS APPENDIX G: SUPPORTING BACKGROUND INFORMATION FOR ESTIMATES PROVIDED IN SECTION 5 Report of the Small Business Advocacy Review Panel on the U.S. Environmental Protection Agency's Potential Revisions to the National Pollutant Discharge Elimination System and the Effluent Limitation Guideline Regulations for Concentrated Animal Feeding Operations ("CAFO Rules") 1.0 INTRODUCTION This report is presented by the Small Business Advocacy Review (SBAR) Panel (the Panel) to the U.S. Environmental Protection Agency (EPA) to consider potential revisions to two regulations that address concentrated animal feeding operations (CAFOs). These two regulations are the National Pollutant Discharge Elimination System (NPDES) CAFO Regulations (40 C.F.R. 122.23, and Part 122, Appendix B), and the Effluent Limitation Guidelines (ELG) for Feedlots (40 C.F.R. Part 412), which includes two parts (Beef & Dairy, Pork & Poultry). On December 16, 1999 EPA's Small Business Advocacy Chairperson (SBAC) convened this Panel under section 609(b) of the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). Section 609(b) requires that the responsible agency convene a review panel prior to publication of any Initial Regulatory Flexibility Analysis (IRFA) that an agency may be required to prepare under the RFA. In addition to its chairperson, the Panel consists of the Director of the Office of Wastewater Management's Permit Division of EPA, the Director of the Office of Science and Technology's Engineering and Analysis Division of EPA, the Deputy Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for Advocacy of the Small Business Administration. As part of the process to meet the requirements of 609(b), outreach efforts (i.e., mailings and meetings) are made by the Panel to obtain the advice and recommendations of representatives of small entities that may be subject to the proposed rule. Section 609(b) of the RFA also directs the Panel to report on the comments provided by these Small Entity Representatives (SERs) and its findings as to issues related to the elements of an IRFA under section 603 of the RFA. Those elements of an IRFA are as follows: A description of and, where feasible, an estimate of the number of small entities that the proposed rules will affect; A description of projected reporting, record keeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirements and the type of professional skills necessary for preparation of the report or record; Identification of all relevant Federal rules, which may duplicate, overlap, or conflict with the proposed rule; and A description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities. This report provides: background information on the proposed rule being developed; the types of small entities that would be subject to the proposed rule; a description of the efforts made to obtain the advice and recommendations of SERs; and a summary of the comments that have been received to date from those SERs. This report also presents the findings and recommendations of the Panel. The complete written comments of the SERs are attached to this report. Once completed, the Panel will submit its report to the Administrator of EPA and will include it in the rulemaking record. The EPA will consider the recommendations of the Panel and where appropriate will make revisions to the draft proposed rule in order to reduce the burden on the small businesses who may be affected by this rulemaking. The EPA will also use the report to determine whether an IFRA is required. It is important to note that the Panel's findings and discussion are based on the information available at the time the report was drafted. EPA is continuing to conduct analyses relevant to the proposed rules, and additional information may be developed or obtained during the remainder of the rule development process. The Panel makes its report at a preliminary stage of rule development in order to provide both the Panel and the Agency with an opportunity to identify and explore potential ways of shaping the proposed rule to minimize the burden of the rule on small entities while achieving the rule's statutory purposes. Any options the Panel identifies for reducing the rule's regulatory impact on small entities may require further analysis and/or data collection to ensure that the options are practicable, enforceable, environmentally sound, protective of public health, and consistent with the statute authorizing the proposed rule. 2.0 BACKGROUND AND REGULATORY HISTORY 2.1 CAFOs Subject to the CWA NPDES Program The Clean Water Act (CWA) permitting program is called the "National Pollutant Discharge Elimination System" (NPDES) program. This program applies to "point sources" who are or may be dischargers of pollutants into waters of the U.S. The purpose of the NPDES program is to protect human health and the environment by controlling the types and amounts of pollutants that can be discharged into U.S. waters. EPA originally issued NPDES permit program regulations in the 1970s. These regulations, which apply to a broad range of industrial and municipal wastewater discharges, specify who must apply for an NPDES permit and what type of condition(s) must be included in a permit (e.g., technology and/or water quality-based effluent limits, monitoring and reporting requirements, special conditions and standard conditions). The NPDES regulations also provide that NPDES permits may be issued by U.S. EPA or those states, territories, and tribes authorized by EPA to implement the NPDES program. Currently, 43 states and the Virgin Islands are authorized to issue NPDES permits.1 Under both the CWA and the NPDES regulations, the term "point source" is defined as any discernible, confined and discrete conveyance, including but not limited to any confined animal feeding operation (CAFO) [CWA Section 502(14)]. As such, in the 1970s EPA promulgated two regulations that directly affect CAFOs. The first is the NPDES regulations for CAFOs which define which animal feeding operations (AFOs) are CAFOs (40 CFR 122.23, and Part 122, Appendix B). These regulations also state that CAFOs are point sources subject to the NPDES permit program. The second regulation is the effluent limitation guidelines (ELGs) for feedlots (40 C.F.R. 412), which establishes the technology- based effluent standards that apply to certain CAFOs. Both of these regulations are briefly summarized below. 2.2 Overview of the NPDES Regulations for CAFOs (40 C.F.R. 122.23) The NPDES regulations for CAFOs first define the term "animal feeding operation" (AFO) and then the term "concentrated animal feeding operation" (CAFO). An operation must first be an AFO before it can be defined as a CAFO. The term "animal feeding operation" is defined in EPA regulations as a "lot or facility" where animals "have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12 month period and crops, vegetation forage growth, or post-harvest residues are not sustained in the normal growing season over any portion of the lot or facility" [40 C.F.R. 122.23]. Once a facility meets the AFO definition, its size, based upon the total numbers of animals confined, is a fundamental factor in determining whether it is a CAFO. The animal livestock industry is diverse and includes a number of different types of animals that are kept and raised in confined situations. To define these various livestock sectors, the concept of an "animal unit" (AU) was established in the EPA regulations [40 C.F.R. 122 Appendix B]. An AU varies according to animal type; one animal is not necessarily equal to one AU. Each livestock type, except poultry, is assigned a multiplication factor2 to facilitate the calculation of the total number of AUs at a given AFO. These factors were intended to facilitate rough equivalence among the different livestock sectors, in terms of approximated relative contributions to water pollution (e.g., under current regulations, one head of beef is equal to 30 or 100 layers or broilers, depending on the watering system). However, it should be noted that, under the current requirements of the current regulation, the threshold at which laying hen operations with liquid manure handling systems are automatically defined as CAFOs represents a significantly lower level of manure production than the corresponding thresholds in the other animal sectors. An AFO is a CAFO if it meets the regulatory CAFO definition or if it is designated as a CAFO. (The concept of designation is explained in the next paragraph.) An AFO is defined as a CAFO where more than 1,000 AUs (as defined by the existing regulation) are confined at the facility; or where more than 300 animal units are confined at the facility and the following occurs: Pollutants are discharged into navigable waters through a manmade ditch, flushing system, or other similar man-made device; or Pollutants are discharged directly into waters that originate outside of and pass over, across, or through the facility or come into direct contact with the confined animals. However, these conditions notwithstanding, an AFO that would otherwise be defined as a CAFO is not so defined if it does not discharge pollutants to waters of the U.S. except in the event of a 25-year, 24-hour storm event. Another way in which an AFO can become a CAFO is by being designated as a CAFO. The NPDES permitting authority may, on a case-by-case basis, after conducting an on-site inspection, decide to designate any AFO as a CAFO based on a finding that the facility "is a significant contributor of pollution to the waters of the United States." A facility with 300 AUs or less, however, may not be designated as a CAFO unless pollutants are discharged into waters of the U.S. through a man-made ditch, flushing system, or other similar man- made device or are discharged directly into waters of the U.S. which originate outside of the facility and pass over, across or through the facility or otherwise come into direct contact with the animals confined in the operation. 2.3 Overview of Feedlot Effluent Limitation Guidelines (40 C.F.R. 412) The current feedlot Effluent Limitation Guidelines (ELG) apply to discharges of pollutants from feedlots (i.e., CAFOs) that have the capacity to hold 1,000 AUs or greater. This ELG allows no discharges of process wastewater pollutants to waters of the U.S. except when chronic or catastrophic storm events cause an overflow from a facility designed, constructed, and operated to hold process-generated wastewater plus runoff from a 25-year, 24- hour storm event. All NPDES permits for CAFOs with more than 1,000 AUs must include an equivalent or more stringent effluent limitation. In those cases where the feedlot ELG does not apply to a CAFO (e.g., the CAFO confines fewer than 1,000 AUs), the permit writer must develop, for inclusion in the NPDES permit, technology-based limitations based on best professional judgment (BPJ). The ELGs for the Feedlots Point Source Category are codified at Title 40, Part 412 of the U.S. Code of Federal Regulations (40 CFR Part 412). The category has two subparts: Subpart A - applies to feedlots with at least: 1,000 slaughter steers and heifers; 700 mature dairy cattle; 2,500 swine weighing more than 55 pounds; 10,000 sheep; 55,000 turkeys; 100,000 laying hens or broilers when facility has unlimited continuous flow watering systems; 30,000 laying hens or broilers when facility has a liquid manure handling system; 500 horses; or 1,000 animal units from a combination of slaughter steers and heifers, mature dairy cattle, swine more than 55 pounds, and sheep. Subpart B - applies only to feedlots confining 5,000 or more ducks.3 As noted above, the ELG for Subpart A prohibits the discharge of process wastewater pollutants to waters of the United States, except when chronic or catastrophic rainfall events cause an overflow from a facility designed, constructed, and operated to contain all process-generated wastewater plus the runoff from a 25-year, 24-hour rainfall event. The regulations specify animal wastes and other water that must be controlled include the following: spillage or overflow from: O animal or poultry watering systems; O washing, cleaning, or flushing pens, barns, manure pits, or other feedlot facilities; O direct contact swimming, washing, or spray cooling of animals; and O dust control precipitation (rain or snow) which comes into contact with any manure, litter, or bedding; or any other raw material or intermediate or final material or product used in or resulting from the production of animals or poultry or direct products (e.g., milk or eggs). 2.4 How the ELG and the NPDES Permit Program are RelatedError! Bookmark not defined. NPDES permits implement a multifaceted approach to protecting water quality. At the core of these permits is a two- pronged pollution control strategy that incorporates both technology-based limits and more stringent site-specific limits based on water quality considerations where necessary. The discharge limits imposed in a permit are thus derived through consideration of two factors: 1) the effluent quality that is both economically achievable and technologically attainable through operation of control technologies and process changes (i.e., ELG); and 2) regional or site-specific water quality conditions. Generally, technology-based limits represent the level of pollutant reduction that a facility can attain at the point of discharge ("end-of-pipe"), by applying pollution control technologies, whereas the water quality-based limits reflect additional restrictions on pollutant discharges that are necessary to achieve or maintain water quality standards. For many industries, minimum technology-based standards are established at a national level through ELGs. For industries not covered by ELGs, technology-based limits are developed by the permit writer on a site-specific basis using best professional judgement (BPJ). In the case of CAFOs, the ELG regulations [40 C.F.R. 412] apply to CAFO feedlots with more than 1,000 AUs. The current ELGs for CAFOs do not allow discharges of process wastewater pollutants to waters of the U.S. from feedlots, except when chronic or catastrophic storm events cause an overflow from a facility designed, constructed, and operated to hold process- generated wastewater plus runoff from a 25-year, 24-hour storm event. In cases where the ELG does not apply (for CAFOs with fewer than 1,000 AUs), the permit writer needs to develop technology-based effluent limitations on a case-by-case basis for the feedlot by using BPJ. The regulations [40 C.F.R. 122.44 (k)] also allow best management practices (BMPs) to be used where they are reasonably necessary to meet effluent limitations and standards or to carry out the purposes and intent of the CWA. Thus, whether a CAFO is subject to the ELG for feedlots or technology-based effluent limitations based on BPJ, it can also be required to develop and implement BMPs reasonably necessary to meet the ELG or BPJ technology-based limitations. In cases where technology-based effluent limitations are not sufficient to meet water quality standards, the permit writer must develop more stringent water quality-based effluent requirements on a site-specific basis. NPDES permits for CAFOs may also include BMPs as water quality-based effluent limitations or use BMPs that are reasonably necessary to meet water quality standards [See, 40 C.F.R. 122.44 (k)]. 2.5 Why EPA is Revising the Regulations for CAFOs and the ELG for Feedlots As noted above, the regulations for CAFOs were originally promulgated in the mid-1970s. Since that time, significant progress has been made in implementing CWA programs and in reducing water pollution. Despite such progress, however, serious water quality problems persist throughout the country. Agriculture, municipal point sources, urban runoff, and industrial point sources are listed as some of the leading sources of these remaining problems. Although it is difficult to determine the exact contribution of any particular source, CAFOs that are not properly managed can pose a number of risks to water quality and public health. Improperly managed manure and wastewater from CAFOs have the potential to contribute large quantities of pollutants such as nutrients (e.g., nitrogen, phosphorus), organic matter, sediments, pathogens, heavy metals, hormones, antibiotics, and ammonia to the environment. To mitigate water quality impacts posed by CAFOs, EPA is revising the regulations for CAFOs, with the following goals: Update the current regulations to reflect current industry characteristics and practices; Make the current regulations simpler and easier to understand; and Ensure that all CAFOs are permitted. Under the CWA EPA will establish effluent limitations based on best available technology that is economically achievable. In developing regulatory options, EPA will carefully assess the costs and benefits of any proposed regulatory changes. Note that while information on the projected costs of various regulatory options was provided to SERs as part of the Panel's outreach, analysis of benefits was still at a preliminary stage and not yet ready for public review. A full evaluation of costs and benefits will be provided for public review and comment at the time the proposed rule is published. 3.0 OVERVIEW OF THE REGULATORY CHANGES UNDER CONSIDERATION The discussion below summarizes the regulatory changes being considered for the NPDES regulations for CAFOs and for the ELG for feedlots. Although similar changes are being considered regarding both regulations, the effects of such changes are different under each. Proposed changes to the NPDES regulations for CAFOs affect which AFOs are considered CAFOs and are therefore subject to the NPDES permit program. Changes to the ELG for feedlots affect which CAFOs are subject to the ELG and the technology-based requirements that apply to these CAFOs. The following potential regulatory changes are slightly different than those originally presented by EPA to potential SERs during a preliminary Small Business Consultation teleconference on the NPDES regulations for CAFOs and the ELG that was held September 17, 1999. Following the teleconference, at EPA's request, many of the participants provided written comments on the potential regulatory changes as presented in the call. In accordance with established procedures for selecting the best representative sample of SERs, not all participants in the call were subsequently selected to participate in the Panel's formal outreach to SERs. However, the Panel did review and consider comments from these participants during its deliberation. The complete set of written comments resulting from the September 17 call is provided in Appendix C. Changes to the potential regulatory revisions resulted from a series of rule development discussions that occurred after that teleconference. The potential regulatory revisions presented below include revisions that reflect stakeholder comments, additional data analysis, and agency deliberations concerning the various options under consideration. The potential regulatory revisions described below do not necessarily include every option that EPA might eventually consider in revising these regulations. In addition, EPA may decide not to adopt any of the options described below in the revised regulations. 3.1 Potential Regulatory Changes to the Regulations for CAFOs 1. Alternative Scenarios for AFOs with between 300-1,000 AUs One of the most significant issues involved in revising the NPDES regulations for CAFOs and ELGs involves how to address AFOs with between 300-1,000 AUs that currently may be defined as CAFOs under the existing regulations. Because any modification to the 300-1,000 AU category would impact other issues, EPA has developed three alternative scenarios for addressing this category of operations. EPA is also considering possible modifications to these scenarios. For example, alternatives 2 and 3 could include a lower threshold for ELG applicability. Alternative 1: The size threshold at which all operations defined as CAFOs are set below 1,000 AUs. Potential thresholds being examined are 750, 500 and 300 AUs. Note that this would represent a simultaneous lowering of the current threshold and elimination of the current exemption for operations above the threshold that do not discharge in less than a 25-year, 24-hour storm event. All operations with a number of AUs over the ELG threshold would be required to comply with ELGs. However, EPA is examining the feasibility of developing tiered ELG requirements to address affordability issues for small entities. The current 300-1,000 AU category, would be eliminated. Thus, operations with fewer AUs than the ELG threshold would no longer be subject to being defined as CAFOs. However, they could still be designated as a CAFO(see next bullet). As in the existing CAFO regulations, any operation under the threshold could be designated as a CAFO if the NPDES permitting authority or EPA determines it to be a significant contributor of pollution to waters of the United States. Operations with less than 300 AUs may only be designated, after inspection, if it is found that pollutants are discharged either through a man-made conveyance or directly into waters that cross the property or come into direct contact with the animals [40 CFR 122.23(c)(2)]. Once designated, the operation would be required to comply with a permit incorporating effluent limits and/or best management practices (BMPs) developed by the permitting authority using best professional judgement (BPJ). Alternative 2: All AFOs with between 300-1,000 AUs would be defined as CAFOs. A "check box" self-certification mechanism would be implemented, whereby each operation would certify to the permitting authority that it does not pose a risk to water quality and public health. Such operations would not have to apply for a permit. Operations that cannot certify that they do not pose risk to water quality would be required to apply for a permit. In the application, the operation would have the additional opportunity to demonstrate to the permit authority that: O Pollutants have not been discharged, are not being discharged, or have no potential to be discharged into waters of the U.S.; and O Pollutants have not been discharged, are not being discharged, or have no potential to be discharged into waters of the U.S. due to improper land application of manure or wastewater. Operations unable to make this demonstration would be required to obtain a NPDES permit. The permit authority would develop technology-based requirements using BPJ. As in existing regulations, any operation with fewer than 300 AUs could be designated as a CAFO if the permitting authority or EPA determines it to be a significant contributor of pollution to waters of the United States. Operations with less than 300 animal units may only be designated, after inspection if it is found that pollutants are discharged either through a man-made conveyance or directly into waters that cross the property or come into direct contact with the animals [40 CFR 122.23(c)(2)]. Once designated, the operation would be required to comply with a permit incorporating effluent limits and/or BMPs developed by the permitting authority using BPJ. Alternative 3: Any AFO with between 300-1,000 AUs that met any one of the following conditions would be defined as a CAFO and would be required to apply for an NPDES permit: 1. Operation has insufficient storage capacity to contain all manure, wastewater, storm water and process wastewater for up to a 25-year, 24-hour storm event, or contain dry manure during non- cropping periods or six months, whichever is shorter; 2. Operation is located in impaired watershed; 3. Distance from the feedlot area to the nearest waters of the U.S. is 100 feet or less; or 4. Operation is located in an area with excess nitrogen and/or phosphorus (N & P) (i.e., crop lands in that area have excessive amounts of N & P). 5. Pollutants have been discharged, are discharging, or have potential to discharge through a natural or man-made conveyance from feedlot into waters of the U.S.; or 6. Pollutants have been discharged, are discharging, or have potential to discharge into waters of the U.S. due to improper land application of manure or wastewater. An operation that meets any one of the first four criteria would not necessarily be required to actually obtain an NPDES permit. In the permit application, the operation would have the opportunity to demonstrate to the permitting authority that neither of the last two criteria are met, and thus would not be required to obtain a permit. Note that the fifth criterion is the same as one of the criteria for defining AFOs in the 300-1,000 AU size range as CAFOs currently, except that discharges through natural as well as man-made conveyances would be covered. Any operation that meets either of the last two criteria would be required to apply for and obtain an NPDES permit, incorporating effluent limits and/or BMPs developed by the permit authority using BPJ. As in existing regulations, any operation with less than 300 AUs could be designated as a CAFO if the permit authority or EPA determines that a discharge took place. Once designated, the operation would be required to comply with a permit incorporating effluent limits and/or BMPs developed by the permitting authority using BPJ. Note that all three of these alternatives reflect a shift away from defining CAFOs based on whether they discharge more frequently than a 25-year, 24-hour storm event. 2. Other NPDES Issues 1. Who must apply for a permit? 1. Immature Animals. EPA is considering whether or not to include immature animals for all animal types in determining the total number of animals at a CAFO. Immature animals in the dairy and swine industry sectors are not used to determine whether or not an AFO constitutes a CAFO under the current regulations. Rather only swine weighing more than 55 pounds and mature dairy cattle, excluding the number of calves and heifers, are counted when determining applicability. In contrast, all slaughter steers and heifers are counted when determining applicability for beef feedlots, and all ages of chickens and turkeys counted. Including immature animals for all animal types might more accurately reflect the concentrated nature of each operation. Furthermore, operations comprised solely of immature animals could then be covered by the NPDES requirements. This change could also affect applicability of the ELGs. The potentially affected sectors are discussed in more detail below. Swine. Production at swine facilities includes breeding, farrowing, weaning, and grow-finishing phases. Most swine production facilities are farrow-to- finish or grow-finish farms, but some facilities may be farrow-wean, farrow-feeder, wean-finish, or nurseries only. EPA might establish a threshold that applies to standalone farrowing and nursery operations which confine large numbers of immature pigs. It is difficult to clearly identify how many swine operations would be affected by including immature animals within the applicability definition, but EPA estimates such facilities comprise a small percentage of the total swine facilities. Dairies. Dairies are less likely than swine facilities to keep immature animals in total confinement until the animals reach maturity. Some dairies keep no heifers or calves onsite, while at others the numbers of heifers and calves equal the number of mature cows. Also, some dairies with calves and heifers keep them confined in drylots or barns, while many others keep immature animals in pastures. Further complicating the matter, the industry and many permitting authorities typically measure the size of an operation by the size of the milking herd, rather than the total number of mature and immature animals. As a general matter, the size of the milking herd at a particular dairy is a fairly constant value, while the number of calves and heifers kept on a site may be allowed to vary depending on business conditions. As a result, it is difficult to clearly identify how many operations would be affected by including immature animals within the applicability definition. It is also unclear at present whether such a change would enhance implementation of the effluent guidelines. 2. Designation Criteria. At this time, EPA is not contemplating revising the conditions in the existing regulations that are used when designating an AFO below 300 AUs as a CAFO. c.Dry Poultry Operations. EPA is considering revising the CAFO definition to include all poultry operations above a specified size threshold regardless of the watering or manure system used. In the 20-plus years since the NPDES regulations for CAFOs were promulgated, continuous overflow watering in poultry operations has been largely discontinued and replaced by more efficient watering methods (e.g., on- demand watering). Moreover, liquid manure systems represent little more than approximately 25 percent of layer operations. Dry manure management systems are not covered under the current regulations, but can result in water pollution due to improper land application or poor on-site storage and handling. Therefore, EPA is considering revising the NPDES regulations for CAFOs in order to reflect these changes in industry practice and ensure proper management and land application of poultry litter. 4. 25-year, 24-hour storm event. EPA is considering removing the 25-year, 24-hour storm exemption from the NPDES CAFO definition (while maintaining the 25-year, 24-hour storm design standard in the ELG for feedlots). CAFOs would be required to apply for a permit even if they only discharge during a 25-year, 24-hour or larger storm event. Both the existing NPDES regulations for CAFOs and the ELG for feedlots contain reference to a 25-year, 24- hour storm event. The ELG requires facilities subject to the ELG to design storage structures to contain a 25- year, 24-hour storm event along with process wastewater. This is an integral part of the technology basis for the ELG regulations. Technology options currently under consideration maintain this design standard for liquid-based systems or systems that must rely on stormwater runoff impoundments such as are used at beef feedlots. EPA recognizes that liquid impoundments cannot be designed to achieve zero discharge without factoring in some volume of rainfall that would be introduced; thus EPA established the requirement to design and maintain the impoundments to hold the volume of stormwater from a 25-year, 24-hour storm event. EPA is considering separate zero discharge requirements that do not include a storm event component for dry manure systems where technology allows for animals and manure to be protected from stormwater. EPA is, however, considering removing the 25-year, 24-hour exemption that is currently included in the NPDES regulations for CAFOs. The NPDES regulations exempt certain AFOs from being defined as a CAFO if they discharge only in the event of a 25-year, 24-hour or larger storm event. EPA is considering removing this exemption to ensure that all AFOs above a specified size threshold are subject to enforceable permit conditions, including monitoring and reporting requirements, and to better address the potential risks to water quality and public health posed by facilities that meet or exceed the specified threshold(s). 5. Co-permitting. EPA is considering requiring corporate entities that exercise substantial operational control over a CAFO to be co-permitted. Over the past few decades, segments of the livestock industry have been consolidating into fewer and larger business organizations. This consolidation has resulted in higher levels of vertical integration, with single companies being involved in essentially all stages of the production process. Under this potential revision, corporate entities that exercise substantial operational control over a CAFO would be explicitly recognized as "operators" of the CAFO for purposes of the NPDES program, and thus would be co-permitted along with the CAFO operator. EPA is currently evaluating factors which may constitute "substantial operational control." 2. What is in the permit? 1. Discharges from Land Application. EPA is considering revising the regulations to explicitly address discharges from improper land application areas under the control of the CAFO operator, along with discharges from the feedlot and storage and handling areas. 2. Comprehensive Nutrient Management Plans (CNMPs). EPA is considering requiring development and implementation of CNMPs as part of an NPDES permit. 3. CNMP Development. EPA is considering requiring permittees to have CNMPs developed by certified planners. This potential revision would recognize that the most effective way for CAFOs to minimize risks to water quality and public health is to develop and implement technically sound, and site-specific CNMPs. These CNMPs should reflect and facilitate technical innovation, sustainable agricultural systems, and new approaches to proper manure and nutrient management. EPA is working with the United States Department of Agriculture and other organizations to promote access to certified planners at reasonable cost and to facilitate certification of operators to write their own plans. 4. Record Keeping and Reporting Related to Offsite Transfer of Manure. EPA is considering requiring CAFO operators that send manure off-site to maintain records of each transfer, including date, quantity transferred, and recipient name and address, and an analysis of the manure content. EPA is also considering requiring CAFO operators to provide any off-site recipient of manure with the analysis of manure content and a brochure (to be supplied by EPA) describing the recipient's responsibilities for appropriate manure management. 5. Monitoring, Record Keeping & Reporting. EPA is considering requirements for: (1) CAFO permittees to keep on-site records of inspections, monitoring and other activities related to the implementation of the CNMP; (2) CAFO permittees to conduct self-certifications and self- evaluations of CNMP implementation, and to maintain records of such evaluations onsite; and (3) CAFO operators to provide additional explicit information needed by the permit authority as part of a permit application or notice of intent (NOI). The monitoring, record keeping and reporting requirements included in CAFO permits should address the routine day-to-day operation of a facility and help ensure that CNMPs are effectively developed and implemented. In addition, permits should address the reporting of non-routine activities (e.g., overflows, leaks, structural failures, improper storage or handling of liquid or dry manure). 6. Facility Closure. EPA is considering requiring that permits issued to CAFOs include a special condition to require proper closure of the facility in order to minimize potential adverse impacts to water quality (i.e., through discharges to waters of the U.S.). Additionally, the regulations would stipulate that a permittee might remain subject to NPDES permitting requirements until the CAFO is properly closed in accordance with requirements established by the authorized permitting authority. Specific closure requirements would be defined by the authorized permitting authority. 3. What type of permit do you get? EPA currently encourages permitting authorities to use general permits for the majority of CAFOs. General permits offer a cost-effective approach for permitting, while providing the site-specific flexibility necessary for these facilities. General permits lessen compliance burden because they allow the applicant to simply submit a notice of intent (NOI) to be covered under a general permit rather than a full permit application. Under the proposed revised regulations, EPA would continue to encourage the use of general permits for most small entities. However, individual permits may be appropriate in certain instances, such as for extremely large CAFOs or facilities with historic compliance problems. EPA is considering whether any regulatory changes are needed to address these situations. 1. Public Involvement. EPA is considering requiring: (1) Individual permits for CAFOs that meet certain criteria; and/or (2) Increased level of public involvement in general permits for CAFOs. Public involvement in the permitting process is a key component of the CWA and the NPDES regulatory program generally. The Agency is considering various options to ensure adequate public involvement in the permitting process for CAFOs. Alternatives being considered include making general permit NOIs available to the public and/or requiring individual permits for all large CAFOs that meet certain criteria. Individual NPDES permits currently afford a greater level of public involvement than general permits. EPA also recognizes the legitimate concerns of operators regarding protection of confidential business information and potential delays in processing of permit applications and NOIs. EPA will follow the procedures as established under the statute that address confidential business information and will balance the value of public involvement with the burden to the operator when considering regulatory options. 2. Permit Application Form. In addition, where individual permits are required, EPA is considering developing a revised individual permit application form. 3.2 Potential Regulatory Changes to the ELG for Feedlots (Beef & Dairy, Pork & Swine) EPA is considering the following regulatory changes to the current ELG for feedlots. These revisions are the same as those originally presented to stakeholders. 1. Lower the Threshold. As described in the first scenario in Alternative 1 in Section 3.1.A, EPA is considering lowering the ELG threshold below 1,000 AUs. Options under consideration include 750, 500 and 300 AUs. The current effluent guidelines apply only to those feedlots with a capacity of 1,000 AUs or greater. The effluent guidelines establish the technology-based limits that are to be included in permits for these facilities. If a facility is subject to permitting but the effluent guidelines do not apply to it, the permit writer develops technology-based limits for that facility's permit on a case-by-case basis using BPJ. Thus, expanding the coverage of the effluent guidelines to include smaller operations would increase the total number of CAFOs that receive technology-based limits specified in the ELG rule rather than on a case-by-case basis. B. Dry Poultry Operations. As discussed in Section 3.1.B. 1 (c) above, EPA is considering expanding the scope of the regulations to apply to layers and broiler operations employing dry manure handling. This could also expand coverage under the ELGs. The current effluent guidelines apply to layer or broiler operations employing continuous flow watering systems or liquid manure systems. Expanding coverage to include dry poultry operations would increase the total number of CAFOs covered by the ELG rule. 3. Discharge Limits. EPA is considering establishing numeric discharge limitations or zero discharge requirements for CAFOs with less than 1,000 AUs. If the applicability threshold of the effluent guidelines is expanded to include operations smaller then 1,000 AUs, EPA will evaluate the technological feasibility and economic achievability of potential effluent guidelines for the newly- covered facilities. Due to the costs associated with runoff controls (e.g., runoff ponds and lagoons), and their significant contribution to the total costs of any new controls, alternative requirements to lessen the financial burden on small entities are being investigated. 4. Land Application. EPA is considering including requirements that apply to land application of manure and other CAFO wastewaters including the development and implementation of comprehensive nutrient management plans. The current effluent guidelines do not specifically address discharges from land application of manure. Land application is an integral part of the CAFO waste management system, and over-applying manure may result in a discharge of nutrient-rich field runoff to surface waters. Some states have established good programs for managing land application of animal wastes; however, others lack the resources needed to implement an adequate level of control. USDA is preparing guidance for developing comprehensive nutrient management plans (CNMPs) on a voluntary basis. EPA is considering including requirements as part of the effluent guidelines, to ensure that operations included in the regulatory program have CNMPs as part of their NPDES permit. 5. Best Management Practices. EPA is considering including requirements for CAFOs to implement best management practices at feedlot and manure storage areas to improve control of contaminated runoff and improve the structural integrity of waste storage structures. Structural and operational practices EPA may include in the regulations include constructed diversions (diking, curbing, grading, or other means) to collect contaminated runoff from (and divert clean stormwater away from) areas where animals are confined or where manure or raw materials are stored; permanently-installed depth markers for ponds, lagoons, tanks, and other containment structures for runoff and liquid animal wastes; alternatives to burial of routine poultry mortality; and regular visual inspections of runoff controls and containment structures. 3.3. Regulatory Flexibility Alternatives The basic premise of EPA's existing regulations is that the regulatory program should focus on large operations and on those posing the greatest risk to water quality and public health. EPA expects to maintain this focus in the revised regulations. This approach helps to reduce the burden of the CAFO regulations on small entities while striving to achieve the goals of the CWA. The current CAFO regulatory program, which has been in place since the 1970s, only applies to those AFOs that meet the regulatory definition of a CAFO or have been designated as a CAFO by the NPDES permitting authority due to risks posed to water quality and public health. The result has been that most AFOs (including most of those meeting the SBA definition of a small business) have not so far been covered by the NPDES regulations and ELGs. Further, it is EPA's intent to keep the revisions to the CAFO regulations as flexible as possible, allowing NPDES authorities to write site-specific permits that address the specific concerns for each CAFO in a manner appropriate and manageable for that business. 3.3.1 NPDES As previously mentioned, the focus of EPA's potential regulatory revisions is primarily on large operations and thus most small entities (those below 300 AUs) would not be affected by the revised regulations. Of approximately 360,000 AFOs nationwide, the vast majority are small entities (more than 97 percent). All CAFOs over the upper regulatory threshold (currently 1,000 AUs) would be required to apply for a permit, while some small operations (those between 300 and 1,000 AUs) could also be required to apply. Over the past 20 years only one AFO has been designated by a NPDES permitting authority to be a CAFO. EPA expects no more than 10 designations to be made. These designations will be aimed at operations contributing to significant water quality impairment. 1. Certification. EPA is considering an option whereby certain operations initially defined as CAFOs may not be required to have an NPDES permit. An operation in the 300-1,000 AU category would be able to certify to the permitting authority that it does not have a potential to discharge and thus does not pose a risk to water quality and public health. Such operations would not have to apply for a permit. Operations that cannot certify that they do not pose risk to water quality would be required to apply for a permit. However, in the application, the operation would have the additional opportunity to demonstrate to the permit authority that pollutants have not been discharged and have no potential to be discharged into waters of the U.S. These operations would not be issued a permit if they could successfully demonstrate no potential to discharge. B.Good Faith Incentive. EPA is considering explicitly incorporating a good faith incentive for small AFOs. In many cases, AFOs that fall below the upper regulatory threshold might be taking early voluntary actions in good faith to manage manure and wastewater in accordance with a Comprehensive Nutrient Management Plan (CNMP). In the event that such smaller AFOs have a discharge that would otherwise cause them to be designated as CAFOs, the revised regulations may provide an opportunity for these smaller AFOs to address the cause of the one-time discharge and avoid being designated as CAFOs. 3. Early Exit. EPA is considering a regulatory provision that would explicitly allow CAFOs that fall below the upper regulatory threshold to exit the regulatory program after five years of good performance. The regulations could allow such a smaller CAFO to exit the regulatory program if it demonstrates that it has successfully addressed the conditions that caused it to either be defined or designated as a CAFO, fully implements a site-specific CNMP, and certifies full compliance with permit requirements. 4. Facilities with Less Than 300 AUs. EPA is not considering revising the criteria [40 CFR Part 122.23(c)] for designating operations with less than 300 AUs. The majority of small AFOs are in this size range. 3.3.2 ELG As mentioned above, NPDES permits for CAFOs below the upper regulatory threshold are written by permitting authorities using best professional judgement (BPJ). Thus, each permit is flexible enough to address site specific concerns without imposing unnecessary burden on small entities. The ELG currently applies only to those operations over 1,000 AU. EPA will give serious consideration to potential impacts on small entities as it considers whether to expand the scope of the (less flexible) ELGs to cover small operations. EPA's primary focus is on operations with an imbalance between the amount of manure produced and the amount of available cropland or pasture. EPA believes that smaller operations typically have ample cropland compared with large operations. Thus, those likely to incur the largest per facility cost are those faced with exporting excess manure to off-site locations, which tend to be larger operations. EPA anticipates that, for any regulatory option that would expand the scope of effluent guidelines to include operations with fewer animal units than the current 1,000 AU threshold, affordability could be a concern. Runoff controls (e.g., runoff ponds and lagoons) and manure storage structures (e.g., litter sheds) associated with "zero discharge" requirements are significant contributors to the total cost for beef and dairy operations less than 1,000 AU and dry poultry operations. Swine and wet poultry operations below 1,000 AUs are presumed to have lagoons in place and thus would not incur a cost for runoff controls. EPA is exploring alternative requirements to lessen the financial burden on small entities. EPA is also reviewing monitoring, record keeping, and reporting requirements that may be imposed when revising the effluent guidelines to determine whether nutrient management objectives can be attained with a lesser set of requirements to ease the burden for small entities. 3.3.3 Additional Regulatory Flexibility Alternatives In addition to the regulatory flexibility alternatives identified above, the Panel also requests consideration of the following alternatives: Based on environmental impacts, EPA would consider compliance date extensions for small business hardship cases. Consider a provision whereby no additional regulation will be promulgated for animal feeding operations with less than 1,000 animal units. Consider not requiring a CNMP in a permit unless sufficient resources are available to the permittee for development and implementation of CNMP requirements. 4.0 DEFINITIONS OF A SMALL BUSINESS The Small Business Administration (SBA) defines a "small business" in the livestock sector in terms of an business's annual receipts or gross revenue. Table 4.1 summarizes SBA's "small business" definitions relating to the industries that may be affected by the rulemaking. Table 4.1. SBA Size Definitions for "Small" Livestock and Poultry Operations SIC Code Industry Description SBA Size Standard a/ SIC 0211 Beef Cattle Feedlots (Custom) $1.5 million SIC 0213 Hogs $0.5 million SIC 0241 Dairy Farms $0.5 million SIC 0251 Broiler, Fryer, Roaster $0.5 million Chickens SIC 0252 Chicken Eggs $9.0 million SIC 0253 Turkey and Turkey Eggs $0.5 million a/ SBA Size Standards by SIC industry (13 CFR Part 121). USGPO, 1991 and USGPO, 1996. SBA's size standards constitute the default definition of "small business" for these livestock and poultry categories. For the egg laying sector (SIC 0252), however, EPA is considering alternative small business thresholds for use in analyzing CAFOs under the CWA, as described below. The following describes EPA's approach to equate SBA's size standard with farm size based on the number of animals on-site. For the purposes of conducting its IRFA for this rulemaking, and in the absence of business-level revenue data, EPA has estimated the number of "small businesses" by first equating SBA's annual revenue definition with the number of animals at an operation. The number of small entities is then estimated from USDA information on the distribution of farms by number of animals in each sector (Section 5). Previously EPA had developed a model to estimate the numbers of animals at an operation that correspond with SBA's revenue- based definitions, accounting for a suite of market factors. Input data included the farm price received by producers and average yield, expressed either as animal weight at slaughter or the volume of milk or number of eggs produced annually. For meat animals, input data also included the number of "turnovers" or annual marketing cycles, representing the total number of meat animals produced and sold for slaughter in a full year cycle. To normalize financial differences between independent operators and contract growers, the model assumed that all producers receive the USDA-reported farm price. The resultant small business estimates were based on farm revenue from livestock-related only (i.e., sales of meat animals, cows milk, and whole eggs, etc.). Revenues from other sources, such as income from crops sales, government payments and other farm-related income, were not considered. Based on SER comments, the SBAR Panel recommended that EPA modify its approach. The revised approach uses SBA's annual revenue size standard and USDA-reported farm revenue data-derived on per animal per farm basis-to calculate the average animal inventory at a small business. This approach does not attempt to normalize conditions between independent operators and contract growers. This approach does account for total cash revenue from both livestock and non-livestock revenue. The revised estimates are calculated using SBA's revenue standards as defined at 13 CFR 121.201, with the exception of laying hens. For layers, EPA is considering an alternative definition of "small business" for purposes of conducting its IRFA. EPA believes that an annual revenue of $1.5 million for an operation better reflects the agricultural community's sense of what constitutes a small business and more closely aligns with the small business definitions codified by SBA for other animal operations. Aggregated farm financial data used by EPA are from the USDA's 1997 Agricultural Resources Management Study (ARMS) database. These data were obtained with the assistance of staff at USDA's Economic Research Service (ERS).4 USDA's financial data report average total farm revenue for each sector. USDA's data also provide corresponding summary information that match the reported average revenue to the total number of farms and the total number of animals by sector. From these data, EPA calculated average revenue per head for the beef, dairy, pork, layer, broiler, and turkey sectors. To equate SBA's size standard (in revenues) with farm size based on the number of animals, EPA used these derived revenue per head values to calculate the number of animals, as follows: #Animals = SBA's Small Business Definition ($ per year) Average Total Revenue per head ($/animal) The resultant number of animals is then used as a threshold for identifying a small business. Estimated "small business" thresholds for each sector are shown in Table 4.2. For the purpose of conducting its IRFA for this rulemaking, EPA is evaluating "small business" for these sectors as an operation that house or confine less than: 1,400 fed beef cattle; 200 mature dairy cattle; 1,400 market hogs; 25,000 turkeys; 61,000 layers; or 260,000 broilers. Table 4.2 shows the estimated number of small animal feeding operations based on these size estimates. Table 4.2. Number of Animals On-site at "Small" Livesto ck and Poultry Farms Sector Total Revenue #Animals Estimated Small Annual per (Avg U.S.) Total AFOs Revenue headb/ (c=a/b) Number of as % a/ (b) AFOs Total (a) Fed $1.5 $1,060 1,400 106,930 98% Cattle million c/ Dairy $0.5 $2,573 200 118,130 93% million Hogs $0.5 $363 1,400 117,860 93% million Broiler $0.5 $2 260,000 34,860 >99% s million Layers $9.0 $25 365,000 75,170 c/ >99% million ($9m) 98% $1.5 61,000 million ($1.5m) Turkeys $0.5 $20 25,000 13,720 89% million All NA NA NA 375,740 95% AFOs a/ SBA Size Standar ds by SIC industr y (13 CFR Part 121). USGPO, 1991 and USGPO, 1996. An alterna tive definit ion of $1.5 million in annual revenue s is also analyze d for Chicken Eggs (SIC 0252) . b/ Revenue per head derived from data obtaine d from USDA's Agricul tural Resourc es Managem ent Study (ARMS) databas e for 1997. ARMS financi al data include average total farm cash income by sector and data corresp onding to the total number of farms and total number of animals for the income data's sample set. For each sector, data reflect average U.S. values and are rounded to the nearest dollar. c/ Total shows operati ons with mixed animal types. Beef include veal. Layers include s wet and dry systems . 5.0 SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED REGULATION Section 4 describes how EPA equated SBA's annual revenue definition with the number of animals at an operation. This section discusses EPA's estimates of the number of small entities based on farm size distribution information from USDA. For the purposes of conducting its IRFA, EPA is evaluating "small business" for these sectors as an animal feeding operation that house or confine less than: 1,400 beef cattle; 200 mature dairy; 1,400 marketed swine; 25,000 turkeys; 61,000 layers; and 260,000 broilers. EPA estimates that there are about 376,000 AFOs.5 Based on the animal inventory thresholds shown above, approximately 95 percent of all AFOs are small entities. Not all of these operations, however, would be subject to the revised regulations. EPA's regulations only apply to those AFOs that meet the regulatory definition of a CAFO or those that have been designated as a CAFO by the NPDES permitting authority due to risks posed to water quality and public health, as discussed in Section 2. EPA estimates that about 22,000 small AFOs may be subject to the proposed regulations. This estimate adjusts for operations with more than a single animal type. 5.1 Estimated Number of AFO "Small Businesses" Affected by the Regulations Table 5.1 presents the estimated number of AFOs and the estimated number of AFOs that are "small businesses" under SBA's size definition in each of the three size categories: more than 1,000 AUs; between 300 and 1,000 AUs; and 300 AUs or less. Sources of data for EPA's small business estimates include published data and information from the U.S. Department of Agriculture (USDA), industry, State agriculture extension agencies and the land grant universities. (For more information on how these estimates were derived, see supporting information in Appendix G.) As shown in Table 5.1, there were an estimated 4,370 AFOs with more than 1,000 AUs that meet the "small business" definition. Most of these operations are in the poultry sector. This estimate does not adjust for operations with more than a single animal type and so is likely overstated. These small AFOs would be subject to the revised ELG and NPDES permit requirements. Table 5.1 Total Number of AFOs and Number of "Small" AFOs, 1997 Total "Small" AFOs Sector AFOsa/ (all farm sizes) Total >1,00 300AU- <300AU >1,00 300AU- <300 Total AFOs 0 1,000A 0 1,000A AU AU U AU U Beef: 106,08 2,080 2,000 102,00 400 2,000 102,00 104,40 cattle 0 0 0 0 Beef: 850 10 200 640 10 200 640 850 veal Dairy: 116,88 1,450 5,690 109,74 0 0 109,74 109,74 milk 0 0 0 0 Dairy: 1,250 400 750 100 0 0 100 100 heifers Hogs: FF 64,240 2,420 9,240 52,580 0 6,190 52,580 58,770 Hogs: GF 53,620 1,670 3,250 48,700 0 2,170 48,700 50,870 Broilers 34,860 3,940 10,200 20,720 3,900 10,200 20,720 34,820 Layers: 3,110 360 800 1,950 60 800 1,950 2,810 wet Layers: 72,060 360 1,330 70,370 0 670 70,370 71,040 dry Turkeys 13,720 370 1,730 11,620 0 530 11,620 12,150 Sum Total 466,67 13,06 35,190 418,42 4,370 22,760 418,42 445,55 0 0 0 0 0 Total 375,74 12,85 28,150 334,74 NAb/ NAb/ 334,74 356,00 AFOs 0 0 0 0 0 a/"Total AFOs" eliminate s double counting of operation s with mixed animal types. Based on survey level Census data, operation s with mixed animal types account for roughly 25 percent of total AFOs. FF= farrow- finish (includes breeder and nursery pigs); GF=grower- finish. APHIS/NAH MS data indicate approxima tely 40 percent of swine farms are grow- finish; the other 60 percent are facilitie s with farrowing . "Layers: wet" are defined at 1,000AU for operation s with 30,000 birds since there are no operation s with continuou s watering systems as defined under the existing regulatio ns. "Layers: dry" are defined at 1,000AU for operation s with 100,000 birds. Source: Values presented in the table are EPA estimates , derived from published USDA data, including 1997 Census of Agricultu re; Cattle: Final Estimates 1994-1998 ; Milking Cows and Productio n: Final Estimates 1993-1997 ; Chickens and Eggs: Final Estimates 1994-1997 ; and Swine `95 reports. Other sources include industry- supplied data and informati on, and also informati on from EPA site visits to AFOs. b/ Not Applicabl e Among AFOs with between 300 and 1,000 AUs, there are an estimated 22,760 small entities. Note, however, that this estimate double counts those operations with more than a single animal type. The majority of small AFOs have 300 AUs or less. All of these are small entities. EPA expects that roughly 10 AFOs with 300 AUs or less will be designated as CAFOs and thus may be affected by the revised regulations. In the past 20 years, only one AFO has been designated as a CAFO. EPA expects that designation may be limited to small dairy and hog confinement operations that are located in more traditional farming regions near or in impaired watersheds. Such operations are likely to be significant contributors to water quality impairment. In summary, EPA estimates that roughly 22,600 small entities6 may be affected by the revised regulations (after eliminating double counting of operations with mixed animal types). Not all of these operations would incur costs under the revised regulation since some of these operations are already in compliance with existing federal and state discharge and permitting requirements. 5.2 Number of CAFOs (300-1,000 AU) by NPDES Regulatory Option The previous section identified the number of small (300 AU or less), medium (between 300-1,000 AU), and large (greater than1,000 AU) operations that are defined as small entities and may be impacted by the proposed CAFO permitting regulation (Table 5.1). This section provides estimates of the number of AFOs with between 300 and 1,000 AUs that may be covered under the various NPDES regulatory options. Table 5.2 provides estimates of the number of these operations by sector in the 300-1,000 AU size range that may be covered under various permitting options. Seven criteria were evaluated: any conveyance from feedlot, improper land application, insufficient storage, operations in watersheds with waters impaired by pathogens or nutrients, operations with greater than 2 AUs per acre, operations within 100 feet of U.S. waters, operations located in areas where nutrients (nitrogen and phosphorus) from manure exceed the nutrient requirements of crops and pasture. The method used to derive these estimates is discussed in Appendi x G. Table 5.2. Number of Small Entitie s (301-1, 000 AU) that may require an NPDES Permit Sector Any Improp Insuffi Impair >2 AU Within Located conveyanc er cient ed per 100' of in a e from land Storage waters acre1 a manure feedlot applic 1 hed1 waterwa shed1 (incl ation y1 discharge s) Beef 320 820 2000 1680 320 400 410 Veal 3 8 20 16 4 4 4 Dairy 0 0 0 0 0 0 0 Hogs 905 1,152 1646 1646 3622 1646 576 Broiler 0 4,858 1056 1900 20064 1478 2428 s Layers- 0 368 80 976 816 112 184 wet Layers- 0 304 118 818 1042 92 152 dry Turkeys 0 363 80 584 1200 110 182 Nationa 1,229 7,873 5000 7622 27068 3844 3936 l Note: Estimates shown above have not been updated to reflect more recent total farm count estimates. 1 EPA estimates that 50% of operations in this category could still demonstrate no potential to discharge and thus would not need a permit under some regulatory options. 6.0 SUMMARY OF SMALL BUSINESS OUTREACH 6.1 EPA Outreach Prior to Convening the Panel To facilitate regulation development, EPA has actively involved interested parties in the development of the proposed rule. As part of these efforts, EPA has provided many opportunities for input in this rulemaking process, including eleven public outreach meetings on the Draft Unified AFO Strategy and a stakeholder conference call, including small entities. In addition, EPA meets with various members of the stakeholder community on a continuing basis through meeting requests and invitations when a meetings, conferences, and site visits. These meetings with environmental organizations, producer groups, and producers representing various agricultural sectors allows EPA the opportunity to interact with and receive input from stakeholders about the Unified Strategy and the NPDES and effluent limitations regulatory revisions. While most of these outreach activities have not targeted small entities explicitly, many have included small business participation. 6.1.1 Joint USDA/EPA Unified AFO Strategy Listening Sessions In the fall of 1998, EPA and USDA announced eleven public outreach meetings designed to allow public comment on the Draft Unified National AFO Strategy. The meetings were held in the following cities: Tulsa, Oklahoma; Harrisburg, Pennsylvania; Ontario, California; Madison, Wisconsin; Seattle, Washington; Des Moines, Iowa; Chattanooga, Tennessee; Indianapolis, Indiana; Fort Worth, Texas; Denver, Colorado; and Annapolis, Maryland. Each meeting included a pre-meeting between state and regional officials, EPA, and USDA representatives to discuss the draft strategy and the issues posed by CAFOs in general. All participants in the public sessions, including numerous small entities, were given the opportunity to sign up and provide their comments to a panel consisting of EPA, USDA, and local representatives. Many of the commenters made points or raised issues germane to small entities. A transcript of these comments was used by EPA and USDA in developing the final Unified National AFO Strategy. These comments and concerns are also being considered by EPA in the development of the revised NPDES CAFO regulations. The transcripts of these meetings are available on the OWM Web Site (www.epa.gov/owm/afo.htm). 6.1.2 Advisory Committee Meeting EPA was invited to meet with the Local Government Advisory Committee, Small Community Advisory Subcommittee on September 8, 1999. At this Federal Advisory Committee Act meeting, EPA described the CAFO regulatory revisions being considered, and responded to questions concerning the effect of EPA's regulatory actions on small communities. While the CAFO regulations do not directly affect small communities, AFOs do have an effect on local economies and on the local environment. Thus, how they are regulated (or not regulated) has implications for local governments. EPA is keeping local government concerns in mind as it proceeds with the CAFO regulatory revisions and general public outreach activities. 6.1.3 Site Visits EPA conducted over 50 site visits to collect information about swine and poultry animal feeding operations and waste management practices. EPA visited six broiler, 12 layer, and six turkey facilities in Georgia, Arkansas, North Carolina, Virginia, West Virginia, Maryland, Delaware, Pennsylvania, Ohio, Indiana, and Wisconsin. EPA visited approximately 30 swine facilities in North Carolina, Pennsylvania, Ohio, Iowa, Minnesota, Texas, Oklahoma, and Utah. These facilities were chosen with the assistance of the National Pork Producers Council, United Egg Producers, United Egg Association, National Turkey Federation, National Resources Defense Council, the Clean Water Network, university experts, State Co-op and extension, and state and EPA regional representatives. During these site visits, EPA also visited locations demonstrating centralized treatment or new and innovative technologies. EPA has also attended USDA-sponsored farm tours, as well as tours offered at industry, academic, and government conferences. In addition, EPA visited approximately 60 sites to collect information about beef and dairy animal feeding operations and waste management practices. EPA visited approximately 30 beef feedlots in Texas, Oklahoma, Kansas, Colorado, California, Indiana, Nebraska, and Iowa, and three veal operations in Indiana. The capacities of the beef feedlots varied from 500 to 120,000 head. EPA also visited approximately 25 dairies in Pennsylvania, Florida, California, Wisconsin, and Colorado, with the total mature dairy cattle at the operations ranging from 40 to 4,000 cows. EPA chose these facilities with the assistance of the National Cattlemen's Beef Association, National Milk Producers Federation, Western United Dairymen, and state and EPA regional representatives. 6.1.4 Industry Associations The National Pork Producers Council (NPPC), United Egg Producers and the United Egg Association (UEP/UEA), National Turkey Federation (NTF), and the National Chicken Council are trade associations that represent the swine and poultry industries. NPPC is a marketing organization and trade association made up of 44 affiliated state pork producer associations. The NPPC's purpose is to increase the quality, production, distribution, and sales of pork and pork products. The NPPC also organizes the research, advertising, and educational programs that are funded by the National Legislative Pork Checkoff program. The UEP/UEA undertakes programs in the following areas: price discovery; production and marketing information; unified industry leadership; USDA relationships; Washington presence, and; promotional efforts. The NTF is the national advocate for all segments of the turkey industry, providing services and conducting activities which increase demand for its members' products. The National Chicken Council represents the vertically integrated companies which produce and process about 95 percent of the chicken market in the U.S. They provide consumer education, public relations, public affairs, and are working to seek a positive regulatory, legislative and economic environment for the broiler industry. All of these organizations have actively participated in developing revisions to the swine and poultry effluent guidelines by assisting in site visit selection, submitting supplemental data, reviewing EPA's draft descriptions of the industry and waste management practices, and participating in or hosting industry meetings with EPA. For example, the NPPC has provided its biennial report Pork Facts that summarizes productivity, production, and economic information. Industry also invited EPA to participate in the environmental frameworks developed by the NPPC and the National Chicken Council. The National Cattlemen's Beef Association (NCBA) and the National Milk Producers Federation (NMPF) are two trade associations that represent the beef and dairy industries. NCBA is a marketing organization and trade association for cattle farmers and ranchers. NMPF deals with milk quality and standards, animal health and food safety issues, dairy product labeling and standards, and legislation affecting the dairy industry. Both organizations have actively participated in developing the beef and dairy effluent guideline by assisting in site visit selection, submitting supplemental data, reviewing EPA's draft documents presenting descriptions of the industry and waste management practices, and participating in/hosting industry meetings with EPA. Other beef and dairy organizations have also provided assistance to EPA. For example, the Western United Dairymen, a dairy organization in California, organized and participated in site visits and a conference call meeting with EPA. In addition, EPA contacted the American Veal Association to obtain further information on veal operations. 6.1.5 CAFO Regulation Workgroup Other outreach includes collaboration with USDA and States agencies. EPA established a workgroup that includes representatives from USDA and seven states, as well as EPA Regions and headquarters' offices. The workgroup was established to advise EPA as it develops its regulatory options. 6.1.6 Small Business Conference Call EPA distributed background information and materials to small business representatives on two separate dates - September 3, 1999 and September 9, 1999. On September 17, 1999, EPA held a conference call from Washington, D.C. to provide a pre-panel forum for small business representatives to provide input on key issues relating to the proposed regulatory changes to the "CAFO Rule." Twenty-seven small business representatives from the beef, dairy, swine, poultry, and exotic animal livestock industries participated in the call. A summary of the conference call is included in Appendix B. Following the conference call, at EPA request, 19 of the 41 small business advisors and national organizations invited to participate provided written comments. Written comments are included in Appendix C. The complete set of these comments were also provided to members of the Panel. 6.2 Panel Outreach The SBAR Panel for the "CAFO Rule" was convened on December 16, 1999. On December 28, 1999, the Panel distributed an outreach package to the final group of SERs, which included many of the participants in EPA's September 17, 1999 outreach conference call. The package included: a SER outreach document, which explained the definition of a small business and those entities most likely to be impacted by the rule; an executive summary of EPA's cost methodology; regulatory flexibility alternatives; a cost methodology overview for the swine, poultry, beef, and dairy sectors; a cost annualization approach; and, a list of questions for SERs. Additional modeling information was also sent to SERs on January 7, 2000 and January 10, 2000. A complete list of these documents can be found in Appendix D. The SERs were asked to review the information package and provide verbal comments to the Panel during a January 5, 2000 conference call, which included participation by 22 SERs. During this conference call, SERs were also encouraged to submit written comments. SERs were given an additional opportunity to make verbal comments during a second conference call which was held on January 11, 2000 and included participation by 20 SERs. During both conference calls, SERs were asked to comment on the costs and viability of the proposed alternatives under consideration by EPA. A summary of the both conference calls can be found in Appendix E. Following the calls, the Panel received 20 sets of written comments from 14 SERs. The complete set of these comments is included in Appendix F, and an extensive summary of them is provided in Section 8 of this Report. 7.0 SMALL ENTITY REPRESENTATIVES EPA, in consultation with SBA, invited the following thirty- four SERs to participate in its SBREFA consultation process. Twenty-two SERs participated in at least one of the conference calls sponsored by the Panel. Fifteen SERs provided written comments to the Panel. The complete list of SERs is provided below. SER Region 1/5/00 1/11/0 Writte Conf. 0 n Call Conf. Commen Call ts MULTI-SECTOR REPRESENTATIVES Nancy Danielson National Government Relations Representative National Farmers' Union Washington, D.C. Tom VanArsdall National Vice President, Environmental Policy National Council of Farmers' Cooperatives Washington, D.C. Katherine Ozer National Executive Director National Family Farmers Coalition Washington, D.C. Don Parrish National Environmental Policy Specialist American Farm Bureau Federation Park Ridge, IL BEEF John Pemberton National National Cattlemen's Beef Association Washington, D.C. Terry Handke Central Muscopah, KS (Kansas) Irvin Carlson Central Browning, MT (Montana) Reg Clause Midwest Jefferson, IA (Iowa) Sue Jarrett Central Wray, CO (Colorado) Galen Frenzen Midwest Fullerton, NE (Nebraska) DAIRY Carissa Itle National National Milk Producers Federation Arlington, VA Scott Mason Mid- North Stratford, NH Atlantic (New Hampshire) Bruce Roos Pacific Cloverdale, Oregon (Oregon) Allen Voortman Pacific Granger, WA (Washingto n) Norman Jordan South Silver City, NC (North Carolina) SWINE Deb Atwood National National Pork Producers Council Washington, DC Paul Willis Midwest (Iowa) Niman Ranch Thornton, IA Chris Petersen Midwest Clear Lake, IA (Iowa) Donna Reifschneider Midwest Smithton, IL (Illinois) Jay Foushee South (North Foushee Farms Carolina) Roxboro, NC POULTRY Judy Morrison National National Contract Poultry Growers Association Minden, LA Broilers V.O. Campbell South Collins, MS (Mississip pi) James Anderson South Hindsville, AK (Arkansas) Gerald Johnson South Perryville, Arkansas (Arkansas) Layers Randy Johnson South Jefferson, GA (Georgia) George Ulmer South Orangeburg, SC (South Carolina) Earl Wetta Midwest Garden Plain, KS (Kansas) Dennis Bowden Mid- East Waldosboro, ME Atlantic (Maine) Turkeys Marion Atkinson Midwest Columbus, KS (Kansas) Tony Helfter Midwest Osage, IA (Iowa) Ken Mitchell Pacific Elk Grove, CA (Californi a) Craig Miller Mid- Harrisonburg, VA Atlantic (Virginia) OTHER SECTORS/EXOTIC ANIMALS BISON: Midwest Del Hensel (Colorado) Commerce City, CO SHEEP: Midwest Pat O'Toole (Wyoming) Savery, WY 8.0 SUMMARY OF COMMENTS FROM SERS In addition to the comments made by the SERs during the January 5, 2000 and January 11, 2000 conference calls, the Panel received 20 written comments from 15 SERs. This Section summarizes the main issues raised by the SERs in their oral and written comments. Under each main issue, the SERs' comments have been organized by the following sectors: multi-sector representatives; swine; beef, dairy, and exotic animals; and, poultry. Table 8.1 provides a record of the written comments (no written comments were provided by SERs in the exotic animal category). The complete written comments are provided in Appendix F and the minutes of the conference calls are in Appendix E. Table 8.1 List of SER Written Comments Name Organization/I Date(s) Number of Total ndividual Received Pages Multi-Sector Representativ es: Don Parrish American Farm 1/24/00 17 Bureau (1st (3 comments Federation letter) letters were 1/27/00 received from (2nd Mr. Parrish) letter) 1/28/00 (3rd letter) Swine: Chris Individual 1/20/00 5 Petersen Deb Atwood National Pork 1/24/00 11 Producers Council Jay Foushee Individual 1/24/00 11 Donna Individual 1/24/00 11 Reifshneider Beef: Terry Handke Individual 1/19/00 2 Galen Frenzen Individual 1/20/00 2 (Attachments included with comment letter.) Sue Jarrett Individual 1/21/00 4 (Letter) (1 comment 1/11/00 letter, plus (References references ) were received from Ms. Jarrett) John National 1/24/00 36 Pemberton Cattlemen's (Attachments Beef included with Association comment letter.) Reg Clause Individual 2/10/00 4 Dairy: Scott Mason Individual 1/21/00 2 Carissa Itle National Milk 1/24/00 6 Producers (Letter) (1comment Federation 2/4/00 letter, plus (References references ) were received from Ms. Itle) Bruce Roos Individual 1/24/00 4 (Attachments included with comment letter.) Poultry (Broilers): V.O. Campbell Individual 1/18/00 4 (1st (Attachments (2 comments Letter) included with letters were 2/1/00 (2nd comment letter.) received from Letter) Mr. Campbell) Poultry (Layers): Randy Johnson Individual 1/18/00 1 (Attachments included with comment letter.) 8.1 Number and Type of Small Entities Affected Beef, Dairy, and Exotic Animals Two SERs provided written comments on this issue. Mr. Pemberton questioned the analysis presented in Table 4-2 (found in the third SER Outreach Mailing, dated December 28, 1999) that indicates no beef operations above 1,000 AUs would be considered small entities, and requested to review the data used. This SER stated that a feedlot with 1,000 AUs will gross approximately $700,000-800,000 per turn of cattle, and will average two turns per year. However, this SER did not agree that the average turnover rate of cattle should always be used in estimating the number of small entities, because it does not account for variations in corn prices, types of cattle feeding, location to corn, calve market, occupation relative to capacity, region, and the placement weight in feedlot. This SER expressed support for a methodology that is based instead on supplemental income (not generated from selling cattle). For example, sometimes the feedlot generates the majority of its revenue by selling feed to customer cattle. Ms. Itle stated that 96 percent of the Nation's dairy farms have herds smaller than 300 AUs (200 mature dairy cows). In her written comments she noted that the analysis of the small business impacts of the proposed CAFO rule focuses on those operations that have more than 300 AUs and meet the SBA small business definition (receiving less than $500,000 in annual gross revenue). She further stated that in the case of dairy, these 2 categories are practically mutually exclusive and a modern producer with 300 AUs is grossing more than this amount. Ms. Itle noted that inclusion of immature animals in determining the number of AUs could potentially mean producers who have approximately 125 mature cows will become regulated as CAFOs. Ms. Itle also urged EPA to refine its cost analysis and consider the results accordingly. Mr. Clause said that 1,000 AUs is really not a large business in terms of the economics; however, it is small enough in terms of what EPA wants to accomplish. Another beef SER agreed. Swine Ms. Atwood, Mr. Foushee, and Ms. Reifshneider also commented on the use of the average turnover rate in developing small business estimates in the swine sector. They indicated that EPA used turnover rates and animal values that do not coincide with the actual pork production turnover rate for the various production operations. All three SERs agreed that the swine industry is unique because each phase of production produces an animal at different turnover rates and value. They urged EPA to account for this in their models. One SER indicated her need for a better, clearer definition of a small business. This SER further remarked that the definition of a small business should account for differences between contract growers and independents. Poultry In terms of revenue calculations, one poultry SER commented that while he only makes $0.07 per dozen eggs, EPA used $0.65 per dozen in its calculations. 8.2 Potential Reporting, Record Keeping, and Compliance Requirements 8.2.1 General Requirements Multi-Sector Representatives Mr. Parrish provided a written comment on this issue. He stated that EPA may only include monitoring, record keeping, and reporting requirements in NPDES permits for CAFOs to the extent that such requirements are reasonable in relation to controlling the discharge of pollutants from discrete "end-of-pipe" outlets. However, Mr. Parrish also stated that he thinks EPA is not authorized to require comprehensive nutrient management plans (CNMPs) and, therefore, he recommended not including any of the associated monitoring, record keeping, and reporting requirements in NPDES permits. Swine One SER expressed concern about the CAFO owner/operator (not any outside party) being required to monitor for discharges. This SER also suggested that the CAFO owner/operator needs to record discharges. Beef, Dairy, and Exotic Animals In his written comment, Mr. Frenzen recommended not requiring unnecessary, time consuming, EPA-designed paperwork with CNMPs. (He felt that nutrient management should be left to the farmer, who is better positioned to evaluate his operation as it affects water quality.) As a SER and a neighbor of a large swine CAFO, Ms. Jarrett stated that she thinks a permit system based on self-monitoring does not work and that there is a need for EPA and the States to do more inspections and enforcement. She also stated that she thinks EPA needs to include in the rule monitoring requirements on swine operations with 1,000 AUs or more. Ms. Jarrett also submitted written comments on this issue. This SER stated that the permitting system should not be a self-implementing, self-monitoring, complaint driven system. She indicated that it should not be an operator's decision to evaluate or make a self-determination as to whether their facility is a zero discharge operation. (However, she also indicated that she did not support expanding the scope of the permitting system to include facilities with less than 1,000 AUs, because it would create an undue burden on such operations.) Poultry In his written comment, Mr. Campbell indicated that record keeping should be kept to a minimum. He stated that many farmers will be unable to comply if for every field, regardless of size, they must identify and keep accurate records of which nutrients were applied and the amount, when and how they were applied and who applied them. He also indicated that soil tests of every field were also infeasible. 8.2.2 Offsite Transfer of Manure Swine Ms. Atwood, Mr. Foushee, and Ms. Reifshneider stated in written comments their belief that EPA lacks the legal authority to require offsite controls of CAFO-generated manure. Restrictions such as requiring a CAFO operator to get a signed certification of CNMP compliance from those who would buy or take as a gift CAFO-generated manure would also serve only to threaten the market for CAFO-generated manure and drive farmers toward the use of commercial fertilizer instead of manure. However, all three of these SERs supported requiring the CAFO to maintain records of off-site manure transfers, including the name and address of the hauler, the date of removal, and volume of removed manure and wastewater. These SERs also agreed that, when the removed manure and wastewater are to be land applied, the operation should make available to the hauler the most recent manure nutrient analysis. Beef, Dairy, and Exotic Animals Two written SER comments were received on this issue. Ms. Itle, a dairy SER, indicated that keeping records of off- site transfer of waste must not be burdensome because small producers who face agronomic rates may need an outlet for the extra manure and burdensome requirements would discourage third parties from using that extra manure. Mr. Pemberton noted that EPA is not considering an option to require manure recipients to sign a document of compliance with a CNMP.7 The National Cattlemen's Beef Association (NCBA) strongly supports this decision. This SER would be concerned with such requirements because offsite land application is not under the control of the operator or the jurisdiction of an AFO's permit and thus should not be included in the permit or the CNMP. EPA's attempt to place liability upon the CAFO operator for third party actions would clearly be outside the jurisdiction of EPA and should not be considered. (Mr. Pemberton thinks that any attempts to strictly link the offsite land application practices of third parties to beef feedlot operators' NPDES permits could destroy the market for dry manure.) 8.2.3 Manure and Soil Testing Requirements Beef, Dairy, and Exotic Animals Ms. Jarrett recommended that, if the establishment of the discharge standard (for operations under 1,000 AUs) and control of land application is left to the discretion of local permitting authorities and its best professional judgement, EPA must set minimum requirements applicable to every permit, including waste and soil analysis. Mr. Handke stated that he thinks most farmers test soil for nutrients. (He noted this in written comments in opposition to a strong enforcement program on manure application.) Swine Ms. Atwood, Mr. Foushee, and Ms. Reifshneider supported requiring permitted swine operations to conduct soil tests and manure nutrient tests every two years. 8.3 Related Rules 8.3.1 Total Maximum Daily Loads Several SERs provided comments on Total Maximum Daily Loads (TMDL) regulation as it relates to CAFO regulations. These comments are summarized below. Multi-Sector Representatives Mr. Parrish suggested that EPA consider that CAFOs in an impaired watershed whose technology-based limits are not sufficient to meet water quality-based standards might incur greater costs, and possibly have to shut down. Beef, Dairy, and Exotic Animals Ms. Itle commented that dairies with less than 300 AUs may be impacted by potential regulatory changes to CAFO rules as well, due to discharge situations or designation as CAFOs as a result of location in a TMDL impaired watershed. This SER echoed this comment in her written comments. In his written comments, Mr. Pemberton included NCBA's comments on EPA's Draft Manual and NPDES Permit for CAFOs where they noted that EPA stated it would coordinate Phase 1 of NPDES permitting with the TMDL program. NCBA questioned how this was possible, considering that NPDES permits do not allow CAFOs (with 1,000 AUs or more) to add any loads to the waters of the U.S. and thus could not be expected to further reduce its loadings as required under the TMDL program. For this reason, NCBA recommended that CAFO NPDES permits should be excluded form the TMDL requirements due to the zero discharge nature of the permit. Poultry Mr. Campbell stated that most 303(d) listed watersheds were listed by the State of Mississippi without supporting scientific evidence of water impairment. He provided reports, which contradict information contained in EPA's TMDL database. One of these reports indicates that water quality problems of the 1970s are linked more to municipal waste and unenforced industrial standards than to agriculture and that remarkable improvement in the quality of their waters over the past 30 years should be recognized. (This SER thus recommended that EPA not designate AFOs as CAFOs because they are located in a 303(d) listed watershed.) 8.3.2 Related State Programs Swine One SER suggested that EPA consider the various State CAFO requirements when considering revising CAFO regulations. Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided written comments about swine CAFO operators, who do not now have NPDES permits, but have adequate management measures to prevent water pollution. These SERs suggested that States have implemented regulations over the last ten years equal to or exceeding NPDES permits and strongly encouraged EPA to consider and analyze these programs accordingly. Beef, Dairy, and Exotic Animals Many beef SERs also suggested that EPA consider state programs when revising CAFO regulations. Several of them provided examples of State programs that implemented regulations that may equal or exceed requirements of the current NPDES program. Mr. Roos noted that Oregon's State Department of Agriculture has a CAFO program that seems very similar to the NPDES program, except that all confined animal feeders are required to have a permit, regardless of size. Mr. Clause noted that Iowa already has substantial state environmental regulations in place, including requirements for certified nutrient management plans and formal certification of manure applicators. Another beef SER commented that the majority of farms are already under some kind of state CAFO nutrient management regulation. Several SERs also commented that States and local agencies are better positioned than the federal government to regulate CAFOs. Mr. Handke stated that state and local agencies can better serve the environment than EPA or national programs, and new or existing regulations should be considered on a regional basis. Mr. Clause had a similar written comment, except he stated that states are is better positioned than local or federal agencies to address concerns and issues regarding CAFOs. Poultry Mr. Brock noted that the state of Alabama recently completed a broad-based stakeholder process to revise its regulations governing the poultry industry. 8.4 Regulatory Alternatives 8.4.1 Revising the Thresholds Multi-Sector Representatives Mr. Parrish provided a written comment in opposition to lowering the NPDES threshold. He stated that EPA's regulation of smaller operations should be based on factors that indicate such operations have a similar polluting potential to larger operations and be narrowly tailored to address direct discharges to waters of the US. Mr. Parrish was not opposed to lowering the ELG threshold, provided that the standards applicable to smaller operations (under 1,000 AUs) are reasonable and affordable to these operations, including alternatives such as nonzero discharge limits and/or lesser design standards up to a 20-year, 24-hour storm. Mr. Parrish was concerned that local permit writers may look to guidelines designed for larger operations for guidance in determining best professional judgement (BPJ), even though these guidelines may be overly stringent for smaller operations. To the extent it would avoid this situation and assuming all AFOs in the intermediate size category (300-1,000 AUs) are going to be included in the NPDES program, such tiered requirements are preferable to the current BPJ approach. Swine Mr. Petersen provided written comments objecting to lowering the NPDES threshold, because that would result in a disproportionate economic effect on small swine producers. However, this SER noted that in his area approximately 70 percent of new facilities have been built individually, but adjacent to each other, in order to avoid the size threshold and thus an automatic need for a permit. Beef, Dairy, and Exotic Animals None of the SERs that commented in outreach meetings supported lowering the NPDES or ELG threshold below 1,000 AUs. (However, two of them supported permitting all operations with greater than 1,000 AUs.) Six SERs provided written comments on this issue - all in opposition to lowering the NPDES threshold. Mr. Handke, Frenzen, and Clause recommended against lowering the NPDES threshold because it would place undue burden on facilities with fewer than 1,000 AUs. These SERs also expressed concerns with lowering the ELG threshold. Mr. Pemberton opposed lowering the NPDES threshold, because this size range of operations (300-1,000 AUs) has not been proven by EPA to cause any immediate environmental concern and also because lowering it would not go any farther to accomplish EPA's stated goals. He noted that EPA already has jurisdiction to permit any size animal feeding operation that falls into the many environmental concern areas that are listed in the current regulations and suggested that EPA does not need to change regulations but merely implement the current regulations. (Mr. Pemberton also expressed concern that EPA is shifting its regulatory focus from larger CAFOs (1,000 AUs or more), as premised under the USDA/EPA Unified Strategy for AFOs, to smaller CAFOs (300 -1,000 AUs), and that EPA is failing to separate proposed changes to NPDES and ELG and, in documents and discussions, is confusing lowering the threshold for NPDES and ELG.) However, Mr. Pemberton did not necessarily oppose lowering the ELG threshold. He noted that NCBA is very interested in exploring with EPA alternative requirements, to lessen the financial burden on small entities, and requested any information that EPA has on the alternatives under consideration. Ms. Jarrett could not support either lowering the NPDES or ELG threshold at this time, because operations with more than 1,000 AUs pose potential and immediate danger far exceeding that of smaller operations and have not yet been successfully addressed. Nor should resources be diverted from them. Ms. Itle also expressed opposition to lowering the NPDES and ELG threshold. This SER stated that it is appropriate to permit facilities smaller than 1,000 AUs only when intentional, repeated direct discharges are occurring. This SER objected to lowering the ELG threshold because zero discharge for operations less than 1,000 AUs could have significant economic impacts on small producers, especially considering that 68 percent of respondents to the 1996 National Animal Health Monitoring System's Dairy '96 study had no storage tank or lagoon in place. [The she also urged EPA to consider as an alternative to lagoons, the use of BMPs such as filter strips and buffers to help control runoff from smaller facilities in place of costly containment structures (see Section 8.4.13)]. Poultry One SER remarked that he does not want the threshold to be lowered for the NPDES threshold because this would include just about every operation in his area. He also wondered why the threshold could not be raised. He noted that Alabama raised its broiler threshold to 125,000. One written poultry SER comment was received on this issue. Mr. Campbell recommended raising the threshold to 150,000 birds at which broilers would be considered CAFOs, since many farms have that capacity. This number reflects the minimum capacity required to support the average farm family. 8.4.2 Revising Criteria for Defining or Designating a CAFO with 300-1,000 AUs Multi-Sector Representatives Mr. Parrish recommended in his written comment that EPA not change the criteria for defining a CAFO, located at 40 C.F.R., Part 122, Appendix B. Mr. Parrish is concerned with EPA's consideration of options to expand the definition of a CAFO to include runoff from agricultural fields where manure from CAFOs has been applied. Mr. Parrish stated that runoff from land application and any other activity in which a CAFO is not collecting and concentrating waste for discharge through a discernible, confined and discrete conveyance is a nonpoint source and thus properly not within the scope of the NPDES program. However, Mr. Parrish did not necessarily oppose alternatives in which criteria for defining CAFOs in the 300-1,000 AU category are modified. If EPA can devise an approach where a facility can know and/or demonstrate it does not meet the primary criteria, relating to past discharges of pollutants, an alternative that includes secondary criteria may not be overly inclusive. It would depend on the breadth of interpretation of "discharge." It is the American Farm Bureau Federation's (AFBA) position that a CAFO does not become a permittable CAFO without an "end-of-pipe" release or "discharge." Beef, Dairy, and Exotic Animals Mr. Voortman preferred that EPA consider permitting operations based on number of animals relative to acres rather than upon number of AUs. This SER stated that this approach would provide a more accurate indicator of water pollution. Mr. Pemberton suggested that EPA not define "man-made conveyances" to include any device in which human action was involved in its creation or maintenance, even if natural materials were used to form the conveyance. He suggested that defining man-made conveyances to include man-made channels or ditches that were not created specifically to carry animal waste but nonetheless do so during storm events would define AFOs as CAFOs that use buffer strips, riparian zones, field tile lines and other practices and thus discourage the voluntary use of such technologies.8 Two written comments were received on this issue. Ms. Itle commented that it is inappropriate to establish numeric AUs per acre in federal regulations because this limit does not take into account the manure characteristics of different animals, varying crop yields, varying soils, or off-site manure transfer. It also does not account for the potential future development of new manure management technologies (and might discourage innovation). Ms. Itle also recommended against changing the criteria to include immature animals in the dairy sector, because this would redefine many AFOs into higher size categories, even though young stock are often not raised in confinement situations or in a manner that contributes significantly to an operation's potential to discharge. Also, she stated that the number of immature dairy cows at a given operation varies significantly relative to mature milking cows and, therefore, would make size for purposes of NPDES permitting more difficult to determine. She further stated that the percentage of designated operations will increase as a result of heightened regulatory focus on CAFOs. Mr. Pemberton also provided written comment in opposition to alternatives in which criteria were modified because, under current regulations, the permitting authority can already designate AFOs with between 300-1,000 AUs as CAFOs, for failure to meet the criteria as modified, with one exception - i.e., the criteria related to land application. And Mr. Pemberton recommended against including on-site land application in any determination of which AFOs are CAFOs (by definition or otherwise) without properly accounting for the agricultural storm water exemption from the definition of a point source (e.g., issuing a permit because an AFO does not land apply in accordance with a CNMP). Mr. Pemberton referred the Panel to comments, appended to his own, in which NCBA also opposed expanding the scope of the NPDES program to include off-site land application, in any form, because it is geographically outside the definition of an AFO (only an AFO can be a CAFO). NCBA also stated its belief that simply being located in an impaired watershed is not justification for an AFO to be designated as a CAFO. Mr. Pemberton also requested that EPA clarify if the two animal units per acre criterion would include grazing operations, since they by definition are not considered as animal feeding operations, and requested that EPA more clearly differentiate between on-site and off-site land applications in discussions and documents. Swine Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided written comments in opposition to revising the definition of a CAFO at 40 CFR 122, Appendix B to restrict eligibility for the 25- year, 24-hour storm permit exemption to facilities that prove they have not or will not discharge. Poultry One written poultry SER comment was received on this issue. Mr. Campbell stated that 303(d) listed watersheds should not be used as criteria for designating CAFOs. He suspects that in Mississippi, and perhaps elsewhere, scientific evidence of impairment was not properly considered during the listing of waters. He contends that storage capacity should not be a factor in determining what is a CAFO, at least until affected operations have time to build adequate storage with the assistance of cost-share and cooperation from federal and State agencies. 8.4.3 Certification for AFOs with between 300-1,000 AUs Multi-Sector Representatives Mr. Parrish stated that the "check a box" approach to self- certification is not feasible because it would create a legal liability for producers in that it would be impossible to certify that an operation posed no threat to water quality. Every operation would be required to apply for a permit and assume the burden of proof that they are not doing something wrong whereas, under current regulations, the burden lies with the permitting authority to identify wrongdoing before issuing permits. However, if EPA includes land application in the determination of a CAFO, Mr. Parrish could support an approach that would allow any AFO that can certify (by soil testing or other monitoring methodology) that nutrient levels in its soils are not excessive to avoid a permit. Beef, Dairy, and Exotic Animals Mr. Pemberton also opposed checkbox certification because it would add confusion by adding legally significant but vague terms ("certify" and "pose a risk to water quality") to a list of terms already in need of clarification as EPA interprets them (e.g., "discharge"). He added that the major flaw with such an approach is that it shifts the burden of proof of whether a permit is required to the citizen. The SER questioned EPA's authority under the CWA to place the burden on the citizen to prove to the government that an event did not happen. The SER stated that it is NCBA's understanding that the government has the obligation to enforce the regulations and has the burden of proving all violations of the CWA. This SER also did not support an alternative where a producer is unable to prove that a discharge did not occur and thus is assumed to have violated the CWA and require a permit, without any evidence offered by the government. Ms. Itle noted that an alternative based on a checkbox approach would change the burden of proof for affected facilities. It would change the assumption from facilities who are not discharging unless proven otherwise by the permitting authority to facilities who are discharging unless they certify otherwise. This SER stated that facilities under 1,000 AUs should be permitted only when intentional, repeated direct discharges are occurring. She also remarked that the process CAFOs with 300-1,000 AUs would use to certify that they do not pose a threat to water quality or public health is unclear. Ms. Itle also expressed concern with the potential legal ramifications to producers of certification approach. Swine Ms. Atwood, Mr. Foushee, and Ms. Reifshneider indicated that it is improper for EPA to instruct states to require facilities that believe they have not or will not discharge to: 1) apply for a permit, and 2) submit technical documentation of "no discharge" with the permit application. However, these SERs noted that National Pork Producer Council's policy is that all pork operations should be required to have permits. 8.4.4 Immature Animals Multi-Sector Representatives Mr. Parrish provided a written comment in opposition to considering immature animals in determining the total number of animals at AFOs. Mr. Parrish stated that, according to the 1997 Census of Agriculture, this would result in an additional 12,602 farms that would qualify as CAFOs and this is a conservative estimate. Swine One SER asked EPA whether or not it had looked at different scenarios for different operations (i.e., farming, nursery, grow-to-finish). Because different operations can include all of these phases, she suggested looking at an average between 10-55 pounds. Mr. Petersen's written comment was in favor of the inclusion of immature animals for all animal types because in the swine industry immature animals are most likely to receive antibiotics and growth promoters. Beef, Dairy, and Exotic Animals Ms. Itle did not support considering immature animals in determining the number of animals at an AFO for purpose of NPDES permit