Supporting Statement for the Information Collection Request for the NPDES Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations June 2006 EPA ICR No. 1989.04 Rural Branch Water Permits Division Office of Wastewater Management Office of Water U. S. Environmental Protection Agency Office of Wastewater Management 1200 Pennsylvania Ave., N. W. Washington, DC 20460 Supported by: Tetra Tech, Inc. 10306 Eaton Place Fairfax, VA 22030 EPA Contract # EP C 05 046 Tetra Tech Project # 16759 07 This page intentionally left blank. TABLE OF CONTENTS 1. IDENTIFICATION OF THE INFORMATION COLLECTION..................................... 1 1a. Title of the Information Collection...................................................................... 1 1b. Short Characterization....................................................................................... 1 2. NEED FOR AND USE OF THE COLLECTION ........................................................ 2 2a. Need/ Authority for the Collection?..................................................................... 2 2b. Practical Utility / Users of the Data.................................................................... 2 3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA. 3 3a. Nonduplication................................................................................................... 3 3b. Public Notice Required Prior to ICR Submission to OMB.................................. 4 3c. Consultations..................................................................................................... 4 3d. Effects of Less Frequent Collection................................................................... 5 3e. General Guidelines............................................................................................ 5 3f. Confidentiality ....................................................................................................... 5 3g. Sensitive Questions........................................................................................... 5 4. THE RESPONDENTS AND THE INFORMATION REQUESTED ............................ 6 4a. Respondents/ NAICS Codes.............................................................................. 6 4b. Information Requested...................................................................................... 8 5. THE INFORMATION COLLECTED  AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT...................................... 15 5a. Agency Activities ............................................................................................. 15 5b. Collection Methodology and Management ...................................................... 15 5c. Small Entity Flexibility...................................................................................... 16 5d. Collection Schedule......................................................................................... 17 6. ESTIMATING THE BURDEN AND THE COST OF THE COLLECTION................ 17 6a. Estimating Respondent Burden....................................................................... 17 6b. Estimating Respondent Costs ......................................................................... 21 6c. Estimating Agency Burden and Cost............................................................... 23 6d. Estimating the Respondent Universe and Total Burden and Costs................. 24 6e. Bottom Line Burden Hours and Costs Tables ................................................. 25 6f. Burden Statement ............................................................................................... 25 References .................................................................................................................... 27 Appendix........................................................................................................................ 29 LIST OF TABLES Table 4  1. CAFO Standard Industrial Classification Codes and Size Thresholds.......... 6 Table 4  2. Estimated Number of CAFOs by Size and Animal Type............................... 8 Table 5  1. SBA and EPA Small Business Thresholds for Animal Sectors ................... 16 Table 6  1. Burden Estimates per CAFO by Activity ..................................................... 18 Table 6  2. Burden Estimates for an Authorized State by Activity................................. 21 Table 6  3. Wage rates used to value CAFO related burdens ...................................... 22 Table 6  4. Capital and O& M Cost per CAFO ( 2005 dollars) ........................................ 23 Table 6  5. EPA Burden and Cost Estimates ................................................................ 24 Table 6  6. Summary of Average Annual CAFO and State Respondents, Burden Hours, and Costs for the ICR Approval Period ( Costs in millions $ 2005)........ 25 ACRONYM LIST AFO animal feeding operation BLS Bureau of Labor Statistics BPJ best professional judgment CFR Code of Federal Regulations CAFO concentrated animal feeding operation CWA Clean Water Act ELG Effluent Limitations Guidelines EPA Environmental Protection Agency ICR Information Collection Request ICIS Integrated Compliance Information System MOA Memorandum of Agreement NAHMS National Animal Health Monitoring System NAICS North American Industry Classification System NASS National Agricultural Statistics Service NMP Nutrient Management Plan NOI Notice of Intent NPDES National Pollutant Discharge Elimination System O& M operation and maintenance OMB Office of Management and Budget OPM Office of Personnel Management PCS Permit Compliance System SBA Small Business Administration SIC Standard Industrial Classification SOC Standard Occupational Classification U. S. C. United States Code USDA United States Department of Agriculture USGS United States Geological Survey This page intentionally left blank. 1 C:\ dmautop\ temp\ DCTM_ ARP. doc 1. IDENTIFICATION OF THE INFORMATION COLLECTION 1a. Title of the Information Collection ICR: NPDES Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations EPA ICR No. 1989.04 OMB Control Number: 2040 0250 1b. Short Characterization This ICR provides an estimate of the information collection burden for respondents covered by the Environmental Protection Agency's ( EPA or the Agency) regulations for concentrated animal feeding operations ( CAFOs) under the National Pollutant Discharge Elimination System ( NPDES) permit program and the Effluent Limitations Guidelines ( ELG). This ICR follows the EPA guidance on preparation of information collection burden assessments ( EPA, 1999). The ICR revises the existing estimates of burden and costs to NPDES permittees and governments ( Federal, State) presented in the prior ICR: Final NPDES and ELG Regulatory Revisions for Concentrated Animal Feeding Operations ( OMB Control No. 2040 0250, EPA ICR No. 1989.02), which expires on July 31, 2006. To prepare this ICR, EPA updated the 2002 burden and costs from the previous ICR to reflect changes in the CAFOs industry sector and increases in labor costs since 2002.

On February 28, 2005, the United States Court of Appeals for the Second Circuit vacated certain provisions in the 2003 final CAFO regulations and remanded others to EPA ( Waterkeeper Alliance et al. v. EPA, 399 F. 3d 486 ( 2nd Cir. 2005)). This ICR does not address changes to EPA regulations as a result of the Waterkeeper court decision, since those revisions are not yet finalized.

The Federal Water Pollution Control Act ( 1972), also known as the Clean Water Act ( CWA), prohibits the discharge of pollutants from a point source to waters of the United States except for discharges authorized and regulated by the NPDES permit program established by Section 402( a). Section 308 of the CWA requires that EPA collect from dischargers any information that may be reasonably required to carry out the objectives and provisions of the CWA. Thus, point sources incur mandatory record keeping and reporting burdens when they apply for NPDES permits and in the course of complying with NPDES program requirements established by EPA. 1 Section 402( b) provides that States ( including U. S. Territories and Indian Tribes may be authorized to administer NPDES programs once the Agency is assured that a State program meets minimum federal requirements. As of May 2006, 45 States and one Territory ( U. S. Virgin Islands) had received approval from EPA to administer the NPDES base program, which includes the federal requirements that are applicable to CAFOs. Of these, 44 are responsible for 1 Nonfederal regulatory agencies may impose additional information collection requirements on regulated point sources. Because those collections exceed the federal requirement, the burdens incurred are not included in the estimate of burdens to meet federal information collection needs. 2 C:\ dmautop\ temp\ DCTM_ ARP. doc issuing NPDES permits to CAFOs ( called " authorized States" hereafter). 2 EPA and authorized State permitting authorities typically receive, review, manage, and report information collected under the NPDES permitting program, including CAFO permits.

Information collected by the NPDES Program Director ( of either an authorized State or EPA) about waste management facilities and operating procedures is used to determine the applicability of permit coverage and to document that a permittee is in compliance with permit requirements. Information is collected using permit application forms and annual reports and through compliance evaluation inspections. Permitting authorities enter data into the Permit Compliance System ( PCS) or Integrated Compliance Information System ( ICIS), the Agency's old and modernized NPDES program databases.

EPA estimates that the burden for this information collection request includes an annual average of 3.50 million hours for all respondents including CAFO owners/ operators and States. This estimate includes the time required to review instructions, search existing data sources, gather and maintain all necessary data, and review the information collected. On average, there will be approximately 24,080 respondents and 196,453 responses per year and average annual capital and O& M costs will total $ 9.12 million.

2. NEED FOR AND USE OF THE COLLECTION 2a. Need/ Authority for the Collection EPA has authority to undertake the information collection activities characterized in this document under Sections 308 and 402 of the CWA, and Title 33 Sections 1311, 1318, and 1342 [ 402 counterparts] of the United States Code ( U. S. C.). CAFOs are defined as point sources for purposes of the NPDES program ( 33 U. S. C. Sec. 362.) Under 33 U. S. C. Sec. 1311 and Sec. 1342, a CAFO must obtain an NPDES permit and comply with the terms of that permit, which may include appropriate conditions on data and information collection. Furthermore, 33 U. S. C. Sec. 1318 provides authority for information collection ( i. e., record keeping, reporting, monitoring, sampling, and other information as needed), which applies to point sources.

EPA and authorized States need the information required by the 2003 CAFO rule to ensure implementation of the CWA requirements.

2b. Practical Utility / Users of the Data EPA and authorized State permitting authorities use the information routinely collected through NPDES applications and compliance evaluations in the following ways:

  to issue NPDES permits with appropriate limitations and conditions that will protect human health and the environment 2 EPA retains authority for NPDES permits for CAFO facilities in Oklahoma; thus, only 44 States are authorized to issue permits to CAFOs. EPA is not aware of any CAFOs in the U. S. Virgin Islands. 3 C:\ dmautop\ temp\ DCTM_ ARP. doc   to update information in EPA's databases that permitting authorities use to determine permit conditions   to calculate national permit issuance, backlog, and compliance statistics   to evaluate national water quality   to assist EPA in program management and other activities that ensure national consistency in permitting   to assist EPA in prioritizing permit issuance activities   to assist EPA in policy development and budgeting   to assist EPA in responding to Congressional and public inquiries Other users of the data include regulated CAFOs and the general public. CAFOs will use the data they collect to improve operational efficiency and evaluate facility maintenance needs. The general public can use information collected through the NPDES permit process to support efforts to protect local environmental quality and quality of life.

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 3a. Nonduplication The information collection pursuant to the regulatory program is site specific and therefore not available from existing sources.

As part of its overall CAFO initiative, EPA undertook efforts to identify existing sources of relevant information as well as to coordinate with other Federal agencies that collect information in the agricultural sector [ e. g., United States Department of Agriculture ( USDA), United States Geological Survey ( USGS), Food and Drug Administration ( FDA), National Oceanic and Atmospheric Administration, Centers for Disease Control ( CDC)] and States. To support development of the USDA/ EPA Unified National Strategy for animal feeding operations ( AFOs) and the 2003 regulatory changes, EPA formed and administered a data and analysis group that included 18 representatives from EPA, USDA, and USGS. This group worked to identify and access existing sources of CAFO data. Although some useful general data were identified, including EPA and USDA information ( e. g., STORET, 305( b) and 303( d) information), no other Federal agency has the facility specific data addressed under the CAFO regulations. In addition, EPA used publicly available information to a significant extent in addressing its information needs.

There are a few national databases maintained by the Federal government that store some information about CAFOs. A search for relevant databases identified the following:

  EPA's PCS database   USDA Census of Agriculture EPA's PCS and ICIS databases are used to store information about facilities that hold NPDES permits. They help EPA monitor the compliance status of permitted facilities. These systems 4 C:\ dmautop\ temp\ DCTM_ ARP. doc hold only data items associated with existing NPDES permits and focus on discharge requirements. This information collection is not duplicative of data already available through PCS or ICIS. In fact, this information collection is the source of data in PCS or ICIS.

USDA's National Agricultural Statistics Service ( NASS) is responsible for maintaining a large amount of information on agricultural operations, including AFOs, through the Census of Agriculture, which is administered every 5 years. Census of Agriculture data are subject to restrictions with regard to what type of data may be released, when, and to whom. Generally, facility level data may not be released. Therefore, the information in the Census of Agriculture database cannot fulfill EPA's data needs for purposes of administering the NPDES program, and EPA has determined through data related discussions with USDA that this information collection is not duplicative of the data available from NASS.

Finally, EPA's Office of Enforcement and Compliance Assurance is developing a database of AFOs through the Agricultural Compliance Assistance Center. This database, however, is only intended to provide the Federal and State agencies with an up to date count of AFOs and CAFOs across the United States, and it will not provide other necessary information regarding compliance status of facilities with NPDES program requirements.

3b. Public Notice Required Prior to ICR Submission to OMB In compliance with the 1995 Paperwork Reduction Act, EPA solicited comments for a 60 day period prior to submission of the ICR to OMB. Comments were requested on March 7, 2006, via a Federal Register Notice ( 71 FR 11407). The Agency did not receive any comments on the notice.

3c. Consultations To facilitate the 2003 CAFO regulation development, EPA provided many opportunities for input in the 2003 rule making process, including holding 11 public outreach meetings on the Draft Unified National AFO Strategy and a stakeholder conference call including small entities. EPA also held nine public outreach meetings associated with the proposed CAFO regulations at locations across the country. Since then, EPA has continued to meet with various members of the stakeholder community as part of ongoing implementation of the 2003 rule. These meetings with environmental organizations, producer groups, and producers representing various agricultural sectors give EPA the opportunity to interact with and receive input from stakeholders about the CAFO NPDES program. While most of those outreach activities have not targeted small entities explicitly, many included small business participation. 5 C:\ dmautop\ temp\ DCTM_ ARP. doc 3d. Effects of Less Frequent Collection EPA has made every effort to establish NPDES permit and associated information collection requirements that minimize the burden on respondents while promoting the protection of water quality. NPDES permit applications are the primary form of information collection for regulated CAFOs and these facilities must reapply for NPDES permits before their existing permits expire. Section 402( p) of the CWA requires that NPDES permits be issued for fixed terms with a maximum term of five years, thereby disallowing less frequent collection than anticipated by this ICR. Compliance evaluation inspections [ and Section 308 requests] are conducted as needed to assure compliance and less frequent collection would hamper compliance assurance efforts. Furthermore, most inspections are conducted by authorized States, which means that collection frequency is largely a matter of State discretion. 3 3e. General Guidelines This information collection complies with Paperwork Reduction Act guidelines ( 5 CFR 1320.5( d)( 2)), except for the requirement for CAFOs to maintain the records on site for five years to demonstrate permit compliance ( 40 CFR 122.42( e)( 2)). The records that this requirement pertains to are listed below in Section 4b( i).

3f. Confidentiality In the current NPDES program for CAFOs, facilities must keep nutrient management plans on site and make them available to the permitting authority on request. These plans may contain confidential business information. When this is the case, the respondent can request that such information be treated as confidential. All confidential data is be handled in accordance with 40 CFR 122.7, 40 CFR Part 2 ( 40 CFR 2.201 et seq.), and EPA's Security Manual Part III, Chapter 9, dated August 9, 1976.

Whenever possible, EPA encourages public involvement in the NPDES regulatory process. However, EPA also recognizes the legitimate concerns of owners/ operators regarding protection of confidential business information and potential delays in processing of permit applications. 4 3g. Sensitive Questions This ICR does not ask owners/ operators sensitive questions concerning private matters ( e. g., religious beliefs).

3 As noted above in section 1b., EPA is preparing a separate ICR that will assess how the Waterkeeper court decision will affect the number of facilities that need permits, how NMPs are processed, and how the related information collection burden will change. 4 Fn. 3, ibid. 6 C:\ dmautop\ temp\ DCTM_ ARP. doc 4. THE RESPONDENTS AND THE INFORMATION REQUESTED This ICR covers the information collection activities expected to occur over the three year ICR renewal period from August 1, 2006, through July 31, 2009. During this period, CAFO and authorized State respondents will collect and report information to obtain NPDES permit coverage and meet permit conditions.

4a. Respondents/ NAICS Codes The two categories of respondents covered in this ICR are the owners or operators of CAFOs and the 44 authorized States that issue permits to CAFOs.

EPA categorizes CAFOs based on the primary type of animal confined at the operation. Table 4 1 lists the major categories along with their North American Industry Classification System ( NAICS) codes, and the corresponding four digit Standard Industrial Classification ( SIC) codes. Note that some industry classification codes may overlap more than one of the categories defined by EPA under the 2003 CAFO regulations. For example, swine of any size have the same NAICS or SIC codes.

Table 4  1. CAFO Standard Industrial Classification Codes and Size Thresholds Size Thresholds NAICS Code ( SIC Code) Animal Type Large Medium Small 112111 ( 0212, 0241), 112112 ( 0211) Beef cattle, heifers, calves or veal for either slaughter or replacement > 1,000 300 1,000 < 300 112111, 112120 ( 0241) Dairy cattle  mature dairy cattle ( whether milked or dry cows) and heifer replacement > 700 200 700 < 200 Swine  each weighing over 25 kilograms  or approximately 55 pounds > 2,500 750 2,500 < 750 112210 ( 0213)

Immature swine  each weighing less than 25 kilograms, or approximately 55 pounds > 10,000 3,000 10,000 < 3,000 112310 ( 0252) Chickens  laying hens, using liquid manure handling system > 30,000 9,000 30,000 < 9,000 112310 ( 0252) Chickens  laying hens, if other than liquid manure handling system > 82,000 25,000 82,000 < 25,000 112320 ( 0251) Chickens other than laying hens  broilers, fryers and roasters, if other than liquid manure handling system > 125,000 37,500 125,000 < 37,500 112330 ( 0253) Turkeys > 55,000 16,500 55,000 < 16,500 Ducks, wet manure handling > 5,000 1,500 5,000 < 1,500 112390 ( 0259) Ducks, dry manure handling > 40,000 12,000 40,000 < 12,000 112410 ( 0214) Sheep or lambs > 10,000 3,000 10,000 < 3,000 112920 ( 0272) Horses > 500 150 500 < 150 Table 4 1 also provides the animal thresholds adopted in the 2003 CAFO rule. EPA uses these thresholds to determine which AFOs are CAFOs. Under the 2003 CAFO rule, all AFOs that confine a sufficient number of animals to meet the large threshold are defined as CAFOs. An 7 C:\ dmautop\ temp\ DCTM_ ARP. doc AFO in the medium size category is defined as a CAFO if it confines a sufficient number of animals and meets one of two discharge criteria:

  pollutants are discharged to U. S. waters through a man made ditch, flushing system, or other similar man made device   pollutants are discharged directly into U. S. waters that originate outside of the facility and pass over, across, or through the facility or otherwise come into direct contact with the confined animals.

An AFO in the smallest size category may become a CAFO through designation only after the permit authority has conducted an on site inspection. Medium AFOs that are not defined CAFOs may also be designated as CAFOs by the permitting authority.

The 2003 NPDES CAFO rule requires all CAFOs to apply for an NPDES permit either by submitting a notice of intent ( NOI) to be covered by a general permit or by submitting an application for an individual permit. 5 Table 4 2 provides the number of CAFOs that need permits under the 2003 NPDES CAFO and ELG regulations. The information presented in Table 4 2 was generated using data from the 1997 and 2002 Census of Agriculture, NASS bulletins, National Animal Health Monitoring System ( NAHMS) species reports, 2003 Demographics Report and industry data sources and comments. According to this information, EPA estimates that approximately 18,801 facilities in 2005 would meet the definition of a Large or Medium CAFO or be designated as a CAFO by the permitting authority. ( EPA, October 14, 2005, Memo to Record: Estimated Number of Permit Applications from CAFOs.) Table 4 2 provides an accounting of the number of CAFOs by animal type as well as operation size.

Exhibit B in the Appendix presents more detailed calculations of the permitting universe changes over the 3 year period covered by the ICR.

5 Fn. 3, ibid. 8 C:\ dmautop\ temp\ DCTM_ ARP. doc Table 4  2. Estimated Number of CAFOs by Size and Animal Type Animal type 2003 CAFO universe Projected % change, 2003 2005 2005 CAFO universe1 Total CAFOs designated for ICR period2 Industry Growth for ICR period2,3 Large CAFOs Beef 1,766 2% 1,801 9 61 Veal 12 0% 12 0 0 Heifer 242 2% 247 3 16 Dairy 1,450 13% 1,639 18 857 Swine 3,924 41% 5,533 30 5,566 Broilers 1,632 32% 2,154 30 1,580 Layers: Dry 729 2% 744 0 23 Layers: Wet 383 0% 375 0 0 Ducks 21 21% 25 0 11 Horses 195 10% 215 0 34 Turkeys 388 7% 415 6 50 TOTAL Large CAFOs 10,742 13,160 96 Medium CAFOs 4 4,625 22% 5,641 TOTAL 15,367 18,801 96 8,198 1. Projection based on NAHMS species reports, 2003 Demographics Report, and 2002 Census of Agriculture changes from 1997 Census. ( This reflects the percent increase in column 2 times the number of CAFOs in column 1) 2. The number of designated and new CAFOs are the total facilities for the 3 year ICR period. 3. Industry growth is for large and medium CAFOs. 4. Medium sized CAFOs, because of how they are defined, will still need permits. Source: EPA ( 2002). Estimates of CAFO Universe EPA ICR No. 1989.02. New CAFOs per year estimates are based on Paul Shriner's ( EPA, OST) July 24, 2000 Memo to administrative record for the CAFO rule 4b. Information Requested 4b( i). Data Items, Including Record Keeping Requirements CAFO Data Items CAFO Application for NPDES Permit. In accordance with the 2003 rule, each CAFO operator has a duty to apply for an NPDES permit by preparing and submitting either an application for an individual NPDES permit for CAFOs under 40 CFR 122.21 or an NOI for coverage under a general NPDES permit for CAFOs under 40 CFR 122.28.

The individual permit application for CAFOs comprises two standard NPDES forms: Forms 1 and 2B. On Form 1, applicants provide basic information necessary for all EPA permit programs, including name, address, type of facility, and number of outfalls. Applicants must 9 C:\ dmautop\ temp\ DCTM_ ARP. doc also submit topographic maps and lists of all EPA and State permits presently held. Form 2B requires applicants to provide the following types of information:

  the name of the owner or operator [ 40 CFR 122.21( i)( 1)( i)]   the facility location and mailing addresses [ 40 CFR 122.21( i)( 1)( ii)]   latitude and longitude of the production area ( entrance to production area) [ 40 CFR 122.21( i)( 1)( iii)]   a topographic map of the geographic area in which the CAFO is located showing the specific location of the production area in lieu of the requirements of 40 CFR 122.21( f)( 7) [ 40 C. F. R 122.21( i)( 1)( iv)]   specific information about the number and type of animals, whether in open confinement or housed under roof ( beef cattle, broilers, layers, swine weighing 55 pounds or more, swine weighing less than 55 pounds, mature dairy cows, dairy heifers, veal calves, sheep and lambs, horses, ducks, turkeys, other) [ 40 CFR 122.21( i)( 1)( v)]   the type of containment ( anaerobic lagoon, roofed storage shed, storage ponds, underfloor pits, above ground storage tanks, below ground storage tanks, concrete pad, impervious soil pad, other) and total capacity for manure, litter, and process wastewater storage ( tons/ gallons) [ 40 CFR 122.21( i)( 1)( vi)]   the total number of acres under control of the applicant available for land application of manure, litter, and process wastewater [ 40 CFR 122.21( i)( 1)( vii)]   estimated amount of manure, litter, and process wastewater generated per year ( tons/ gallons) [ 40 CFR 122.21( i)( 1)( viii)]   estimated amount of manure, litter, and process wastewater transferred to other persons per year ( tons/ gallons) [ 40 CFR 122.21( i)( 1)( ix)]   for CAFOs that must seek coverage under a permit after December 31, 2006, certification that a nutrient management plan has been completed and will be implemented upon the date of permit coverage [ 40 CFR 122.21( i)( 1)( x)].

The NOI pertains to coverage under a general permit, which a permitting authority uses to cover multiple permittees requiring similar permit conditions. CAFO operators are required to submit the same information as listed above ( 40 CFR 122.21( i)( 1)) when completing an NOI to be covered under a general permit.

No Potential to Discharge Requests. 6 The 2003 NPDES CAFO regulation provides that in lieu of requesting permit coverage, an operation can request a determination of " no potential to discharge." To do this, the CAFO owner or operator must submit any information that would support such a determination, within the time frame provided by the permit authority and in accordance with paragraphs 40 CFR 122.23( g). The request must include all of the information specified in 40 CFR 122.21( f) and ( i)( 1)( i) through ( ix) ( listed above under CAFO Application for NPDES Permit). The permitting authority has discretion to require additional information to supplement the request, and may also gather additional information through inspection of the CAFO [ 40 CFR 122.23( f)( 2)].

6 Fn. 3, ibid. 10 C:\ dmautop\ temp\ DCTM_ ARP. doc EPA believes that the standard to qualify for this exemption is high and relatively few, if any, CAFOs would make the request. Therefore, for the purpose of estimating ICR burdens, EPA assumes that all CAFOs apply for permits.

Requirement to Develop and Implement a Nutrient Management Plan. The NMP was first required by the 2003 CAFO rule. At a minimum, an NMP must include best management practices and procedures necessary to implement applicable effluent limitations and standards [ 40 CFR 122.42( e)( 1)]. As specified in the 2003 rule, permitted CAFOs must have their nutrient management plans developed and implemented by December 31, 2006; CAFOs that seek to obtain coverage under a permit after December 31, 2006, must have a nutrient management plan developed and implemented upon the date of permit coverage7 [ 40 CFR 122.42( e)( 1)]. The nutrient management plan must, to the extent applicable:

  ensure adequate storage of manure and process wastewater, including procedures to ensure proper operation and maintenance of the storage facilities [ 40 CFR 122.42( e)( 1)( i)]   ensure proper management of mortalities ( i. e., dead animals) to ensure that they are not disposed of in any liquid manure, storm water, or process wastewater storage or treatment system that is not specifically designed to treat animal mortalities [ 40 CFR 122.42( e)( 1)( ii)]   ensure that clean water is diverted, as appropriate, from the production area [ 40 CFR 122.42( e)( 1)( iii)]   prevent direct contact of confined animals with waters of the United States [ 40 CFR 122.42( e)( 1)( iv)]   ensure that chemicals and other contaminants handled on site are not disposed of in any manure, litter, process wastewater, or storm water storage or treatment system unless specifically designed to treat such chemicals and other contaminants [ 40 CFR 122.42( e)( 1)( v)]   identify appropriate site specific conservation practices to be implemented, including as appropriate buffers or equivalent practices, to control runoff of pollutants to waters of the United States [ 40 CFR 122.42( e)( 1)( vi)]   identify protocols for appropriate testing of manure, litter, process wastewater, and soil [ 40 CFR 122.42( e)( 1)( vii)]   establish protocols to land apply manure, litter, or process wastewater in accordance with site specific nutrient management practices that ensure appropriate agricultural utilization of the nutrients in the manure, litter, or process wastewater [ 40 CFR 122.42( e)( 1)( viii)]   identify specific records that will be maintained to document the implementation and management of the minimum elements described above [ 40 CFR 122.42( e)( 1)( ix)].

Record Keeping Requirements. The 2003 rule specifies that CAFOs must keep, maintain for five years, and make available to the Director upon request the following records:

  all applicable records identified pursuant to 40 CFR 122.42( e)( 1)( ix) [ 40 CFR 122.42( e)( 2)( i)( A)]

7 The Waterkeeper court decision is necessitating changes to the dates for permitting and permit related activities. These changes are not assessed in this ICR. Although EPA has modified some of these dates already, those changes are driven by the Waterkeeper decision, and the related ICR impacts are being assessed, as noted above, in a separate ICR. 11 C:\ dmautop\ temp\ DCTM_ ARP. doc   all CAFOs subject to 40 CFR Part 412 must comply with record keeping requirements as specified in 40 CFR 412.37( b) and ( c), and 40 CFR 412.47( b) and ( c) [ 40 CFR 122.42( e)( 2)( i)( B)], which are listed below: ( Note: Although all citations below are to 40 CFR 412.37, 40 CFR 412.47( b) applies all 40 CFR 412.37( b) conditions for CAFOs subject to Subpart C to CAFOs subject to Subpart D and 40 CFR 412.47( c) applies all 40 CFR 412.37( c) conditions for CAFOs subject to Subpart C to CAFOs subject to Subpart D.)   each CAFO must maintain on site for a period of five years from the date they are created a complete copy of the information required by 40 CFR 122.21( i)( 1) and 40 CFR 122.42( e)( 1)( ix) and the records specified in 40 CFR 412.37( b)( 1) through ( b)( 6) [ 40 CFR 412.37( b)], which are listed below: o records documenting the inspections required under 40 CFR 412.37( a)( 1) [ 40 CFR 412.37( b)( 1)] o weekly records of the depth of the manure and process wastewater in the liquid impoundment as indicated by the depth marker under 40 CFR 412.37( a)( 2) [ 40 CFR 412.37( b)( 2)] o records documenting any actions taken to correct deficiencies required under 40 CFR 412.37( a)( 3); deficiencies not corrected within 30 days must be accompanied by an explanation of the factors preventing immediate correction [ 40 CFR 412.37( b)( 3)] o records of mortalities management and practices used by the CAFO to meet the requirements of 40 CFR 412.37( a)( 4) [ 40 CFR 412.37( b)( 4)] o records documenting the current design of any manure or litter storage structures, including volume for solids accumulation, design treatment volume, total design volume, and approximate number of days of storage capacity [ 40 CFR 412.37( b)( 5)] o records of the date, time, and estimated volume of any overflow [ 40 CFR 412.37( b)( 6)]   each CAFO must maintain on site a copy of its site specific nutrient management plan; each CAFO must maintain on site for a period of five years from the date it is created a complete copy of the information required by 40 CFR 412.4 and 40 CFR 122.42( e)( 1)( ix) and the records specified in 40 CFR 412.37( c)( 1) through ( c)( 10) [ 40 CFR 412.37( c)], which are listed below: o expected crop yields [ 40 CFR 412.37( c)( 1)] o the date( s) manure, litter, or process waste water is applied to each field [ 40 CFR 412.37( c)( 2)] o weather conditions at time of application and for 24 hours prior to and following application [ 40 CFR 412.37( c)( 3)] o test methods used to sample and analyze manure, litter, process waste water, and soil [ 40 CFR 412.37( c)( 4)] o results from manure, litter, process waste water, and soil sampling [ 40 CFR 412.37( c)( 5)] o explanation of the basis for determining manure application rates, as provided in the technical standards established by the Director [ 40 CFR 412.37( c)( 6)] 12 C:\ dmautop\ temp\ DCTM_ ARP. doc o calculations showing the total nitrogen and phosphorus to be applied to each field, including sources other than manure, litter, or process wastewater [ 40 CFR 412.37( c)( 7)] o total amount of nitrogen and phosphorus actually applied to each field, including documentation of calculations for the total amount applied [ 40 CFR 412.37( c)( 8)] o the method used to apply the manure, litter, or process wastewater [ 40 CFR 412.37( c)( 9)] o date( s) of manure application equipment inspection [ 40 CFR 412.37( c)( 10)]   a copy of the CAFO's site specific NMP must be maintained on site and made available to the Director upon request [ 40 CFR 122.42( e)( 2)( ii)].

Requirements Related to Transfer of Manure or Process Wastewater to Other Persons. Prior to transferring manure, litter, or process wastewater to other persons, Large CAFOs must provide the recipient of the manure, litter, or process wastewater with the most current nutrient analysis consistent with the requirements of 40 CFR 412. Large CAFOs must retain for five years records of the date, recipient name and address, and approximate amount of manure or process wastewater transferred to a third party [ 40 CFR 122.42( e)( 3)].

CAFO Annual Reporting Requirements. CAFO permittees must submit an annual report to the Director that includes the following [ 40 CFR 122.42( e)( 4)]:

  the number and type of animals, whether in open confinement and housed under roof ( beef cattle, broilers, layers, swine weighing 55 pounds or more, swine weighing less than 55 pounds, mature dairy cows, dairy heifers, veal calves, sheep and lambs, horses, ducks, turkeys, other) [ 40 CFR 122.42 ( e)( 4)( i)]   estimated amount of total manure, litter, and process wastewater generated by the CAFO in the previous 12 months ( tons/ gallons) [ 40 CFR 122.42 ( e)( 4)( ii)]   estimated amount of total manure, litter, and process wastewater transferred to another person by the CAFO in the previous 12 months ( tons/ gallons) [ 40 CFR 122.42 ( e)( 4)( iii)]   total number of acres for land application covered by the NMP developed in accordance with 40 CFR 122.43( e)( 1) [ 40 CFR 122.42 ( e)( 4)( iv)]   total number of acres under control of the CAFO that were used for land application of manure, litter, and process wastewater in the previous 12 months [ 40 CFR 122.42 ( e)( 4)( v)]   summary of all manure, litter, and process wastewater discharges from production areas that have occurred in the previous 12 months, including date, time, and approximate volume [ 40 CFR 122.42 ( e)( 4)( vi)] 8   a statement indicating whether the current version of the CAFO's NMP was developed or approved by a certified nutrient management planner [ 40 CFR 122.42( e)( 4)( vii)].

8 Discharges that could result in significant impacts to the environment or human health must still be reported at the time of the discharge event in a noncompliance report. Since timely reporting is essential in these instances, separate regulations have been established in 40 CFR 122.41 for the reporting of bypasses or upsets. Burden and costs for this type of noncompliance reporting have been analyzed in the ICR for the National Pollutant Discharge Elimination System ( NPDES)/ Compliance Assessment/ Certification Information ( ICR No. 1427.06). 13 C:\ dmautop\ temp\ DCTM_ ARP. doc State Data Items No Potential to Discharge Determination. According to 40 CFR 122.23( f)( 3) of the 2003 rule, the permit authority must prepare a preliminary determination and a statement of basis or fact sheet in response to requests for the no potential to discharge exemption. The permit authority would also need to prepare a public notice, respond to comments, and issue a final determination.

State Record Keeping and Reporting. States requirements to maintain NPDES permit records for each permitted CAFO under their jurisdiction will be specified in each State's Memorandum of Agreement ( MOA) with EPA. Federal regulations pertaining to the MOA with the EPA Regional Administrator are contained in 40 CFR 123.24.

4b( ii). Description of Respondent Activities CAFO Activities CAFO activities pertain mainly to preparing and submitting NPDES permit applications and collecting and keeping information required to demonstrate permit compliance. General startup and permit application activities include:

  reading and understanding the rule requirements   completing and submitting NOI ( for general permit coverage)   completing and submitting Forms 1 and 2B ( for an individual permit).

Activities required of all CAFOs to demonstrate and document permit compliance include:

  develop and maintain on site a nutrient management plan   prepare and submit annual reports   maintain records to document implementation of the NMP Additional activities required of Large CAFOs to demonstrate and document permit compliance include:

  collect representative manure, litter, and process wastewater samples   collect representative soil samples   inspect manure, litter, and/ or process wastewater application equipment at a minimum of once per year   collect information for transfers of manure, litter, or process wastewater to other people   maintain production area and land application area records.

Although Small and Medium CAFOs are not subject to the information collection and record keeping requirements in 40 CFR 412 Subparts C and D, it is possible that many of the activities listed therein may be performed as part of the data collection and record keeping to document implementation of the NMP. Furthermore, permitting authorities may choose to apply the ELG requirements for Large CAFOs to Small and Medium CAFOs. Therefore, for the purpose of 14 C:\ dmautop\ temp\ DCTM_ ARP. doc estimating burden for this ICR, EPA uses the burden estimates for activities that expressly apply to Large CAFOs to also estimate the burdens for Small and Medium CAFOs.

In addition to the activities performed on a regular basis, EPA assumes that CAFO owners or operators will need to participate in any on site inspection conducted by the permit authority. This represents an information collection burden because the purpose of the inspection is to collect information regarding permit compliance.

CAFO owners or operators will also incur capital and operating costs to collect information needed to document compliance. Capital expenditures include:

  purchase of a soil auger for sampling   purchase of a manure sampler   installation of a depth marker.

Recurring or O& M expenditures include:

  soil sample analysis   manure sample analysis   other direct costs for record keeping.

For the purpose of this ICR, EPA assumed that no CAFOs incur burden to make an optional request for an exemption from permitting on the basis of No Potential to Discharge. The information requirements for this request are the same as the required application. Thus, all CAFOs incur permit related burdens, which would most likely overstate burdens for any CAFO that makes a request. The analysis in this ICR also reflects the assumption that no CAFO subject to the discharge limitations in 40 CFR 412 Subparts C or D request a permit effluent limitation based on either Voluntary Alternative Performance Standards in 40 CFR 412.31( a)( 2) or Voluntary Superior Environmental Performance Standards in 40 CFR 412.46( d).

State Activities Permitting Activities. In accordance with 40 CFR 123.25 and 124.10, authorized States will incur burdens to perform the following information collection activities for CAFOs that submit individual permits or NOIs:

  reviewing the submission for completeness   providing public notice of draft permits and responding to comments   holding public hearing( s), as necessary.

Compliance Evaluation Activities. Authorized States will incur burdens to perform the following activities to ensure compliance with State permit programs:

  inspecting permitted CAFOs in accordance with 40 CFR 123.26( b)   reviewing annual reports submitted by permitted CAFOs under 40 CFR 122.42( e)( 4). 15 C:\ dmautop\ temp\ DCTM_ ARP. doc No Potential to Discharge Determinations. Under the 2003 CAFO rule, Large CAFOs that can demonstrate that they have no potential to discharge determination manure or process wastewater to waters of the United States may request an exemption from NPDES permitting. The permit authority, upon request, may make a case specific determination that a Large CAFO has no potential to discharge. In making this determination, the permit authority must consider the potential for discharges from both the production area and any land application areas and any record of prior discharges by the CAFO. In no case may the CAFO be determined to have " no potential to discharge" if it has had a discharge within the 5 years prior to the date of the request [ 40 CFR 122.23( f)( 1)].

As noted above, EPA does not anticipate that States will incur burden to make such determinations and therefore assumes for this ICR that all CAFOs request coverage under an NPDES permit. EPA believes that the State burden to administer a permit would be higher in the long run compared to a one time burden to make a determination. Thus, the burden estimates in this ICR potentially overstate State burden in the event an operation decides to request an exemption.

Voluntary Alternative Performance Standards. In accordance with the 2003 CAFO rule, Large CAFOs can request alternative performance standards in lieu of the discharge limitations in 40 CFR 412 Subparts C and D [ 40 CFR 412.31( a)( 2) and 40 CFR 412.46( d), respectively]. EPA does not have information to estimate how many operations, if any, will submit such a request. The burden to review the request would be site specific, depending on the basis for the request and the information provided by the CAFO operator. Because this is an uncertain and infrequent burden, EPA does not include this burden in its analysis.

5. THE INFORMATION COLLECTED  AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT 5a. Agency Activities EPA has permitting responsibilities in the six States not authorized to issue NPDES permits to CAFOs. In those States, the Agency's activities would be similar to the activities described for authorized States [ see Section 4b( ii)].

5b. Collection Methodology and Management CAFO respondents submit the requested information to their NPDES permitting authority. EPA manages a portion of the information collected electronically. As under the existing NPDES program for other sectors, respondent data pertaining to facilities permitted under the regulations is catalogued in the automated PCS database or the new ICIS database. The information provided on permit application forms or NOI forms is entered into the relevant NPDES database. 16 C:\ dmautop\ temp\ DCTM_ ARP. doc 5c. Small Entity Flexibility Small, Medium, and Large operations are defined in Table 4 1. The 2003 CAFO rule substituted head count thresholds for animal unit thresholds for each type of animal being regulated under the rule.

Whereas EPA establishes thresholds based on the number of animals units, the Small Business Administration ( SBA) uses revenue based thresholds to distinguish small agricultural operations from larger operations. Consequently, EPA developed a model to convert the SBA's revenue thresholds to the number of animals by sector. EPA used the SBA's revenue based definitions ( except for laying hens) and data from USDA and the industry for this effort. The SBA and EPA thresholds are shown for each sector in Table 5  1. A comparison of the SBA based animal thresholds with EPA's animal thresholds indicates that most Medium and Small CAFOs are small entities and some Large CAFOs will be small entities as well.

Table 5  1. SBA and EPA Small Business Thresholds for Animal Sectors NAICS code ( SIC code) Animal sector SBA threshold ( revenue in millions) a Corresponding SBA animal threshold ( number of animals) CAFO Size Threshold ( number of animals)

112112 ( 0211) Beef cattle feedlots $ 1.5 1,400 Large: > 1,000 112111, 112120 ( 0241) Dairy farms and dairy heifer replacement production $ 0.75 300 b Large > 700 Medium > 200 112210 ( 0213) Hogs $ 0.75 2,100 c Large > 2,500 Medium > 750 112310 ( 0252) Chicken eggs $ 1.5 d 61,000 Large > 30,000 112320 ( 0251) Broiler, fryer, roaster chickens $ 0.75 375,000 Large > 125,000 112330 ( 0253) Turkeys and turkey eggs $ 0.75 37,500 Large > 55,000 a. SBA thresholds effective February 22, 2002. Classification is met if the operation has revenue equal to or less than the threshold cited. b. Mature dairy cattle. c. Each weighing over 25 kilograms. d. EPA consulted with SBA on the use of this alternative definition; the original threshold is $ 9.0 million. Note: Certain animal sectors ( e. g., sheep and lambs, horses, and ducks) are not subject to ELG requirements, and EPA has not developed corresponding small business animal thresholds for those sectors.

In the 2003 CAFO rule, EPA's premise is that the regulations should focus on those operations posing the greatest risk to water quality and public health, in particular operations with large numbers of animals. Fewer than 6,200 of the approximately 230,000 Small and Medium AFOs nationwide are currently affected by the 2003 CAFO rule. This approach helps to reduce the burden of the CAFO regulations on small entities while striving to achieve the goals of the CWA. 17 C:\ dmautop\ temp\ DCTM_ ARP. doc Furthermore, as Section 6 shows, the burden estimates for many of the NPDES related activities are relatively small. The 2003 CAFO rule provides additional flexibility in that the ELG requirements apply only to Large CAFOs. Permitting authorities, which are mainly State agencies, will establish technology based requirements for Small and Medium CAFOs based on best professional judgment ( BPJ). Finally, the 2003 CAFO rule provided regulatory relief for Small and Medium CAFOs by not requiring them to record information for off site manure transfers.

5d. Collection Schedule This ICR covers the information collection activities expected to occur over the three year ICR renewal period from August 1, 2006 through July 31, 2009. To simplify the burden analysis, EPA estimated that 20 percent ( one fifth) of the existing facilities would renew their permit every year. New facilities would apply for a permit the year they begin operations. Designated CAFOs must apply for an NPDES permit within 90 days after receiving the notice of designation from the permit authority. EPA assumed that 32 operations might be designated every year.

6. ESTIMATING THE BURDEN AND THE COST OF THE COLLECTION This section describes how EPA estimated CAFO respondent, State, and Agency burden and costs for this ICR. Section 6( a) describes EPA's estimates of respondent burden for individual CAFOs and States. Section 6( b) describes the cost estimates for individual CAFOs and States. Section 6( c) describes the estimation of Agency burden and costs. Section 6( d) shows the total annual burden and costs across the entire universe of CAFOs and States affected during the ICR approval period. Section 6( e) summarizes the overall burden and cost estimates and provides annual averages over the three year period.

6a. Estimating Respondent Burden The discussion below provides brief descriptions of the CAFO and State activities and Tables 6  1 and 6  2 summarize the burden assumptions. Exhibits A. 1 and A. 2 in the Appendix provide additional information regarding the burden and cost assumptions, which were based on the active CAFOs NPDES ICR ( OMB No. 2040  0250, EPA ICR No. 1989.02). Since this ICR discussed in this supporting statement is a renewal of the active ICR rather than an assessment of burden change due to regulatory revisions, EPA did not update the per activity burden assumptions.

CAFO Burden Start up activities are steps that a CAFO owner or operator takes in preparation to comply with the information collection requirements of the 2003 CAFO rule. Owners or operators of new facilities that are potentially affected by the rule will need to familiarize themselves with the NPDES CAFO program to determine whether they need to apply for a permit and implement the effluent guideline requirements. This is a one time burden. EPA assumes that it will take CAFO 18 C:\ dmautop\ temp\ DCTM_ ARP. doc operators three hours to read and understand the relevant portions of 40 CFR 122 and 40 CFR 412 and related guidance.

Permit application activities involve completing and submitting either an NOI or an application for an individual permit. For the active CAFOs NPDES ICR ( OMB No. 2040  0250, EPA ICR No. 1989.02), EPA estimated a permit application burden of nine hours for either permit type.

Table 6  1. Burden Estimates per CAFO by Activity Activities Frequency per CAFO Burden Hours per Response1 Read/ Understand the Rule one time 3 NPDES Permit Application Activities Complete/ submit Notice of Intent for general permit Complete/ submit individual permit application Inspection every 5 years every 5 years every 5 years 9 9 4 Data Collection, Record Keeping, and Reporting Activities Prepare and Submit Annual Report Record Off site Transfers of Manure ( Large CAFOs only) annual annual 1 14 Nutrient Management Plan Develop/ update nutrient management plan every 5 years 46 ELG Requirements2 Visual Inspections Inspect Manure Application Equipment Collect and Send Manure Sample Collect and Send Soil Sample Record Keeping annual annual annual every 5 years annual 13 4 2 8 80 1. A response is the completion of an activity and the duration and frequency of responses can vary. For example, each of the following is considered a response: the one time effort to read and understand the rule, submitting a permit application once every five years, or collecting ELG records throughout a year. The hour estimates have been rounded to the nearest hour for presentation. 2. Although Small and Medium CAFOs are not subject to the ELG requirements in 40 CFR 412, EPA assumes that the ELG burdens provide upper bound estimates for the burdens for Small and Medium CAFOs because many of the ELG information elements also provide documentation for the NMP and information for the annual report.

CAFO owners or operators will perform various activities to meet data collection and record keeping requirements. Large CAFO operators will conduct weekly visual inspections of the waste storage and storm water diversion facilities and daily inspections of water lines to identify maintenance needs. EPA assumed that these inspections can be primarily conducted in the course of every day operations and, therefore, they do not impose a substantial incremental burden on CAFOs beyond the need to document inspection findings. Manure application equipment must be inspected annually and the activity documented. Soil samples must be collected at least once every five years from all fields receiving manure and analyzed for nutrient content. Manure samples must be collected annually and analyzed for nutrient content. Large CAFOs must retain manure and soil sampling results on site. Large CAFOs must also document other production area and land application area activities, as noted in above Section 4( b)( i). Support documents for the 2003 CAFO rule ( EPA 2001a, b) provide the basis for estimating burdens for these requirements, which are shown in Table 6 1. 19 C:\ dmautop\ temp\ DCTM_ ARP. doc Under the 2003 CAFO rule, the ELG requirements are applicable to Large CAFOs; permit authorities must use BPJ to develop the effluent limitation conditions and associated record keeping requirements for all other CAFOs. For the purpose of estimating the cost of the 2003 CAFO rule, EPA assumed that the ELG record keeping and reporting requirements for Small and Medium CAFOs would be comparable to those specified for Large CAFOs. Thus, EPA applied these ELG burdens to all CAFOs in its social cost analysis. EPA has retained this approach for estimating the ELG burden in this ICR. As with Large CAFOs under the ELG, Small and Medium CAFOs are required to identify and maintain records to document their NMP implementation, and the types of records required by 40 CFR 412 Subparts C and D can provide such documentation. Furthermore, many of these records will also assist preparation of annual reports, resulting in a minimal burden for that activity.

To comply with permit requirements in the 2003 CAFO rule, CAFO operators need to develop a nutrient management plan that contains the minimum measures specified in 40 CFR 122.42( e)( 1) and maintain the plan on site. There are two parts to the NMP burden estimate  one for the engineering design of storage structures for manure, litter, and process wastewater, which is discussed in Section 6( ii), and a second for all other measures for the production area and land application area, which is discussed here. For the nonengineering portion of the NMP, EPA estimated a weighted average burden of 46.2 hours to develop a plan. This estimate uses the same methodology as in the active CAFOs NPDES ICR ( OMB No. 2040  0250, EPA ICR No. 1989.02). Although some owners or operators will be able to develop their own NMPs, EPA has assumed that the plans will be developed mainly by certified planners not employed at the farm. This burden, which does not apply to CAFOs that do not land apply manure generated on site, is incurred in the first year an operation requests coverage under the CAFO regulations and repeated at least once every five years for the NMP updates.

Large CAFOs that transfer manure, litter, and process wastewater to another party also need to collect the following information for each transfer: the date of transfer, the recipient's name and address, and the quantity transferred. They will also need to provide the recipient with nutrient content information. Based on a national estimate of excess manure at Large CAFOs of 181 million tons and an average transfer amount of 100 tons, EPA estimated an average of 169 transfers per year per Large CAFO ( 181 million ÷ 100 ÷ 10,700 CAFOs). EPA also estimated that recording the information required for each transfer requires 5 minutes. The resulting average burden per CAFO is 14 hours.

All CAFOs prepare and submit an annual report to the permitting authority. The report provides an annual update to several data items contained in the permit application forms as well as a summary of any production area discharges. Many CAFO operators or owners will be able to copy information directly from the application form or their records to their report. EPA assumes that the annual report will require only one hour to complete and submit, on average.

This ICR also incorporates the potential burden to CAFO owners or operators of participating in on site inspections conducted by the permit authority. As noted in the State burden section below, EPA assumes that inspectors spend an average of four hours per on site inspection activities. During this time, the inspector may want to review records and inspect waste 20 C:\ dmautop\ temp\ DCTM_ ARP. doc management and land application equipment. It is likely that the CAFO operator or owner will incur some burden during the inspection to make records available and show the facility to the inspector. EPA assumes a matching average burden to CAFOs of four hours per inspection.

State Burden The 44 authorized States will incur burden to issue permits and track and report permit compliance. Table 6 2 provides a summary of the burden estimates described below. For its analysis for the active CAFOs NPDES ICR, EPA obtained labor burden estimates that it has used in previous NPDES related cost and burden analyses, and asked State agency and EPA Regional staff to evaluate whether those estimates were representative of the CAFO rule information collection burden. EPA also considered comments provided on the proposed rule and notice of data availability ( NODA) that addressed the issue of State burdens.

States will incur burden for two categories of activities: Implementation for general permits and implementation for individual permits.

Authorized States will incur annual costs to administer their permit programs. To administer State general permits, permitting authorities will need to review NOI forms submitted by CAFO operators seeking coverage under a general permit. To administer individual permits, State agencies will need to:

  review application forms ( i. e., Forms 1 and 2B)   request public comment prior to issuing a permit   conduct public hearings, as needed.

To assure compliance with State NPDES permit programs, State agencies will need to inspect permitted CAFOs and review annual reports submitted by permitted CAFOs.

CAFOs seeking coverage under a general permit submit completed NOI forms that the permitting authority needs to review and make a determination of coverage. For the active CAFOs NPDES ICR, EPA estimated that NOI review and recordkeeping activities would require four hours. EPA also estimated that the hearing time for a general permit, should one be requested, would require 420 hours.

Permitting authorities must issue public notices when they develop draft permits. For both individual and general permits, EPA estimates a burden of 5 hours to issue the required public notices and respond to comments.

For the active CAFOs NPDES ICR, EPA assumed State administration costs for individual permits include 100 hours per permit to review Forms 1 and 2B and perform related recordkeeping activities. EPA also estimated that the hearing time for an individual permit, should one be requested, would be 200 hours. Updated information from EPA Regions confirms this figure as being an accurate estimate of the labor burden for conducting hearings. The burden estimate in this case must account for personnel both to manage the logistics of the hearing and to attend the hearing. Typically, the staff attending a public hearing include a presiding officer, technical 21 C:\ dmautop\ temp\ DCTM_ ARP. doc staff, legal counsel, and a court reporter. All these personnel must travel to the hearing site, which often requires overnight travel depending on the venue for the hearing. Logistics tasks for the public hearing include selecting the venue, publicizing the meeting, coordinating attendance, and managing the public record.

For the active CAFOs NPDES ICR, EPA assumed that the average inspections for CAFOs covered by either a general or an individual permit would be close to 16 hours. This estimate includes 6 hours for round trip travel time, 2 hours to review State records and prepare for the inspection, 4 hours to conduct the on site inspection of records and operation, and 4 hours to report on the inspection and maintain records. EPA assumed annual reports would require 4 hours for the permitting authority to review.

Table 6  2. Burden Estimates for an Authorized State by Activity Activities Frequency per State Burden Hours per Response1 State General NPDES Permit Application Activities Review and Approve NOIs/ Record Keeping Public Hearings 2 Notify Public, Respond to Comments per CAFO per Permit per CAFO 4 420 5 State Individual Permit Application Activities Review and Approve Permits/ Record Keeping Public Hearings 3 Notify Public, Respond to Comments per CAFO per CAFO per CAFO 100 200 5 State Annual Permit Reporting Activities Facility Inspection Annual Report Review per CAFO per CAFO 16 4 1. A response is the completion of an activity and the duration and frequency of responses can vary. For example, each of the following is considered a response: the one time effort to request NPDES program modification, reviewing permit applications, and annual NOI publications. 2. EPA Assumed that all general permits would require a public hearing 3. EPA Assumed that 12% of individual permits would require a public hearing. EPA also assumed that if a public hearing was required, the labor burden for the permitting authority would total to 200 hours. This is the same figure as was used in the 2003 ICR; recent information from EPA Regions confirms this figure as being an accurate estimate.

6b. Estimating Respondent Costs This section describes how EPA derived the cost per respondent for each of the activities described above.

6b( i). Estimating Labor Costs CAFO Labor Costs To obtain cost estimates at the CAFO level, EPA multiplied the burdens reported in Table 6 1 by the appropriate wage rates in Table 6  3. 22 C:\ dmautop\ temp\ DCTM_ ARP. doc Table 6  3. Wage rates used to value CAFO related burdens Labor category Original rate Source Conversion Hourly rate ($ 2005)

Farm Operator/ Owner $ 18.50/ hr BLS: 45 1011 First Line Supervisors/ Managers of Farming, Fishing, and Forestry Workers 2004 to 2005 1.5 benefits multiplier $ 28.48 Farm Laborer $ 9.07/ hr BLS: 45 2093 Farmworkers, Farm and Ranch Animals 2004 to 2005 1.5 benefits multiplier $ 13.96 Agronomist 2 $ 26.67 BLS: 19 1013 Soil and Plant Scientists 2004 to 2005 1.5 benefits multiplier $ 41.06 Note: Original rates are from the May 2004 National Industry Specific Occupational Employment and Wage Estimates from the Bureau of Labor Statistics. EPA adjusted the wage to 2005 dollars using the Employer Costs for Employee Compensation Index values for the first quarter of 2004 ( 16.71) and the first quarter of 2005 ( 17.15) and a fringe rate of 50 percent.

State Labor Costs EPA used a wage rate of $ 37.98 to value State labor burden, which was based on the mean hourly wage rate of $ 23.13 for Conservation Scientists ( SOC 19 1031) from the May 2004 National Industry Specific Occupational Employment and Wage Estimates for NAICS 999200  State Government ( OES designation). EPA adjusted the wage to 2005 dollars using the Employer Costs for Employee Compensation Index values for the first quarter of 2004 ( 16.71) and the first quarter of 2005 ( 17.15) and a fringe rate of 60 percent.

6b( ii). Estimating Capital and Operation and Maintenance Costs CAFO Capital and O& M Costs CAFO operators incur capital costs when they purchase equipment or one time services or builds structures that are needed specifically for compliance with the rule's reporting and record keeping requirements. The capital costs included in this ICR are based on those used in the burden analysis for the 2003 CAFO rule ( EPA, 2001 a, b).

Capital costs relevant to this ICR include purchasing a soil auger to collect soil samples and a manure sampler. CAFOs will also need to install depth markers in their lagoons. All operations will need to develop the NMP elements that pertain to the production area, including performing an engineering analysis of the waste storage volume requirements needed to comply with the 2003 CAFO rule. This burden will occur the first time a facility requests coverage under the revised regulations and should not need to be updated unless the operation undergoes a significant change in operation.

To incorporate capital expenditures in EPA's estimate of annual burden, all capital costs have been amortized over a 10 year period assuming a 7 percent interest rate. This is the same amortization schedule used to estimate annualized costs for the economic analysis of the 2003 rule ( EPA 2002a). 23 C:\ dmautop\ temp\ DCTM_ ARP. doc A facility incurs O& M costs when it regularly uses services, materials, or supplies needed to comply with the rule's reporting and record keeping requirements that the facility will not use otherwise. Any cost for the operation and upkeep of capital equipment is considered O& M costs. For the 2003 CAFO rule, O& M costs include laboratory analysis of soil and manure and a general record keeping cost. All costs were based on the cost analysis for the final rule and are documented in EPA ( 2001a, b).

Table 6  4 summarizes the capital and O& M costs associated with the record keeping and reporting activities.

Table 6  4. Capital and O& M Cost per CAFO ( 2005 dollars) Activities Frequency per CAFO Cost ($) Capital Costs1,2 Purchase of a Soil Auger for Sampling Cost for Production Area portion NMP Purchase of a Manure Sampler Installation of Depth Markers one time one time one time one time $ 4.13 $ 146.47 $ 4.98 $ 4.98 O& M Costs1 Lab analysis of soil sample Lab analysis of manure sample Other direct costs for record keeping every 5 years annual annual $ 90 $ 127 $ 112 1. Costs are taken from the active CAFOS NPDES ICR ( OMB No. 2040  0250, EPA ICR No. 1989.02). These estimates have been escalated to 2005 dollars using a CPI. 2. All capital costs are reported as total costs. They are amortized over 10 years at a 7% discount rate for use in the analysis.

State O& M Costs States will incur publication costs to issue public notices for general permits and for each individual permit. For purposes of presenting a complete accounting of burden impacts, these non labor recurring costs are tabulated as O& M costs. EPA assumed that States would publish four notices per year for NOIs under general permits and one notice per individual permit. In the event an individual permit requires a public hearing, a public notice is also required. The publication cost per public notice is $ 1,060, which is based on the assumption that notices will be placed in four publications at an average cost of $ 265 ( EPA 2002a).

6c. Estimating Agency Burden and Cost EPA is responsible for writing NPDES permits for CAFOs in six States ( Alaska, Idaho, Massachusetts, New Hampshire, New Mexico, and Oklahoma). Based on CAFO data, EPA estimated that CAFOs in these States represent 3.4 percent of the total number of CAFOs ( Kellogg et al., 2000). In these instances, EPA is responsible for the activities and associated burdens and costs that would otherwise be incurred by a State. The permitting burden estimates for EPA, shown in Table 6 5, are the same as State burdens. 24 C:\ dmautop\ temp\ DCTM_ ARP. doc EPA used an hourly wage rate for a GS 12, Step One Federal employee to estimate the cost of the Agency staff. The U. S. Office of Personnel Management 2005 General Schedule reported an hourly rate of $ 25.98 for this pay grade. Multiplying this rate by 1.6 to incorporate typical Federal benefits ( OPM, 1999), EPA obtained a final hourly rate of $ 41.57.

Table 6  5. EPA Burden Estimates by Activity Activities Frequency per State Burden Hours per Response1 Federal General NPDES Permit Application Activities Review and Approve NOIs/ Record Keeping Public Hearings 2 Notify Public, Respond to Comments per CAFO per CAFO per CAFO 4 420 5 Federal Individual Permit Application Activities Review and Approve Permits/ Record Keeping Public Hearings 3 Notify Public, Respond to Comments per CAFO per CAFO per CAFO 100 200 5 Federal Annual Permit Reporting Activities Facility Inspection Annual Report Review per CAFO per CAFO 16 4 1. A response is the completion of an activity and the duration and frequency of responses can vary. For example, each of the following is considered a response: the one time effort to request NPDES program modification, reviewing permit applications, and annual NOI publications. 2. EPA assumed that all general permits would require a public hearing 3. EPA assumed that 12% of individual permits would require a public hearing 6d. Estimating the Respondent Universe and Total Burden and Costs EPA's estimate of total burden and costs is the product of the burden and cost estimates per activity or response, provided above, and the number of CAFOs or States expected to perform specific activities each year. Exhibits A. 4 and A. 5 in the Appendix show the number of CAFO and State respondents and responses, respectively, on an annual basis for the three years of this ICR. Exhibits A. 6 and A. 7 in the Appendix report the associated annual burden estimates and annual costs, respectively.

In addition to estimating the fraction of CAFOs in authorized States, EPA developed assumptions to estimate the ratio of general to individual permits as well as the number of individual permits requiring hearings. For the active CAFOS NPDES ICR ( OMB No. 2040  0250, EPA ICR No. 1989.02) EPA assumed that 30 percent of CAFOs apply for an individual NPDES permit and 70 percent submit an NOI for coverage under a general permit. EPA chose this more conservative estimate because only 22 of the 43 authorized States at the time had general permits for CAFOs. This ICR retains this ratio in view of the fact that several States issue only individual permits as of the start of the ICR reporting period. In addition, several States continue to require individual permits for certain categories of CAFOs based, for example, on size or location. 25 C:\ dmautop\ temp\ DCTM_ ARP. doc 6e. Bottom Line Burden Hours and Costs Tables This section provides a description of bottom line burden and cost estimates for this ICR. Table 6  6 provides a summary of the average annual number of respondents, burden hours, and costs for CAFO and State respondents. Detailed information can be found in the Appendix.

6e( i). CAFO Respondents and State Respondents The bottom line burden hours and costs shown in Table 6  6 reflect the average annual burden hours and costs for all ICR related activities performed by respondents during the ICR renewal period 2006 2009.

The final burden and cost estimates can be used to calculate mean burden and cost per respondent. As reported in Exhibit A. 8 in the Appendix, the total number of CAFO respondents in the first three years is 72,108. This figure reflects for each year that the total number of industry respondents includes both any CAFOs that apply for permits as well as any CAFOs that complete annual activities such as annual reporting. ( For more detail on how the number of respondents is calculated, please see Exhibit B in the Appendix.) The annual average number of respondents is 24,036. The total burden over three years is 9.12 million hours, which results in the annual average burden of 3.04 million hours. Dividing the annual average burden of 3.04 million hours by 24,036 respondents, EPA estimated that the annual average burden per CAFO respondent is approximately 127 hours. The annual average labor cost per respondent is $ 2,175 ($ 52.28 million/ 24,036). These estimates include burden to prepare the land application portion of the NMP, which may be a third party burden. Annual average total cost including capital and O& M expenses is $ 2,446 ($ 56.79 million/ 24,036).

The State burden and cost estimates in Table 6  7 can be used to calculate mean burden and cost per State; actual burdens and costs will vary with the number of CAFOs in each State. There are 44 States that will incur the burden and costs described above. Dividing the annual average burden of 0.45 million hours for all States by 44 gives an average per State burden of approximately 10,300 hours. The average annual cost per State is $ 0.39 million for labor, and $ 0.45 million when O& M costs are included.

Table 6  6. Summary of Average Annual CAFO and State Respondents, Burden Hours, and Costs for the ICR Approval Period ( Costs in millions $ 2005) Respondent Respondents Responses Burden ( million hours) Labor Costs Capital Costs O & M Costs Total Costs CAFOs 24,036 155,754 3.04 $ 52.28 $ 0.44 $ 6.07 $ 58.79 States 44 40,699 0.45 $ 17.26 $ 0.00 $ 2.61 $ 19.88 Total 24,080 196,453 3.50 $ 69.54 $ 0.44 $ 8.68 $ 78.66 Note: Detail may not add to totals because of independent rounding.

6e( ii). Bottom Line Agency Burden and Cost Under the 2003 CAFO rule, the average annual burden for EPA is estimated to be approximately 16,345 hours and the average annual cost will be $ 0.89 million. 26 C:\ dmautop\ temp\ DCTM_ ARP. doc 6f. Burden Statement EPA estimates that the total average annual public burden for this information collection request would be 3.50 million hours, including 0.45 million hours for State respondents and 3.04 million hours for all CAFO respondents covered by this ICR. This estimate includes the time required to review instructions, search existing data sources, gather and maintain all necessary data, and complete and review the information collection. The annual average estimate of 24,080 respondents includes 44 States and 24,036 CAFO respondents. The annual average number of responses is 196,453, which includes 40,699 State responses and 155,754 CAFO responses. Average annual capital costs are $ 0.44 million and O& M costs are $ 8.68 million.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA HQ OW 2006 0136, which is available for online viewing at www. regulations. gov, or in person viewing at the Water Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Avenue, NW, Washington, D. C. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is ( 202) 566 1744, and the telephone number for the Water Docket is ( 202) 566 2426. An electronic version of the public docket is available at www. regulations. gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. When in the system, select " search," then key in the Docket ID Number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D. C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number EPA HQ OW 2006 0136 and OMB Control Number 2040 0250 in any correspondence. 27 C:\ dmautop\ temp\ DCTM_ ARP. doc References Kellogg, R. L., C. H. Lander, D. C. Moffitt, and N. Gollehon. 2000. Manure Nutrients Relative to the Capacity of Cropland and Pastureland to Assimilate Nutrients: Spatial and Temporal Trends for the United States. United States Department of Agriculture, Natural Resources Conservation Service, Economic Research Service, Washington, D. C. [ http:// www. nrcs. usda. gov/ technical/ land/ pubs/ manntr. pdf])

OPM ( Office of Personnel Management). 1999. Work Years and Personnel Costs: Fiscal Year 1998. OMSOE OWI 98 1, Office of Personnel Management, Washington, D. C.

OPM ( Office of Personnel Management). 2005. Salary Table 2005 GS, Hourly/ Overtime Rates by Grade and Step. Office of Personnel Management, Washington, D. C.

USDOL ( U. S. Department of Labor). 2005. Employer Cost for Employee Compensation. U. S. Department of Labor, Bureau of Labor Statistics, Washington, D. C.

USDOL ( U. S. Department of Labor). 2004. May 2004 National Industry Specific Occupational Employment and Wage Estimates. U. S. Department of Labor, Bureau of Labor Statistics, Washington, D. C.

USEPA ( U. S. Environmental Protection Agency). December 2002a. Development Document for the Final Revisions to the National Pollutant Discharge Elimination System Regulation and the Effluent Guidelines for Concentrated Animal Feeding Operations ( EPA 821 R 03 001). U. S. Environmental Protection Agency, Office of Wastewater Management, Washington, D. C.

USEPA ( U. S. Environmental Protection Agency). December 2002b. Supporting Statement for the Information Collection Request for the Final NPDES and ELG Regulatory Revisions for Concentrated Animal Feeding Operations ( EPA ICR No. 1989.02). U. S. Environmental Protection Agency, Office of Wastewater Management, Washington, D. C.

USEPA ( U. S. Environmental Protection Agency). January 2001a. Cost Methodology Report for Beef and Dairy Animal Feeding Operations ( EPA 821 R 01 019). U. S. Environmental Protection Agency, Office of Wastewater Management, Washington, D. C.

USEPA ( U. S. Environmental Protection Agency). January 2001b. Cost Methodology Report for Swine and Poultry Sectors ( EPA 821 R 01 018). U. S. Environmental Protection Agency, Office of Wastewater Management, Washington, D. C.

USEPA ( U. S. Environmental Protection Agency). October 14, 2005. Memo to Record: Estimated Number of Permit Applications from CAFOs. U. S. Environmental Protection Agency, Office of Standards and Technology, Washington, D. C. 28 C:\ dmautop\ temp\ DCTM_ ARP. doc This page intentionally left blank. 29 C:\ dmautop\ temp\ DCTM_ ARP. doc Appendix 30 C:\ dmautop\ temp\ DCTM_ ARP. doc This page intentionally left blank.


[Federal Register Volume 78, Number 75 (Thursday, April 18, 2013)]
[Notices]
[Page 23329]
[FR Doc No: 2013-09137]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Aircraft Access to SWIM Working Group Meeting

    Meeting Announcement: Thursday, May 16, 2013, From 1:00 p.m. to
4:00 p.m. FAA Headquarters, 800 Independence Ave. SW., Washington DC
20591, Bessie Coleman Room (Second Floor).

Open Meeting

    The Federal Aviation Administration (FAA) invites federal
employees, aviation professionals and all others interested in FAA
NextGen technologies to attend and participate in an Aircraft Access to
SWIM Working Group Meeting scheduled for Thursday, May 16, 2013 from
1:00 p.m. to 4:00 p.m. in the Bessie Coleman Room (Second Floor) at the
FAA Headquarters Building in Washington DC To attend and follow
security procedures, participants must register for the meeting by
sending an email to<EMAIL_ADDRESS>with the following
information: Name, Company, Phone Number, U.S. Citizen (Y/N). RSVPs to
Corey Muller are required by COB May 1, 2013.

Aircraft Access to SWIM

    The FAA's Next Generation Air Transportation System (NextGen)
program is a comprehensive modernization of our National Airspace
System (NAS). It is intended to provide new aviation capabilities for
both users and operators by improving aviation safety, system capacity
and throughput.
    The FAA's System Wide Information Management (SWIM) program is one
of seven transformational programs of the NextGen portfolio. SWIM is
designed to utilize a Service Oriented Architecture (SOA) to exchange
aviation data and services without the restrictive, time consuming and
expensive process of developing unique interfaces for the multitude of
systems and equipment used by the NAS.
    The Aircraft Access to SWIM (AAtS) initiative is the airborne
component of the SWIM SOA. AAtS will allow aircraft to exchange
operational information such as: weather, airport information, and
other services during all phases of flight. This AAtS capability is
significant in that near real time NAS data will now be available to
support strategic and tactical traffic management and flight
operations.
    AAtS will provide aircraft with a means to obtain a common
collection of aeronautical services provided from multiple sources.
These sources include the FAA, DHS, NWS, and other information sources
to create a shared aviation information environment. The AAtS
initiative will utilize commercial air/ground network providers'
infrastructure to exchange data between aircraft and the NAS ground
facilities. The FAA in collaboration with industry users will define
the set of operational and technical requirements that will be used to
drive that infrastructure.
    The AAtS initiative will facilitate common situational awareness
between the aircraft flight crews and traffic managers, which will
result in better decision making and more efficient NAS operations.
AAtS will work to ensure safe, secure, dependable, and hassle-free
travel; while reducing energy use, emissions and the impact of aviation
on the environment.

Paul Fontaine,
Director, Advanced Concepts and Technology Development, Federal
Aviation Administration.
[FR Doc. 2013-09137 Filed 4-17-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: June 7, 2006 (Volume 71, Number 109)]
[Notices]
[Page 33009-33011]
[DOCID:fr07jn06-139]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53911; File No. SR-Amex-2006-40]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange LLC Relating to Direct
Registration System Eligibility Requirements

 May 31, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that
on April 28, 2006, the American Stock Exchange LLC (``Amex'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change described in Items I, II, and III below, which
items have been prepared primarily by Amex. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Amex is proposing to add new Rule 778 to its Rules and new Section
135 to its Company Guide to require certain listed securities to be
eligible for a Direct Registration System operated by a securities
depository.\3\
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    \3\ The term ``securities depository'' means a securities
depository registered as a clearing agency under Section 17A(b)(2)
of the Act.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Amex included statements
concerning

the purpose of and basis for the proposed rule change and discussed any
comments it received on the proposed rule change. The text of these
statements may be examined at the places specified in Item IV below.
Amex has prepared summaries, set forth in sections (A), (B), and (C)
below, of the most significant aspects of these statements.\4\
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    \4\ The Commission has modified the text of the summaries
prepared by the Amex.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    In order to reduce the costs, risks, and delays associated with the
physical delivery of securities certificates, Amex is proposing to
require (i) all securities (other than the securities identified below)
initially listing on Amex on or after January 1, 2007, to be eligible
for a DRS and (ii) all securities (other than the securities identified
below) listed on Amex on and after January 1, 2008, to be eligible for
a DRS.\5\ The initial listing requirement set forth in (i) above will
not apply to securities of issuers which already have securities listed
on the Amex, securities of issuers which immediately prior to such
initial Amex listing had securities listed on another national
securities exchange, derivative products,\6\ or securities (other than
stocks) which are book-entry-only. The ongoing listing requirement set
forth in (ii) above will not apply to derivative products or securities
(other than stocks) which are book-entry-only.
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    \5\ The New York Stock Exchange LLC (``NYSE'') and The NASDAQ
Stock Market LLC (``Nasdaq'') have also filed proposed rule changes
with the Commission that would require certain listed companies to
become DRS eligible. Securities Exchange Act Release Nos. 53912 (May
31, 2006) [File No. SR-NYSE-2006-29] and 53913 (May 31, 2006) [File
No. SR-NASDAQ-2006-08].
    \6\ As defined in Article 1, Section 3(d) of Amex's
Constitution, the term ``derivative products'' includes in addition
to standardized options, other securities which are issued by The
Options Clearing Corporation or another limited purpose entity or
trust, and which are based solely on the performance of an index or
portfolio of other publicly traded securities. The term ``derivative
products'' does not include warrants of any type or closed-end
management investment companies.
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    Securities certificates are used by issuers as a means to evidence
and transfer ownership. Because securities certificates require manual
processing and because trading volumes have increased, the manual
clearance and settlement systems have become overburdened resulting in
significant delays and expenses in processing securities transaction
and in increased risks associated with lost, stolen, and forged
certificates. In Section 17A of the Act,\7\ Congress recognized these
concerns by calling for the establishment of a national system for the
prompt and accurate clearance and settlement of securities
transactions, including the transfer of record ownership and the
safeguarding of securities.
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    \7\ 15 U.S.C. 78q-1.
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    A DRS allows an investor to establish either through the issuer's
transfer agent or through the investor's broker-dealer a book-entry
securities position on the books of the issuer and to electronically
transfer that securities position between the transfer agent and the
broker-dealer through facilities administered by DTC.\8\ Instead of
receiving a securities certificate, the investor receives a DRS
statement as evidence of share ownership. Investors retain the rights
associated with securities certificates, including such rights as
control of ownership and voting rights, without having the
responsibility of holding and safeguarding securities certificates. In
addition, in corporate actions such as reverse stock splits and
mergers, cancellation of old shares and issuance of new shares are
handled electronically with no securities certificates to be returned
to or received from the transfer agent.
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    \8\ Currently, the only registered clearing agency operating a
DRS is the Depository Trust Company (``DTC''). For a description of
DRS and the DRS facilities administered by DTC, see Securities
Exchange Act Release Nos. 37931 (November 7, 1996), 61 FR 58600
(November 15, 1996), [File No. SR-DTC-96-15] (order granting
approval to establish DRS) and 41862 (September 10, 1999), 64 FR
51162 (September 21, 1999), [File No. SR-DTC-99-16] (order approving
implementation of the Profile Modification System).
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    Issuers and their transfer agents may incur initial costs when
making an issue DRS-eligible and in turn satisfy the new listing
standards as set forth in this proposed rule change. In order to make a
security DRS-eligible, the issuer must have a transfer agent which is a
DRS Limited Participants.\9\ Issuers will also need to meet certain DTC
criteria, such as insurance and connectivity requirements, in order to
make an issue DRS-eligible. Further, an issuer's corporate by-laws must
permit the issuance of book-entry shares. Amex believes that the
proposed deadlines for DRS eligibility coupled with proactive and
instructive communication by Amex with issuers, will allow issuers
sufficient time to make the necessary changes to comply with the
proposed rule change.
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    \9\ For a description of DTC's rules relating to DRS Limited
Participants and a description of DRS facilities administered by
DTC, see Securities Exchange Act Release Nos. 37931 (November 7,
1996), 61 FR 58600 (November 15, 1996), [File No. SR-DTC-96-15]
(order granting approval to establish DRS) and 41862 (September 10,
1999), 64 FR 51162 (September 21, 1999), [File No. SR-DTC-99-16]
(order approving implementation of the Profile Modification System).
---------------------------------------------------------------------------

    While the propose rule change should significantly reduce the
number of transactions in securities for which settlement is effected
by the physical delivery of securities certificates, the proposed rule
change will not eliminate the ability of investors to obtain securities
certificates after the settlement of securities transactions, provided
the issuer chooses to issue or continue to issue certificates.
(2) Statutory Basis
    Amex believes the proposed rule change is consistent with Section
6(b) of the Act, in general, and furthers the objectives of Section
6(b)(5) of the Act, in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to perfect the mechanism of a free
and open market and a national market system, and, in general, to
protect investors and the public interest.\10\
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    \10\ 15 U.S.C. 78f(b)(5).
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    Amex believes that DRS eligibility listing requirements will limit
market impediments arising from the physical delivery of securities
certificates, thereby promoting the perfection of the national market
system. Because investors will have the option of holding their
securities in DRS only if the security is DRS-eligible, Amex believes
that the proposed rule change is necessary to encourage listed issuers
to limit the use of physical certificates. Further, the proposed rule
change should serve to increase the efficiency of the clearance and
settlement system and prevent forgery, theft, or other misappropriation
thereby serving to better protect the public interest. Finally, because
the costs, both direct and indirect, associated with securities
certificates are ultimately borne by investors, Amex believes that
investors in Amex listed securities covered by the proposed rule change
should realize the benefits of accurate, quick, and cost-efficient
transfers, rapid distribution of sale proceeds, reduced lost or stolen
certificates and replacement fees, elimination of the risk associated
with catastrophic events, and consistency of owning in book-entry
across asset classes.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    Amex does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received by Amex with respect
to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period: (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding; or (ii) as to which the self-regulatory organization consents,
the Commission will:
    (A) By order approve such proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
) or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-Amex-2006-40 in the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2006-40. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filings also will be
available for inspection and copying at the principal office of Amex
and on Amex's Web site, http://www.amex.com. All comments received will

be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Amex-2006-40 and should be submitted on
or before June 28, 2006.

    For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-8817 Filed 6-6-06; 8:45 am]

BILLING CODE 8010-01-P