management decisions that dictate when and how the storage can be
emptied. The link between adequate storage and land application
practices is one of the most critical considerations in developing and
implementing a site-specific nutrient management plan. For example, the
amount of land available for application, the hydraulic limitations
(ability of the land to handle additional water without the occurrence
of runoff), geology, and soil properties of the available land base can
play an important role. See Chapter 2 of EPA's technical guidance for
CAFOs ``Managing Manure Nutrients at Concentrated Animal Feeding
Operations'' (EPA-821-B-04-00) for more information.
    Given these considerations, EPA is proposing requirements for
approval of site-specific management practices for such open
containment systems with the expectation that a system designed in
accordance with these requirements will meet the no discharge standard
within the limits of design and operational foreseeability. EPA
believes that the design, operation and maintenance elements and
analytical assessment required under this alternative are sufficient
for this purpose. The assessment process was previously described in
two papers delivered to the American Society of Agricultural Engineers,
available in today's record (Moffitt et al., (2003), DCN 1-01233 and
Moffitt and B. Wilson, (2004), DCN 1-01224).
    The first step is to gather information about the specific
operation to be analyzed and the regulatory framework in which it
operates. The regulatory framework could include: state requirements
for minimum storage periods for rainy seasons or winter or additional
minimum capacity requirements for chronic rainfall; technical standards
that prohibit or otherwise limit land application to frozen, saturated,
or snow-covered ground; standards that further limit land application
where there is a high risk of nutrient transport; increased storage
requirements for manure intended to be transferred to another recipient
at a later time; and any other special requirements that would impact
the size of the storage facility. The operator's management options and
needs should also be included in the design and evaluation, as
discussed below. The accuracy of this first step is critical to
designing and evaluating a manure storage facility. A check sheet of
possible considerations based on 40 CFR 412.46(a)(1) may help ensure
the right information is gathered, and EPA solicits comment on what
relevant information must be included in the analysis as a minimum.
    The second step is the design of the storage facility using design
procedures in the USDA Natural Resources Conservation Service's (NRCS)
``Agricultural Waste Management Field Handbook,'' NEH-651. This will be
done using Animal Waste Management (AWM) software, which is NRCS's
manure storage and treatment planning/design software tool for animal
feeding operations that can be used to estimate the production of
manure, bedding, and process water and to determine the appropriate
size of storage/treatment facilities. The Common Computing Environment
(CCE) version of AWM 2.10 is currently available on the web, and
planned software updates in the near future are not expected to change
the general form of the tool. Site-specific input to AWM includes
climate data for 30 years consisting of historical average monthly
precipitation obtained from local weather stations, and evaporation
values obtained from the National Oceanic and Atmospheric
Administration (NOAA) handbook. Additional inputs include animal
numbers and typical animal sizes/weights, added water and bedding (if
any), and the size and condition of outside areas exposed to rainfall
and contributing runoff to the storage facility. AWM allows the user to
specify a storage period (months), and the software will design for the
series of months with the most rainfall. The program will not design a
system in excess of 12 months, as such designs are not recommended. As
an alternative, the user can designate months when the storage pond can
be emptied, and AWM sizes the pond based on the months with the most
precipitation between pumping events. The output of this step is the
design of a waste storage facility. AWM provides a series of reports
describing the storage facility and providing a listing of the related
specifications including the dimensions of the storage facility, daily
manure and wastewater additions, the size and characteristics of the
fields, and other management assumptions such as storage period.
    The third step is an evaluation of the adequacy of the AWM designed
storage facility using the Soil Plant Air Water (SPAW) Hydrology Tool.
The current version of SPAW is 6.1. SPAW is a field-level tool that
uses a modified Soil Conservation Service Curve Number Method to
develop water budgets for agricultural fields. SPAW is used by NRCS to
evaluate the design procedure in the ``Agricultural Waste Management
Field Handbook,'' NEH-651 (DCN 1-1231). Water budget processes are
evaluated by making daily adjustments to crop canopy cover and
antecedent soil moisture. Field water budgets can be used for
evaluating runoff and infiltration from precipitation events. SPAW also
provides an integrated pond module to develop pond water budgets that
is ideal for assessing the adequacy of an open containment system.
Input to SPAW includes daily precipitation, temperature, and
evaporation data; storage facility dimensions and manure related
quantities extracted from AWM; and the strategies for managing the
storage facility. For each user-specified soil profile and crop
rotation, SPAW simulates possible runoff from fields as well as the
irrigation water needs of fields receiving the storage effluent.
Hydrologic groups are used to rate soils for potential to release
excess water down grade.
    EPA notes that where AWM software is used for design and SPAW is
used for evaluation, additional software for nutrient management
planning may be appropriately linked and the NMP data can then be
imported. For example, see 6-12 of ``Managing Manure'' (EPA-821-B-04-
009) for a discussion of ``Manure Management Planner'' or ``MMP,'' a
comprehensive Windows-based planning tool for manure management.
    SPAW is then run with the site-specific historic rainfall records
to see if the open containment system (referred to as a pond in SPAW)
and associated management and land application was adequate to
eliminate any discharge. EPA has concluded that 100 years of data is an
adequate timeframe for simulation purposes and will support a
reasonable finding of no discharge. However, EPA is aware that 100
years of continuous rainfall data may not be available for many CAFOs.
The SPAW model can be run using actual rainfall data where available,
and then simulated with a confidence interval analysis over a period of
100 years. The SPAW model shows not only that the storage facility does
not discharge, but also that there is no runoff of wastewater from
fields during land application activities, which is necessary to ensure
that the open containment system is operated in a way to meet the land
application requirements of the rule. In practice, if the SPAW
evaluation indicated any level of discharge or any spillway flow, the
pond design volume could be increased in size in AWM, the new
dimensions converted to SPAW input, and the simulation done again. This
iterative procedure could continue until

the pond simulation predicts no discharge. If the facility shows no
discharge over the 100 year simulation, then EPA has concluded that the
lagoon or pond has been designed to achieve the requirement of no
discharge.
    EPA has obtained several case studies using this approach to
design. Example CNMPs were obtained from Georgia, South Carolina,
Nebraska, North Carolina, and Iowa. Each of these CNMPs was used as the
basis of design for a new facility. The CNMPs were used to get animal
numbers and average weights, crop acreage, location for climate
records, storage period, and information about spreading of manure and
wastewater. The design volume is generally pumped out of the storage
facility twice a year (once in the spring, and once in the fall). These
are large pump down events, and it is part of the planning and design
process to assure that there is sufficient land and pumping capacity to
accomplish this activity. These case studies allow two weeks for this
pump down to occur. In the few instances when the storage volume
approaches the volume reserved for precipitation and runoff, the
additional volume is pumped out of the storage facility as soil
conditions permit. In some cases, wastewater removals for irrigation
were simulated based on crop consumptive use capability. These are
small pump out events. The first case study is a confinement swine
operation in Nebraska which had 1600 grower pigs with an average weight
of 140 lbs. This example facility has the waste storage pond emptied
three times a year. The storage pond has an emergency spillway at nine
feet and the depth of storage for the design storm is six inches.
Several years within the simulation, the storage volume did reach the
level reserved for the design storm, but pump-out was able to occur to
restore the storage volume. See DCN 1-01225 for more information. The
second case study is a similar facility in Georgia which uses a center
pivot irrigation system. In this particular case, the landowner can
irrigate almost year round since the crop is a hayfield with a winter
small grain. This particular facility is designed for a 150 day storage
period. This facility was simulated using a two times per year pumpdown
schedule as well as a year-round pumpdown, both resulting in a no
discharge system. Additional case studies may be found in EPA's record
(DCN 1-01226.).
    In these case studies, the AWM design is simulated using SPAW with
the result of no predicted discharges. If the AWM design does not
result in a system that would comply with the no discharge
requirements, the CAFO could evaluate different design and management
options (such as different storage periods and dewatering schedules
consistent with the CAFO's NMP) that do not result in any predicted
discharges, or the CAFO could conclude an open system is not
appropriate for the particular site being evaluated.
    Under today's proposal, EPA would require certain specified
information regarding design, operation, and maintenance of the system
to be included in the CAFOs NMP under 40 CFR 122.42(e)(1). This
includes the key user-defined inputs and model system parameters. EPA
proposes to require a site-specific analysis and require certain
elements of the analysis be submitted to the Director. (See 40 CFR
412.46(a)(1).) These site-specific design, construction, operation, and
maintenance measures would then become enforceable requirements in the
CAFO's permit. As long as the CAFO complies with these requirements,
the CAFO would presumptively meet the no discharge requirement. The
burden would be on the CAFO to demonstrate that any open system it
employed meets the new source standard. EPA believes that this would
provide a clear and enforceable standard for the CAFO as well as
provide assurance to the public that the proposed system would comply
with the no discharge requirements.
    Under today's proposal, the Director has the discretion to require
additional information from a new source Subpart D CAFO owner or
operator to support site-specific effluent limitations. EPA is aware
that other peer-reviewed models and programs have been or may be
developed that could be determined to be equivalent to AWM and SPAW.
Therefore the proposed rule gives the Director the discretion to
approve design software or procedures equivalent to AWM and SPAW. EPA
solicits comment on this approach to demonstrating that an open storage
system meets the no discharge requirements and providing an alternate
approach for facilities that comply with the enforceable design,
construction, operation and maintenance measures developed under the
approach.
    The information, design, and evaluation process in today's proposal
is intended to allow CAFOs the flexibility to demonstrate compliance
with the no discharge requirements for any type of open storage
facility. As a practical consideration, EPA expects most CAFOs
selecting this compliance alternative will submit designs for open
manure storage structures accompanied by a narrow range of acceptable
operation and management practices. However, for a given type of
storage facility design (for example, a constant volume anaerobic
digester followed by an open storage pond sized for 12 months storage
of treated manure), EPA believes it is possible to conduct a series of
assessments for a specified geographic area that fully encompass the
range of operational and management measures that would be used across
multiple CAFOs with the specified storage facility. In this case, SPAW
could be run to validate a wide range of NMP and storage pond
management scenarios. The Director may then determine that any CAFO
using the specified facility type and submitting a plan that falls
within the pre-approved range of operational and management practices
would not need to conduct the assessment step (i.e., the validation
using SPAW) individually. EPA solicits comment on this approach to
streamlining the evaluation process for those CAFOs submitting ``pre-
approved'' designs and operational procedures.
    EPA is proposing this compliance option only for new Subpart D
facilities that employ open manure storage structures, because EPA
believes that facilities employing other manure handling technologies
(e.g., under house pits) will be able to ensure zero discharge of
manure, litter, and process wastewater without having to employ the
detailed design, modeling, and evaluation approach described here.
However, EPA recognizes that other types of new Subpart D facilities
required to meet the zero discharge standard might believe that such an
approach should be available to them as well. EPA thus requests comment
on whether it should develop a comparable provision for facilities
other than those employing open manure storage structures under which a
facility could demonstrate in advance through a rigorous modeling
analysis that it was designed, operated and maintained to achieve zero
discharge, and subsequent compliance with the site-specific design,
construction, operation and maintenance components of this
demonstration would then constitute compliance with the no-discharge
requirement in the rule.
(b) Superior Alternative Performance Standards
    EPA proposes to delete 40 CFR 412.46(d) and remove the voluntary
superior performance standards provision for new swine, poultry, and
veal sources. The court ruling states that EPA cannot establish
production area standards that substantially prevent discharges as
equivalent to standards

that prohibit discharges outright. In accordance with this ruling, EPA
is proposing to withdraw this provision.

E. Remand Concerning Pathogens for BCT

1. What Were the BCT Provisions in the 2003 CAFO Rule?
    The CWA requires compliance with progressively more stringent
technology-based limitations. The Act requires existing point sources
to comply with limitations achievable by application of the ``best
practicable control technology presently available'' or ``BPT.'' These
limitations control conventional, priority, and/or nonconventional
pollutants, and are typically based on the average pollutant removal
performance of the best facilities examined by EPA. EPA also bases
limitations on the discharge of toxic or non-conventional pollutants on
the ``best available technology economically achievable,'' or ``BAT.''
The 1977 amendments to the CWA required EPA to identify effluent
reduction levels for conventional pollutants associated with ``best
conventional pollutant control technology'' or ``BCT'' for discharges
from existing industrial point sources. BCT is not an additional
limitation, but replaces BAT for control of conventional pollutants.
Effluent limitations based on BCT may not be less stringent than the
limitations based on BPT. Thus, BPT effluent limitations are a
``floor'' below which BCT effluent limitations cannot be established.
Section 304(a)(4) designates the following as conventional pollutants:
biochemical oxygen demand (BOD), total suspended solids (TSS), fecal
coliform (FC), pH, and any additional pollutants defined by the
Administrator as conventional. The Administrator designated oil and
grease as an additional conventional pollutant, on July 30, 1979 (44 FR
44501).
    The Clean Water Act Amendments that created BCT also specify that
the cost associated with BCT effluent limitations be ``reasonable''
with respect to the effluent reductions. Accordingly, the ``BCT
Methodology'' was developed to answer the question of whether it is
``cost-reasonable'' for industry to control conventional pollutants at
a level more stringent than already required by BPT effluent
limitations. The BCT methodology was originally published on August 29,
1979, along with the promulgation of BCT ELGs for 41 industry
subcategories (44 FR 50732). The crux of the methodology was a
comparison of the costs of removing conventional pollutants for a
candidate BCT technology within a particular industry segment, to the
costs of removal for an average-sized publicly owned treatment works
(POTW). The Fourth Circuit remanded the regulation, and directed EPA to
develop an industry cost-effectiveness test in addition to the POTW
test. EPA proposed a revised BCT methodology in 1982 (47 FR 49176) that
addressed the industry cost-effectiveness test (the ``second'' test).
EPA proposed to base the POTW benchmark on model plant costs in a 1984
notice (49 FR 37046). The final BCT methodology was published on July
9, 1986 (51 FR 24974), maintaining the basic approach of the 1982
proposed BCT methodology and adopting the use of the new POTW data.
    In the 2003 CAFO rule, EPA established BPT-based effluent
limitation guidelines or ``ELGs'' for large beef, dairy, veal, swine,
and poultry CAFOs. These effluent limitation guidelines prohibit the
discharge of manure, litter, or process wastewater into waters of the
U.S. from the production areas at the CAFOs. (40 CFR 412.31(a).)
However, when precipitation causes a discharge of manure, litter, or
process wastewater, this may be allowed provided certain conditions are
met. (40 CFR 412.31(a)(1).) In order to qualify for this allowance, the
CAFO must have a properly designed and constructed storage structure
with the capacity to contain all manure, litter, and process wastewater
and the runoff and direct precipitation from a 25-year, 24-hour
rainfall event. (40 CFR 412.31(a)(1)(i).) In addition, the CAFO's
production area must be operated in accordance with specified best
management practices (BMPs). (40 CFR 412.31(a)(1)(ii).) The rule also
established other BMPs governing CAFO wastes applied to land under the
control of the CAFO. (40 CFR 412.4.) EPA estimated that the ELGs will
achieve significant reductions in the annual water pollutant load from
Large CAFOs nationwide, including 155 million pounds of nutrients
(e.g., nitrogen and phosphorus), over two billion pounds of sediments,
and a 46 percent reduction in discharges of pathogens including fecal
coliform. (68 FR 7239, Table 7.2.)
    In establishing the ELGs in the 2003 rulemaking, EPA also
considered reductions in conventional pollutants, including BOD, fecal
coliform, and TSS. However, it was difficult for EPA to assess fecal
coliform loadings and reductions because they vary greatly depending on
site characteristics. Moreover, quantifying discharges of conventional
pollutants from land application areas is difficult due to the
challenges of: Distinguishing between CAFO sources of pollutants and
non-CAFO sources of pollutants; determining what share of pollutants
reaching the edge of field reach surface waters; and quantifying the
potential for regrowth of fecal coliform both after treatment and after
land application of manure. Despite these challenges, EPA estimated
approximate reductions of fecal coliform associated with the following
technology options considered in the 2003 rule: Option 1 (nitrogen-
based land application rates and zero discharge from the production
area with an overflow allowance under specified conditions); Option 2,
the final option selected (limiting nutrient-based land application
rates and zero discharge from the production area with an overflow
allowance under specified conditions); Option 3 (Option 2 plus
permeability limitations on lagoons and ponds for protection of ground
water based on synthetic lagoon liners); Option 5 (Option two except no
overflow allowance for swine and poultry; Option 5a (Option 5 plus
drier manure management such as composting for beef and dairy
operations); and Option 6 (Option 2 plus anaerobic digestion with
energy recovery for large swine and dairy operations). Pollutant
reduction estimates for these options were provided in the final rule.
For beef and dairy operations (subcategory C facilities), EPA also
evaluated BOD and TSS reduction associated with Option 7 (Option 2 plus
a national prohibition on land application of manure to frozen, snow-
covered, or saturated ground), but did not present the pollutant
removal estimates for this option.
    Because of the difficulties associated with quantifying reductions
of conventional pollutant discharges, EPA relied primarily on sediment
discharges (as a surrogate for TSS) in establishing BCT requirements.
Following this approach, EPA identified no BCT technology option that
achieves significantly greater TSS removals than the BPT requirements
eventually promulgated in 2003 except for Option 5. EPA determined
Option 5 was not economically achievable for subcategory D (68 FR
7218). EPA therefore concluded that there were no available BCT
technologies on which to base limits for conventional pollutants that
were more stringent than BPT, and established BCT requirements equal to
BPT in the 2003 CAFO rule (see 40 CFR 412.33 and 412.44). If EPA had
identified available technology options that achieve greater reductions
of conventional pollutants than are

achieved by BPT, then EPA would have performed the two-part BCT cost
test required by CWA section 304(b)(4)(B). (68 FR 7224).
2. Summary of the Second Circuit Court Decision
    In its February 28, 2005, decision, the Second Circuit Court of
Appeals remanded the 2003 CAFO rule's BCT standard for pathogens. In
the court's view, the 2003 CAFO rule violated the Clean Water Act
because EPA did not make an affirmative finding that the BCT-based ELGs
adopted in the CAFO rule do in fact represent the best conventional
pollutant control technology for reducing pathogens--specifically,
fecal coliform. The court noted that EPA may well determine that the
ELGs otherwise adopted by the CAFO rule do in fact represent the best
conventional pollutant control technology for reducing pathogens. The
court further noted that EPA may determine, after considering all the
relevant factors, that the ELGs otherwise adopted by the 2003 CAFO rule
will directly--not just incidentally--reduce pathogens and do so better
than any other pollutant control technology.
3. This Proposal
    In today's notice, EPA finds that the BCT-based ELGs adopted in the
2003 CAFO rule do in fact represent the best conventional pollutant
control technology for removal of pathogens, including fecal coliform.
First, EPA discusses its evaluation of various candidate technologies
to assess whether they are technologically feasible for facilities in a
subcategory and would achieve greater reductions of fecal coliform than
the technologies selected as the basis for BPT limitations in the 2003
rule. Specifically, EPA presents pathogen reductions associated with
technology Options 3, 5, 6 and 7 described previously and discussed in
the 2003 docket. EPA notes that these regulatory options are discussed
here even though EPA has already determined these options are either
not technologically feasible or not economically achievable, because
these options may provide more reductions of pathogens than the option
selected for the final 2003 CAFO ELGs. EPA did not consider Options 1
and 4 because they do not provide any further pollutant reductions over
the final selected Option 2. Today, EPA also presents additional
candidate technologies for pathogen reductions: Fluidized bed
incinerators; composting for poultry; chemical addition for
disinfection; and additional storage to comply with a national
prohibition of land application to frozen, saturated, or snow-covered
ground (Option 7) for the swine industry (Option 7 for the beef and
dairy industries was already presented in 2003).
    Second, today's proposal provides results of the BCT cost-
reasonableness test for the candidate technology options. EPA finds
that none of these candidate technologies would pass either part of the
BCT cost test. Therefore, EPA has concluded that any combination of
these technologies developed into a regulatory option for a subcategory
would also not pass the BCT cost test. Finally, because the traditional
BCT cost test has been based on pollutants other than fecal coliform,
today's proposal presents an approach to conducting the POTW cost test
for CAFOs that explicitly addresses fecal coliform. Today's notice
presents the results of applying this cost test to the candidate BCT
technology options considered for CAFOs. None of the candidate
technology options would pass the alternative BCT cost test. Each of
these analyses is described in more detail below.
(a) Are There Technically Feasible Candidate Technologies That Achieve
Greater Reductions for Fecal Coliform Than Technologies Selected for
BCT in the 2003 Rule?
    EPA evaluated numerous sources of data on CAFO manure management
systems, including treatment technologies and best management practices
(BMPs) for pollution prevention, as well as for the handling, storage,
treatment, and land application of wastes. These data sources included
available technical literature, over 11,000 comments submitted by
industry and other public commenters, and insights gained from
conducting over 116 site visits to CAFOs. EPA specifically identified
several technologies and BMPs for the reduction of fecal coliforms and
other pathogens, including digesters, fluidized bed incinerators,
chemical addition for disinfection, composting, and deep stacking of
poultry litter (see descriptions of these and other technologies in
Chapter 8 of the TDD). Production area practices and land application
practices were also evaluated. Each of these potential candidate BCT
technologies is summarized below:
    Anaerobic Digestion. EPA specifically evaluated anaerobic digesters
as a candidate technology option in the 2003 rule, identified as Option
6 in the preamble and supporting documents (see Chapter 1 of the ``Cost
Methodology for the Final Revisions to the NPDES and ELG for CAFOs'' or
``Cost Report,'' EPA-821-R-03-004). However, EPA rejected this
technology for BCT because anaerobic digesters are not demonstrated to
be technically feasible at all CAFOs. Specifically, wastes from beef,
heifer, and poultry operations would not support the operation of these
treatment systems. (68 FR 7217.) Even for those types of CAFOs that
generate quantities and types of manure and wastes more conducive to
the digestion process (e.g., dairy and swine facilities above a minimum
size), the use of digesters does not necessarily lead to significant
reductions for many of the pollutants present (e.g., nutrients,
metals).
    There are three basic temperature regimes for anaerobic digestion:
Psychrophilic, mesophilic, and thermophilic. Psychrophilic, or low-
temperature, digestion is a natural decomposition process at
temperatures typically found in lagoons. The hydraulic retention time
for stable operation varies from 30 days to 90 days depending on
temperature. EPA notes this same time-temperature relationship occurs
in typical manure storage facilities, and results in some of the
reduction of pathogens (including fecal coliform) that were estimated
for the 2003 CAFO rule. Mesophilic digestion reduces the retention
period to 12 to 20 days. In some limited cases digesters were shown to
reduce fecal coliform by as much as 99 percent, particularly by
thermophilic (higher temperatures in the range of 135 to 155 degrees
Fahrenheit) digestion, but regrowth of both fecal coliform and other
pathogens was shown to occur during effluent storage. (68 FR 7217.) EPA
did not receive any public comments or data during the 2003 rulemaking
process that provided a reliable means of either quantifying this
regrowth or differentiating the performance of digesters from the die-
off and regrowth that occurs in untreated manure storage facilities.
Most importantly, a digester does not eliminate the need for the CAFO
to have liquid impoundments for process wastewater, treated wastewater,
and storm water runoff. EPA previously noted that the digester process
may stabilize manure, and may offer certain other benefits (e.g.,
energy recovery, control of methane emissions), but as a result of the
storage requirements (and associated potential for regrowth) the
technology would not necessarily result in decreased discharges of
pollutants (including pathogens) beyond the selected BPT option. (68 FR
7217.) EPA notes that digestion may also be conducted aerobically, but
this variation

is rarely seen at CAFOs due to process problems, design challenges,
high energy requirements, and disproportionately high costs. (See Table
8-14 of the TDD for a list of aerobic digestion and activated sludge
processes.)
    EPA further notes that digesters do not reduce the total nutrients
in animal wastes. Most of the phosphorus removed from the effluent is
concentrated in the digested solids, which are often used for land
application. Other data show that changes in pollutant composition,
particularly the soluble forms of nitrogen, could result in increased
discharges of pollutants following land application of digested manure,
specifically ammonia releases and other emissions. (See Chapter 8 of
the TDD.) Similarly, metals are not reduced and remain in the digester
effluent and solids. EPA further rejects this technology as practical
for all CAFOs due to the high failure rate of these systems at certain
types of facilities (see Cost Report, page 5-119), as well as the
substantial costs including significant capital costs and the large
uncertainty in any potential annual cost offset due to energy recovery.
As of October 2002, there were 40 CAFOs with operating digesters out of
several hundred thousand AFOs nationwide, of which 35 were able to
partially offset costs through biogas recovery. In addition, EPA
continues to believe that mandating the use of anaerobic digesters
could divert resources from or complicate the installation of other
technologies that can potentially achieve better performance overall.
This finding does not alter EPA's previous conclusion that the use of
digesters by CAFOs on a site-specific basis may be appropriate in some
circumstances (e.g., as part of a manure management system to comply
with the new source requirements (see 68 FR 7220), but today's proposal
concludes that the technology is not an appropriate basis for setting
national BCT standards for conventional pollutants.
    Despite EPA's conclusion that digesters are not technologically
feasible for many CAFOs across a subcategory, today EPA presents the
BCT cost test for those CAFOs where the digester technology is most
likely to be feasible--large swine and dairy facilities. This option
includes treatment in a mesophilic digester (either a heated covered-
lagoon digester, plug flow, or complete mix digester, with biogas
recovery) prior to manure storage. Treated manure is assumed to be
stored in the CAFOs existing manure storage facility and land applied
consistent with the BPT requirements of 40 CFR 412.
    To evaluate costs and pollutant reductions of all technologies
presented today, EPA used the same 1,600 farm-based cost models EPA
used in the 2003 CAFO rule (68 FR 7243; also see Chapters 2 and 5 of
the Cost Report). Digester costs were determined using EPA's AgStar
Farmware (version 2). As described above, quantifying pathogen
reductions is difficult. For purposes of conducting the cost-
reasonableness test, EPA assumes the heated digester system will reduce
fecal coliforms in the stored manure by 99 percent (atwolog order
reduction). EPA's digester option costs include cost-offsets due to
biogas recovery and energy recovery, and a new storage pond for
effluent storage if the CAFO did not already utilize a liquid storage
structure. EPA's costs also include annual technical consultation and
services necessary to assure effective digester system operation, and
optimal biogas generation and energy recovery.
    Runoff of land applied manure was simulated using the Groundwater
Loading Effects of Agricultural Management Systems (GLEAMS) models EPA
developed for the 2003 CAFO rule (see III-19 of ``Loads Report'').
GLEAMS is a field-scale model that simulates hydrologic transport,
erosion, biochemical processes such as chemical transformation and
plant uptake, and nutrient losses in surface runoff, sediment, and
groundwater leachate and is described in the Loads Report. The National
Water Pollution Control Assessment Model (NWPCAM) is a national
surface-water quality model designed to characterize water quality for
the nation's network of rivers, streams, and lakes. In the 2003 CAFO
rule analysis, NWPCAM simulations predicted that, on average
nationwide, 75 percent of fecal coliform, 88 percent of BOD5, and 79
percent of TSS that reach the edge-of-field will reach surface waters
(all calculated at the RF3 storm reach level). EPA combined the reduced
discharges of conventional pollutants from modeled production area
overflows (see Loads Report for more information) with the reduced land
application discharges based on the edge-of-field load analyses (the
GLEAMS simulations followed by attenuation in the NWPCAM model) to
quantify reductions in conventional pollutant discharges from both the
production area and the land application area. EPA also conducted
sensitivity analyses on the range of costs of this technology by
considering alternative cost offsets for biogas recovery for energy
production. The specific assumptions and resulting model farm costs may
be found in DCN 22177 and DCN 1-02001.
    The incremental costs (annualized costs in 2001 dollars) and
pollutant reductions are shown in Table E.2 which follows the
discussion of technology options analyzed. 2001 dollars are used for
comparability with POTW benchmark costs. The cost index used to bring
forward CAFO costs to year 2001 is the same index that was used to
bring forward POTW benchmark costs to year 2001 dollars. Since the POTW
cost test compares cost to pollutant ratios for both industry and
POTWs, applying the same cost index to both ratios would not change the
overall comparison of these ratios. For this reason, EPA has determined
that it is not necessary to bring the 2001 costs forward to current
year dollars for any technology option presented today.
    Fluidized Bed Incinerators. This technology was reviewed but not
considered as a technology option in the 2003 CAFO rule. Fluidized bed
incineration is a proven technology for reducing waste volume and for
converting the waste to useful products (e.g., energy, nutrient
enriched ash), and is being used at municipal waste disposal
facilities. However, even at municipal operations, incineration can be
a costly method of disposal and frequently requires co-combustion with
other feedstocks.
    In addition, incinerators are not widely used in the United States
to manage animal manure because they are generally not affordable to
individual CAFOs. Application of this technology has been attempted
unsuccessfully by a beef feedlot in the U.S., but the incinerator
thermal output could not be sustained (TDD, 8-93 to 8-95). Fluidized
bed incinerators are also sensitive to moisture content and fuel
particle size, limiting incinerator effectiveness to those wastes that
are no more than 15-20 percent moisture.
    Individual poultry CAFOs in the U.S. do not currently use
incineration as a method of handling excess poultry litter, although
centralized incinerator projects have been successfully developed in
the European Union in selected geographic areas with a high density of
poultry operations, and several similar systems have been proposed in
the U.S. These centralized incinerators reduce pathogens in the litter.
However, large-scale, centralized incineration plants have not yet
successfully translated into feasible, smaller-scale units for
individual CAFO use. (See Chapter 8 of the TDD.)

    EPA is aware that it is also possible to gasify manure solids on-
farm, but this technology is still in the pilot stage. EPA is further
aware of a demonstration project that heats the manure in a refractory
oven, and uses the gasses to replace propane in a mortality handling
system. EPA is not aware of any individual CAFOs using incineration due
to fuel costs, the high capital costs of the incineration unit, and the
inability to sustain the technology for most animal manures. EPA
therefore rejects this technology as not technologically feasible for
individual CAFOs.
    Chemical Disinfection. Methods of disinfection include chemical
addition, heat, mechanical methods, and radiation. Various types of
chemical addition for the purpose of disinfection were reviewed but not
selected as part of a technology option in the 2003 CAFO rule. (See
Chapter 8 of the TDD for more information.) Commonly used disinfection
technologies in the U.S. include the addition of chemicals such as
chlorine, calcium hypochlorite, sodium hypochlorite, lime, and ozone.
Chlorination has a history of select pathogen destruction effectiveness
and is relatively inexpensive when used as a polishing step for final
incremental removal of pathogens. The Occupational Safety and Health
Administration (OSHA) has established intensive training and safety
measures for chlorine use. (DCN 1-01198.) Organic compounds present in
typical CAFO wastewater can combine with chlorine to form chloroform (a
documented animal carcinogen), monochloramines, and other toxic chloro-
organic compounds. Chlorine dioxide is widely used as an alternative
bactericide, but requires expensive generating equipment, and produces
chlorate and chlorite as potentially undesirable by-products. Chemical
addition is not commonly practiced in the United States for treatment
of animal wastes. In order for chlorination to be optimally effective
and to minimize the generation of chlorinated by-products, the treated
wastewater should have low levels of suspended solids--generally 30 to
50 mg/l or less. Therefore, to implement chlorine-based disinfection,
animal wastewater would require primary and/or biological treatment
prior to disinfection. Storage tanks, dosage control equipment, and
mixing equipment would need to be retrofitted. The capital investment
to modify a typical CAFO's existing manure management system would be
costly and operation of the system would require higher levels of
maintenance and operator skill.
    Lime addition is used as a disinfectant for animal wastes found in
barns and milking parlors. Lime addition is a proven treatment
technology for achieving Class A and Class B biosolids standards. To
meet Class B requirements using lime stabilization, the pH of the
biosolids must be elevated to more than 12 for two hours and
subsequently maintained at more than 11.5 for 22 hours. The material
also needs to be kept at high temperature (70 degrees Celsius) for at
least 30 minutes, which would require outside heating of the material
to be treated. EPA has very little data on the scalability of the
technology to individual CAFOs. What data there is suggests that the
capital costs for holding tanks, dosage tanks, mixing equipment, and
neutralization tanks necessary for retrofitting this technology at
CAFOs would be high. The addition of lime results in an increase in
sludge volume, although lime stabilization generally requires less
storage space than alternatives such as composting. Most high moisture
CAFO wastes would require some sort of digestion and/or dewatering
prior to stabilization. EPA believes additional costs for operator
training, safety controls, chemical purchases, and increased volume of
materials that must be hauled and land applied may be another reason
the technology has not been adopted by CAFOs given the successful
application of lime addition to biosolids. Lime addition in poultry
houses has been shown to interfere with pesticide functionality, and
lime addition to poultry litter has been shown to cause a huge flush of
ammonia emissions from the litter. EPA further notes that the addition
of lime to organic wastes in general has been shown to accelerate
ammonia emissions.
    Ozone is a highly effective germicide against a wide range of
pathogenic organisms, including bacteria, protozoa, and viruses. Ozone
use in U.S. wastewater treatment is limited due to high capital and
operating costs and intensive energy requirements. Ozonation, like
chlorination, requires a wastewater that has relatively low levels of
solids to avoid regrowth of microorganisms after disinfection and limit
costs associated with oxidizing oxygen demanding solids. Ozone
disinfection technology is not commonly used in the United States for
treatment of animal wastes. The processes are costly and require higher
levels of maintenance and operator skill. Efficient ozone disinfection
requires a pH of 6-10 and temperature of at least 36 degrees
Fahrenheit. (TDD, p. 8-117.) To implement this technology, animal
wastewater would require primary and/or biological treatment prior to
disinfection (DCN 1-01198). Therefore, EPA rejected ozonation as
impractical due to high operation and maintenance requirements, high
operator skill requirements, considerable worker safety concerns, and
overall high costs.
    For the above reasons, EPA finds that all of these chemical
addition technologies are not technically feasible for individual
CAFOs.
    Deep Stacking and Composting of Poultry Litter. Deep stacking
consists of piling litter in a conical pile or stack after it is
removed from a poultry house and raising the temperature to a maximum
of 140 Fahrenheit (60 Celsius) by microbes. As with anaerobic
digestion, incineration, and in some cases, chemical addition, the heat
(high temperature) reduces pathogens. Although the practice of deep
stacking poultry litter enhances its potential value as a feedstuff for
ruminants by reducing concern about possible pathogen transmission, the
stacked poultry litter is not pathogen free. The stacked litter is not
mixed out of concern that re-aeration will create the potential for
excessive heating. Thus, outer regions of the deep stacked litter do
not reach the temperatures necessary for pathogen destruction. In
practice, deep stacking may be considered a specialized approach to
composting in which oxygen availability limits the overall temperature
and the degree to which dry matter (``volatile solids'' or ``VS'') are
destroyed. (TDD, p. 8-131 to 8-132.) Due to the lack of reliable data
on the overall effectiveness of the technology in reducing fecal
coliform, the operational similarities to windrow composting (an option
already evaluated), and limited applications to limited types of
poultry CAFOs, EPA rejects deep stacking as not technically feasible
for consideration as a BCT candidate.
    For more general composting practices (e.g., windrow composting),
EPA notes that the effectiveness of the technology is weather
dependent, it requires a large amount of land, and additional runoff
controls and wastewater storage, and its use would impose a much higher
operating cost on CAFOs. (TDD, p. 8-102 to 8-110; Cost Report, Section
5.12.) Not withstanding these limitations, some CAFOs successfully use
composting technologies. Windrow composting in particular is available
to a range of CAFOs, and was included in technology option 5a for beef
and dairy operations in the 2003 rule. Composting is also a

technically feasible technology for incremental pathogen removals at
most poultry operations. Composting was therefore further evaluated for
cost reasonableness for beef, dairy, and poultry operations as part of
today's proposal.
    As with the digester option, the model farms used in the analysis
were the same as those used in the 2003 final CAFO rule. Costs were
based on windrow composting, and include turning equipment, labor,
berms for runoff controls, a storage pond for collection of compost
site effluent, and solid-liquid separation for beef and dairy
facilities. For purposes of this analysis, EPA assumes 99 percent
reduction of fecal coliform in the manure or litter prior to overflows
from storage ponds or runoff from land application of the manure. EPA
is aware that some composting operations today offset their costs
through sales of the composted material. EPA believes regulatory
requirements that resulted in all facilities in a geographical area
composting their manure would flood the local market and significantly
reduce a CAFO's ability to offset costs through compost sales. For this
reason, compost sales cannot reliably be included as cost offsets for
this option.
    Ground water controls. As discussed above, the ground water option
(2003 CAFO rule Option 3) may result in decreased discharges of
pollutants in comparison to the final BPT requirements. However, EPA
concludes the conventional pollutant reductions for Option 3 are small.
In analyzing this option, soil permeability was used to determine
leakage values (a reflection of the pollutant mobility in the soil
under the manure storage area). Estimated costs included a retrofit
installation of synthetic liners plus monitoring wells in the vicinity
of manure storage structures. EPA estimated national pollutant
reductions by first looking at each geographical region's probability
for ground water contamination. Factors influencing potential for
ground water contamination include the presence of sandy soils, shallow
groundwater tables, and the presence of karst or karst-like terrain
(see Table 29 in section III.G of the Loads Report). Regional loads
were summed to generate a national load estimate. The incremental costs
and pollutant reductions for this option in the 2003 CAFO rule analysis
are presented in Table E.2.
    No discharge option. As discussed above, the no discharge option
for existing swine and poultry facilities (2003 CAFO rule Option 5)
would result in decreased discharges of conventional pollutants in
comparison to the final BPT requirements. In the earlier rulemaking,
EPA rejected this option for BAT because it was not found to be
economically achievable. Consequently, this option is not an available
BCT technology. The incremental costs and pollutant reductions from the
2003 CAFO rule analysis are presented in Table E.2.
    Production Area Management Practices. One mechanism for pathogen
discharges to surface waters is catastrophic spills. In the 2003 rule,
EPA required various production area management practices to address
catastrophic spills, and has not identified any additional production
area management practices that would further reduce pathogen discharges
from the production area.
    EPA expects that the 2003 rule requirements for no discharge from
the production area, as well as routine inspection and mandatory
management practices for the control of liquid impoundment levels, will
reduce catastrophic spills (40 CFR 412.37(a)(1) and (2)). At the
production area, operators are required to handle animal mortalities in
a manner so as to prevent contamination of surface water (40 CFR
412.37(a)(4)). The proper use of manure as a fertilizer is closely
linked with manure storage, typically resulting in increased storage
capacity and longer retention times of both liquid and solid manure
allowing increased opportunity for die-off of pathogens due to
competition, UV, and other factors. For example, runoff from fields
receiving poultry litter that had been stored prior to application
showed no significant difference in pathogen content from runoff from
control fields to which manure had not been applied (GEIS, 1999),
demonstrating that pathogen reductions from lengthy storage times are
significant. (See Response to Comments Document, CAFO400085-16.)
    Minimum storage periods, while site-specific, are nonetheless
necessary to meet the land application requirements of the 2003 CAFO
rule (see ``Cost Methodology'' report for more information on typical
storage periods; see Chapter 2 of ``Managing Manure'' for more
information on the link between adequate storage and land application
practices). Adequate storage, though not specifically defined by the
2003 CAFO rule, already accomplishes significant pathogen reductions.
(See ``Loads Report'' for pollutant reduction estimates attributed to
storage and the production area management practices required by the
final CAFO rules.) EPA has not identified any additional production
area management practices that will result in additional reductions of
pathogens.
    Land Application Practices. Although the requirements of the 2003
rule related to land application of manure were not specifically
designed to reduce the pathogens in animal wastes, they are effective
at achieving reductions of pathogens in CAFO discharges. In addition to
the production area management practices described above, CAFO
discharges of pathogens are further reduced by applying manure at rates
that ensure appropriate agricultural utilization of nutrients and
establishing setbacks or buffers where manure, litter, and other
process wastewater are not applied. Accordingly, the final rule
requirements include several land application practices, such as
appropriate rates and timing of application, overall consideration of
whether any land application should occur, and application setbacks and
buffers. The 2003 CAFO rule also requires field-specific assessments of
the potential for nutrient transport for each field to which manure may
be land applied. Such assessments must address the source, form,
timing, and method of application. Application rates must minimize
phosphorus and nitrogen transport from the field to surface waters (40
CFR 412.4(c)(2)). Application rate has been identified as the single
most important factor affecting pollution of surface waters from fields
receiving manure. In one case study, swine lagoon effluent applied to
tile drained fields at 1.1 inches showed no difference in runoff
quality from the control fields, but application at three times this
rate yielded high levels of fecal coliform in the adjacent surface
water.
    The final selected option also specifies that manure, litter, or
other process wastewaters are not to be applied within 100 feet of any
down-gradient surface waters, open tile line intake structures,
sinkholes, agricultural well heads, or other conduits to surface waters
(40 CFR 412.4(c)(5)). This setback is an area where manure, litter, or
other process wastewaters are not applied, but crops may continue to be
grown. The setback achieves pollutant reductions by increasing the
distance pollutants have to travel to reach surface waters. The
transport of nutrients and other pollutants (including pathogens) in
manure to surface waters and the rate at which transport occurs is
dependent on the land use, geography, topography, climate, amount and
method of manure application, and the nature and density of vegetation
in the area. As a compliance alternative to the setbacks

requirement, CAFOs may use vegetated buffers (40 CFR 412.4(c)(5)).
EPA's record shows numerous examples of buffers with trapping
efficiencies as high as 91% (e.g., see DCNs 385026, 321083, 22374).
Buffer strips stabilize streambanks and shorelines, and prevent loss of
pollutants from bank erosion and slumping. (Response to Comments
Document, CAFO400085-16.) As indicated above, EPA considered and
selected nutrient management and use of setbacks or buffers for the BPT
ELGs (see 40 CFR 412.4 and 412.37). Because pathogen transport often
occurs through adherence to soil or other solid particles, management
practices that reduce discharges of other pollutants, particularly TSS,
will also reduce pathogen discharges.
    As described previously, pathogen die-off occurs during the period
manure is stored prior to land application, and further die-off of
pathogens occurs when the animal waste is exposed to sunlight following
surface application to land. Pathogenic bacteria in particular are
sensitive to changes in environmental conditions. EPA applied the
GLEAMS model to estimate changes in pollutants leaving the land
application areas of CAFO facilities. EPA also calculated reductions in
pathogen indicator loadings from the production area of facilities.
(See Response to Comments Document, Appendix A, Essay: CAFOs as Sources
of Pathogens and Related Risks).
    Additional factors affecting pathogen content in the runoff from
land application areas include incorporation methods, tillage
practices, saturation of the receiving field, and elapsed time
following application before a rainfall. These factors are expected to
be addressed, where appropriate, in the State technical standards
required under 40 CFR 412.4(c)(2). For examples, see ``Managing
Manure,'' 2-12 for a discussion of additional storage capacity for the
winter season; Appendix L for technical guidance on minimizing risks of
runoff of manure in the winter; and Appendix M for guidance on
estimating the minimum level of rainfall at which runoff begins.
    In the 2003 CAFO rule, 40 CFR 412.4 requires technical standards
for nutrient management to address the form, source, timing, and method
of application to each field. At the time EPA evaluated, but did not
select, technology Option 7 (same as Option 2 plus prohibition of land
application of manure to frozen, snow-covered, or saturated ground).
The incremental costs and pollutant reductions from the 2003 CAFO rule
analysis for this option for beef and dairy facilities are presented in
Table E.3. Today, EPA also presents the costs and conventional
pollutant reductions of this technology option for swine facilities. To
comply with this requirement at swine facilities, EPA has calculated
the costs for additional storage capacity (up to six months additional
storage in the Midwest and Mid-Atlantic regions; facilities in the
Southern region were assumed not to need additional containment for
manure storage over the winter). In all other respects, the cost models
and model farms are the same as those used in the 2003 CAFO rule. EPA
notes some incremental pollutant reductions from the productions area
occur as a result of this requirement due to a reduction in frequency
of overflows from manure storage areas, and that minimal reductions
occur from the land application areas because the technical standards
and NMPs required by the 2003 CAFO rule, while not banning application
of manure to frozen, snow covered and saturated fields outright,
already address timing issues associated with application of manure.
EPA did not identify any additional land application management
practices that will result in additional reductions of pathogens.
(b) Do Any of These Technologies Pass the BCT Cost-Reasonableness Test?
    In addition to other factors specified in Section 304(b)(4)(B), the
CWA requires that EPA establish BCT limitations after consideration of
a two part ``cost-reasonableness'' test. The ``cost reasonableness''
test evaluates ``the reasonableness of the relationship between costs
of attaining a reduction in effluent and the effluent reduction
benefits derived, and the comparison of the cost and level of reduction
of such pollutants from the discharge of POTWs to the cost and level of
reduction of such pollutants from a class or category of industrial
sources * * *'' EPA explained its methodology for the development of
BCT limitations in July 1986 (51 FR 24974). In developing the BCT
methodology, EPA was guided by legislative history of the Clean Water
Act, in particular, Congress' concern that controls for conventional
pollutants at levels more stringent than BPT were likely to be
unreasonably expensive in some cases. The BCT methodology answers the
question of whether it is ``cost-reasonable'' for industry to control
conventional pollutants at a level more stringent than BPT already
requires.
    Establishing BCT effluent limitations for an industrial category or
subcategory begins by identifying technology options that provide
additional conventional pollutant control beyond that provided by
application of BPT effluent limitations. EPA evaluates the candidate
technologies by applying the two-part BCT cost test. To ``pass'' the
POTW test (the first part of the cost-reasonableness test), the cost
per pound of incremental conventional pollutant removed in upgrading
from BPT to the candidate BCT must be less than the cost per pound of
incremental conventional pollutant removed in upgrading POTWs from
secondary treatment to advanced secondary treatment. The second part of
the test that the ``candidate'' BCT technology must pass is the
industry cost-effectiveness test, discussed below.
    Historically, EPA has evaluated the cost-reasonableness of each
technology option on a subcategory basis. However, the candidate BCT
technologies being evaluated for CAFOs vary significantly in costs and
feasibility by animal type within a subcategory of CAFOs (Cost
Methodology Report, EPA-821-R-03-004). For CAFOs, the specific
candidate technologies are not universally applicable. If EPA were to
evaluate each technology across a subcategory, there would not be any
technology that could be applied to an entire subcategory to be
evaluated, and EPA would conclude no technology exists that could be
used to potentially establish BCT limitations more stringent than BPT.
Therefore EPA has evaluated each candidate technology on a species-
specific basis (the animal species for which the technology is believed
to be technologically available). These species-specific results may
then be assembled into candidate technology options that are practical
for a subcategory. This provides a meaningful evaluation of cost-
reasonableness for the entire subcategory, and is therefore both
appropriate and necessary for applying the BCT cost reasonableness
methodology to CAFOs.
    As described in the 1986 BCT methodology, the two conventional
pollutants used in calculating the POTW pollutant removal benchmark are
BOD and TSS. As previously discussed, EPA relied primarily on sediment
removals as an indicator of conventional pollutant reductions. The
models available for simulating pollutant reductions from land
application practices (GLEAMS, EPIC, and BASINS) do not measure BOD,
and EPA was not able to quantify BOD loadings from land application in
the 2003 CAFO rule. Runoff from land application areas contains BOD
from manure and process wastewaters, but it also contains BOD from
organic matter including background soil organic materials and crop
residues. In contrast to crop

residues, manure BOD is highly sensitive to moisture and aerobic
conditions, and quickly forms inorganic materials and nutrients after
land application, as evidenced by significant off-gassing (odor) as the
manure decomposes. (DCN 1-01230.) BOD deliveries to surface water are
also highly variable, but current literature suggests the timing of
land application in relation to future rainfall events is a key
parameter.
    Since the 2003 CAFO rule, models including WAM (Watershed
Assessment Model) and WMM (Watershed Management Model) were developed
that have some watershed level BOD modeling capability (for example,
see ``TMDLs for Nutrient, DO, and BOD for Delaney Creek,'' March 2005,
DCN 1-01222). The data required for the WMM model include: Area of all
the land use categories and the area served by septic tanks; percent
impervious area for each land use category; event mean concentration of
runoff (EMC) for each pollutant type and land use category; percent EMC
of each pollutant type that is in suspended form; and annual
precipitation. The lack of data/literature to support estimation of
national BOD loadings from land applied manure is a significant issue.
EPA concludes the capability is still not available to model BOD
runoff.
    The 2003 CAFO rule prohibits dry weather discharges from land
application areas, and the BPT land application requirements (including
technical standards for timing, form, and rate of application, as well
as the required vegetated buffer, setback, or equivalent practices)
already minimize discharges of BOD from land application areas.
However, the reductions in BOD in runoff from land application areas,
specifically the BOD attributable to manure and process wastewater, are
minimal in comparison to production area discharges of BOD. Therefore
EPA's load reductions for BOD include production area discharges
(overflows and runoff from manure storage), but do not include land
application. (See the TDD for discussion of EPA's modeling of overflows
from the production area and runoff from land application areas; also
see ``Loads Report'.) Table E.1 provides a summary of the costs and
pollutant reductions of the 2003 CAFO rule BPT.

                           Table E.1.--2003 CAFO Rule BPT Costs and Pollutant Removals
----------------------------------------------------------------------------------------------------------------
                                       Annualized costs                        TSS removed        Total pounds
               Sector                 ($2001, millions,     BOD removed      (million pounds    removed (million
                                           pre tax)       (million pounds)      sediment)           pounds)
----------------------------------------------------------------------------------------------------------------
Beef................................                 86                  0               1201               1201
Dairy...............................                128                  0                 99                 99
Swine...............................                 25                  0                113                113
Poultry.............................                 41                  6                181                187
----------------------------------------------------------------------------------------------------------------

    Table E.2 provides incremental costs and incremental pollutant
removals of candidate technologies in relation to BPT. Incremental
costs are the costs of the technology option minus the BPT costs from
Table E.1. Incremental load reductions are the pounds removed by the
technology option minus the BPT load reductions from Table E.1. Total
incremental reductions include BOD and TSS. See Section D.1(c) of
today's preamble for additional discussion of pathogens (fecal
coliform) reductions.

                               Table E.2.--Incremental Costs and Conventional Pollutant Removals of Candidate Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Annualized
                                                                                cost of
                                                                                candidate   Incremental  Incremental  Incremental     Total
                                                                                technology     costs     BOD removed  TSS removed  incremental
              Candidate technology                            Animal sector                 option      ($2001,      (million     (million    reductions
                                                                                ($2001,     millions,     pounds)       pounds      (million
                                                                                millions,     pre-tax)                 sediment)     pounds)
                                                                                pre-tax)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ground water Controls \1\......................  Beef..................................          231          145            0            0            0
                                                 Dairy.................................          316          188            0            0            0
                                                 Swine.................................           61           36            0            0            0
No Discharge...................................  Swine.................................          133          108            7            1            8
Composting.....................................  Beef..................................        1,367         1281            3           25           28
                                                 Dairy.................................          277          149            1            7            8
                                                 Poultry...............................          508          467            0            0            0
Anaerobic Digestion............................  Dairy.................................          505          377            2            9           11
                                                 Swine.................................           79           54            6            0            7
Land Application Timing Restrictions...........  Beef..................................          112           26            0            0            0
                                                 Dairy.................................          318          190            2            7            9
                                                 Swine.................................           37           12            7            1           8
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Only reduced discharges to surface waters via a hydrologic connection are included in this analysis.

    The POTW upgrade cost is referred to as the POTW benchmark; its
derivation is described in the 1986 final BCT methodology notice (51 FR
24974). The upgrade cost to industry must be less than the POTW
benchmark of $0.25 per pound (in 1976 dollars) or $0.65 per pound (in
2001 dollars). Table E.3 provides the cost per pound of conventional
pollutants (BOD and TSS) removed by the candidate technology. (See the
Addendum to the TDD, DCN 1-10227 for additional information on the POTW
benchmark.)

                                         Table E.3.--Cost Test Part One
                                               [POTW test results]
----------------------------------------------------------------------------------------------------------------
                                                                   Incremental cost
                                                                  per pound removed
        Candidate technology                Animal sector         by technology ($/       POTW test  result
                                                                         lb)
----------------------------------------------------------------------------------------------------------------
Ground water controls..............  Beef.......................              \1\NC  Fail.
                                     Dairy......................                 NC  Fail.
                                     Swine......................                 NC  Fail.
No discharge.......................  Swine......................              13.55  Fail.
Composting.........................  Beef.......................              46.39  Fail.
                                     Dairy......................              17.84  Fail.
                                     Poultry....................                 NC  Fail.
Anaerobic Digestion................  Dairy......................              34.15  Fail.
                                     Swine......................               7.89  Fail.
Land Application Timing              Beef.......................             366.65  Fail.
 Restrictions.
                                     Dairy......................              20.90  Fail.
                                     Swine......................               1.55  Fail.
----------------------------------------------------------------------------------------------------------------
\1\ Values were not calculated because no additional pollutant reductions to surface waters were expected for
  these options.

    In all cases, the POTW benchmark is lower than the cost per pound
of conventional pollutants removed by the candidate technology. Since
the candidate technologies all fail the POTW cost test, the candidate
technologies are not cost-reasonable. EPA notes that even though a
candidate technology may be affordable for a subcategory, the candidate
technologies must be cost-reasonable to be considered as a basis for
setting BCT limitations.
    EPA concludes that since all candidate technologies fail the POTW
test for each species evaluated, any technology option developed for
subcategories C or D utilizing a combination of these candidate
technologies also fails the POTW test. In addition, EPA believes the
results presented here for beef, dairy, swine, and poultry operations
are reasonably extrapolated to veal calf operations (which are
typically total confinement operations like swine) and heifer
operations (which use similar waste management technologies to beef
feedlots). EPA notes veal calf and heifer operations comprise
approximately two percent of all Large CAFOs. Once the candidate
technology fails the POTW test, the candidate technology fails the
cost-reasonableness test. The industry cost-effectiveness test (the
second test for determining cost reasonableness) is only relevant if
the POTW test (the first test) is passed. The following discussion of
the industry cost-effectiveness test is provided today for
completeness.
    The second test that the candidate BCT technology must pass to be
considered cost-reasonable is the industry cost-effectiveness test. To
pass the industry cost test, EPA computes a ratio of two incremental
costs. The first incremental cost is the cost per pound removed by the
candidate technology relative to BPT. The second incremental cost is
the cost per pound removed by BPT relative to no treatment (i.e., raw
wasteload). As in the POTW test, the ratio of the first cost divided by
the second cost is compared to an industry cost benchmark. The industry
cost benchmark is the ratio of two incremental costs: The cost per
pound to upgrade a POTW from secondary treatment to advanced secondary
treatment is divided by the cost per pound to initially achieve
secondary treatment. If the industry ratio is lower than the benchmark,
then the candidate technology passes the cost test. The industry cost
benchmark is 1.29 (see 51 FR 24974; also see the Pulp and Paper Final
Rule Technical Development Document, EPA-821-R-97-011). Table E.4 shows
the ratio of the incremental costs for the candidate technology
options. (See Addendum to the TDD for additional information on the
cost ratio calculations.)

                                         Table E.4.--Cost Test Part Two
                                   [Industry cost-effectiveness test results]
----------------------------------------------------------------------------------------------------------------
                                                          Candidate
     Candidate technology          Animal sector       technology cost     Industry cost     Industry cost test
                                                            ratio            benchmark             result
----------------------------------------------------------------------------------------------------------------
Ground water controls........  Beef.................                 NC               1.29  Fail.
                               Dairy................                 NC               1.29  Fail.
                               Swine................                 NC               1.29  Fail.
No discharge.................  Swine................              61.15               1.29  Fail.
Composting...................  Beef.................             647.70               1.29  Fail.
                               Dairy................              13.86               1.29  Fail.
                               Poultry..............                 NC               1.29  Fail.
Anaerobic digestion..........  Dairy................              26.52               1.29  Fail.
                               Swine................              35.63               1.29  Fail.
Land Application Timing        Beef.................           5,119.52               1.29  Fail.
 Restrictions.
                               Dairy................              16.23               1.29  Fail.
                               Swine................               6.99               1.29  Fail.
----------------------------------------------------------------------------------------------------------------

    In all cases, the candidate technology's cost ratio is higher than
the industry cost benchmark, and the technology would fail the second
test. EPA concludes that since all candidate technologies fail the
industry cost-effectiveness test for each species evaluated, any
technology option developed for subcategories C or D utilizing a
combination of these candidate technologies also fails the industry
cost test for similar reasons described above.
(c) How Is EPA Evaluating Pathogens in Its BCT Cost Reasonableness
Analysis?
    As stated above, EPA establishes BCT effluent limitations for an
industrial category or subcategory by identifying technology options
that provide additional conventional pollutant control beyond that
provided by application of BPT technologies. EPA evaluates candidate
technologies by applying the two-part BCT cost test where one
requirement is that the cost per pound of conventional pollutant
removed in upgrading from BPT to the candidate BCT must be less than
the cost per pound of conventional pollutant removed in upgrading POTWs
from secondary treatment to advanced secondary treatment. The two
conventional pollutants used in calculating the POTW pollutant removal
benchmark are BOD and TSS.
    For the candidate technology's cost comparison, the 1986 BCT
methodology describes the use of BOD and TSS, and also oil and grease
when appropriate in the context of the industry and technology being
evaluated. When the Agency promulgated the BCT methodology (including
descriptions of how to apply the cost test), fecal coliform and pH were
not included in the calculations because, unlike BOD and TSS, these
pollutants were not measurable as ``pounds removed.'' Section
304(b)(4)(B) authorizes EPA to consider other appropriate factors in
establishing BCT. The 1986 methodology envisioned the need for
adjustments to the BCT cost test methodology in future rulemakings to
account for lack of comparable data or other industry-specific factors.
(51 FR 24974, 24976 (July 9, 1986).) For CAFOs, where pathogen
reductions are a factor to be considered, including fecal coliform for
the determination of BCT cost reasonableness is an appropriate
application of such flexibility.
    The Second Circuit directed EPA to make an affirmative finding that
the BCT-based ELGs adopted in the 2003 CAFO rule do in fact represent
the best conventional pollutant control technology for reducing
pathogens, specifically fecal coliform. Although fecal coliform is not
typically used in BCT cost calculations, in light of the Second
Circuit's direction and the flexibility inherent in the BCT
methodology, EPA developed procedures to evaluate cost-reasonableness
for fecal coliform removal for this industry. Therefore, today's
proposal includes an additional set of cost comparisons to directly
account for pathogens by specifically including fecal coliform, the
only conventional pollutant that is a possible pathogen. EPA thus adds
fecal coliform to the BCT determination, which is an appropriate
adjustment to the BCT methodology for the CAFO industry. The proposed
approach parallels the two-part cost-reasonableness test conducted
above for pounds of conventional pollutants, but here, pounds of
conventional pollutants is replaced by colony forming units (CFU) of
fecal coliform. Table E.5 presents the costs and fecal coliform (FC)
removals of the 2003 CAFO rule (BPT).

          Table E.5.--2003 CAFO Rule BPT Costs and FC Removals
------------------------------------------------------------------------
                                     Annualized costs
              Sector                ($2001, millions,      FC removed
                                         pre-tax)        (million CFU)
------------------------------------------------------------------------
Beef..............................                 86     10.56 x 10\13\
Dairy.............................                128      0.97 x 10\13\
Swine.............................                 25      0.42 x 10\13\
Poultry...........................                 41      6.74 x 10\13\
------------------------------------------------------------------------

    Table E.6 provides incremental costs and incremental fecal coliform
(FC) removals of candidate technologies in relation to BPT. In this
analysis, EPA has again evaluated the candidate technologies first on a
species-specific basis. These results may then be combined to form
candidate technology options that can be used to conduct the cost-
reasonableness test on a subcategory wide basis. Costs are the same as
those presented in Table E.2. Fecal coliform removals were determined
using the 2003 CAFO rule methodology as described above in section
E.3(a).

                     Table E.6.--Incremental Costs and FC Removals of Candidate Technologies
----------------------------------------------------------------------------------------------------------------
                                                                               Incremental
                                                                             annualized cost     Incremental FC
          Candidate technology                      Animal sector           ($2001, millions,  removed  (million
                                                                                pre-tax)             CFU)
----------------------------------------------------------------------------------------------------------------
Ground water controls...................  Beef............................                145             \1\ ND
                                          Dairy...........................                188                 ND
                                          Swine...........................                 36                 ND
No discharge............................  Swine...........................                108       7.4 x 10\13\
Composting..............................  Beef............................               1281       250 x 10\13\
                                          Dairy...........................                149      30.4 x 10\13\
                                          Poultry.........................                467     0.460 x 10\13\
Anaerobic digestion.....................  Dairy...........................                377      22.9 x 10\13\
                                          Swine...........................                 54       136 x 10\13\
Land Application Timing Restriction.....  Beef............................                 26     0.560 x 10\13\
                                          Dairy...........................                190      22.9 x 10\13\

                                          Swine...........................                 12      136 x 10\13\
----------------------------------------------------------------------------------------------------------------
\1\ Values were non-zero, but too small to report in the indicated units.

    EPA needed to develop a new benchmark to use for this alternative
POTW part of the BCT cost test which reflects the cost to reduce fecal
coliform at a POTW. To do this, EPA first examined the costs of removal
of fecal coliform at secondary and advanced secondary plants. EPA
defined both secondary and advanced secondary plants in the same way as
in the 1986 BCT cost methodology. Secondary plants are assumed to be
activated sludge plants and advanced secondary plants are activated
sludge plants with polymer addition. EPA reviewed the POTW costs
presented in the July 9, 1986, Federal Register Notice, and confirmed
that the costs reflect both chlorination and biological treatment (see
51 FR 24982). Performance data show that the majority of fecal coliform
removal (90 to 98 percent) occurs during secondary treatment and is
accomplished through removal of the biosolids. Disinfection, such as
through chlorination or ultraviolet decomposition, is used as a
polishing step to reduce fecal coliform to below 200 CFU/100 mL. EPA
concludes that the POTW benchmark must reflect the cost of biological
treatment as well as a polishing step for disinfection.
    Second, EPA evaluated the amount of fecal coliform removed at
POTWs. EPA evaluated reported influent and effluent fecal coliform data
reported by POTWs on their discharge monitoring reports (as assembled
in EPA's Permit Compliance System). EPA determined, however, that there
were insufficient influent data to develop a representative national
influent concentration for fecal coliform. Therefore, EPA used
reference data on typical domestic wastewater concentrations of fecal
coliform (Metcalf and Eddy, Wastewater Engineering: Treatment,
Disposal, and Reuse (1991 3d ed.), DCN 1-01002.) EPA notes that the
limited PCS influent data falls within the range of the domestic
wastewater reference data. (See DCN 1-01002.)
    Final effluent fecal coliform concentration from POTWs with
secondary treatment was set at 200 CFU per 100 mL (Ambient Water
Quality Criteria for Bacteria, DCN 1-01004). EPA used data from EPA's
Permit Compliance System to evaluate national effluent concentrations
of fecal coliform from POTWs with advanced secondary treatment. The
data shows those POTWs with advanced secondary treatment generally
achieved fecal coliform effluent concentrations of 20 to 40 CFU/100 mL,
with a median effluent of 21 CFU per 100 mL. (See DCN 1-01005.)
    Finally, EPA estimated the benchmark cost to remove a trillion CFU
per year for each of the five flow categories evaluated in the 1986 BCT
cost methodology, and weighted the costs by total POTW flow for the
category. The resulting incremental cost per trillion CFU removed was
$0.33 (2001). (See Addendum to the TDD for additional information on
the POTW benchmark calculations.) Table E.7 shows the POTW test results
using this fecal coliform POTW benchmark for conducting part one of the
cost-reasonableness test.

                                  Table E.7.--Fecal Coliform Cost Test Part One
                                               [POTW test results]
----------------------------------------------------------------------------------------------------------------
                                                                  Cost per trillion
        Candidate technology                Animal sector           CFU removed by        POTW  test result
                                                                      technology
----------------------------------------------------------------------------------------------------------------
Ground water controls..............  Beef.......................            \1\ NC1  Fail.
                                     Dairy......................                 NC  Fail.
                                     Swine......................                 NC  Fail.
No discharge.......................  Swine......................               1.46  Fail.
Composting.........................  Beef.......................               0.51  Fail.
                                     Dairy......................               0.49  Fail.
                                     Poultry....................             101.44  Fail.
Anaerobic digestion................  Dairy......................               1.64  Fail.
                                     Swine......................               0.04  Pass.
Land Application Timing              Beef.......................               4.58  Fail.
 Restrictions.
                                     Dairy......................               0.83  Fail.
                                     Swine......................               0.01  Pass.
----------------------------------------------------------------------------------------------------------------
\1\ NC means not calculated.

    For most sectors, the alternate POTW benchmark is lower than the
cost per CFU removed by the candidate technology. In these cases, the
candidate technologies fail the POTW test for fecal coliform. The
remaining candidate technologies are assumed to pass the POTW test and
move on to the second cost test.
    The second test that the candidate BCT technology must pass to be
considered cost-reasonable is the industry cost-effectiveness test. As
described previously, to pass the industry cost test, EPA computes a
ratio of two incremental costs. In the alternative cost test, the fecal
coliform reductions are used in lieu of pounds of TSS and BOD. The
first incremental cost is therefore the cost per trillion CFU removed
by the candidate technology relative to BPT. This is divided by the
cost per trillion CFU removed by BPT relative to no treatment (i.e.,
raw

wasteload). The industry cost benchmark is the ratio of two incremental
costs: The cost per trillion CFU to upgrade a POTW from secondary
treatment to advanced secondary treatment over the cost per trillion
CFU to initially achieve secondary treatment. If the industry ratio is
lower than the benchmark, then the candidate technology passes the cost
test. The industry cost benchmark is 0.04. Table E.8 shows the ratio of
the incremental costs for the candidate technology options and the
results of the second test. (See Addendum to the TDD for detailed
calculations of the industry cost benchmark.)

                                         Table E.8.--Cost Test Part Two
                   [Industry cost-effectiveness test results for the fecal coliform cost test]
----------------------------------------------------------------------------------------------------------------
                                                          Candidate
     Candidate technology          Animal sector       technology cost     Industry cost     Industry cost test
                                                            ratio            benchmark             result
----------------------------------------------------------------------------------------------------------------
Anaerobic digestion..........  Swine................               6.63               0.04  Fail.
Land Application Timing        Swine................               1.48               0.04  Fail.
 Restrictions.
----------------------------------------------------------------------------------------------------------------

    In both cases, the industry cost ratio is higher than the
benchmark. Therefore, none of the candidate technologies pass the
industry cost-effectiveness test. Since all candidate technologies fail
the BCT cost test for each species evaluated, any technology option
developed for subcategories C or D utilizing a combination of these
candidate technologies also fails the cost test. EPA notes the
reductions in fecal coliform achieved by the candidate technologies
(i.e., greater than 99 percent fecal coliform removal in the case of
digesters and composting) represent the upper bound attainable by any
technology. Finally, EPA's record shows all candidate technologies
would fail the second test even under EPA's sensitivity analyses that
assume considerable cost-offsets and cost-sharing. (See Addendum to TDD
for additional information on the sensitivity analysis for cost-
offsets. EPA solicits comment on all of these data and analyses.)
(d) What BCT Limitations Are Proposed Today?
    EPA found that the primary sources of discharges from CAFOs were
production area overflows due to inadequate operation and maintenance
of the infrastructure for containing and transporting liquid manure and
wastewater, and discharges from the application area due to
agriculturally improper application of manure, litter, and process
wastewater. EPA previously concluded that the BPT standards requiring
operation, maintenance, and record-keeping BMPs along with no discharge
from the production area, and land application BMPs that require
appropriate agricultural utilization of manure, litter, and process
wastewater, significantly reduce water pollutant discharges, including
pathogen loads.
    The technologies already evaluated by EPA generally show high
removals (99 percent) of conventional pollutants. In order to pass the
cost-reasonableness test, EPA believes any additional candidate
technologies would need to show similar pollutant removals and
significantly lower costs. EPA is also aware of technologies that may,
on a site-specific basis, be used to provide further reductions of
conventional pollutants. However, EPA's record shows these other
technologies are not available engineering alternatives for most CAFOs,
and they are therefore not technologically feasible candidates. (See
Chapter 8 of the TDD and the docket accompanying today's proposal for
descriptions of these additional technologies.) EPA further assumes
variations of the technologies evaluated today (for example, plug-flow
or complete mix anaerobic digesters versus activated sludge systems)
will have comparable or higher costs and comparable pollutant
reductions. Therefore, EPA concludes that variations of the candidate
technologies evaluated today will not pass the cost-reasonableness
test. EPA solicits comment on these findings.
    In summary, EPA identified several candidate technologies that can
potentially achieve greater removals of conventional pollutants than
the BPT standards. EPA evaluated these candidate technologies by
conducting the two-part cost reasonableness test. If any candidate
technologies are feasible and pass both the POTW and the industry cost
test, then the most stringent technology option among them becomes the
basis for setting BCT effluent limitations. Alternatively, if no
candidate technology more stringent than BPT passes, then BCT effluent
limitations are set equal to BPT effluent limitations. Today EPA finds
that all candidate technologies fail the cost-reasonableness test. EPA
also finds that all candidate technologies fail the alternative cost-
reasonableness test that is based on fecal coliform. Accordingly, EPA
proposes BCT effluent limitations equal to the 2003 CAFO rule BPT
limitations, and affirms that the 2003 CAFO rule BPT limitations do in
fact represent the best conventional pollutant control technology. EPA
solicits comment on all aspects of the cost-reasonableness analysis and
the alternative cost test presented today.

IV. Impact Analysis

A. Environmental Impacts

    When EPA issued the revised CAFO regulations on February 12, 2003,
it estimated annual pollutant reductions for the rule at 56 million
pounds of phosphorus, 110 million pounds of nitrogen, and two billion
pounds of sediment. The new proposed rule will retain these
environmental benefits since the technical requirements for facilities
that discharge are not affected and all facilities will still need to
control nutrient releases from the production and land application
areas. The overall magnitude of the benefits will increase over 2003
due to growth in the industry, but the analysis for today's proposed
rule does not recalculate these effects since the increase is not due
to changes in the CAFO regulations.
    The premise that environmental benefits are retained is based in
large part on the assumption that facilities that do not apply for
permits will, in fact, not discharge and will still manage wastewater,
manure and litter appropriately at both production and land application
areas. The preamble for the proposed rule makes clear that, although it
is not necessary for a CAFO to be covered by an NPDES permit in order
to qualify for the agricultural storm water exemption, it is the
Agency's view that if a facility wants to claim that precipitation-
related discharges from land-application areas are agricultural storm
water runoff, the CAFO should be land-applying at agronomic rates that
correspond to the requirements in 40 CFR 122.42(e)(1)(vi)-(ix) for land
application.

    The premise that benefits are retained is also based on the
conventional modeling assumption of ``full compliance,'' which in this
case involves assuming that all facilities that discharge will seek
permit coverage. EPA is aware that the permitting history of CAFOs to
date could be viewed as calling into question the validity of this
assumption. At the time of the 2003 CAFO rule, current estimates
indicated that only 4,000 CAFOs were permitted out of a total universe
of approximately 13,000 CAFOs potentially covered under the pre-2003
CAFO regulations. (See the Technical Development Document for the 2003
rule, Chapter 9.) This difference was driven by two key factors. First,
many operations claimed the 25-year, 24-hour storm exemption available
under the old regulations. Second, many authorized States were at that
point still developing their NPDES CAFO programs and were using a
variety of mechanisms to control discharges from CAFOs.
    The ongoing reporting on NPDES CAFO permitting completed by EPA
since passage of the 2003 rule continues to augment information on
CAFOs, and indicates that the number of permitted CAFOs is growing.
Currently, EPA estimates that approximately 8,500 CAFOs are covered by
NPDES permits. EPA plans to continue to work to ensure full NPDES
coverage for discharging CAFOs by expanding its partnership with
industry stakeholders.
    EPA seeks comment on its assumptions regarding the benefits of the
rule (no change from the 2003 rule).

B. Administrative Burden Impacts

    Since there is no change in technical requirements, changes in
impacts on respondents are estimated to result exclusively from changes
in the information collection burden. To determine the administrative
burden for the Paperwork Reduction Act (PRA) analysis for today's
proposed rule, the Agency examined the two key permitting changes
resulting from the Waterkeeper decision and how they would be
implemented under the proposal. These two permitting features are the
change in the duty to apply for CAFOs and the change to the NMP-related
provisions for CAFO permits.
    The 2003 CAFO rule had a universal duty to apply requirement which
required virtually all CAFOs to obtain NPDES permit coverage. The
supporting analysis for the rule estimated that as a result of this
requirement, approximately 15,500 CAFOs would ultimately receive NPDES
permits. (See the Technical Development Document for the 2003 rule,
Chapter 9.) Today's proposed rule changes the duty to apply requirement
so that only CAFOs that discharge or propose to discharge would need to
seek NPDES coverage. To derive the number of CAFOs that could
ultimately fall into this category, EPA first estimated industry size
for 2005 by projecting industry growth from the 2003 estimates using
both USDA 2002 Census of Agriculture statistics as well as Agency-based
sector expertise. This exercise yielded an estimate of approximately
18,800 total CAFOs for 2005. EPA then combined the 2005 projections for
each animal sector with information on standardized operational
profiles to anticipate the numbers of facilities as of 2005 that might
experience discharges. For example, when inclement weather precludes
land application or dewatering activities, open lot type facilities,
such as beef lots and dairy operations, are more likely to experience
conditions that could result in a discharge due to the use of open on-
site lagoons common at many of these facilities. Additionally, EPA
assumed that all dairies generate wastewater from the production area
and generally have uncovered on-site lagoons. Thus, for purposes of
burden estimates, EPA assumed that all dairies and most beef feedlots
would apply for permits.
    Even though the industry grew to roughly 18,800 CAFOs from 2002 to
2005 (an aggregate growth factor of approximately 22% due to industry
expansion and the trend toward larger, more concentrated facilities),
the change in the duty to apply requirement is anticipated to reduce
the number of facilities needing permit coverage to approximately
14,000 CAFOs. Based on these updated figures, EPA estimates that
approximately 25 percent fewer CAFOs would ultimately receive permits
under today's proposed rule than under the requirements of the 2003
rule. These projections are discussed in more detail in documentation
available in the public record for today's proposal.
    These figures may overestimate CAFO NPDES permits in that they make
conservative categorical assumptions about the likelihood of a
discharge based on broad operational profiles and do not account for
more subtle stratifications within specific operational categories. For
instance, although most dairies generate washwater from the production
area and have on-site lagoons, there do, in fact, exist dairies
designed to be zero-discharge operations.
    Using the CAFO universe numbers discussed above, EPA projects that
CAFO operators will experience an aggregate administrative burden
reduction of nearly $15.5 million annually as a result of the court
decision to vacate the duty to apply requirement since fewer facilities
will need to apply and submit the paperwork for NPDES permits.
Similarly, permit authorities (``State respondents'') will experience a
roughly $5.2 million reduction in administrative burden due to the
court decision to vacate the duty to apply requirement.
    In contrast, the administrative burden impacts from the NMP-related
changes made in response to the court ruling go up. EPA is revising the
permitting process for both individual and general permits to ensure
that CAFOs seeking permits submit their NMPs with their permit
application. (NMPs were already required for all CAFOs under the 2003
rule.) EPA projects that facilities collectively would only experience
a minimal increase in administrative burden--nearly $111,000 for all
facilities annually--as a consequence of this change. However, State
permitting authorities would face a $5.7 million annual increase in
administrative burden as a result of the significant effort needed to
review the NMPs for each permittee, arrange for public review and
conduct public hearings if requested, respond to comments, and
incorporate the terms of the NMP into the NPDES CAFO permit. For permit
authorities, these costs would more than offset the burden reduction
from the change in the duty to apply and the resulting decline in the
number of CAFO permits.
    Table 1 below summarizes the administrative burden changes expected
to occur as a result of the proposed rule. Baseline A presents the
costs to facilities and permitting authorities of implementing the 2003
CAFO rule as described above. In addition, Table 1 provides an
illustration in Baseline B of the administrative burden costs in the
absence of EPA's proposed rule. The permit processing burden (``duty to
apply'') for State permitting authorities in this scenario would
increase rather than decrease due to a lack of clarity on the
appropriate permitting processes for implementing the court ruling.
Specifically, under this baseline, EPA assumes that States would not be
able to realize time savings from the use of general permits for CAFOs
because of the Court's directive that CAFO permits include facility-
specific terms of the CAFO's NMP. EPA instead used burden estimates
associated with the individual permit process when costing the burden
for CAFO permits under Baseline B. The proposed rule provides a
mechanism for States to realize some time savings through the use of
general permits while

still complying with the Court's directive.
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP30JN06.048

    Overall, under Baseline A as previously described, the
administrative burden under the proposed rule (i.e., the difference
between Baseline A and the proposed costs of the proposal) is projected
to decline to a total of approximately $64 million, which constitutes a
reduction of roughly $15 million compared to the 2003 CAFO rule. This
burden impact estimate accounts both for growth in the industry and
changes in labor rates since the 2003 rule was issued. In addition, the
changes are based on annualized impacts, and assume a permit term of
five years as stipulated in the Clean Water Act. More documentation on
the administrative burden impacts is available in the public record for
today's proposal in the supporting documents for the Paperwork
Reduction Act analysis.

V. Cross Media Approaches

    Since 2003, EPA and some stakeholders have been interested in
developing a framework to enable CAFOs to pursue superior environmental
performance across all media. We are aware that today some CAFOs
voluntarily conduct whole-farm audits to evaluate releases of
pollutants to all media through Environmental Management Systems, self-
assessment tools, EPA's performance track, ISO 14001 certification, and
state-approved trade offs in reducing discharges to water and emissions
to air that accomplish the best overall level of protection given state
and local conditions. EPA continues to believe that the development of
new and emerging technologies offers the potential to achieve
equivalent or greater pollutant reductions relative to those achieved
by the effluent guidelines and standards. Many of these are superior
from a cross media perspective, and EPA would like to encourage
superior cross media solutions. These regulations regarding nutrient
management plans may provide a unique opportunity for EPA to encourage
cross media approaches at CAFOs. For example, the nutrient value in the
animal byproducts provides a valuable source of fertilizer for crops.
However, inappropriate application can lead to preventable discharges
to water and emissions to air. Optimal application technologies and
rates reduce potential water quality and air quality standards
violations.
    EPA would like to take comment on the feasibility (including
consideration of legal, technical, and implementation issues) of
allowing flexibility in how facilities can meet various programmatic
requirements, for instance those of the Clean Air Act and the Clean
Water Act, in order to achieve greater cross-media pollutant
reductions. We are interested in exploring this type of approach for
both existing and new CAFOs.
    EPA continues to believe the development of new and emerging
technologies offers the potential to match or surpass the pollutant
reductions achieved by today's effluent guidelines and standards. EPA
does not want to discourage approaches that are superior from a cross
media perspective. Some CAFOs today voluntarily conduct whole-farm
audits to evaluate releases of pollutants to all media. EPA plans to
consider future opportunities and incentives for CAFOs to participate
in such activities. We are not currently proposing such an approach
through this action. The development of any such approach would proceed
through future notice and comment rulemaking.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
    1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;

    2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
    3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
    4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
    Pursuant to the terms of Executive Order 12866, OMB has notified
EPA that it considers this a ``significant regulatory action'' within
the meaning of the Executive Order. EPA has submitted this action to
OMB for review. Changes made in response to OMB suggestions or
recommendations will be documented in the public record.

B. Paperwork Reduction Act

    The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR) document prepared by EPA has been
assigned EPA ICR number 1989.03.
    Under the 2003 rule, all CAFOs were required to apply for a permit
and develop and implement a nutrient management plan. Today's proposed
rule would reduce the universe of CAFOs that are subject to these
requirements specifically to those CAFOs that discharge or propose to
discharge.
    Overall, the administrative burden under the proposed rule is
projected to decline to a total of approximately $64 million, which
constitutes a reduction of approximately $15 million compared to the
2003 CAFO rule. The overall labor burden decreases by 777,366 hours.
Much of this burden reduction arises from the reduced burden to
facility respondents--i.e., those CAFOs subject to permitting. EPA
estimates that these operations will experience an aggregate
administrative burden reduction of nearly $15.5 million annually
(810,751 labor hours) as a result of the portion of the court decision
that vacates the duty to apply requirement since fewer facilities will
need to apply and submit the paperwork for NPDES permits. However,
State permitting authorities would face an increase in administrative
burden as a result of the significant effort needed to review the NMPs
for each permittee, arrange for public review and conduct public
hearings if requested, respond to comments, and incorporate the terms
of the NMP into the NPDES CAFO permit. This increase in burden to
States offsets the burden reduction experienced by CAFOs, and is
explained in more detail in Section IV of the impact analysis for
today's proposal.
    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 in 40 CFR are listed in 40 CFR Part 9.
    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 rule, which
includes this ICR, under Docket ID number EPA-HQ-OW-2005-0037. Submit
any comments related to the ICR for this proposed rule to EPA and OMB.
See ADRESSES section at the beginning of this notice for where to
submit comments to EPA. Send comments to OMB at the Office of
Information and Regulatory Affairs, Office of Management and Budget,
725 17th Street, NW., Washington, DC 20503, Attention: Desk Office for
EPA. Since OMB is required to make a decision concerning the ICR
between 30 and 60 days after June 30, 2006, a comment to OMB is best
assured of having its full effect if OMB receives it by July 31, 2006.
The final rule will respond to any OMB or public comments on the
information collection requirements contained in this proposal.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on
small entities, small entity is defined as: (1) A small business as
defined by the Small Business Administration (SBA) at 13 CFR 121.201
size standards; (2) a small governmental jurisdiction that is a
government of a city, county, town, school district or special district
with a population of less than 50,000; and (3) a small organization
that is any not-for-profit enterprise which is independently owned and
operated and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
adverse economic impact on a substantial number of small entities since
the proposed rule involves a net burden reduction compared to the
burden placed on facilities under the 2003 CAFO rule. Additionally,
this proposed rule would not affect small governments as the permitting
authorities are State or federal agencies. We continue to be interested
in the potential impacts of the proposed rule on small entities and
welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

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

Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
    EPA has determined that this proposed rule would not contain a
federal mandate that may result in expenditures of $100 million or more
for State, local, and tribal governments, in the aggregate, or the
private sector in any one year. The proposed rule would increase the
burden to the States by $502,000 (30,300 hours) annually, which
reflects the fact that although States will need to process fewer
permits, the effort associated with each permit is greater. The
proposed rule would also decrease the burden to CAFO respondents by
nearly $15.4 million (807,659 hours) annually due to the smaller number
of facilities that will need permits. In total, EPA estimates a net
reduction of $15 million annually (777,366 hours) in the information
collection burden as a result of the proposed rule. Thus, today's
proposed rule is not subject to the requirements of sections 202 and
205 of the UMRA. For the same reason, EPA has determined that this rule
contains no regulatory requirements that might significantly or
uniquely affect small governments. Thus, today's proposed rule is not
subject to the requirements of section 203 of UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    Under section 6(b) of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. Under section 6(c) of Executive
Order 13132, EPA may not issue a regulation that has federalism
implications and that preempts State law, unless the Agency consults
with State and local officials early in the process of developing the
proposed regulation.
    EPA has concluded that this proposed rule does not have federalism
implications. It will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in Executive Order 13132.
EPA estimates that the average annual impact on all authorized States
together is $502,000. EPA does not consider an annual impact of this
magnitude on States to be a substantial effect. In addition, EPA does
not expect this rule to have any impact on local governments.
    Further, the revised regulations would not alter the basic State-
federal scheme established in the Clean Water Act under which EPA
authorizes States to carry out the NPDES permitting program. EPA
expects the revised regulations to have little effect on the
relationship between, or the distribution of power and responsibilities
among, the federal and State governments. Thus, Executive Order 13132
does not apply to this rule.
    Consistent with EPA policy, EPA nonetheless consulted with
representatives of State governments early in the process of developing
the proposed regulation to permit them to have meaningful and timely
input into its development. Through a variety of meetings with State
associations, States have been apprized of the issues related to
addressing the court's decisions. States provided input during these
meetings. State concerns generally focused on the process for
incorporating NMPs into permits and the related public review process,
and also on guidance related to what is a discharge from a CAFO given
that the proposal would now require only those operations that have a
discharge to apply for a permit. These concerns have been addressed in
detail in this proposal in such a way as to build in flexibility, yet
accountability, for the new permit application requirements and review
processes proposed herein today.
    In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.

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

    Executive Order 13175, entitled, ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.''
    This proposed rule does not have tribal implications. It will not
have substantial direct effects on tribal governments, on the
relationship between the federal government and Indian tribes, or on
the distribution of power and responsibilities between the federal
government and Indian tribes, as specified in Executive Order 13175.
Thus, Executive Order 13175 does not apply to this rule.
    In the spirit of Executive Order 13175, and consistent with EPA
policy to promote communications between EPA and tribal governments,
EPA specifically solicits additional comment on this proposed rule from
tribal officials.

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

    Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that: (1) Is determined to be ``economically significant''
as defined under E.O. 12866, and (2) concerns an environmental health
or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
    This regulation is not subject to Executive Order 13045 because it
is not economically significant as defined under E.O. 12866, and
because the Agency does not have reason to believe

the environmental health and safety risks addressed by this action
present a disproportionate risk to children. The benefits analysis
performed for the 2003 CAFO rule determined that the rule would result
in certain significant benefits to children's health. (Please refer to
the Benefits Analysis in the record for the 2003 CAFO final rule.)
Today's action does not affect the environmental benefits of the rule.

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

    This proposed rule is not subject to Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it
is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Pub. L. 104-113, Section 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standard bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
    Today's proposal does involve the use of technical standards for
land application of manure and elimination of discharges from the
production area. However, the specific standards applicable to a
specific operator are generally determined by the permitting authority
on a State-wide or site-specific BPJ basis. EPA encourages the use by
permitting authorities of voluntary consensus standards, such as those
developed by USDA, in establishing the site-specific technical
requirements in CAFO permits.

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OMB No. 2040-0250

List of Subjects

40 CFR Part 122

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

40 CFR Part 412

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

    Dated: June 22, 2006.
Stephen L. Johnson,
Administrator.

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

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

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

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

    2. Section 122.21 is amended by revising the last sentence in
paragraph (a)(1), and revising paragraph (i)(1)(x), to read as follows:

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

    (a) * * *
    (1) * * * The requirements for concentrated animal feeding
operations to seek coverage under an NPDES permit are described in
Sec.  122.23(d).
* * * * *
    (i) * * *
    (1) * * *
    (x) A nutrient management plan that at a minimum satisfies the
requirements specified in Sec.  122.42(e)(1). In addition, the nutrient
management plan for all CAFOs subject to 40 CFR part 412, subpart C or
subpart D, must satisfy the applicable requirements of 40 CFR 412.4(c).
* * * * *
    3. Section 122.23 is amended by revising paragraphs (a), (d)(1),
(d)(2), (f), and (g) and by removing paragraph (h) to read as follows:

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

    (a) Permit requirement for CAFOs. Concentrated animal feeding
operations, as defined in paragraph (b) of this section, are point
sources. Once an operation is defined as a CAFO, the NPDES requirements
for CAFOs that discharge or propose to discharge pollutants apply with
respect to all animals in confinement at the operation and all manure,
litter and process wastewater generated by those animals or the
production of those animals, regardless of the type of animal.
* * * * *
    (d) * * *
    (1) All owners or operators of a CAFO that discharges or proposes
to discharge pollutants must apply for a permit. All owners or
operators of a CAFO that discharges or proposes to discharge pollutants
must seek coverage under an NPDES permit. Specifically, the CAFO owner
or operator must either apply for an individual NPDES permit or submit
a notice of intent for coverage under an NPDES general permit. If the
Director has not made a general permit available to the CAFO, the CAFO
owner or operator must submit an application for an individual permit
to the Director.
    (2) Information to submit with permit application. A permit
application for an individual permit must include the information
specified in Sec.  122.21. A notice of intent for a general permit must
include the information specified in Sec. Sec.  122.21 and 122.28.
* * * * *
    (f) When must the owner or operator of a CAFO seek coverage under
an NPDES permit? (1) Operations defined or designated as CAFOs as of
[the effective date of the final rule]. The owner or operator of a CAFO
that discharges or proposes to discharge pollutants must seek to obtain
coverage under an NPDES permit by a date specified by the Director, but
no later than July 31, 2007.