April 7, 2000      SBAR Panel Report on CAFO                  
                       Final Report of the
              Small Business Advocacy Review Panel
                 on EPA's Planned Proposed Rule
                                
                               On
                                
     National Pollutant Discharge Elimination System (NPDES)
                               And
         Effluent Limitation Guideline (ELG) Regulations
                                
                               For
                                
             Concentrated Animal Feeding Operations
                          ("CAFO Rule")
                                
                   Report Date:  April 7, 2000
                        TABLE OF CONTENTS
                                


1.0  INTRODUCTION

2.0  BACKGROUND AND REGULATORY HISTORY
     2.1  CAFOs Subject to the CWA NPDES Program
     2.2  Overview of the NPDES Regulations for CAFOs (40 C.F.R.
           122.23)
     2.3  Overview of Feedlot Effluent Limitation Guidelines (40
          C.F.R.   412)
     2.4  How the ELG and the NPDES Permit Program are Related
     2.5  Why EPA is Revising the Regulations for CAFOs and the
          ELG for Feedlots

3.0  OVERVIEW OF THE REGULATORY CHANGES
     UNDER CONSIDERATION
     3.1  Potential Regulatory Changes to the Regulations for
          CAFOs
     3.2  Potential Regulatory Changes to the ELG for Feedlots
          (Beef & Dairy, Pork & Swine)
     3.3. Regulatory Flexibility Alternatives
          3.3.1                                             NPDES
          3.3.2                                               ELG
          3.3.3    Additional Regulatory Flexibility Alternatives

4.0  DEFINITIONS OF A SMALL BUSINESS

5.0  SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED
     REGULATION
     5.1  Estimated Number of AFO "Small Businesses" Affected by
          the Regulations
     5.2  Number of CAFOs (300-1,000 AU) by NPDES Regulatory
          Option

6.0  SUMMARY OF SMALL BUSINESS OUTREACH
     6.1  EPA Outreach Prior to Convening the Panel
          6.1.1Joint USDA/EPA Unified AFO Strategy Listening Sessions
          6.1.2                        Advisory Committee Meeting
          6.1.3                                       Site Visits
          6.1.4                             Industry Associations
          6.1.5                         CAFO Regulation Workgroup
          6.1.6                    Small Business Conference Call

7.0  SMALL ENTITY REPRESENTATIVES

8.0  SUMMARY OF COMMENTS FROM SERS
     8.1  Number and Type of Small Entities Affected
     8.2  Potential Reporting, Record Keeping, and Compliance
          Requirements
          8.2.1  General Requirements
          8.2.2  Offsite Transfer of Manure
          8.2.3  Manure and Soil Testing Requirements
     8.3  Related Rules
          8.3.1                         Total Maximum Daily Loads
          8.3.2                            Related State Programs
     8.4  Regulatory Alternatives
          8.4.1                           Revising the Thresholds
          8.4.2     Revising Criteria for Defining or Designating
               a
               CAFO with 300-1,000 AUs
          8.4.3 Certification for AFOs with between 300-1,000 AUs
          8.4.4                                  Immature Animals
          8.4.6                            Dry Poultry Operations
          8.4.7Removal of the 25-Year, 24-Hour Storm Event Permit Exemption
          8.4.9           Comprehensive Nutrient Management Plans
               8.4.9.1.  General Issues
               8.4.9.2  CNMP Development
          8.4.10  Offsite Transfer of Manure
          8.4.11  General and Individual Permits
          8.4.12  Land Application
          8.4.13    Manure and Wastewater Storage and Best
               Management
               Practices (BMPs)
     8.5  Regulatory Flexibility Alternatives
          8.5.1    Additional Regulatory Flexibility Alternatives
          8.5.2                                    Exit Provision
          8.5.3                              Good Faith Incentive
     8.6  Other Issues
          8.6.1     Costs                                Analysis
          8.6.2   Imposing Burden on Small Farms
          8.6.3                                     Sound Science
          8.6.4                     Regional & Industry Variation
          8.6.5                       Definition of "Animal Unit"
          8.6.6                                    Research Needs
          8.6.7                Financial and Technical Assistance
          8.6.8                                   Legal Authority
          8.6.9                                     Air Emissions
          8.6.10                                 Facility Closure
          8.6.11                             100 Foot Buffer Zone
          8.6.12                       Additional Recommendations
          8.6.13                   Comments on the SBREFA Process
          8.6.14                            Confusing Regulations

9.0  PANEL FINDINGS AND DISCUSSION
     9.1  Number and Types of Entities Affected
     9.2  Potential Reporting, Record Keeping, and Compliance
          Requirements
          9.2.1Record Keeping Related to Off-Site Transfer of Manure
          9.2.2 Permit Application and Certification Requirements
          9.2.3                              Frequency of Testing
          9.2.4Groundwater Requirements Where Linked to Surface Water
     9.3  Related Federal Rules
     9.4  Regulatory Alternatives
          9.4.1                  Revised Applicability Thresholds
          9.4.2                      25-year, 24-hour Storm Event
          9.4.3            Manure and Wastewater Storage Capacity
          9.4.4                                  Land Application
          9.4.5                                     Co-permitting
          9.4.6                        CNMP Preparer Requirements
          9.4.7                    General vs. Individual Permits
          9.4.8                                  Immature Animals
     9.5  Other Issues
          9.5.1                               Additional Analysis
          9.5.2                      Public Availability of CNMPs
          9.5.3                                        Dry Manure
          9.5.4                  Coordination with State Programs
                         LIST OF TABLES
                                
Table 4.1.  SBA Size Definitions for "Small"  Livestock and Poultry Operations
Table 4.2.  Number of Animals On-site at "Small" Livestock and Poultry Farms
Table 5.1   Total Number of AFOs and Number of "Small" AFOs, 1997
Table 5.2.  Number of Small Entities (301-1,000 AU) that may require an NPDES Permit
Table 8.1                            List of SER Written Comments
                                
                       LIST OF APPENDICES
                                
APPENDIX A: LIST OF ITEMS DISTRIBUTED TO SMALL BUSINESS
            STAKEHOLDERS FOR THE SEPTEMBER 17, 1999CONFERENCE
            CALL

APPENDIX B: SUMMARY OF SMALL BUSINESS CONSULTATION CONFERENCE
            CALL ON CONCENTRATED ANIMAL FEEDING OPERATIONS
            PERMIT RULE AND EFFLUENT LIMITATION GUIDELINES
            REVISIONS: SEPTEMBER 17, 1999

APPENDIX C: WRITTEN COMMENTS RESPONDING TO THE SEPTEMBER 17,
            1999 SMALL BUSINESS CONSULTATION CONFERENCE CALL ON
            CONCENTRATED ANIMAL FEEDING OPERATIONS PERMIT RULE
            AND EFFLUENT LIMITATION GUIDELINES REVISIONS

APPENDIX D: LIST OF ITEMS DISTRIBUTED TO SMALL ENTITY
            REPRESENTATIVES FOR THE JANUARY 5, 2000 AND JANUARY
            11, 2000 CONFERENCE CALLS

APPENDIX E: COMBINED SUMMARY OF  SMALL ENTITY REPRESENTATIVE
            CONFERENCE CALLS ON THE NATIONAL POLLUTANT DISCHARGE
            ELIMINATION SYSTEM (NPDES) AND EFFLUENT LIMITATION
            GUIDELINE (ELG) REGULATIONS FOR CONCENTRATED ANIMAL
            FEEDING OPERATIONS: JANUARY 5, 2000 AND JANUARY 11,
            2000

APPENDIX F: WRITTEN COMMENTS FROM SMALL ENTITY
            REPRESENTATIVESSOLICITED BY THE PANEL AT THE JANUARY
            5 AND
            JANUARY 11, 2000 CONFERENCE CALLS

APPENDIX G: SUPPORTING BACKGROUND INFORMATION FOR ESTIMATES
            PROVIDED IN SECTION 5
                                
    Report of the Small Business Advocacy Review Panel on the
   U.S. Environmental Protection Agency's Potential Revisions
                             to the
     National Pollutant Discharge Elimination System and the
          Effluent Limitation Guideline Regulations for
             Concentrated Animal Feeding Operations
                         ("CAFO Rules")
                                
     1.0  INTRODUCTION

     This report is presented by the Small Business Advocacy
Review (SBAR) Panel (the Panel) to the U.S. Environmental
Protection Agency (EPA) to consider potential revisions to two
regulations that address concentrated animal feeding operations
(CAFOs).  These two regulations are the National Pollutant
Discharge Elimination System (NPDES) CAFO Regulations (40 C.F.R.
122.23, and Part 122, Appendix B), and the Effluent Limitation
Guidelines (ELG) for Feedlots (40 C.F.R. Part 412), which
includes two parts (Beef & Dairy, Pork & Poultry).

     On December 16, 1999 EPA's Small Business Advocacy
Chairperson (SBAC) convened this Panel under section 609(b) of
the Regulatory Flexibility Act (RFA) as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
Section 609(b) requires that the responsible agency convene a
review panel prior to publication of any Initial Regulatory
Flexibility Analysis (IRFA) that an agency may be required to
prepare under the RFA.  In addition to its chairperson, the Panel
consists of the Director of the Office of Wastewater Management's
Permit Division of EPA, the Director of the Office of Science and
Technology's Engineering and Analysis Division of EPA, the Deputy
Administrator of the Office of Information and Regulatory Affairs
within the Office of Management and Budget, and the Chief Counsel
for Advocacy of the Small Business Administration.

     As part of the process to meet the requirements of 609(b),
outreach efforts (i.e., mailings and meetings) are made by the
Panel to obtain the advice and recommendations of representatives
of small entities that may be subject to the proposed rule.
Section 609(b) of the RFA also directs the Panel to report on the
comments provided by these Small Entity Representatives (SERs)
and its findings as to issues related to the elements of an IRFA
under section 603 of the RFA.  Those elements of an IRFA are as
follows:

      A description of and, where feasible, an estimate of the
     number of small entities that the proposed rules will affect;

      A description of  projected reporting, record keeping, and
     other compliance requirements of the proposed rule, including an
     estimate of the classes of small entities which will be subject
     to the requirements and the type of professional skills necessary
     for preparation of the report or record;
     
      Identification of all relevant Federal rules, which may
     duplicate, overlap, or conflict with the proposed rule; and
  
      A description of any significant alternatives to the
     proposed rule which accomplish the stated objectives of
     applicable statutes and which minimize any significant economic
     impact of the proposed rule on small entities.

  This report provides:  background information on the proposed
rule being developed; the types of small entities that would be
subject to the proposed rule; a description of the efforts made
to obtain the advice and recommendations of SERs; and a summary
of the comments that have been received to date from those SERs.
This report also presents the findings and recommendations of the
Panel.  The complete written comments of the SERs are attached to
this report.

  Once completed, the Panel will submit its report to the
Administrator of EPA and will include it in the rulemaking
record.  The EPA will consider the recommendations of the Panel
and where appropriate will make revisions to the draft proposed
rule in order to reduce the burden on the small businesses who
may be affected by this rulemaking.  The EPA will also use the
report to determine  whether an IFRA is required.

  It is important to note that the Panel's findings and
discussion are based on the information available at the time the
report was drafted.  EPA is continuing to conduct analyses
relevant to the proposed rules, and additional information may be
developed or obtained during the remainder of the rule
development process.  The Panel makes its report at a preliminary
stage of rule development in order to provide both the Panel and
the Agency with an opportunity to identify and explore potential
ways of shaping the proposed rule to minimize the burden of the
rule on small entities while achieving the rule's statutory
purposes.  Any options the Panel identifies for reducing the
rule's regulatory impact on small entities may require further
analysis and/or data collection to ensure that the options are
practicable, enforceable, environmentally sound, protective of
public health, and consistent with the statute authorizing the
proposed rule.
     2.0       BACKGROUND AND REGULATORY HISTORY

2.1            CAFOs Subject to the CWA NPDES Program

  The Clean Water Act (CWA) permitting program is called the
"National Pollutant Discharge Elimination System" (NPDES)
program.  This program applies to "point sources" who are or may
be dischargers of pollutants into waters of the U.S.  The purpose
of the NPDES program is to protect human health and the
environment by controlling the types and amounts of pollutants
that can be discharged into U.S. waters.  EPA originally issued
NPDES permit program regulations in the 1970s.  These
regulations, which apply to a broad range of industrial and
municipal wastewater discharges, specify who must apply for an
NPDES permit and what type of condition(s) must be included in a
permit (e.g., technology and/or water quality-based effluent
limits, monitoring and reporting requirements, special conditions
and standard conditions).  The NPDES regulations also provide
that NPDES permits may be issued by U.S. EPA or those states,
territories, and tribes authorized by EPA to implement the NPDES
program.  Currently, 43 states and the Virgin Islands are
authorized to issue NPDES permits.1

  Under both the CWA and the NPDES regulations, the term "point
source" is defined as any discernible, confined and discrete
conveyance, including but not limited to any confined animal
feeding operation (CAFO) [CWA Section 502(14)].  As such, in the
1970s EPA promulgated two regulations that directly affect CAFOs.
The first is the NPDES regulations for CAFOs which define which
animal feeding operations (AFOs) are CAFOs (40 CFR 122.23, and
Part 122, Appendix B).  These regulations also state that CAFOs
are point sources subject to the NPDES permit program.  The
second regulation is the effluent limitation guidelines (ELGs)
for feedlots (40 C.F.R.  412), which establishes the technology-
based effluent standards that apply to certain CAFOs.  Both of
these regulations are briefly summarized below.

2.2            Overview of the NPDES Regulations for CAFOs (40
     C.F.R.  122.23)

  The NPDES regulations for CAFOs first define the term "animal
feeding operation" (AFO) and then the term "concentrated animal
feeding operation" (CAFO).  An operation must first be an AFO
before it can be defined as a CAFO.

  The term "animal feeding operation" is defined in EPA
regulations as a "lot or facility" where animals "have been, are,
or will be stabled or confined and fed or maintained for a total
of 45 days or more in any 12 month period and crops, vegetation
forage growth, or post-harvest residues are not sustained in the
normal growing season over any portion of the lot or facility"
[40 C.F.R.  122.23].

  Once a facility meets the AFO definition, its size, based upon
the total numbers of animals confined, is a fundamental factor in
determining whether it is a CAFO.  The animal livestock industry
is diverse and includes a number of different types of animals
that are kept and raised in confined situations.  To define these
various livestock sectors, the concept of an "animal unit" (AU)
was established in the EPA regulations [40 C.F.R.  122 Appendix
B].  An AU  varies according to animal type; one animal is not
necessarily equal to one AU.  Each livestock type, except
poultry, is assigned a multiplication factor2 to facilitate  the
calculation of the total number of AUs at a given AFO.  These
factors were intended to facilitate rough equivalence among the
different livestock sectors, in terms of approximated relative
contributions to water pollution (e.g., under current
regulations, one head of beef is equal to 30 or 100 layers or
broilers, depending on the watering system).  However, it should
be noted that, under the current requirements of the current
regulation, the threshold at which laying hen operations with
liquid manure handling systems are automatically defined as CAFOs
represents a significantly lower level of manure production than
the corresponding thresholds in the other animal sectors.

  An AFO is a CAFO if it meets the regulatory CAFO definition or
if it is designated as a CAFO.  (The concept of designation is
explained in the next paragraph.)  An AFO is defined as a CAFO
where more than 1,000 AUs (as defined by the existing regulation)
are confined at the facility; or where more than 300 animal units
are confined at the facility and the following occurs:

      Pollutants are discharged into navigable waters through a
     manmade ditch, flushing system, or other similar man-made device;
     or
      Pollutants are discharged directly into waters that
     originate outside of and pass over, across, or through the
     facility or come into direct contact with the confined animals.

  However, these conditions notwithstanding, an AFO that would
otherwise be defined as a CAFO is not so defined if it does not
discharge pollutants to waters of the U.S. except in the event of
a  25-year, 24-hour storm event.  Another way in which an AFO can
become a CAFO is by being designated as a CAFO.  The NPDES
permitting authority may, on a case-by-case basis, after
conducting an on-site inspection, decide to designate any AFO as
a CAFO based on a finding that the facility "is a significant
contributor of pollution to the waters of the United States." A
facility with 300 AUs or less, however, may not be designated as
a CAFO unless pollutants are discharged into waters of the U.S.
through a man-made ditch, flushing system, or other similar man-
made device or are discharged directly into waters of the U.S.
which originate outside of the facility and pass over, across or
through the facility or otherwise come into direct contact with
the animals confined in the operation.

2.3            Overview of Feedlot Effluent Limitation Guidelines
     (40 C.F.R.   412)

  The current feedlot Effluent Limitation Guidelines (ELG) apply
to discharges of pollutants from feedlots (i.e., CAFOs) that have
the capacity to hold 1,000 AUs or greater. This ELG allows no
discharges of process wastewater pollutants to waters of the U.S.
except when chronic or catastrophic storm events cause an
overflow from a facility designed, constructed, and operated to
hold process-generated wastewater plus runoff from a 25-year, 24-
hour storm event.  All NPDES permits for CAFOs with more than
1,000 AUs  must include an equivalent or more stringent effluent
limitation.  In those cases where the feedlot ELG does not apply
to a CAFO (e.g., the CAFO confines fewer than 1,000 AUs), the
permit writer must develop, for inclusion in the NPDES permit,
technology-based limitations based on best professional judgment
(BPJ).

  The ELGs for the Feedlots Point Source Category are codified
at Title 40, Part 412 of the U.S. Code of Federal Regulations (40
CFR Part 412).  The category has two subparts:

     Subpart A - applies to feedlots with at least:
        1,000 slaughter steers and heifers;
        700 mature dairy cattle;
        2,500 swine weighing more than 55 pounds;
        10,000 sheep;
        55,000 turkeys;
        100,000 laying hens or broilers when facility has
          unlimited continuous flow     watering systems;
        30,000 laying hens or broilers when facility has a
          liquid manure handling     system;
        500 horses; or
        1,000 animal units from a combination of slaughter
          steers and heifers, mature     dairy cattle, swine more
          than 55 pounds, and sheep.

     Subpart B - applies only to feedlots confining 5,000 or more
     ducks.3

     As noted above, the ELG for Subpart A prohibits the
discharge of process wastewater pollutants to waters of the
United States, except when chronic or catastrophic rainfall
events cause an overflow from a facility designed, constructed,
and operated to contain all process-generated wastewater plus the
runoff from a 25-year, 24-hour rainfall event.  The regulations
specify animal wastes and other water that must be controlled
include the following:
         spillage or overflow from:
       O    animal or poultry watering systems;
       O    washing, cleaning, or flushing pens, barns, manure pits, or
          other feedlot facilities;
       O    direct contact swimming, washing, or spray cooling of
          animals; and
       O    dust control

         precipitation (rain or snow) which comes into contact with
       any manure, litter, or bedding; or

         any other raw material or intermediate or final material or
       product used in or resulting from the production of animals or
       poultry or direct products (e.g., milk or eggs).

2.4  How the ELG and the NPDES Permit Program are RelatedError!
     Bookmark not defined.

     NPDES permits implement a multifaceted approach to
protecting water quality.  At the core of these permits is a two-
pronged pollution control strategy that incorporates both
technology-based limits and more stringent site-specific limits
based on water quality considerations where necessary.  The
discharge limits imposed in a permit are thus derived through
consideration of two factors:

     1)    the effluent quality that is both economically achievable
       and technologically attainable through operation of control
       technologies and process changes (i.e., ELG); and

     2)   regional or site-specific water quality conditions.

     Generally, technology-based limits represent the level of
pollutant reduction that a facility can attain at the point of
discharge ("end-of-pipe"), by applying pollution control
technologies, whereas the water quality-based limits reflect
additional restrictions on pollutant discharges that are
necessary to achieve or maintain water quality standards.

     For many industries, minimum technology-based standards are
established at a national level through ELGs.  For industries not
covered by ELGs, technology-based limits are developed by the
permit writer on a site-specific basis using best professional
judgement (BPJ).  In the case of CAFOs, the ELG regulations [40
C.F.R. 412] apply to CAFO feedlots with more than 1,000 AUs.  The
current ELGs for CAFOs do not allow discharges of process
wastewater pollutants to waters of the U.S. from feedlots, except
when chronic or catastrophic storm events cause an overflow from
a facility designed, constructed, and operated to hold process-
generated wastewater plus runoff from a 25-year, 24-hour storm
event.  In cases where the ELG does not apply (for CAFOs with
fewer than 1,000 AUs), the permit writer needs to develop
technology-based effluent limitations on a case-by-case basis for
the feedlot by using BPJ.  The regulations
 [40 C.F.R. 122.44 (k)] also allow best management practices
(BMPs) to be used where they are reasonably necessary to meet
effluent limitations and standards or to carry out the purposes
and intent of the CWA.  Thus, whether a CAFO is subject to the
ELG for feedlots or technology-based effluent limitations based
on BPJ, it can also be required to develop and implement BMPs
reasonably necessary to meet the ELG or BPJ technology-based
limitations.

     In cases where technology-based effluent limitations are not
sufficient to meet water quality standards, the permit writer
must develop more stringent water quality-based effluent
requirements on a site-specific basis.  NPDES permits for CAFOs
may also include BMPs as water quality-based effluent limitations
or use BMPs that are reasonably necessary to meet water quality
standards [See, 40 C.F.R. 122.44 (k)].

2.5  Why EPA is Revising the Regulations for CAFOs and the ELG
     for Feedlots

     As noted above, the  regulations for CAFOs were originally
promulgated in the mid-1970s.  Since that time, significant
progress has been made in implementing CWA programs and in
reducing water pollution.  Despite such progress, however,
serious water quality problems persist throughout the country.
Agriculture, municipal point sources, urban runoff, and
industrial point sources are listed as some of the leading
sources of these remaining problems.  Although it is difficult to
determine the exact contribution of any particular source, CAFOs
that are not properly managed can pose a number of risks to water
quality and public health.  Improperly managed manure and
wastewater from CAFOs have the potential to contribute large
quantities of pollutants such as nutrients (e.g., nitrogen,
phosphorus), organic matter, sediments, pathogens, heavy metals,
hormones, antibiotics, and ammonia to the environment.

     To mitigate water quality impacts posed by CAFOs, EPA is
revising the regulations for CAFOs, with the following goals:

         Update the current regulations to reflect current industry
       characteristics and practices;
         Make the current regulations simpler and easier to
       understand; and
         Ensure that all CAFOs are permitted.

     Under the CWA EPA will establish effluent limitations based
on best available technology that is economically achievable.  In
developing regulatory options, EPA will carefully assess the
costs and benefits of any proposed regulatory changes.  Note that
while information on the projected costs of various regulatory
options was provided to SERs as part of the Panel's outreach,
analysis of benefits was still at a preliminary stage and not yet
ready for public review.  A full evaluation of costs and benefits
will be provided for public review and comment at the time the
proposed rule is published.
     3.0       OVERVIEW OF THE REGULATORY CHANGES UNDER
          CONSIDERATION

     The discussion below summarizes the regulatory changes being
considered for the NPDES regulations for CAFOs and for the ELG
for feedlots. Although similar changes are being considered
regarding both regulations, the effects of such changes are
different under each.  Proposed changes to the NPDES regulations
for CAFOs affect which AFOs are considered CAFOs and are
therefore subject to the NPDES permit program.  Changes to the
ELG for feedlots affect which CAFOs are subject to the ELG and
the technology-based requirements that apply to these CAFOs.

     The following potential regulatory changes are slightly
different than those originally presented by EPA to potential
SERs during a preliminary Small Business Consultation
teleconference on the NPDES regulations for CAFOs and the ELG
that was held September 17, 1999.  Following the teleconference,
at EPA's request, many of the participants provided written
comments on the potential regulatory changes as presented in the
call.  In accordance with established procedures for selecting
the best representative sample of SERs,  not all participants in
the call were subsequently selected to participate in the Panel's
formal outreach to SERs.  However, the Panel did review and
consider comments from these participants during its
deliberation.  The complete set of written comments resulting
from the September 17 call is provided in Appendix C.

      Changes to the potential regulatory revisions resulted from
a series of rule development discussions that occurred after that
teleconference.  The potential regulatory revisions presented
below include revisions that reflect stakeholder comments,
additional data analysis, and agency deliberations concerning the
various options under consideration.  The potential regulatory
revisions described below do not necessarily include every option
that EPA might eventually consider in revising these regulations.
In addition, EPA may decide not to adopt any of the options
described below in the revised regulations.

3.1  Potential Regulatory Changes to the Regulations for CAFOs

1.   Alternative Scenarios for AFOs with between 300-1,000 AUs

     One of the most significant issues involved in revising the
     NPDES regulations for CAFOs and ELGs involves how to address
     AFOs with between 300-1,000 AUs that currently may be
     defined as CAFOs under the existing regulations.  Because
     any modification to the 300-1,000 AU category would impact
     other issues, EPA has developed three alternative scenarios
     for addressing this category of operations.  EPA is also
     considering possible modifications to these scenarios.  For
     example, alternatives 2 and 3 could include a lower
     threshold for ELG applicability.

     Alternative 1:

         The size threshold at which all operations defined as CAFOs
       are set below 1,000 AUs.  Potential thresholds being examined are
       750, 500 and 300 AUs.  Note that this would represent a
       simultaneous lowering of the current threshold and elimination of
       the current exemption for operations above the threshold that do
       not discharge in less than a 25-year, 24-hour storm event.

         All operations with a number of AUs over the ELG threshold
       would be required to  comply with ELGs.  However, EPA is
       examining the feasibility of developing tiered ELG requirements
       to address affordability issues for small entities.

         The current 300-1,000 AU category, would be eliminated.
       Thus, operations with fewer AUs  than the ELG threshold would no
       longer be subject to being defined as CAFOs.  However, they could
       still be designated as a CAFO(see next bullet).
     
         As in the existing CAFO regulations, any operation under the
       threshold could be designated as a CAFO if the NPDES permitting
       authority or EPA determines it to be a significant contributor of
       pollution to waters of the United States.  Operations with less
       than 300 AUs may only be designated, after inspection, if it is
       found that pollutants are discharged either through a man-made
       conveyance or directly into waters that cross the property or
       come into direct contact with the animals [40 CFR 122.23(c)(2)].
       Once designated, the operation would be required to comply with a
       permit incorporating effluent limits and/or best management
       practices (BMPs) developed by the permitting authority using best
       professional judgement (BPJ).

     Alternative 2:

         All AFOs with between 300-1,000 AUs would be defined as
       CAFOs.

         A "check box" self-certification mechanism would be
       implemented, whereby each operation would certify to the
       permitting authority that it does not pose a risk to water
       quality and public health.  Such operations would not have to
       apply for a permit.

         Operations that cannot certify that they do not pose risk to
       water quality would be required to apply for a permit.  In the
       application, the operation would have the additional opportunity
       to demonstrate to the permit authority that:

       O    Pollutants have not been discharged, are not being
          discharged, or have no potential to be discharged into waters of
          the U.S.; and
       O    Pollutants have not been discharged, are not being
          discharged, or have no  potential to be discharged into waters of
          the U.S. due to improper land application of manure or
          wastewater.

         Operations unable to make this demonstration would be
       required to obtain a NPDES permit.  The permit authority would
       develop technology-based requirements using BPJ.

         As in existing regulations, any operation with fewer than
       300 AUs could be designated as a CAFO if the permitting authority
       or EPA determines it to be a significant contributor of pollution
       to waters of the United States.  Operations with less than 300
       animal units may only be designated, after inspection if it is
       found that pollutants are discharged either through a man-made
       conveyance or directly into waters that cross the property or
       come into direct contact with the animals [40 CFR 122.23(c)(2)].
       Once designated, the operation would be required to comply with a
       permit incorporating effluent limits and/or BMPs developed by the
       permitting authority using BPJ.

     Alternative 3:

         Any AFO with between 300-1,000 AUs that met any one of the
       following conditions would be defined as a CAFO and would be
       required to apply for an NPDES permit:

       1.   Operation has insufficient storage capacity to contain all
          manure, wastewater, storm water and process wastewater for up to
          a 25-year, 24-hour storm event, or contain dry manure during non-
          cropping periods or six months, whichever is shorter;
2.   Operation is located in impaired watershed;
3.   Distance from the feedlot area to the nearest waters of the
U.S. is 100 feet or less; or
4.   Operation is located in an area with excess nitrogen and/or
phosphorus (N & P) (i.e., crop lands in that area have excessive
amounts of N & P).
5.   Pollutants have been discharged, are discharging, or have
potential to discharge through a natural or man-made conveyance
from feedlot into waters of the U.S.; or
6.   Pollutants have been discharged, are discharging, or have
potential to discharge into waters of the U.S. due to improper
land application of manure or wastewater.

         An operation that meets any one of the first four criteria
       would not necessarily be required to actually obtain an NPDES
       permit.  In the permit application, the operation would have the
       opportunity to demonstrate to the permitting authority that
       neither of the last two criteria are met, and thus would not be
       required to obtain a permit.  Note that the fifth criterion is
       the same as one of the criteria for defining AFOs in the
       300-1,000 AU size range as CAFOs currently, except that
       discharges through natural as well as man-made conveyances would
       be covered.

         Any operation that meets either of the last two criteria
       would be required to apply for and obtain an NPDES permit,
       incorporating effluent limits and/or BMPs developed by the permit
       authority using BPJ.

         As in existing regulations, any operation with less than 300
       AUs could be designated as a CAFO if the permit authority or EPA
       determines that a discharge took place.  Once designated, the
       operation would be required to  comply with a permit
       incorporating effluent limits and/or BMPs developed by the
       permitting authority using BPJ.

     Note  that all three of these alternatives reflect  a  shift
     away  from  defining CAFOs based on whether  they  discharge
     more frequently than a 25-year, 24-hour storm event.

2.   Other NPDES Issues

     1.   Who must apply for a permit?

       1.   Immature Animals.  EPA is considering whether or not to
          include immature animals for all animal types in determining the
          total number of animals at a CAFO.

          Immature animals in the dairy and swine industry
          sectors are not used to determine whether or not an AFO
          constitutes a CAFO under the current regulations.
          Rather only swine weighing more than 55 pounds and
          mature dairy cattle, excluding the number of calves and
          heifers, are counted when determining applicability. In
          contrast, all slaughter steers and heifers are counted
          when determining applicability for beef feedlots, and
          all ages of chickens and turkeys counted.  Including
          immature animals for all animal types might  more
          accurately reflect the concentrated nature of each
          operation.  Furthermore, operations comprised solely of
          immature animals could then be covered by the NPDES
          requirements.  This change could also affect
          applicability of the ELGs.  The potentially affected
          sectors are discussed in more detail below.

          Swine.  Production at swine facilities includes
          breeding, farrowing, weaning, and grow-finishing
          phases.  Most swine production facilities are farrow-to-
          finish or grow-finish farms, but some facilities may be
          farrow-wean, farrow-feeder, wean-finish, or nurseries
          only.  EPA  might establish a threshold that applies to
          standalone farrowing and nursery operations which
          confine large numbers of immature pigs.  It is
          difficult to clearly identify how many swine operations
          would be affected by including immature animals within
          the applicability definition, but EPA estimates such
          facilities comprise a small percentage of the total
          swine facilities.

          Dairies.  Dairies are less likely than swine facilities
          to keep immature animals in total confinement until the
          animals reach maturity.  Some dairies keep no heifers
          or calves onsite, while at others the numbers of
          heifers and calves equal the number of mature cows.
          Also, some dairies with calves and heifers keep them
          confined in drylots or barns, while many others keep
          immature animals in pastures.

          Further complicating the matter, the industry and many
          permitting authorities typically measure the size of an
          operation by the size of the milking herd, rather than
          the total number of mature and immature animals.  As a
          general matter, the size of the milking herd at a
          particular dairy is a fairly constant value, while the
          number of calves and heifers kept on a site may be
          allowed to vary depending on business conditions.  As a
          result, it is difficult to clearly identify how many
          operations would be affected by including immature
          animals within the applicability definition.  It is
          also unclear at present whether such a change would
          enhance implementation of the effluent guidelines.

       2.   Designation Criteria.  At this time, EPA is not
          contemplating revising the conditions in the existing regulations
          that are used when designating an AFO below 300 AUs as a CAFO.

       c.Dry Poultry Operations.  EPA is considering revising
          the CAFO definition to include all poultry operations
          above a specified size threshold regardless of the
          watering or manure system used.

          In the 20-plus years since the NPDES regulations for
          CAFOs were promulgated, continuous overflow watering in
          poultry operations has been largely discontinued and
          replaced by more efficient watering methods (e.g., on-
          demand watering).  Moreover, liquid manure systems
          represent little more than approximately 25 percent of
          layer operations.  Dry manure management systems are
          not covered under the current regulations, but can
          result in water pollution due to improper land
          application or poor on-site storage and handling.
          Therefore, EPA is considering revising the NPDES
          regulations for CAFOs in order to reflect these changes
          in industry practice and ensure proper management and
          land application of poultry litter.

       4.   25-year, 24-hour storm event.  EPA is considering removing
          the 25-year, 24-hour storm exemption  from the NPDES CAFO
          definition (while maintaining the 25-year, 24-hour storm design
          standard in the ELG  for feedlots).  CAFOs would be required to
          apply for a permit even if they only discharge during a 25-year,
          24-hour or larger storm event.
       
          Both the existing NPDES regulations for CAFOs and the
          ELG for feedlots contain reference to a 25-year, 24-
          hour storm event.  The ELG requires facilities subject
          to the ELG to design storage structures to contain a 25-
          year, 24-hour storm event along with process
          wastewater.  This is an integral part of the technology
          basis for the ELG regulations.  Technology options
          currently under consideration maintain this design
          standard for liquid-based systems or systems that must
          rely on stormwater runoff impoundments such as are used
          at beef feedlots. EPA recognizes that liquid
          impoundments cannot be designed to achieve zero
          discharge without factoring in some volume of rainfall
          that would be introduced; thus EPA established the
          requirement to design and maintain the impoundments to
          hold the volume of stormwater from a 25-year, 24-hour
          storm event.  EPA is considering separate zero
          discharge requirements that do not include a storm
          event component for dry manure systems where technology
          allows for animals and manure to be protected from
          stormwater.  EPA is, however, considering removing the
          25-year, 24-hour exemption that is currently included
          in the NPDES regulations for CAFOs.  The NPDES
          regulations exempt certain AFOs from being defined as a
          CAFO if they discharge only in the event of a 25-year,
          24-hour or larger storm event.  EPA is considering
          removing this exemption to ensure that all AFOs above a
          specified size threshold  are subject to enforceable
          permit conditions, including monitoring and reporting
          requirements, and to better address the potential risks
          to water quality and public health posed by facilities
          that meet or exceed the specified threshold(s).

       5.   Co-permitting.  EPA is considering requiring corporate
          entities that exercise substantial operational control over a
          CAFO to be co-permitted.

          Over the past few decades, segments of the livestock
          industry have been consolidating into fewer and larger
          business organizations.  This consolidation has
          resulted in higher levels of vertical integration, with
          single companies being involved in essentially all
          stages of the production process.  Under this potential
          revision, corporate entities that exercise substantial
          operational control over a CAFO would be explicitly
          recognized as "operators" of the CAFO for purposes of
          the NPDES program, and thus would be co-permitted along
          with the CAFO operator.  EPA is currently evaluating
          factors which may constitute "substantial operational
          control."

     2.   What is in the permit?

       1.   Discharges from Land Application.  EPA is considering
          revising the regulations to explicitly address discharges from
          improper land application areas under the control of the CAFO
          operator, along with discharges from the feedlot and storage and
          handling areas.

       2.   Comprehensive Nutrient Management Plans (CNMPs).  EPA is
          considering requiring development and implementation of CNMPs as
          part of an NPDES permit.

       3.   CNMP Development.  EPA is considering requiring permittees
          to have CNMPs developed by certified planners.

          This potential revision would recognize that the most
          effective way for CAFOs to minimize risks to water
          quality and public health is to develop and implement
          technically sound, and site-specific CNMPs.  These
          CNMPs should reflect and facilitate technical
          innovation, sustainable agricultural systems, and new
          approaches to proper manure and nutrient management.
          EPA is working with the United States Department of
          Agriculture and other organizations to promote access
          to certified planners at reasonable cost and to
          facilitate certification of operators to write their
          own plans.

       4.   Record Keeping and Reporting Related to Offsite Transfer of
          Manure.  EPA is considering requiring CAFO operators that send
          manure off-site to maintain records of each transfer, including
          date, quantity transferred, and recipient name and address, and
          an analysis of the manure content.  EPA is also considering
          requiring CAFO operators to provide any off-site recipient of
          manure with the analysis of manure content and a brochure (to be
          supplied by EPA) describing the recipient's responsibilities for
          appropriate manure management.

       5.   Monitoring, Record Keeping & Reporting.  EPA is considering
          requirements for:

          (1)  CAFO permittees to keep on-site records of inspections,
              monitoring and other activities related to the implementation of
              the CNMP;
          (2)  CAFO permittees to conduct self-certifications and self-
              evaluations of CNMP implementation, and to maintain records of
              such evaluations onsite; and
          (3)  CAFO operators to provide additional explicit information
              needed by the permit authority as part of a permit application or
              notice of intent (NOI).

          The monitoring, record keeping and reporting
          requirements included in CAFO permits should address
          the routine day-to-day operation of a facility and help
          ensure that CNMPs are effectively developed and
          implemented.  In addition, permits should address the
          reporting of non-routine activities (e.g., overflows,
          leaks, structural failures, improper storage or
          handling of liquid or dry manure).

       6.   Facility Closure.  EPA is considering requiring that permits
          issued to CAFOs include a special condition to require proper
          closure of the facility in order to minimize potential adverse
          impacts to water quality (i.e., through discharges to waters of
          the U.S.).  Additionally, the regulations would stipulate that a
          permittee might remain subject to NPDES permitting requirements
          until the CAFO  is properly closed in accordance with
          requirements established by the authorized permitting authority.
          Specific closure requirements would be defined by the authorized
          permitting authority.

     3.   What type of permit do you get?

     EPA currently encourages permitting authorities to use
     general permits for the majority of CAFOs. General permits
     offer a cost-effective approach for permitting, while
     providing the site-specific flexibility necessary for these
     facilities.  General permits lessen compliance burden
     because they allow the applicant to simply submit a notice
     of intent (NOI) to be covered under a general permit rather
     than a full permit application.  Under the proposed revised
     regulations, EPA would continue to encourage the use of
     general permits for most small entities.  However,
     individual permits may be appropriate in certain instances,
     such as for extremely large CAFOs or facilities with
     historic compliance problems.  EPA is considering whether
     any regulatory changes are needed to address these
     situations.

       1.   Public Involvement.  EPA is considering requiring:

          (1)  Individual permits for CAFOs that meet certain
criteria; and/or
          (2)  Increased level of public involvement in general
permits for CAFOs.

          Public involvement in the permitting process is a key
          component of the CWA and the NPDES regulatory program
          generally.  The Agency is considering various options
          to ensure adequate public involvement in the permitting
          process for CAFOs.  Alternatives being considered
          include  making general permit NOIs available to the
          public and/or requiring individual permits for all
          large CAFOs that meet certain criteria.  Individual
          NPDES permits currently afford a greater level of
          public involvement than general permits.  EPA also
          recognizes the legitimate concerns of operators
          regarding protection of confidential business
          information and potential delays in processing of
          permit applications and NOIs.  EPA will follow the
          procedures as established under the statute that
          address confidential business information and will
          balance the value of public involvement with the burden
          to the operator when considering regulatory options.

       2.   Permit Application Form.  In addition, where individual
          permits are required, EPA is considering developing a revised
          individual permit application form.


3.2  Potential Regulatory Changes to the ELG for Feedlots (Beef &
     Dairy, Pork & Swine)

     EPA is considering the following regulatory changes to the
current ELG for feedlots.  These revisions are the same as those
originally presented to stakeholders.

1.   Lower the Threshold.  As described in the first scenario in
     Alternative 1 in Section 3.1.A, EPA is considering lowering the
     ELG threshold below 1,000 AUs.  Options under consideration
     include 750, 500 and 300 AUs.

     The current effluent guidelines apply only to those feedlots
     with a capacity of 1,000 AUs or greater.  The effluent
     guidelines establish the technology-based limits that are to
     be included in permits for these facilities.  If a facility
     is subject to permitting but the effluent guidelines do not
     apply to it, the permit writer develops technology-based
     limits for that facility's permit on a case-by-case basis
     using BPJ.  Thus, expanding the coverage of the effluent
     guidelines to include smaller operations would increase the
     total number of CAFOs that receive technology-based limits
     specified in the ELG  rule rather than on a case-by-case
     basis.

B.   Dry Poultry Operations.  As discussed in Section 3.1.B. 1
     (c) above, EPA is considering expanding the scope of the
     regulations to apply to layers and broiler operations
     employing dry manure handling.  This could also expand
     coverage under the ELGs.

     The current effluent guidelines apply to layer or broiler
     operations employing continuous flow watering systems or
     liquid manure systems.  Expanding coverage to include dry
     poultry operations would increase the total number of CAFOs
     covered by the ELG rule.

3.   Discharge Limits.  EPA is considering establishing numeric
     discharge limitations or zero discharge requirements for CAFOs
     with less than 1,000 AUs.

     If the applicability threshold of the effluent guidelines is
     expanded to include operations smaller then 1,000 AUs, EPA
     will evaluate the technological feasibility and economic
     achievability of potential effluent guidelines for the newly-
     covered facilities.  Due to the costs associated with runoff
     controls (e.g., runoff ponds and lagoons), and their
     significant contribution to the total costs of any new
     controls, alternative requirements to lessen the financial
     burden on small entities are being investigated.

4.   Land Application.  EPA is considering including requirements
     that apply to land application of manure and other CAFO
     wastewaters including the development and implementation of
     comprehensive nutrient management plans.

     The current effluent guidelines do not specifically address
     discharges from land application of manure.  Land
     application is an integral part of the CAFO waste management
     system, and over-applying manure may result in a discharge
     of nutrient-rich field runoff to surface waters.  Some
     states have established good programs for managing land
     application of animal wastes; however, others lack the
     resources needed to implement an adequate level of control.
     USDA is preparing guidance for developing comprehensive
     nutrient management plans (CNMPs) on a voluntary basis. EPA
     is considering including requirements as part of the
     effluent guidelines, to ensure that operations included in
     the regulatory program have CNMPs as part of their NPDES
     permit.

5.   Best Management Practices.  EPA is considering including
     requirements for CAFOs to implement best management practices at
     feedlot and manure storage areas to improve control of
     contaminated runoff and improve the structural integrity of waste
     storage structures.

     Structural and operational practices EPA may include in the
     regulations include constructed diversions (diking, curbing,
     grading, or other means) to collect contaminated runoff from
     (and divert clean stormwater away from) areas where animals
     are confined or where manure or raw materials are stored;
     permanently-installed depth markers for ponds, lagoons,
     tanks, and other containment structures for runoff and
     liquid animal wastes; alternatives to burial of routine
     poultry mortality; and regular visual inspections of runoff
     controls and containment structures.


3.3. Regulatory Flexibility Alternatives

     The basic premise of EPA's existing regulations is that the
regulatory program should focus on large operations and on those
posing the greatest risk to water quality and public health.  EPA
expects to maintain this focus in the revised regulations.  This
approach helps to reduce the burden of the CAFO regulations on
small entities while striving to achieve the goals of the CWA.

     The current CAFO regulatory program, which has been in place
since the 1970s, only applies to those AFOs that meet the
regulatory definition of a CAFO or have been designated as a CAFO
by the NPDES permitting authority due to risks posed to water
quality and public health.  The result has been that most AFOs
(including most of those meeting the SBA definition of a small
business) have not so far been covered by the NPDES regulations
and ELGs.

     Further, it is EPA's intent to keep the revisions to the
CAFO regulations as flexible as possible, allowing NPDES
authorities to write site-specific permits that address the
specific concerns for each CAFO in a manner appropriate and
manageable for that business.

3.3.1  NPDES

     As previously mentioned, the focus of EPA's potential
regulatory revisions is primarily on large operations and thus
most small entities (those below 300 AUs)  would not be affected
by the revised regulations.  Of approximately 360,000 AFOs
nationwide, the vast majority are small entities (more than 97
percent).  All CAFOs over the upper  regulatory threshold
(currently 1,000 AUs) would  be required to apply for a permit,
while some small operations (those between 300 and 1,000 AUs)
could also be required to apply.

     Over the past 20 years only one AFO has been designated by a
NPDES permitting authority to be a CAFO.  EPA expects no more
than 10 designations to be made.  These designations will be
aimed at operations contributing to significant water quality
impairment.

     1.   Certification. EPA is considering an option whereby certain
       operations initially defined as CAFOs may not be required to have
       an NPDES permit.  An operation in the 300-1,000 AU category would
       be able to certify to the permitting authority that it does not
       have a potential to discharge and thus does not pose a risk to
       water quality and public health.  Such operations would not have
       to apply for a permit.

       Operations that cannot certify that they do not pose risk
       to water quality would be required to apply for a permit.
       However, in the application, the operation would have the
       additional opportunity to demonstrate to the permit
       authority that pollutants have not been discharged and
       have no potential to be discharged into waters of the
       U.S.  These operations would not be issued a permit if
       they could successfully demonstrate no potential to
       discharge.

     B.Good Faith Incentive.  EPA is considering explicitly
       incorporating a good faith incentive for small AFOs.  In
       many cases, AFOs that fall below the upper regulatory
       threshold might be taking early voluntary actions in good
       faith to manage manure and wastewater in accordance with
       a Comprehensive Nutrient Management Plan (CNMP).  In the
       event that such smaller AFOs have a discharge that would
       otherwise cause them to be designated as CAFOs, the
       revised regulations may provide an opportunity for these
       smaller AFOs to address the cause of the one-time
       discharge and avoid being designated as CAFOs.

     3.   Early Exit.  EPA is considering a regulatory provision that
       would explicitly allow CAFOs that fall below the upper regulatory
       threshold to exit the regulatory program after five years of good
       performance.  The regulations could allow such a smaller CAFO to
       exit the regulatory program if it demonstrates that it has
       successfully addressed the conditions that caused it to either be
       defined or designated as a CAFO, fully implements a site-specific
       CNMP, and certifies full compliance with permit requirements.

     4.   Facilities with Less Than 300 AUs.  EPA is not considering
       revising the criteria [40 CFR Part 122.23(c)] for designating
       operations with less than 300 AUs.  The majority of small AFOs
       are in this size range.

3.3.2  ELG

     As mentioned above, NPDES permits for CAFOs below the upper
regulatory threshold are written by permitting authorities using
best professional judgement (BPJ).  Thus, each permit is flexible
enough to address site specific concerns without imposing
unnecessary burden on small entities. The ELG currently applies
only to those operations over 1,000 AU.  EPA will give serious
consideration to potential impacts on small entities as it
considers whether to expand the scope of the (less flexible) ELGs
to cover small operations.

     EPA's primary focus is on operations with an imbalance
between the amount of manure produced and the amount of available
cropland or pasture.  EPA believes that smaller operations
typically have ample cropland compared with large operations.
Thus, those likely to incur the largest per facility cost are
those faced with exporting excess manure to off-site locations,
which tend to be larger operations.

     EPA anticipates that, for any regulatory option that would
expand the scope of effluent guidelines to include operations
with fewer animal units than the current 1,000 AU threshold,
affordability could be a concern.  Runoff controls (e.g., runoff
ponds and lagoons) and manure storage structures (e.g., litter
sheds) associated with "zero discharge" requirements are
significant contributors to the total cost for beef and dairy
operations less than 1,000 AU and dry poultry operations.  Swine
and wet poultry operations below 1,000 AUs are presumed to have
lagoons in place and thus would not incur a cost for runoff
controls.  EPA is exploring alternative requirements to lessen
the financial burden on small entities.

     EPA is also reviewing monitoring, record keeping, and
reporting requirements that may be imposed when revising the
effluent guidelines to determine whether nutrient management
objectives can be attained with a lesser set of requirements to
ease the burden for small entities.

3.3.3  Additional Regulatory Flexibility Alternatives

     In addition to the regulatory flexibility alternatives
identified above, the Panel also requests consideration of the
following alternatives:

         Based on environmental impacts, EPA would consider
       compliance date extensions for small business hardship cases.

         Consider a provision whereby no additional regulation will
       be promulgated for animal feeding operations with less than 1,000
       animal units.

         Consider not requiring a CNMP in a permit unless sufficient
       resources are available to the permittee for development and
       implementation of CNMP requirements.
         4.0  DEFINITIONS OF A SMALL BUSINESS

     The Small Business Administration (SBA) defines a "small
business" in the livestock sector in terms of an business's
annual receipts or gross revenue.  Table 4.1 summarizes SBA's
"small business" definitions relating to the industries that may
be affected by the rulemaking.



Table 4.1.
SBA Size
Definitions
for "Small"
Livestock
and Poultry
Operations
                                              
SIC Code           Industry Description          SBA Size
                                                Standard a/
                                              
  SIC 0211    Beef Cattle Feedlots (Custom)    $1.5 million
                                              
  SIC 0213    Hogs                             $0.5 million
                                              
  SIC 0241    Dairy Farms                      $0.5 million
                                              
  SIC 0251    Broiler, Fryer, Roaster          $0.5 million
              Chickens
                                              
  SIC 0252    Chicken Eggs                     $9.0 million
                                              
  SIC 0253    Turkey and Turkey Eggs           $0.5 million

a/ SBA Size
Standards by
SIC industry
(13 CFR Part
121).
USGPO, 1991
and USGPO,
1996.

     SBA's size standards constitute the default definition of
"small business" for these livestock and poultry categories.  For
the egg laying sector (SIC 0252), however, EPA is considering
alternative small business thresholds for use in analyzing CAFOs
under the CWA, as described below.  The following describes EPA's
approach to equate SBA's size standard with farm size based on
the number of animals on-site.

     For the purposes of conducting its IRFA for this rulemaking,
and in the absence of business-level revenue data, EPA has
estimated the number of "small businesses" by first equating
SBA's annual revenue definition with the number of animals at an
operation.  The number of small entities is then estimated from
USDA information on the distribution of farms by number of
animals in each sector (Section 5).

     Previously EPA had developed a model to estimate the numbers
of animals at an operation that correspond with SBA's revenue-
based definitions, accounting for a suite of market factors.
Input data included the farm price received by producers and
average yield, expressed either as animal weight at slaughter or
the volume of milk or number of eggs produced annually.  For meat
animals, input data also included the number of "turnovers" or
annual marketing cycles, representing the total number of meat
animals produced and sold for slaughter in a full year cycle.  To
normalize financial differences between independent operators and
contract growers, the model assumed that all producers receive
the USDA-reported farm price.  The resultant small business
estimates were based on farm revenue from livestock-related only
(i.e., sales of meat animals, cows milk, and whole eggs, etc.).
Revenues from other sources, such as income from crops sales,
government payments and other farm-related income, were not
considered.

     Based on SER comments, the SBAR Panel recommended that EPA
modify its approach.  The revised approach uses SBA's annual
revenue size standard and USDA-reported farm revenue data-derived
on per animal per farm basis-to calculate the average animal
inventory at a small business.  This approach does not attempt to
normalize conditions between independent operators and contract
growers.  This approach does account for total cash revenue from
both livestock and non-livestock revenue.

     The revised estimates are calculated using SBA's revenue
standards as defined at 13 CFR 121.201, with the exception of
laying hens.  For layers, EPA is considering an alternative
definition of "small business" for purposes of conducting its
IRFA.  EPA believes that an annual revenue of $1.5 million for an
operation better reflects the agricultural community's sense of
what constitutes a small business and more closely aligns with
the small business definitions codified by SBA for other animal
operations.

     Aggregated farm financial data used by EPA are from the
USDA's 1997 Agricultural Resources Management Study (ARMS)
database.  These data were obtained with the assistance of staff
at USDA's Economic Research Service (ERS).4  USDA's financial
data report average total farm revenue for each sector.  USDA's
data also provide corresponding summary information that match
the reported average revenue to the total number of farms and the
total number of animals by sector.  From these data, EPA
calculated average revenue per head for the beef, dairy, pork,
layer, broiler, and turkey sectors.

     To equate SBA's size standard (in revenues) with farm size
based on the number of animals, EPA used these derived revenue
per head values to calculate the number of animals, as follows:

     #Animals = SBA's Small Business Definition ($ per year)
                          Average Total Revenue per head
($/animal)

     The resultant number of animals is then used as a threshold
for identifying a small business.  Estimated "small business"
thresholds for each sector are shown in Table 4.2.  For the
purpose of conducting its IRFA for this rulemaking, EPA is
evaluating "small business" for these sectors as an operation
that house or confine less than: 1,400 fed beef cattle; 200
mature dairy cattle; 1,400 market hogs; 25,000 turkeys; 61,000
layers; or 260,000 broilers.  Table 4.2 shows the estimated
number of small animal feeding operations based on these size
estimates.


Table
4.2.
Number
of
Animals
On-site
at
"Small"
Livesto
ck and
Poultry
Farms
                                                    
Sector    Total    Revenue   #Animals   Estimated     Small
          Annual     per    (Avg U.S.)    Total       AFOs
         Revenue   headb/     (c=a/b)   Number of     as %
            a/       (b)                   AFOs       Total
           (a)
                                                    
Fed      $1.5       $1,060        1,400    106,930     98%
Cattle   million                                c/
                                                    
Dairy    $0.5       $2,573          200    118,130     93%
         million
                                                    
Hogs     $0.5         $363        1,400    117,860     93%
         million
                                                    
Broiler  $0.5           $2      260,000     34,860    >99%
s        million
                                                    
Layers   $9.0          $25      365,000  75,170 c/    >99%
         million                  ($9m)                98%
         $1.5                    61,000
         million                ($1.5m)
                                                    
Turkeys  $0.5          $20       25,000     13,720     89%
         million
                                                    
All         NA       NA         NA         375,740     95%
AFOs

a/ SBA
Size
Standar
ds by
SIC
industr
y (13
CFR
Part
121).
USGPO,
1991
and
USGPO,
1996.
An
alterna
tive
definit
ion of
$1.5
million
in
annual
revenue
s is
also
analyze
d for
Chicken
Eggs
(SIC
0252) .
 b/
Revenue
per
head
derived
from
data
obtaine
d from
USDA's
Agricul
tural
Resourc
es
Managem
ent
Study
(ARMS)
databas
e for
1997.
ARMS
financi
al data
include
average
total
farm
cash
income
by
sector
and
data
corresp
onding
to the
total
number
of
farms
and
total
number
of
animals
for the
income
data's
sample
set.
For
each
sector,
data
reflect
average
U.S.
values
and are
rounded
to the
nearest
dollar.
c/
Total
shows
operati
ons
with
mixed
animal
types.
Beef
include
veal.
Layers
include
s wet
and dry
systems
.

     5.0  SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED
          REGULATION


     Section 4 describes how EPA equated SBA's annual revenue
definition with the number of animals at an operation.  This
section discusses EPA's estimates of the number of small entities
based on farm size distribution information from USDA.

     For the purposes of conducting its IRFA, EPA is evaluating
"small business" for these sectors as an animal feeding operation
that house or confine less than:

         1,400 beef cattle;
         200 mature dairy;
         1,400 marketed swine;
         25,000 turkeys;
         61,000 layers; and
         260,000 broilers.

     EPA estimates that there are about 376,000 AFOs.5  Based on
the animal inventory thresholds shown above, approximately 95
percent of all AFOs are small entities.

     Not all of these operations, however, would be subject to
the revised regulations.  EPA's regulations only apply to those
AFOs that meet the regulatory definition of a CAFO or those that
have been designated as a CAFO by the NPDES permitting authority
due to risks posed to water quality and public health, as
discussed in Section 2.  EPA estimates that about 22,000 small
AFOs may be subject to the proposed regulations.  This estimate
adjusts for operations with more than a single animal type.

5.1  Estimated Number of AFO "Small Businesses" Affected by the
     Regulations

     Table 5.1 presents the estimated number of AFOs and the
estimated number of AFOs that are "small businesses" under SBA's
size definition in each of the three size categories: more than
1,000 AUs; between 300 and 1,000 AUs; and 300 AUs or less.
Sources of data for EPA's small business estimates include
published data and information from the U.S. Department of
Agriculture (USDA), industry, State agriculture extension
agencies and the land grant universities.  (For more information
on how these estimates were derived, see supporting information
in Appendix G.)

     As shown in Table 5.1, there were an estimated 4,370 AFOs
with more than 1,000 AUs that meet the "small business"
definition.  Most of these operations are in the poultry sector.
This estimate does not adjust for operations with more than a
single animal type and so is likely overstated.  These small AFOs
would be subject to the revised ELG and NPDES permit
requirements.


Table 5.1
  Total
Number of
AFOs and
Number of
 "Small"
  AFOs,
  1997
                 
          Total        "Small" AFOs
 Sector   AFOsa/
           (all
           farm
          sizes)
                                                           
          Total  >1,00 300AU- <300AU >1,00 300AU-   <300   Total
           AFOs    0   1,000A          0   1,000A    AU
                  AU     U            AU      U
                                                           
Beef:     106,08 2,080  2,000 102,00   400   2,000 102,00 104,40
cattle         0                   0                    0      0
                                                           
Beef:        850    10    200    640    10     200    640    850
veal
                                                           
Dairy:    116,88 1,450  5,690 109,74     0       0 109,74 109,74
milk           0                   0                    0      0
                                                           
Dairy:     1,250   400    750    100     0       0    100    100
heifers
                                                           
Hogs: FF  64,240 2,420  9,240 52,580     0   6,190 52,580 58,770
                                                           
Hogs: GF  53,620 1,670  3,250 48,700     0   2,170 48,700 50,870
                                                           
Broilers  34,860 3,940 10,200 20,720 3,900  10,200 20,720 34,820
                                                           
Layers:    3,110   360    800  1,950    60     800  1,950  2,810
wet
                                                           
Layers:   72,060   360  1,330 70,370     0     670 70,370 71,040
dry
                                                           
Turkeys   13,720   370  1,730 11,620     0     530 11,620 12,150
                                                           
Sum Total 466,67 13,06 35,190 418,42 4,370  22,760 418,42 445,55
               0     0             0                    0      0
                                                           
Total     375,74 12,85 28,150 334,74  NAb/    NAb/ 334,74 356,00
AFOs           0     0             0                    0      0

a/"Total
AFOs"
eliminate
s double
counting
of
operation
s with
mixed
animal
types.
Based on
survey
level
Census
data,
operation
s with
mixed
animal
types
account
for
roughly
25
percent
of total
AFOs.
FF=
farrow-
finish
(includes
breeder
and
nursery
pigs);
GF=grower-
finish.
APHIS/NAH
MS data
indicate
approxima
tely 40
percent
of swine
farms are
grow-
finish;
the other
60
percent
are
facilitie
s with
farrowing
.
"Layers:
wet" are
defined
at
1,000AU
for
operation
s with
30,000
birds
since
there are
no
operation
s with
continuou
s
watering
systems
as
defined
under the
existing
regulatio
ns.
"Layers:
dry" are
defined
at
1,000AU
for
operation
s with
100,000
birds.
Source:
Values
presented
in the
table are
EPA
estimates
, derived
from
published
USDA
data,
including
1997
Census of
Agricultu
re;
Cattle:
Final
Estimates
1994-1998
; Milking
Cows and
Productio
n: Final
Estimates
1993-1997
;
Chickens
and Eggs:
Final
Estimates
1994-1997
; and
Swine `95
reports.
Other
sources
include
industry-
supplied
data and
informati
on, and
also
informati
on from
EPA site
visits to
AFOs.
b/ Not
Applicabl
e

     Among AFOs with between 300 and 1,000 AUs, there are an
estimated 22,760 small entities.  Note, however, that this
estimate double counts those operations with more than a single
animal type.

     The majority of small AFOs have 300 AUs or less.  All of
these are small entities.  EPA expects that roughly 10 AFOs with
300 AUs or less will be designated as CAFOs and thus may be
affected by the revised regulations.  In the past 20 years, only
one AFO has been designated as a CAFO.  EPA expects that
designation may be limited to small dairy and hog confinement
operations that are located in more traditional farming regions
near or in impaired watersheds.  Such operations are likely to be
significant contributors to water quality impairment.

     In summary, EPA estimates that roughly 22,600 small entities6
may be affected by the revised regulations (after eliminating
double counting of operations with mixed animal types).  Not all
of these operations would incur costs under the revised
regulation since some of these operations are already in
compliance with existing federal and state discharge and
permitting requirements.

5.2  Number of CAFOs (300-1,000 AU) by NPDES Regulatory Option

     The previous section identified the number of small (300 AU
or less), medium (between 300-1,000 AU), and large (greater
than1,000 AU) operations that are defined as small entities and
may be impacted by the proposed CAFO permitting regulation (Table
5.1).  This section provides estimates of the number of AFOs with
between 300 and 1,000 AUs that may be covered under the various
NPDES regulatory options.

     Table 5.2 provides estimates of the number of these
operations by sector in the 300-1,000 AU size range that may be
covered under various permitting options.  Seven criteria were
evaluated:
           any conveyance from feedlot,
           improper land application,
           insufficient storage,
           operations in watersheds with waters impaired by pathogens
          or nutrients,
           operations with greater than 2 AUs per acre,
           operations within 100 feet of U.S. waters,
           operations located in areas where nutrients (nitrogen and
          phosphorus) from manure exceed the nutrient requirements of crops
          and pasture.

The method used to derive these estimates is discussed in Appendi
                                                            x G.


 Table
  5.2.
 Number
   of
 Small
Entitie
   s
(301-1,
000 AU)
  that
  may
require
   an
 NPDES
 Permit
                                                          
 Sector     Any    Improp  Insuffi Impair  >2 AU Within  Located
         conveyanc   er     cient    ed     per  100' of  in a
          e from    land   Storage waters  acre1    a    manure
          feedlot  applic     1     hed1         waterwa  shed1
           (incl    ation                          y1
         discharge
            s)
                                                          
Beef           320     820    2000    1680   320     400     410
                                                          
Veal             3       8      20      16     4       4       4
                                                          
Dairy            0       0       0       0     0       0       0
                                                          
Hogs           905   1,152    1646    1646  3622    1646     576
                                                          
Broiler          0   4,858    1056    1900 20064    1478    2428
s
                                                          
Layers-          0     368      80     976   816     112     184
wet
                                                          
Layers-          0     304     118     818  1042      92     152
dry
                                                          
Turkeys          0     363      80     584  1200     110     182
                                                          
Nationa      1,229   7,873    5000    7622 27068    3844    3936
l
Note: Estimates shown above have not been updated to reflect more
recent total farm count estimates.
1  EPA estimates that 50% of operations in this category could
still demonstrate no  potential to discharge and thus would not
need a permit under some regulatory options.

     6.0    SUMMARY OF SMALL BUSINESS OUTREACH

6.1      EPA Outreach Prior to Convening the Panel

     To facilitate regulation development, EPA has actively
involved interested parties in the development of the proposed
rule.  As part of these efforts, EPA has provided many
opportunities for input in this rulemaking process, including
eleven public outreach meetings on the Draft Unified AFO Strategy
and a stakeholder conference call, including small entities.  In
addition, EPA meets with various members of the stakeholder
community on a continuing basis through meeting requests and
invitations when a meetings, conferences, and site visits.  These
meetings with environmental organizations, producer groups, and
producers representing various agricultural sectors allows EPA
the opportunity to interact with and receive input from
stakeholders about the Unified Strategy and the NPDES and
effluent limitations regulatory revisions.  While most of these
outreach activities have not targeted small entities explicitly,
many have included small business participation.

6.1.1  Joint USDA/EPA Unified AFO Strategy Listening Sessions

     In the fall of 1998, EPA and USDA announced eleven public
outreach meetings designed to allow public comment on the Draft
Unified National AFO Strategy.  The meetings were held in the
following cities: Tulsa, Oklahoma; Harrisburg, Pennsylvania;
Ontario, California; Madison, Wisconsin; Seattle, Washington; Des
Moines, Iowa; Chattanooga, Tennessee; Indianapolis, Indiana; Fort
Worth, Texas; Denver, Colorado; and Annapolis, Maryland.  Each
meeting included a pre-meeting between state and regional
officials, EPA, and USDA representatives to discuss the draft
strategy and the issues posed by CAFOs in general.  All
participants in the public sessions, including numerous small
entities, were given the opportunity to sign up and provide their
comments to a panel consisting of EPA, USDA, and local
representatives.  Many of the commenters made points or raised
issues germane to small entities.  A transcript of these comments
was used by EPA and USDA in developing the final Unified National
AFO Strategy.  These comments and concerns are also being
considered by EPA in the development of the revised NPDES CAFO
regulations.  The transcripts of these meetings are available on
the OWM Web Site (www.epa.gov/owm/afo.htm).

6.1.2    Advisory Committee Meeting

     EPA was invited to meet with the Local Government Advisory
Committee, Small Community Advisory Subcommittee on September 8,
1999.  At this Federal Advisory Committee Act meeting, EPA
described the CAFO regulatory revisions being considered, and
responded to questions concerning the effect of EPA's regulatory
actions on small communities.  While the CAFO regulations do not
directly affect small communities, AFOs do have an effect on
local economies and on the local environment.  Thus, how they are
regulated (or not regulated) has implications for local
governments.  EPA is keeping local government concerns in mind as
it proceeds with the CAFO regulatory revisions and general public
outreach activities.

6.1.3    Site Visits

     EPA conducted over 50 site visits to collect information
about swine and poultry animal feeding operations and waste
management practices.  EPA visited six broiler, 12 layer, and six
turkey facilities in Georgia, Arkansas, North Carolina, Virginia,
West Virginia, Maryland, Delaware, Pennsylvania, Ohio, Indiana,
and Wisconsin.  EPA visited approximately 30 swine facilities in
North Carolina, Pennsylvania, Ohio, Iowa, Minnesota, Texas,
Oklahoma, and Utah.  These facilities were chosen with the
assistance of the National Pork Producers Council, United Egg
Producers, United Egg Association, National Turkey Federation,
National Resources Defense Council, the Clean Water Network,
university experts, State Co-op and extension, and state and EPA
regional representatives.  During these site visits, EPA also
visited locations demonstrating centralized treatment or new and
innovative technologies.  EPA has also attended USDA-sponsored
farm tours, as well as tours offered at industry, academic, and
government conferences.

     In addition, EPA visited approximately 60 sites to collect
information about beef and dairy animal feeding operations and
waste management practices.  EPA visited approximately 30 beef
feedlots in Texas, Oklahoma, Kansas, Colorado, California,
Indiana, Nebraska, and Iowa, and three veal operations in
Indiana.  The capacities of the beef feedlots varied from 500 to
120,000 head.  EPA also visited approximately 25 dairies in
Pennsylvania, Florida, California, Wisconsin, and Colorado, with
the total mature dairy cattle at the operations ranging from 40
to 4,000 cows.  EPA chose these facilities with the assistance of
the National Cattlemen's Beef Association, National Milk
Producers Federation, Western United Dairymen, and state and EPA
regional representatives.

6.1.4    Industry Associations

     The National Pork Producers Council (NPPC), United Egg
Producers and the United Egg Association (UEP/UEA), National
Turkey Federation (NTF), and the National Chicken Council are
trade associations that represent the swine and poultry
industries.  NPPC is a marketing organization and trade
association made up of 44 affiliated state pork producer
associations.  The NPPC's purpose is to increase the quality,
production, distribution, and sales of pork and pork products.
The NPPC also organizes the research, advertising, and
educational programs that are funded by the National Legislative
Pork Checkoff program.  The UEP/UEA undertakes programs in the
following areas: price discovery; production and marketing
information; unified industry leadership; USDA relationships;
Washington presence, and; promotional efforts.  The NTF is the
national advocate for all segments of the turkey industry,
providing services and conducting activities which increase
demand for its members' products.  The National Chicken Council
represents the vertically integrated companies which produce and
process about 95 percent of the chicken market in the U.S.  They
provide consumer education, public relations, public affairs, and
are working to seek a positive regulatory, legislative and
economic environment for the broiler industry.

     All of these organizations have actively participated in
developing revisions to the swine and poultry effluent guidelines
by assisting in site visit selection, submitting supplemental
data, reviewing EPA's draft descriptions of the industry and
waste management practices, and participating in or hosting
industry meetings with EPA.  For example, the NPPC has provided
its biennial report Pork Facts that summarizes productivity,
production, and economic information.  Industry also invited EPA
to participate in the environmental frameworks developed by the
NPPC and the National Chicken Council.

     The National Cattlemen's Beef Association (NCBA) and the
National Milk Producers Federation (NMPF) are two trade
associations that represent the beef and dairy industries.  NCBA
is a marketing organization and trade association for cattle
farmers and ranchers.  NMPF deals with milk quality and
standards, animal health and food safety issues, dairy product
labeling and standards, and legislation affecting the dairy
industry.  Both organizations have actively participated in
developing the beef and dairy effluent guideline by assisting in
site visit selection, submitting supplemental data, reviewing
EPA's draft documents presenting descriptions of the industry and
waste management practices, and participating in/hosting industry
meetings with EPA.

     Other beef and dairy organizations have also provided
assistance to EPA.  For example, the Western United Dairymen, a
dairy organization in California, organized and participated in
site visits and a conference call meeting with EPA.  In addition,
EPA contacted the American Veal Association to obtain further
information on veal operations.

6.1.5    CAFO Regulation Workgroup
     
     Other outreach includes collaboration with USDA and States
agencies.  EPA established a workgroup that includes
representatives from USDA and seven states, as well as EPA
Regions and headquarters' offices.  The workgroup was established
to advise EPA as it develops its regulatory options.

6.1.6    Small Business Conference Call

     EPA distributed background information and materials to
small business representatives on two separate dates - September
3, 1999 and September 9, 1999.  On September 17, 1999, EPA held a
conference call from Washington, D.C. to provide a pre-panel
forum for small business representatives to provide input on key
issues relating to the proposed regulatory changes to the "CAFO
Rule."  Twenty-seven  small business representatives from the
beef, dairy, swine, poultry, and exotic animal livestock
industries participated in the call.  A summary of the conference
call is included in Appendix B.  Following the conference call,
at EPA request, 19 of the 41 small business advisors and national
organizations invited to participate provided written comments.
Written comments are included in Appendix C.  The complete set of
these comments were also provided to members of the Panel.

6.2      Panel Outreach

     The SBAR Panel for the "CAFO Rule" was convened on December
16, 1999.  On December 28, 1999, the Panel distributed an
outreach package to the final group of SERs, which included many
of the participants in EPA's September 17, 1999 outreach
conference call.  The package  included: a SER outreach document,
which explained the definition of a small business and those
entities most likely to be impacted by the rule; an executive
summary of EPA's cost methodology; regulatory flexibility
alternatives; a cost methodology overview for the swine, poultry,
beef, and dairy sectors; a cost annualization approach; and, a
list of questions for  SERs.  Additional modeling information was
also sent to  SERs on January 7, 2000 and January 10, 2000.  A
complete list of these documents can be found in Appendix D.

      The SERs were asked to review the information package and
provide verbal comments to the Panel during a January 5, 2000
conference call, which included participation by 22 SERs.  During
this conference call, SERs were also encouraged to submit written
comments.  SERs were given an additional opportunity to make
verbal comments during a second conference call which was held on
January 11, 2000 and included participation by 20 SERs.  During
both conference calls, SERs were asked to comment on the costs
and viability of the proposed alternatives under consideration by
EPA.  A summary of the both conference calls can be found in
Appendix E.  Following the calls, the Panel received 20 sets of
written comments from 14 SERs.  The complete set of these
comments is included in Appendix F, and an extensive summary of
them is provided in Section 8 of this Report.

     7.0    SMALL ENTITY REPRESENTATIVES

     EPA, in consultation with SBA, invited the following thirty-
four SERs to participate in its SBREFA consultation process.
Twenty-two SERs participated in at least one of the conference
calls sponsored by the Panel.  Fifteen SERs provided written
comments to the Panel.  The complete list of SERs is provided
below.

                                                        
           SER                Region    1/5/00  1/11/0  Writte
                                        Conf.     0        n
                                         Call   Conf.   Commen
                                                 Call     ts

       MULTI-SECTOR
     REPRESENTATIVES
                                                        
Nancy Danielson              National                     
Government Relations
Representative

National Farmers' Union
Washington, D.C.
                                                        
Tom VanArsdall               National                     
Vice President,
Environmental Policy

National Council of
Farmers' Cooperatives
Washington, D.C.
                                                        
Katherine Ozer               National                     
Executive Director

National Family Farmers
Coalition
Washington, D.C.
                                                        
Don Parrish                  National                    
Environmental Policy             
Specialist                       

American Farm Bureau
Federation
Park Ridge, IL

           BEEF
                                                        
John Pemberton               National                     

National Cattlemen's Beef
Association
Washington, D.C.
                                                        
Terry Handke                 Central                      
Muscopah, KS                 (Kansas)
                            
                                                        
Irvin Carlson                Central                    
Browning, MT                (Montana)
                                                        
Reg Clause                   Midwest                     
Jefferson, IA                 (Iowa)
                            
                                                        
Sue Jarrett                  Central                     
Wray, CO                    (Colorado)
                                                        
Galen Frenzen                Midwest                     
Fullerton, NE               (Nebraska)

          DAIRY
                                                        
Carissa Itle                 National                    

National Milk Producers
Federation
Arlington, VA
                                                        
Scott Mason                    Mid-                      
North Stratford, NH          Atlantic
                               (New
                            Hampshire)
                                                        
Bruce Roos                   Pacific                      
Cloverdale, Oregon           (Oregon)
                                                        
Allen Voortman               Pacific                   
Granger, WA                 (Washingto
                                n)
                                                        
Norman Jordan                 South                       
Silver City, NC               (North
                            Carolina)

          SWINE
                                                        
Deb Atwood                   National                     

National Pork Producers
Council
Washington, DC
                                                        
Paul Willis                  Midwest                  
                              (Iowa)
Niman Ranch
Thornton, IA
                                                        
Chris Petersen               Midwest                     
Clear Lake, IA                (Iowa)
                                                        
Donna Reifschneider          Midwest                     
Smithton, IL                (Illinois)
                                                        
Jay Foushee                   South                       
                              (North
Foushee Farms               Carolina)
Roxboro, NC

         POULTRY
                                                        
Judy Morrison                National                 

National Contract Poultry
Growers Association
Minden, LA

Broilers
                                                        
V.O. Campbell                 South                      
Collins, MS                 (Mississip
                               pi)
                                                        
James Anderson                South                   
Hindsville, AK              (Arkansas)
                                                        
Gerald Johnson                South                    
Perryville, Arkansas        (Arkansas)

Layers
                                                        
Randy Johnson                 South                      
Jefferson, GA               (Georgia)
                                                        
George Ulmer                  South                   
Orangeburg, SC                (South
                            Carolina)
                                                        
Earl Wetta                   Midwest                    
Garden Plain, KS             (Kansas)
                                                        
Dennis Bowden                  Mid-                     
East Waldosboro, ME          Atlantic
                             (Maine)

Turkeys
                                                        
Marion Atkinson              Midwest                    
Columbus, KS                 (Kansas)
                                                        
Tony Helfter                 Midwest                    
Osage, IA                     (Iowa)
                                                        
Ken Mitchell                 Pacific                    
Elk Grove, CA               (Californi
                                a)
                                                        
Craig Miller                   Mid-                    
Harrisonburg, VA             Atlantic
                            (Virginia)

   OTHER SECTORS/EXOTIC
         ANIMALS
                                                        
BISON:                       Midwest                   
Del Hensel                  (Colorado)
Commerce City, CO
                                                        
SHEEP:                       Midwest                  
Pat O'Toole                 (Wyoming)
Savery, WY

8.0    SUMMARY OF COMMENTS FROM SERS


     In addition to the comments made by the SERs during the
January 5, 2000 and January 11, 2000 conference calls, the Panel
received 20 written comments from 15 SERs.  This Section
summarizes the main issues raised by the SERs in their oral and
written comments.  Under each main issue, the SERs' comments have
been organized by the following sectors: multi-sector
representatives; swine; beef, dairy, and exotic animals; and,
poultry.  Table 8.1 provides a record of the written comments (no
written comments were provided by SERs in the exotic animal
category).  The complete written comments are provided in
Appendix F and the minutes of the conference calls are in
Appendix E.


  Table 8.1
 List of SER
   Written
   Comments
                                              
Name            Organization/I  Date(s)       Number of Total
                ndividual       Received      Pages

Multi-Sector
Representativ
es:
                                              
Don Parrish     American Farm   1/24/00       17
                Bureau          (1st          
(3 comments     Federation      letter)       
letters were                    1/27/00
received from                   (2nd
Mr. Parrish)                    letter)
                                1/28/00
                                (3rd
                                letter)
                                

Swine:
                                              
Chris           Individual      1/20/00       5
Petersen
                                              
Deb Atwood      National Pork   1/24/00       11
                Producers
                Council
                                              
Jay Foushee     Individual      1/24/00       11
                                              
Donna           Individual      1/24/00       11
Reifshneider

Beef:
                                              
Terry Handke    Individual      1/19/00       2
                                              
Galen Frenzen   Individual      1/20/00       2
                                              (Attachments
                                              included with
                                              comment letter.)
                                              
Sue Jarrett     Individual      1/21/00       4
                                (Letter)      
(1 comment                      1/11/00       
letter, plus                    (References   
references                      )
were received
from Ms.
Jarrett)
                                              
John            National        1/24/00       36
Pemberton       Cattlemen's                   (Attachments
                Beef                          included with
                Association                   comment letter.)
                                              
Reg Clause      Individual      2/10/00       4

Dairy:
                                              
Scott Mason     Individual      1/21/00       2
                                              
Carissa Itle    National Milk   1/24/00       6
                Producers       (Letter)
(1comment       Federation      2/4/00
letter, plus                    (References
references                      )
were received
from Ms.
Itle)
                                              
Bruce Roos      Individual      1/24/00       4
                                              (Attachments
                                              included with
                                              comment letter.)

Poultry
(Broilers):
                                              
V.O. Campbell   Individual      1/18/00       4
                                (1st          (Attachments
(2 comments                     Letter)       included with
letters were                    2/1/00 (2nd   comment letter.)
received from                   Letter)
Mr. Campbell)

Poultry
(Layers):
                                              
Randy Johnson   Individual      1/18/00       1
                                              (Attachments
                                              included with
                                              comment letter.)


8.1  Number and Type of Small Entities Affected

     Beef, Dairy, and Exotic Animals
     Two SERs provided written comments on this issue.  Mr.
     Pemberton questioned the analysis presented in Table 4-2
     (found in the third SER Outreach Mailing, dated December 28,
     1999) that indicates no beef operations above 1,000 AUs
     would be considered small entities, and requested to review
     the data used. This SER stated that a feedlot with 1,000 AUs
     will gross approximately $700,000-800,000 per turn of
     cattle, and will average two turns per year.  However, this
     SER did not agree that the average turnover rate of cattle
     should always be used in estimating the number of small
     entities, because it does not account for variations in corn
     prices, types of cattle feeding, location to corn, calve
     market, occupation relative to capacity, region, and the
     placement weight in feedlot.  This SER expressed support for
     a methodology that is based instead on supplemental income
     (not generated from selling cattle).  For example, sometimes
     the feedlot generates the majority of its revenue by selling
     feed to customer cattle.
     
     Ms. Itle stated that 96 percent of the Nation's dairy farms
     have herds smaller than 300 AUs (200 mature dairy cows).  In
     her written comments she noted that the analysis of the
     small business impacts of the proposed CAFO rule focuses on
     those operations that have more than 300 AUs and meet the
     SBA small business definition (receiving less than $500,000
     in annual gross revenue).  She further stated that in the
     case of dairy, these 2 categories are practically mutually
     exclusive and a modern producer with 300 AUs is grossing
     more than this amount.  Ms. Itle noted that inclusion of
     immature animals in determining the number of AUs could
     potentially mean producers who have approximately 125 mature
     cows will become regulated as CAFOs.  Ms. Itle also urged
     EPA to refine its cost analysis and consider the results
     accordingly.
     
     Mr. Clause said that 1,000 AUs is really not a large
     business in terms of the economics; however, it is small
     enough in terms of what EPA wants to accomplish.  Another
     beef SER agreed.
     
     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider also commented
     on the use of the average turnover rate in developing small
     business estimates in the swine sector.  They indicated that
     EPA used turnover rates and animal values that do not
     coincide with the actual pork production turnover rate for
     the various production operations.  All three SERs agreed
     that the swine industry is unique because each phase of
     production produces an animal at different turnover rates
     and value.  They urged EPA to account for this in their
     models.
     
     One SER indicated her need for a better, clearer definition
     of a small business.  This SER further remarked that the
     definition of a small business should account for
     differences between contract growers and independents.
     
     Poultry
     In terms of revenue calculations, one poultry SER commented
     that while he only makes $0.07 per dozen eggs, EPA used
     $0.65 per dozen in its calculations.
     
8.2  Potential Reporting, Record Keeping, and Compliance
     Requirements

     8.2.1  General Requirements
     
     Multi-Sector Representatives
     Mr. Parrish provided a written comment on this issue.  He
     stated that EPA may only include monitoring, record keeping,
     and reporting requirements in NPDES permits for CAFOs to the
     extent that such requirements are reasonable in relation to
     controlling the discharge of pollutants from discrete
     "end-of-pipe" outlets.  However, Mr. Parrish also stated
     that he thinks EPA is not authorized to require
     comprehensive nutrient management plans (CNMPs) and,
     therefore, he recommended not including any of the
     associated monitoring, record keeping, and reporting
     requirements in NPDES permits.
     
     Swine
     One SER expressed concern about the CAFO owner/operator (not
     any outside party) being required to monitor for discharges.
     This SER also suggested that the CAFO owner/operator needs
     to record discharges.

     Beef, Dairy, and Exotic Animals
     In his written comment, Mr. Frenzen recommended not
     requiring unnecessary, time consuming, EPA-designed
     paperwork with CNMPs.  (He felt that nutrient management
     should be left to the farmer, who is better positioned to
     evaluate his operation as it affects water quality.)

     As a SER and a neighbor of a large swine CAFO,  Ms. Jarrett
     stated that she thinks a permit system based on
     self-monitoring does not work and that there is a need for
     EPA and the States to do more inspections and enforcement.
     She also stated that she thinks EPA needs to include in the
     rule monitoring requirements on swine operations with 1,000
     AUs or more.

     Ms. Jarrett also submitted written comments on this issue.
     This SER stated that the permitting system should not be a
     self-implementing, self-monitoring, complaint driven system.
     She indicated that it should not be an operator's decision
     to evaluate or make a self-determination as to whether their
     facility is a zero discharge operation.  (However,  she also
     indicated that she did not support expanding the scope of
     the permitting system to include facilities with less than
     1,000 AUs, because it would create an undue burden on such
     operations.)
     
     Poultry
     In his written comment, Mr. Campbell indicated that record
     keeping should be kept to a minimum.  He stated that many
     farmers will be unable to comply if for every field,
     regardless of size, they must identify and keep accurate
     records of which nutrients were applied and the amount, when
     and how they were applied and who applied them.  He also
     indicated that soil tests of every field were also
     infeasible.

     8.2.2  Offsite Transfer of Manure

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider stated in
     written comments their belief that EPA lacks the legal
     authority to require offsite controls of CAFO-generated
     manure.  Restrictions such as requiring a CAFO operator to
     get a signed certification of CNMP compliance from those who
     would buy or take as a gift CAFO-generated manure would also
     serve only to threaten the market for CAFO-generated manure
     and drive farmers toward the use of commercial fertilizer
     instead of manure.  However, all three of these SERs
     supported requiring the CAFO to maintain records of off-site
     manure transfers, including the name and address of the
     hauler, the date of removal, and volume of removed manure
     and wastewater.  These SERs also agreed that, when the
     removed manure and wastewater are to be land applied, the
     operation should make available to the hauler the most
     recent manure nutrient analysis.
     
     Beef, Dairy, and Exotic Animals
     Two written SER comments were received on this issue.  Ms.
     Itle, a dairy SER, indicated that keeping records of off-
     site transfer of waste must not be burdensome because small
     producers who face agronomic rates may need an outlet for
     the extra manure and burdensome requirements would
     discourage third parties from using that extra manure.
     
     Mr. Pemberton noted that EPA is not considering an option to
     require manure recipients to sign a document of compliance
     with a CNMP.7  The National Cattlemen's Beef Association
     (NCBA) strongly supports this decision.  This SER would be
     concerned with such requirements because offsite land
     application is not under the control of the operator or the
     jurisdiction of an AFO's permit and thus should not be
     included in the permit or the CNMP.  EPA's attempt to place
     liability upon the CAFO operator for third party actions
     would clearly be outside the jurisdiction of EPA and should
     not be considered.  (Mr. Pemberton thinks that any attempts
     to strictly link the offsite land application practices of
     third parties to beef feedlot operators' NPDES permits could
     destroy the market for dry manure.)

     8.2.3  Manure and Soil Testing Requirements
     
     Beef, Dairy, and Exotic Animals
     Ms. Jarrett recommended that, if the establishment of the
     discharge standard (for operations under 1,000 AUs) and
     control of land application is left to the discretion of
     local permitting authorities and its best professional
     judgement, EPA must set minimum requirements applicable to
     every permit, including waste and soil analysis.  Mr. Handke
     stated that he thinks most farmers test soil for nutrients.
     (He noted this in written comments in opposition to a strong
     enforcement program on manure application.)

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider supported
     requiring permitted swine operations to conduct soil tests
     and manure nutrient tests every two years.

8.3  Related Rules

  8.3.1  Total Maximum Daily Loads
  
  Several SERs provided comments on Total Maximum Daily Loads
  (TMDL) regulation as it relates to CAFO regulations.  These
  comments are summarized below.
  
  Multi-Sector Representatives
  Mr. Parrish suggested that EPA consider that CAFOs in an
  impaired watershed whose technology-based limits are not
  sufficient to meet water quality-based standards might incur
  greater costs, and possibly have to shut down.
  
  Beef, Dairy, and Exotic Animals
  Ms. Itle commented that dairies with less than 300 AUs may be
  impacted by potential regulatory changes to CAFO rules as
  well, due to discharge situations or designation as CAFOs as a
  result of location in a TMDL impaired watershed.  This SER
  echoed this comment in her written comments.
  
  In his written comments, Mr. Pemberton included NCBA's
  comments on EPA's Draft Manual and NPDES Permit for CAFOs
  where they noted that EPA stated it would coordinate Phase 1
  of NPDES permitting with the TMDL program.  NCBA questioned
  how this was possible, considering that NPDES permits do not
  allow CAFOs (with 1,000 AUs or more) to add any loads to the
  waters of the U.S. and thus could not be expected to further
  reduce its loadings as required under the TMDL program.  For
  this reason, NCBA recommended that CAFO NPDES permits should
  be excluded form the TMDL requirements due to the zero
  discharge nature of the permit.
  
  Poultry
  Mr. Campbell stated that most 303(d) listed watersheds were
  listed by the State of Mississippi without supporting
  scientific evidence of water impairment.  He provided reports,
  which contradict information contained in EPA's TMDL database.
  One of these reports indicates that water quality problems of
  the 1970s are linked more to municipal waste and unenforced
  industrial standards than to agriculture and that remarkable
  improvement in the quality of their waters over the past 30
  years should be recognized.  (This SER thus recommended that
  EPA not designate AFOs as CAFOs because they are located in a
  303(d) listed watershed.)
  
  8.3.2  Related State Programs
  
     Swine
     One SER suggested that EPA consider the various State CAFO
     requirements when considering revising CAFO regulations.
     
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided
     written comments about swine CAFO operators, who do not now
     have NPDES permits, but have adequate management measures to
     prevent water pollution.  These SERs suggested that States
     have implemented regulations over the last ten years equal
     to or exceeding NPDES permits and strongly encouraged EPA to
     consider and analyze these programs accordingly.
     
     Beef, Dairy, and Exotic Animals
     
     Many beef SERs also suggested that EPA consider state
     programs when revising CAFO regulations.  Several of them
     provided examples of State programs that implemented
     regulations that may equal or exceed requirements of the
     current NPDES program.  Mr. Roos noted that Oregon's State
     Department of Agriculture has a CAFO program that seems very
     similar to the NPDES program, except that all confined
     animal feeders are required to have a permit, regardless of
     size.  Mr. Clause noted that Iowa already has substantial
     state environmental regulations in place, including
     requirements for certified nutrient management plans and
     formal certification of manure applicators.  Another beef
     SER commented that the majority of farms are already under
     some kind of state CAFO nutrient management regulation.
     
     Several SERs also commented that States and local agencies
     are better positioned than the federal government to
     regulate CAFOs.  Mr. Handke stated that state and local
     agencies can better serve the environment than EPA or
     national programs, and new or existing regulations should be
     considered on a regional basis.  Mr. Clause had a similar
     written comment, except he stated that states are is better
     positioned than local or federal agencies to address
     concerns and issues regarding CAFOs.
     
     Poultry
     Mr. Brock noted that the state of Alabama recently completed
     a broad-based stakeholder process to revise its regulations
     governing the poultry industry.

8.4  Regulatory Alternatives

  8.4.1  Revising the Thresholds
  
  Multi-Sector Representatives
  Mr. Parrish provided a written comment in opposition to
  lowering the NPDES threshold.  He stated that EPA's regulation
  of smaller operations should be based on factors that indicate
  such operations have a similar polluting potential to larger
  operations and be narrowly tailored to address direct
  discharges to waters of the US.  Mr. Parrish was not opposed
  to lowering the ELG threshold, provided that the standards
  applicable to smaller operations (under 1,000 AUs) are
  reasonable and affordable to these operations, including
  alternatives such as nonzero discharge limits and/or lesser
  design standards up to a 20-year, 24-hour storm. Mr. Parrish
  was concerned that local permit writers may look to guidelines
  designed for larger operations for guidance in determining
  best professional judgement (BPJ), even though these
  guidelines may be overly stringent for smaller operations.  To
  the extent it would avoid this situation and assuming all AFOs
  in the intermediate size category (300-1,000 AUs) are going to
  be included in the NPDES program, such tiered requirements are
  preferable to the current BPJ approach.
  
  Swine
  Mr. Petersen provided written comments objecting to lowering
  the NPDES threshold, because that would result in a
  disproportionate economic effect on small swine producers.
  However, this SER noted that in his area approximately 70
  percent of new facilities have been built individually, but
  adjacent to each other, in order to avoid the size threshold
  and thus an automatic need for a permit.

  Beef, Dairy, and Exotic Animals
  None of the SERs that commented in outreach meetings supported
  lowering the NPDES or ELG threshold below 1,000 AUs.
  (However, two of them supported permitting all operations with
  greater than 1,000 AUs.)
       
  Six SERs provided written comments on this issue - all in
  opposition to lowering the NPDES threshold.  Mr. Handke,
  Frenzen, and Clause recommended against lowering the NPDES
  threshold because it would place undue burden on facilities
  with fewer than 1,000 AUs.  These SERs also expressed concerns
  with lowering the ELG threshold.
  
  Mr. Pemberton opposed lowering the NPDES threshold, because
  this size range of operations (300-1,000 AUs) has not been
  proven by EPA to cause any immediate environmental concern and
  also because lowering it would not go any farther to
  accomplish EPA's stated goals.  He noted that EPA already has
  jurisdiction to permit any size animal feeding operation that
  falls into the many environmental concern areas that are
  listed in the current regulations and suggested that EPA does
  not need to change regulations but merely implement the
  current regulations.  (Mr. Pemberton also expressed concern
  that EPA is shifting its regulatory focus from larger CAFOs
  (1,000 AUs or more), as premised under the USDA/EPA Unified
  Strategy for AFOs, to smaller CAFOs (300 -1,000 AUs), and that
  EPA is failing to separate proposed changes to NPDES and ELG
  and, in documents and discussions, is confusing lowering the
  threshold for NPDES and ELG.)

  However, Mr. Pemberton did not necessarily oppose lowering the
  ELG threshold.  He noted that NCBA is very interested in
  exploring with EPA alternative requirements, to lessen the
  financial burden on small entities, and requested any
  information that EPA has on the alternatives under
  consideration.

  Ms. Jarrett could not support either lowering the NPDES or ELG
  threshold at this time, because operations with more than
  1,000 AUs pose potential and immediate danger far exceeding
  that of smaller operations and have not yet been successfully
  addressed.  Nor should resources be diverted from them.

  Ms. Itle also expressed opposition to lowering the NPDES and
  ELG threshold.  This SER stated that it is appropriate to
  permit facilities smaller than 1,000 AUs only when
  intentional, repeated direct discharges are occurring.  This
  SER objected to lowering the ELG threshold because zero
  discharge for operations less than 1,000 AUs could have
  significant economic impacts on small producers, especially
  considering that 68 percent of respondents to the 1996
  National Animal Health Monitoring System's Dairy '96 study had
  no storage tank or lagoon in place. [The she also urged EPA to
  consider as an alternative to lagoons, the use of BMPs such as
  filter strips and buffers to help control runoff from smaller
  facilities in place of costly containment structures (see
  Section 8.4.13)].

  Poultry
  One SER remarked that he does not want the threshold to be
  lowered for the NPDES threshold because this would include
  just about every operation in his area.  He also wondered why
  the threshold could not be raised.  He noted that Alabama
  raised its broiler threshold to 125,000.
  
  One written poultry SER comment was received on this issue.
  Mr. Campbell recommended raising the threshold to 150,000
  birds at which broilers would be considered CAFOs, since many
  farms have that capacity.  This number reflects the minimum
  capacity required to support the average farm family.
       
  8.4.2  Revising Criteria for Defining or Designating a CAFO
       with 300-1,000 AUs
  
  Multi-Sector Representatives
  Mr. Parrish recommended in his written comment that EPA not
  change the criteria for defining a CAFO, located at 40 C.F.R.,
  Part 122, Appendix B.  Mr. Parrish is concerned with  EPA's
  consideration of options to expand the definition of a CAFO to
  include runoff from agricultural fields where manure from
  CAFOs has been applied.  Mr. Parrish stated that runoff from
  land application and any other activity in which a CAFO is not
  collecting and concentrating waste for discharge through a
  discernible, confined and discrete conveyance is a nonpoint
  source and thus properly not within the scope of the NPDES
  program.  However, Mr. Parrish did not necessarily oppose
  alternatives in which criteria for defining CAFOs in the
  300-1,000 AU category are modified.  If EPA can devise an
  approach where a facility can know and/or demonstrate it does
  not meet the primary criteria, relating to past discharges of
  pollutants, an alternative that includes secondary criteria
  may not be overly inclusive.  It would depend on the breadth
  of interpretation of "discharge."  It is the American Farm
  Bureau Federation's (AFBA) position that a CAFO does not
  become a permittable CAFO without an "end-of-pipe" release or
  "discharge."

  Beef, Dairy, and Exotic Animals
  Mr. Voortman preferred that EPA consider permitting operations
  based on number of animals relative to acres rather than upon
  number of AUs.  This SER stated that this approach would
  provide a more accurate indicator of water pollution.

  Mr. Pemberton suggested that EPA not define "man-made
  conveyances" to include any device in which human action was
  involved in its creation or maintenance, even if natural
  materials were used to form the conveyance.  He suggested that
  defining man-made conveyances to include man-made channels or
  ditches that were not created specifically to carry animal
  waste but nonetheless do so during storm events would define
  AFOs as CAFOs that use buffer strips, riparian zones, field
  tile lines and other practices and thus discourage the
  voluntary use of such technologies.8
  
  Two written comments were received on this issue.  Ms. Itle
  commented that it is inappropriate to establish numeric AUs
  per acre in federal regulations because this limit does not
  take into account the manure characteristics of different
  animals, varying crop yields, varying soils, or off-site
  manure transfer.  It also does not account for the potential
  future development of new manure management technologies (and
  might discourage innovation).  Ms. Itle also recommended
  against changing the criteria to include immature animals in
  the dairy sector, because this would redefine many AFOs into
  higher size categories, even though young stock are often not
  raised in confinement situations or in a manner that
  contributes significantly to an operation's potential to
  discharge.  Also, she stated that the number of immature dairy
  cows at a given operation varies significantly relative to
  mature milking cows and, therefore, would make size for
  purposes of NPDES permitting more difficult to determine.  She
  further stated that the percentage of designated operations
  will increase as a result of heightened regulatory focus on
  CAFOs.
     
  Mr. Pemberton also provided written comment in opposition to
  alternatives in which criteria were modified because, under
  current regulations, the permitting authority can already
  designate AFOs with between 300-1,000 AUs as CAFOs, for
  failure to meet the criteria as modified, with one exception -
  i.e., the criteria related to land application.  And Mr.
  Pemberton recommended against including on-site land
  application in any determination of which AFOs are CAFOs (by
  definition or otherwise) without properly accounting for the
  agricultural storm water exemption from the definition of a
  point source (e.g., issuing a permit because an AFO does not
  land apply in accordance with a CNMP).  Mr. Pemberton referred
  the Panel to comments, appended to his own, in which NCBA also
  opposed expanding the scope of the NPDES program to include
  off-site land application, in any form, because it is
  geographically outside the definition of an AFO (only an AFO
  can be a CAFO).  NCBA also stated its belief that simply being
  located in an impaired watershed is not justification for an
  AFO to be designated as a CAFO.

  Mr. Pemberton also requested that EPA clarify if the two
  animal units per acre criterion would include grazing
  operations, since they by definition are not considered as
  animal feeding operations, and requested that EPA more clearly
  differentiate between on-site and off-site land applications
  in discussions and documents.
  

  Swine
  Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided written
  comments in opposition to revising the definition of a CAFO at
  40 CFR 122, Appendix B to restrict eligibility for the 25-
  year, 24-hour storm permit exemption to facilities that prove
  they have not or will not discharge.
     
  Poultry
  One written poultry SER comment was received on this issue.
  Mr. Campbell stated that 303(d) listed watersheds should not
  be used as criteria for designating CAFOs.  He suspects that
  in Mississippi, and perhaps elsewhere, scientific evidence of
  impairment was not properly considered during the listing of
  waters. He contends that storage capacity should not be a
  factor in determining what is a CAFO, at least until affected
  operations have time to build adequate storage with the
  assistance of cost-share and cooperation from federal and
  State agencies.

  8.4.3  Certification for AFOs with between 300-1,000 AUs
  
  Multi-Sector Representatives
  Mr. Parrish stated that the "check a box" approach to self-
  certification is not feasible because it would create a legal
  liability for producers in that it would be impossible to
  certify that an operation posed no threat to water quality.
  Every operation would be required to apply for a permit and
  assume the burden of proof that they are not doing something
  wrong whereas, under current regulations, the burden lies with
  the permitting authority to identify wrongdoing before issuing
  permits.  However, if EPA includes land application in the
  determination of a CAFO, Mr. Parrish could support an approach
  that would allow any AFO that can certify (by soil testing or
  other monitoring methodology) that nutrient levels in its
  soils are not excessive to avoid a permit.
  
  Beef, Dairy, and Exotic Animals
  Mr. Pemberton also opposed checkbox certification because it
  would add confusion by adding legally significant but vague
  terms ("certify" and "pose a risk to water quality") to a list
  of terms already in need of clarification as EPA interprets
  them (e.g., "discharge").  He added that the major flaw with
  such an approach is that it shifts the burden of proof of
  whether a permit is required to the citizen.  The SER
  questioned EPA's authority under the CWA to place the burden
  on the citizen to prove to the government that an event did
  not happen.  The SER stated that it is NCBA's understanding
  that the government has the obligation to enforce the
  regulations and has the burden of proving all violations of
  the CWA.  This SER also did not support an alternative where a
  producer is unable to prove that a discharge did not occur and
  thus is assumed to have violated the CWA and require a permit,
  without any evidence offered by the government.
  
  Ms. Itle noted that an alternative based on a checkbox
  approach would change the burden of proof for affected
  facilities.  It would change the assumption from facilities
  who are not discharging unless proven otherwise by the
  permitting authority to facilities who are discharging unless
  they certify otherwise.  This SER stated that facilities under
  1,000 AUs should be permitted only when intentional, repeated
  direct discharges are occurring.  She also remarked that the
  process CAFOs with 300-1,000 AUs would use to certify that
  they do not pose a threat to water quality or public health is
  unclear.
  
  Ms. Itle also expressed concern with the potential legal
  ramifications to producers of certification approach.
  
  Swine
  Ms. Atwood, Mr. Foushee, and Ms. Reifshneider indicated that
  it is improper for EPA to instruct states to require
  facilities that believe they have not or will not discharge
  to: 1) apply for a permit, and 2) submit technical
  documentation of "no discharge" with the permit application.
  However, these SERs noted that National Pork Producer
  Council's policy is that all pork operations should be
  required to have permits.

  8.4.4   Immature Animals
  
  Multi-Sector Representatives
  Mr. Parrish provided a written comment in opposition to
  considering immature animals in determining the total number
  of animals at AFOs.  Mr. Parrish stated that, according to the
  1997 Census of Agriculture, this would result in an additional
  12,602 farms that would qualify as CAFOs and this is a
  conservative estimate.

  Swine
  One SER asked EPA whether or not it had looked at different
  scenarios for different operations (i.e., farming, nursery,
  grow-to-finish).  Because different operations can include all
  of these phases, she suggested looking at an average between
  10-55 pounds.

  Mr. Petersen's written comment was in favor of the inclusion
  of immature animals for all animal types because in the swine
  industry immature animals are most likely to receive
  antibiotics and growth promoters.

  Beef, Dairy, and Exotic Animals
  Ms. Itle did not support considering immature animals in
  determining the number of animals at an AFO for purpose of
  NPDES permit because it would make size determinations very
  difficult, both for the operator and the permit writer,
  because numerous dairies constantly relocate young among
  different AFOs.

  One exotic animal SER suggested that EPA prove the viability
  of its proposals on large operations before they are imposed
  on smaller operations.

  Three SERs provided written comments to this issue.  Ms. Itle
  is concerned that if young stock were included in AU counts
  for the dairy industry, producers who have approximately 125
  mature cows could potentially find themselves subject to
  regulatory provisions.  Since there are twice as many dairy
  operations in the U.S. with 100-199 head as there are with
  more than 200 head of dairy cattle, this SER anticipates a
  dramatic increase in the number of dairies potentially subject
  to NPDES permits, with little justification. Often, young
  stock are not raised in confinement situations, and heifer
  barns are seldom flushed with water for cleaning, so discharge
  potential from these practices is not significant.  In
  addition, young stock numbers experience more variance than do
  milking cow numbers.  This would make permitting size more
  difficult to determine.
  
  Mr. Mason commented that including immature animals (i.e.,
  heifers) would bring his operation into the greater than 300
  AU category.
  
  As a neighbor of a large swine operation, Ms. Jarrett
  commented on this issue.  In this sector where immature
  animals are currently not considered, she indicated that they
  should be included in the total number of AUs.  (Source
  materials are included with the comment letter in Appendix F.)
  
  8.4.6  Dry Poultry Operations
  
  Multi-Sector Representatives
  Mr. Parrish commented that dry operations should not be
  included in the regulations because of the absence of water or
  other liquids and thus dry manure management systems do not
  result in pollutants that can be discharged through a discrete
  point source.  The current NPDES CAFO definition correctly
  includes only layer and broiler operations that use continuous
  overflow watering or liquid manure systems because of their
  possibility to discharge pollutants.

  Poultry
  One written comment was received on whether or not to include
  dry poultry operations in the regulations.  Mr. Campbell
  viewed continuous overflow also as an unsuitable condition for
  designating a CAFO, partially because the term is no longer
  used by the poultry industry.  Instead EPA should use the
  terminology the industry uses within each animal sector.
  
  
  8.4.7  Removal of the 25-Year, 24-Hour Storm Event Permit
       Exemption
  
  Multi-Sector Representatives
  Mr. Parrish provided written comments in opposition to removal
  of the 25-year, 24-hour storm event permit exemption.  Mr.
  Parrish noted that the permit exemption represents the least
  cost approach to small entities to federal CAFO regulations.
  Mr. Parrish also stated his belief that removing this
  provision would not only be unreasonable but also unlawful. He
  argued that, although EPA has authority under CWA to regulate
  point sources and CAFOs are deemed to be point sources, this
  authority is limited by the congressional intent underlying
  it, and that there is substantial evidence in the legislative
  history of the CWA that Congress intended to control only "end-
  of-pipe" discharges of effluents from CAFOs.  Mr. Parrish also
  indicated that the legislative history of CWA requires that
  the CAFO regulations retain some type of severe storm event
  exception.  He also stated that no permit conditions should be
  included for discharges so long as the CAFO maintains
  structures that are designed and constructed to contain a 25-
  year, 24-hour storm event.
  
  Swine
  One swine SER commented that this provision should be clearer
and easier to understand.

  Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided written
  comments in opposition to restricting eligibility to the 25-
  year, 24-hour storm permit exemption to facilities that prove
  they have not or will not discharge.  These SERs stated that
  the States and EPA should grant the catastrophic storm
  exemption unless records chronicle a previous discharge to
  waters of the United States.

  Beef, Dairy, and Exotic Animals
  Mr. Pemberton noted that EPA has estimated the number of CAFOs
  without an NPDES permit, but has not yet identified how many
  of these do not have a permit because they properly qualify
  for the exemption and he suggested that EPA do so.  The same
  SER also requested that EPA explain why a NPDES permit was
  needed if the operation already has sufficient engineering to
  protect against discharges.  Several SERs agreed that the
  motivation is unclear for removing this provision in
  situations where the operation is already sufficiently
  engineered.

  Two beef SERs indicated that they are concerned about removing
  this provision but that what is needed to qualify may be
  unclear and that EPA could clarify this by including design
  specifications.

  Ms. Jarrett supported removal of this exemption for operations
  with 1,000 AUs or more.  She added that her operation has been
  engineered enough so that there are no discharges; however,
  she suspects there are large swine operations in her State
  that do not have adequate engineering, are discharging, and
  are not permitted.

  Another beef SER stated a concern that removal of this
  exemption could put people out of business.

  A dairy SER also indicated that he is concerned about the
  removal of this exemption and supported this type of limit
  because otherwise all operations would be permitted.

  Five written SER comments were received on this issue.  Two
  beef SERs and three dairy SERs stated that EPA should not
  remove the provision.  One of these SERs, Mr. Pemberton, is
  concerned that EPA has not provided any scientific research or
  analysis of why the provision needs to be removed.  He
  continued by stating that, without this provision, there would
  no longer be any incentive for non-permitted operations to
  "over engineer" their facilities to contain a 25-year, 24-hour
  storm event, in order to avoid a permit.  Mr. Pemberton also
  requested that EPA justify a decision to remove this provision
  and provide environmental reasons and scientific analysis upon
  which such a decision is based.  NCBA is not persuaded that
  all AFOs with 1,000+ AU probably have discharged in the past
  or have a reasonable likelihood to discharge in the future,
  under conditions of less rainfall than a 25-year, 24-hour
  event.

  Mr. Clause, who operates a 1,000+ AU facility, also opposed
  removing this provision, because he would be required to
  obtain a permit when he otherwise would not need one. Mr.
  Clause is concerned that the permitting authority would
  require him to add measures such as expanding his facility's
  containment, which would require massive expenditures without
  any resulting improvements to water quality.  This SER noted
  that neither manure nor wastewater from his operation reached
  the nearest stream during the very large storms of 1993 and
  that this was not necessarily because of his facility's
  design.  Although he has containment and other manure-
  management measures (e.g., buffer strips) in place, he noted
  that there are other significant factors working against
  discharge, such as his operation's location relative to the
  nearest surface water body and the slope of the land in-
  between.  Mr. Clause indicated that he is better positioned
  than a permit writer is to manage his operation (and the
  manure it generates) so that it does not contribute to water
  pollution.  Mr. Clause also indicated that obtaining a permit
  would not offer him any legal protection from citizen suits;
  if it had, and it was important for him to have such
  protection, he would have already applied for one.
  
  Ms. Itle added that removal of this existing storm exemption
  would require CAFOs to apply for a permit even if they
  discharge only during a 25-year, 24-hour storm event.  The
  marginal environmental benefit received from eliminating
  inevitable severe storm discharges does not warrant the
  additional cost or regulatory burden of eliminating this
  exemption.
  
  Mr. Mason requested that EPA explain why it would lift this
  provision.  He stated his belief that, if it is removed, every
  farm will have to have a permit and the associated
  construction and compliance costs would be tremendous.
  
  Mr. Roos indicated that most operations in his rainy region
  would be unable to comply with a requirement to contain a 25-
  year, 24-hour storm event because they would need dikes around
  their property.  He added that this could be costly.

  Poultry
  One written poultry SER comment was received on this issue.
  Mr. Campbell stated that a single discharge in 25 years should
  not be a significant factor in designating CAFOs because the
  impact would be small in his geographic area and it would not
  justify the large amount of paperwork.


  8.4.8 Co-permitting
  
  Multi-Sector Representatives
  Mr. Parrish commented that growers are at a disadvantage in
  that they are responsible for all the risks.  He provided a
  written comment in opposition to co-permitting.  He stated
  that co-permitting would have the following adverse
  consequences: affect the rights of farmers; result in massive
  structural re-organization of the domestic poultry industry;
  and place additional financial burden of environmental
  compliance on the farmer/grower.  He noted that, when
  integrators have been faced with sharing the grower's
  compliance costs, it has resulted in contractual
  indemnification clauses or other means of shifting the cost
  away from the integrator to the grower.  He added that, even
  if the integrator assumes some of the responsibility
  initially, he thinks that most, if not all, of the costs would
  eventually be passed on to the grower.
     
  He also suggested that EPA not use the term, "independent
  contractor," as this term is used by the Internal Revenue
  Service (IRS) but not necessarily with exactly the same
  meaning.  Use of this term by EPA could thus effect the
  contractual relationship between producers and contractors as
  well as their tax status.
  
  The same SER provided a written comment in opposition to co-
  permitting.  He stated that co-permitting will do the
  following:
         Affect the rights of farmers;
         Result in massive structural re-organization of the domestic
          poultry industry; and
         Place additional financial burden of environmental
          compliance on the farmer/grower.
     
  The same SER indicated that EPA should not use the same term,
  "independent contractor," used by the IRS because farmers who
  grow agricultural commodities under the contract fall under
  the definition of an "independent contractor."  According to
  the SER, use of this term by EPA could effect the contractual
  relationship between producers and contractors.

  Swine
  Several SERs provided comments about co-permitting.  One SER
  commented that the grower would have to take some
  responsibility.  Another SER expanded the responsibility
  concept and added that the owners of animals should share the
  same responsibility as the growers.  This viewpoint was
  countered by two other SERs who indicated that co-permitting
  is not a good idea because it could result in the closure of
  some operations due to the strict compliance requirements by
  the integrator.

  One SER added that while he is in favor of co-permitting, the
  integrator has all of the power.

  Four SERs provided written comments on this issue.  While Ms.
  Atwood, Mr. Foushee, and Ms. Reifshneider stated that they do
  not support co-permitting, they do believe in the shared
  responsibility between owners and operators.  In their view,
  EPA does not have the legal authority to consider corporate
  entities as "operators" of a CAFO under the CWA.  They stated
  that a contractual arrangement is embodied in contract law not
  CWA authority.

  Mr. Petersen stated that even though there should be a
  provision for co-permitting, EPA must understand that contract
  producers are already burdened with an unfair share of the
  risk and they have little power to negotiate contracts,
  particularly once the contract is signed.  Contract producers
  are simply trying to survive given the economic circumstances
  they are enduring.
          
  Beef, Dairy, and Exotic Animals
  Three written SER comments were received on this issue.

  Mr. Pemberton stated that EPA should not regulate the
  "companies and industries" that feedlot operators are involved
  with and questioned EPA's legal authority to do so.  Mr.
  Clause stated that co-permitting would have the unintended
  consequence of driving many small operators out of business
  with no apparent environmental benefits.  He was concerned
  that integrators would drop many of their growers and pass any
  additional costs on to the remaining ones.
  
  Ms Jarrett suggested criteria for determining whether or not a
  co-permit is required. Some of the criteria mentioned were
  "Does the operator own the animals?"and "Who controls when the
  manure is applied?"  She added that co-permitting could be
  required for application to land that is adjacent but does not
  belong to the CAFO when the land application is under the
  direct control of the CAFO operator.  She was particularly
  concerned about large, corporately owned hog operators near
  her small beef feedlot, that she feels are not adequately
  regulated.  She also mentioned in a conference call that she
  contracts with another farmer to raise some of her cattle and
  is not sure that this should require a co-permit.

  Poultry
  One SER suggested that there were few, if any, independent
  poultry operators in the U.S. The SER indicated that co-
  permitting would restrict the freedom of the contract grower
  to move from integrator to integrator.  The SER also stated
  that co-permitting will:  1) increase the contact between the
  grower and the integrator, and 2) increase the incentive for
  the integrator to interfere in the grower's operation.

  Another SER questioned whether or not integrators are going to
  pass the regulatory costs to growers.  He also questioned how
  the grower was going to overcome the costs.  The SER indicated
  that co-permitting would place tremendous amounts of pressure
  on the grower.
          
  One SER remarked that if you make one integrator angry, others
  in the area would hold it against the grower.  He further
  remarked that after 20 years of service, his integrator sold
  his contract to another contractor.
  
  Mr. Campbell stated that in Mississippi, growers move from
  integrator to integrator.

  Another SER stated that moving from integrator to integrator
  is not normal practice in most States.  The SER also indicated
  that the current situation for most poultry growers is not
  very good.  For example, some growers receive only $0.025 per
  dozen eggs.

  Another SER indicated that the integrator would hold the
growers liable.

  Another SER said that he is concerned about co-permitting
  because it will bring "legal changes to the permitting
  process," and he questioned the legal authority for co-
  permitting.
  
  One written SER comment was received on this issue.  Mr.
  Campbell cited six negative effects on AFOs and integrators
  that could potentially result from co-permitting as follows:

     1.   Increased oversight from integrators
     2.   Restrictions to changing integrators, and elimination
          of competition among integrators for the best growers
     3.   Pressure for integrators to terminate AFOs that fail to
          comply with nutrient management plans.
     4.   Encouragement for integrators to build and operate
          their own grow-out facilities
     5.   Shift to larger contractors by integrators to
          facilitate compliance
     6.   Change in structure of animal production that could
          require contract operators to own the animals and be
          responsible for production costs.


  8.4.9  Comprehensive Nutrient Management Plans
  
     8.4.9.1.  General Issues
     
     Multi-Sector Representatives
     Mr. Parrish provided a written comment which indicated that
     EPA is not authorized to require the development and
     implementation of CNMPs as a condition of an NPDES permit,
     because these plans address nonpoint source pollution.

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided
     written comments regarding CNMPs.  The SERs stated that they
     support the requirement of CNMPs on land owned or controlled
     by the operator.  However, they believe that there should be
     no legal linkage between the CAFO operator and the
     environmental performance of any third party user of the
     CAFO-generated manure.  They also stated that the phosphorus
     requirements within this rule have the potential of
     significantly impacting the pork producer economically.
     They supported three recommendations from the National
     Environmental Dialogue on Pork Production (the Pork
     Dialogue) to address the phosphorus issue:

         Federal agencies should work with land grant universities to
          develop specific information regarding each soil type and ability
          to hold phosphorus;
         USDA, in cooperation with land grant universities, should
          establish maximum, or threshold, phosphorous levels for all major
          soils based on their capacity to retain applications of
          phosphorous; and
         When soil phosphorous thresholds are established, and only
          where the phosphorous threshold is exceeded, producers should be
          given a significant period of time, up to five years, to adapt
          their systems to phosphorus-based manure management.
     
     The same three SERs also recommended that CNMPs should be
     retained onsite and only available to authorized
     authorities.  They further recommended that CNMPs should be
     considered confidential business documents, and should be
     afforded appropriate confidentiality from the general
     public.

     Beef, Dairy, and Exotic Animals
     Mr. Frenzen, a beef SER, posed the rhetorical question of
     why nutrient plans are not needed for commercial fertilizer.

     Ms. Jarrett stated that CNMPs should only be required for
     large swine operations over 1,000 AUs.  She said that
     "washing" has created runoff problems and manure management
     problems for those in the swine industry.  Because of these
     problems, swine operations with over 1,000 AUs should
     definitely be required to develop and implement CNMPs.  Ms.
     Jarrett also commented that beef operations with less than
     2,500 AUs should not be required to develop and implement
     CNMPs.
     
     A dairy SER indicated that rather than using AUs to
     determine whether or not a CNMP is necessary, use either AUs
     per acre or tons of manure per acre applied.
     
     Three written SER comments were received on this issue.
     
     Mr. Pemberton recommended that the schedule and requirements
     for CNMP should not even be considered until EPA develops  a
     funding strategy for the drafting and implementation of  the
     CNMP.
     
     The same SER indicated that the CNMPs proposed by EPA are
     not the most effective way for all AFOs and CAFOs to
     minimize water quality and public health risks. He also
     stated that the CNMP should be retained onsite and only be
     available to permitting authorities.  CNMPs should be
     considered confidential business documents that outline all
     of a producer's strategies and practices.  EPA has
     demonstrated no need for the public to have access to this
     document.
     
     Ms. Jarrett emphasized the need for a CNMP between CAFO
     operators who control the pump and valve that applies
     effluent to crop land and the owner of the land where the
     manure is being applied.
     
     A dairy SER remarked that existing NRCS approved nutrient
     management plans may already be appropriate regulatory
     flexibility alternatives to a requirement for CNMPs for
     small operations.
     
     Mr. Frenzen urged EPA not to require unnecessary, time
     consuming paperwork with CNMPs which are not designed by the
     farmers themselves.

     8.4.9.2  CNMP Development
     
     Multi-Sector Representatives
     Mr. Parrish provided a written comment that there is an
     inadequate supply of certified CNMP planners. He also
     provided information on the cost of developing CNMPs, which
     varies considerably depending on existing practices, current
     management, and the size and configuration of the farm.  He
     estimated that these plans may cost from $2,000 to $60,000
     for typical farms to develop.

     Beef, Dairy, and Exotic Animals
     Ms. Itle agreed that there is a lack of resources available
     to help develop and implement these plans.  Development of
     CNMPs by certified planners may be expensive for small
     producers.  The SER suggests existing NRCS-approved nutrient
     management plans may be an appropriate regulatory
     flexibility alternative to CNMPs for small producers.  Ms.
     Itle commented that National Milk Producers Federation is
     interested in cooperating with USDA and EPA to generate
     resources for CNMP development.
     
     A dairy SER and a beef SER prefer that the farm owner
     develop the plan.  The dairy SER, Mr. Mason, is concerned
     about the high cost of producing a plan for his farm.  He
     consulted a certified crop consultant familiar with his farm
     and, based on this, estimated that it would cost $5,000 to
     produce the plan for his farm and $1,000 to maintain it.
     
     A beef SER stated a concern that financial support will be
     needed to develop these plans; though the industry continues
     to see more regulations and guidance documents, there has
     been nothing addressing this very important issue of
     financial assistance.

     Swine
     Ms. Reifshneider suggested that EPA consider a computer
     program for use in developing a site-specific CNMP in lieu
     of using a certified crop advisor.  The same SER added that
     computer programs would be much more efficient.

     Poultry
     Mr. Campbell wondered what role a certified permit writer
     has.  He indicated that in Mississippi, Natural Resources
     Conservation Service writes the plan.  After the plan is
     complete, it is sent to the Department of Environmental
     Quality (DEQ).  DEQ then writes a permit based on the actual
     CNMP.

     Another SER suggested that EPA considered not including a
     CNMP as a condition of a permit.

     One written comment was received on this issue.  Mr.
     Campbell  requested that owners/operators be protected from
     interruption in production during the development of NMPs in
     the event that there are disagreements between the certified
     planners and owners/operators, particularly if planners hold
     up the process without just cause.  Owners/operators should
     have the option of appealing to another authority.


     8.4.10  Offsite Transfer of Manure
     
     Multi-Sector Representatives
     Mr. Parrish provided a written comment opposing EPA
     regulating individuals or entities that purchase animal
     waste from CAFOs because, in doing so, EPA would be
     regulating nonpoint sources of pollution, which he thinks is
     not within the scope of EPA's authority.

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider stated in
     written comments their belief that EPA lacks the legal
     authority to require offsite controls of CAFO-generated
     manure. The restriction of third-party use of CAFO-generated
     manure would threaten the cooperative market that exists
     between animal producers and the surrounding farmers who
     choose to use CAFO-generated manure on their crops.  These
     three SERs did support requiring the CAFO to maintain
     certain off-site manure transfer records (see Section
     8.2.2).

     Beef, Dairy, and Exotic Animals
     Two written comments were received on this issue.  Mr.
     Handke stated that holding AFO operators responsible for
     what happens to manure given or sold to a second party would
     place an undue liability on the feedlot.

     Mr. Pemberton stated that EPA's attempt to place liability
     upon the CAFO operator for third party actions would clearly
     be outside the jurisdiction of EPA and should not be
     considered.  Mr. Pemberton also stated that he thinks any
     attempts to strictly link the offsite land application
     practices of third parties to beef feedlot operators' NPDES
     permits could destroy the market for dry manure.
     
     
     8.4.11  General and Individual Permits
     
     Multi-Sector Representatives
     One SER suggested that EPA consider the privacy issues
     involved with general and individual permits.
     
     Mr. Parrish stated that general permits are preferable to
     individual permits.
     
     Swine
     In their written comments, Ms. Atwood, Mr. Foushee, and Ms.
     Reifshneider indicated that EPA should do the following in
     regard to this issue:
         Issue general permits to new operations;
         Develop NPDES language that makes it clear that general
          permits should be available to all operations of all sizes and
          age, except those operations with historic compliance problems;
          and
         Give full credit to design capacity animal number, rather
          than determining "significant" expansion" on a point-in-time
          change in animal numbers.
          
     The same three SERs noted that NPPC's policy is that all
     pork operations should be required to have permits.  These
     SERs are also concerned that if EPA establishes so many
     exemptions, most CAFOs will likely be required to have
     individual permits.

     Beef, Dairy, and Exotic Animals
     Ms. Itle commented that individual permits are too resource
     intensive.

     Three written SER comments were received on this issue.

     Ms. Itle stated that general permits are a much more
     reasonable option for CAFOs, and individual permits should
     only be warranted in cases of historic compliance problems.
     She maintains that the application process itself requires
     the investment of a certain amount of time and money which
     should be accounted for in EPA's analysis.
     
     Ms. Jarrett encouraged EPA to implement individual permits
     on all facilities of 1,000 AUs or more, with a full review
     period for public input and set minimal criteria that all
     permits must address.

     Mr. Clause, who operates a 1,000+ AU operation, expressed
     concerns about the level and nature of public scrutiny and
     involvement in the process for individual permits and the
     potential for public interference and micro-management.
     This SER recommended that EPA not change the current policy,
     where general permits are the norm and individual permitting
     is limited to well-defined, extraordinary cases.

     Poultry
     One written comment was received on this issue.  Mr. Johnson
     is also concerned about public interference.


     8.4.12  Land Application
     
     Multi-Sector Representatives
     Mr. Parrish stated his belief that EPA does not have the
     legal authority to expand the scope of the NPDES program to
     include runoff from fields on which manure from a CAFO is
     applied, because land application results in mostly nonpoint
     source pollution.

     Beef, Dairy, and Exotic Animals
     Mr. Mason, a dairy SER, commented that manure is a valuable
     product.  Another dairy SER agreed and added that manure
     should be viewed as an asset rather than a liability.
     
     Mr. Voortman, a dairy SER, commented that, since most
     dairies land apply, this issue will undoubtedly affect them.
     The same SER also stated that approximately 95 percent of
     small dairies have enough cropland for spreading their
     manure.

     Ms. Itle, another dairy SER, was concerned about the
     difficulty involved in applying manure during the rainy
     season in his area.  He indicated that his operation is
     equipped to hold about two weeks worth of manure, and a
     major problem is trying to find the agronomic rate at which
     to apply the manure.
                                        
     Mr. Pemberton, a beef SER, expressed concern about what
     effects regulating land application would have on manure use
     and suggested that EPA needs to do a related benefit
     analysis.

     Mr. Frenzen, a beef SER, stated that most small AFOs have
     sufficient crop land for spreading their manure.
     
     Ms. Jarrett stated that many large swine operations (>1,000
     AUs) discharge due to excessive land application.  The SER
     suggested that EPA permit these operations.
     
     Five SERs submitted written comments on this issue.

     Mr. Pemberton recommended against including on-site land
     application within the scope of the NPDES program, not
     without properly accounting for the agricultural storm water
     exemption.  Mr. Pemberton also did not support including
     off-site land application within its scope and referred the
     Panel to NCBA's comments on this issue.
     
     Mr. Handke indicated that he does not see the need for a
     strong enforcement program on manure application because the
     variability in phosphorus and nitrogen application can be so
     great, and most farmers already soil test.  Mr. Handke
     suggested that NRCS and State universities could advise
     farmers on issues such as manure management as it relates to
     land application of phosphorous and nitrogen.
     
     Another beef SER stated that EPA needs to make it clear that
     AFO producers that choose to land apply manure on their own
     property do not give up the protections of the CWA to be
     allowed to have certain activities fall under the
     agriculture storm water exemption.  Just because one aspect
     of a producer's operation is considered a point source does
     not allow EPA to designate nonpoint source activities as
     point sources.
     
     The beef SER also indicated that EPA has made this proposal
     on land application without doing an analysis on what the
     ramifications of it will be upon the manure market.  This
     SER is also concerned that the standard has not been applied
     equally.  Organic fertilizer will have these very strict
     requirements while commercial fertilizer will not.  This SER
     recommended that EPA take advantage of the pilot project
     outlined in this year's appropriations bill to make some
     determinations on the effects of these proposals before
     implementing them nationwide.
     
     Ms. Itle stated that phosphorus-based land application rates
     have the potential to restructure the dairy industry.
     Producers would require much more available land to apply
     manure, facilities for manure storage, and possibly the
     purchase of commercial nitrogen fertilizer to meet crops'
     needs.  Only in the event of a local phosphorus loading
     problem should phosphorus-based application limits even be
     considered.
     
     Ms. Itle also stated that the spreading of manure in winter
     should be maintained as a potential management option,
     otherwise many small producers would be forced to make
     significant storage investments.  She stated that while
     smaller facilities are likely to have more crop land for
     land application, they are also less likely to have adequate
     manure storage.  Therefore, manure storage requirements
     would have a significant impact on them.  She indicated that
     dairy farmers will need another outlet for extra manure if
     EPA imposes agronomic land application limits and that
     requirements which are too stringent would discourage the
     use of CAFO manure by third parties.
     
     Poultry
     In reference to land application, one SER commented that
     litter is viewed by producers as an asset.


     8.4.13 Manure and Wastewater Storage and Best Management
     Practices (BMPs)
     
     Multi-Sector Representatives
     Mr. Parrish's written comments included cost estimates for
     various best management practices (BMPs), which indicate
     that lagoons and adding storage capacity could be very
     expensive while filter strips and barnyard improvements
     would not, depending on the size and configuration of the
     operation.
     
     Swine
     One SER indicated that bankruptcy may occur along with
     facility closure.  He asked whether indemnity funds would be
     available to protect against bankruptcy.
     
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider supported the
     recommendation of the Pork Dialogue that new and expanded
     manure and wastewater storage facilities should be
     consistent with the engineering standards and specifications
     provided by the NRCS or the American Society of Agricultural
     Engineers (ASAE).  These SERs also supported the
     recommendation that existing facilities which: (1) receive
     only the amount of manure and wastewater for which they are
     designed, (2) are properly maintained, and (3) exhibit no
     signs of loss of structural integrity, should be considered
     to meet the standards proposed in the Pork Dialogue.
     
     Beef, Dairy, and Exotic Animals
     
     Mr. Pemberton noted in written comments that NCBA is very
     interested in discussing alternative requirements under
     consideration by EPA that would lessen the financial burden
     on small entities and requested any information on these
     requirements.  Mr. Pemberton also appended comments to his
     own, in which NCBA objects to a requirement for covering dry
     manure (e.g., storage sheds) because 90 percent of cattle
     feeding operations are outdoors and it would involve placing
     roofs over the entire feedlot at those operations, which
     would be economically and practically infeasible.  This also
     would not provide any environmental benefit, because any
     rainwater that comes into contact with the manure stored in
     cattle pens (which allows more efficient production) is
     stored in a retention pond.  NCBA is also concerned that EPA
     not prevent temporary in-field manure stacking, which is a
     common practice that allows operations to store large
     quantities of manure (each time the pen is cleaned) until it
     can be land applied.  In light of this practice, NCBA
     suggested that the more practical BMP would be ensure that
     the manure is stored in a place that prevents polluted
     runoff into waters of the US.
     
     Mr. Frenzen, who operates a 300+ AU facility, stated that
     the financial impact of being permitted under the NPDES
     program could be substantial, and provided cost estimates of
     constructing a livestock waste control facility, which
     includes a retention pond, to support his statement.  He was
     very concerned about additional regulations that will
     require expensive structures (e.g., retention ponds).

     Ms. Itle, a dairy SER, also provided a written comment on
     this issue.  She recommended that EPA base any ELGs that
     would apply to small entities on the implementation of BMPs
     and not on containment structures.  She stated that, in
     particular, ponds and lagoons can be incredibly expensive
     and many small dairy producers do not have such measures in
     place. The 1996 National Animal Health Monitoring System's
     Dairy '96 study found that 68 percent of respondents had no
     storage tank or lagoon in place.  This SER also stated that
     filter strips are an excellent example of an effective,
     affordable technology to control polluted runoff and
     provided references to a study that demonstrate that certain
     BMPs can be effective in addressing nonpoint source
     pollution.  She also stated that the use of BMPs, such as
     filter strips and buffers, should be encouraged to control
     runoff in place of costly containment structures.  Ms Itle
     indicated that recommended BMPs should be site specific and
     follow NRCS approved guidelines.

     Two dairy SERs included in their written comments estimates
     of the costs to smaller dairy operations of building or
     expanding storage capacity that would indicate that such
     requirements could be unaffordable.  Mr. Mason provided a
     cost estimate to 300 AU facilities of building storage for
     approximately 3/4 of a year, and stated his belief that
     almost 2/3 of the farms in his county with 300-1,000 AUs
     would have to build or expand storage facilities.  Mr. Roos
     estimated that facilities that can handle waste in a 25-
     year, 24-hour storm could cost approximately $1,000 per cow
     for a 100 cow dairy in his county and that nearly half of
     the farms in his county would need to spend at least as
     much.
     
     Instead of requiring additional storage capacity, Mr. Mason
     suggested that field stacking could be better managed to
     reduce the risk of runoff associated with it while reducing
     the costs to the operator associated with manure spreading.
     Mr. Mason is also concerned that EPA is considering
     additional regulations of field stacking that may result in
     poorer manure management.
     
     Poultry
     One written SER comment was received on this issue.  Mr.
     Campbell believed that BMPs should be voluntary, and strict
     oversight should be reserved for problem AFOs.
     
               
8.5    Regulatory Flexibility Alternatives
     
     8.5.1     Additional Regulatory Flexibility Alternatives

     Multi-Sector Representatives
     As an attachment to his written comments, Mr. Parrish
     provided some additional regulatory flexibility
     alternatives.  These alternatives are as follows:
     
           Option #1 - Provide a "no permit option" for any operation
            that can certify, with the permitting agency (by soil testing or
            other monitoring methodology), that nutrient levels in soils are
            not excessive.
           Option #2 - No additional regulations to be promulgated for
            animal feeding operations that meet the SBA small business
            definition.  The permitting authority would retain the authority
            to permit operations that "discharge" on a case-by-case basis.
           Option #3 - No additional regulations to be promulgated for
            animal feeding operations with less than 1,000 animal units.  The
            permitting authority would retain the authority to permit
            operations that "discharge" on a case-by-case basis.
           Option #4 - No additional requirements for animal feeding
            operations with less than 1,000 animal units unless there are
            sufficient public resources available to maintain the viability
            and income of the operator/permittee for development and
            implementation of the permit.
           Option #5 - Provide a tiered "no exposure" exemption - No
            permit would be required if operations meet the following
            criteria:
     
             -    Operations between 300 and 500 animal units - facility is
               designed and maintained to a "no discharge" standard except in
               the event of a 10-year, 24-hour rainfall event.
             -    Operations between 500 and 1,000 - facility is designed and
               maintained to a "no discharge" standard except in the event of a
               20-year, 24-hour rainfall event.
             -    -    Operations between 1,000 and 6000 animal units -
               facility is designed and maintained to a "no discharge" standard
               except in the event of a 25-year, 24-hour rainfall event.
             -    Operations greater than 6,000 animal units - facility is
               designed and maintained to a "no discharge" standard except in
               the event of a 50-year, 24-hour rainfall event.
             
        Mr. Parrish offered options 2 and 5 in order to provide
     flexibility for small entities with over 1,000 AUs.
     
     8.5.2    Exit Provision
     
     Beef, Dairy, and Exotic Animals
     One written SER comment was received on this issue.  Ms.
     Itle state that smaller CAFOs should be allowed to exit the
     regulatory program if they have successfully addressed
     issues that had required them to obtain a permit.  NCBA
     questioned whether this would not provide a true incentive
     for development of CNMPs by AFOs.

     8.5.3      Good Faith Incentive
     
     Beef, Dairy, and Exotic Animals
     In this category of SERs, one written comment was received
     from Ms. Itle.  She stated that this good faith incentive
     alternative should be extended to those operating with a NMP
     as opposed to a CNMP.  Ms. Itle also requested that EPA
     clarify whether operations that cannot certify or prove in a
     permit application that they do not pose a threat to water
     quality would still be eligible for the good faith
     incentive.
     
     NCBA suggested that EPA extend this incentive to operations
     with over 1,000 AUs.
     
     Mr. Frenzen was very concerned about additional regulations
     that will require burdensome paperwork and operate from the
     assumption that operators are guilty until proven innocent.
          
          
8.6    Other Issues

     8.6.1     Costs     Analysis
     
     Multi-Sector Representatives
     Mr. Parrish was concerned about the complexity and
     presentation of the cost methodology, calculations and
     results, and suggested that EPA present the information in a
     simpler manner.
     
     The SER specifically referenced to Table 3 in Attachment 5,
     tab 1, page 12 of the December 28th outreach mailing for
     clarification.  He referred to these estimates as average
     costs and stated that the cost for individual operations
     would vary significantly, depending on the size and
     configuration of the farm, management, and extent to which
     these operations have already implemented certain pollution
     control technologies.
     
     The same SER also provided a series of written comments
     pertaining to costs.  Some of the costs mentioned by the SER
     are listed below:
       Waste Management - $50,000 to $200,000
       Barnyard Improvements - $1,000 to $500,000
       Retrofit System - $50,000 (when there is inadequate room
       from proper filter areas)
       Controlling wastewater from milking facilities - $1,000
       to $40,000
       Development of CNMPs - $2,000 to $60,000
       Implementation of CNMPs (engineering costs) - $2,000 to
       $50,000
       
     In addition to listing costs associated with the
     implementation of pollution prevention plans, the SER
     included in his written comments, a discussion of the
     inconsistencies in EPA's cost model and of the economic
     impacts of the proposed regulations.  (Source materials are
     included with the comment letter in Appendix F.)  The same
     SER also remarked that a hidden cost for the regulations
     would be the treatment of manure for odor control.

     Beef, Dairy and Exotic Animals
     One beef SER anticipates that these regulations will cost
him about $6,000.

     Mr. Roos indicated that in order to comply with these
     regulations, it would cost him approximately $70,000.  He
     estimated that it would also cost 60-70 percent of the farms
     in his area this much as well.  The SER provided a breakdown
     of his expected costs:
       $38,000   for an above ground manure tank
       $  1,050   for site preparation
       $  2,600   for a rock fill
       $     580   for a waste transfer line (5 inches)
       $10,000   for an electric agitator
       $  8,200   for a culvert (250 feet by 2 feet)
       $  4,675   for a buried mainline
       $     915   for participation in a NRCS waste utilization
       program
       $  7,050   for roofing

     One dairy SER stated that concrete lagoons would cost
     approximately $1,000 per AU.  He also stated his belief that
     this cost estimate is far more accurate than EPA's.

     Six SER written comments were received on costs.  Mr.
     Pemberton is concerned that there was not enough time during
     the Panel to analyze EPA's cost information.  The SER is
     concerned over generalities and assumptions underlying that
     information, such as by the classification of regions.

     Mr. Handke enclosed two estimates for construction of a
     livestock waste control facility along with his comments.
     One assumes a 25-year, 24-hour storm event variance, while
     the other is for zero discharge.  He indicated that the
     financial impact for his 300+ operation is substantial.  The
     total bid for the storm event variance is $23,610, while the
     total bid for the zero discharge is $42,852.  (Source
     material is included with the comment letter in Appendix F.)
     
     Mr. Mason presented a historical perspective of costs for
     building manure storage systems.  (Source material is
     included with the comment letter in Appendix F.)  He also
     indicated that a 300 AU operation would have to spend
     $147,000 to $294,000 in order to build enough manure
     storage.  He mentioned that 2/3 of the farms in his county
     from 300-1,000 AUs would have to build or expand such
     storage facilities.  This number will increase under the
     current economic conditions that farmers are facing unless
     EQIP funding becomes more available.  The actual funding for
     cost share programs to help farmers build manure management
     structures has been cut by almost 2/3.
     
     
     Mr. Mason also commented that it would not only cost him
     $5,000 to have a certified crop consultant produce a
     nutrient plan for his farm, but that it would cost him
     $1,000 to maintain the plan.

     Mr. Roos enclosed a copy of the proposed compliance costs
     for his dairy, which total $73,080.  He also enclosed a list
     of projects necessary to be in compliance with the Oregon
     State Department of Agriculture's CAFO Program, which is
     very similar to the proposed CAFO Rule.  (Source material is
     included with the comment letter in Appendix F.)
     
     Ms. Itle provided comments on Attachment 5 of the December
     28th mailing to SER entitles, "Overview of the methodology
     for estimating the cost of revising the ELGs for beef and
     dairy AFOs."  (Source material is included with the comment
     letter in Appendix F.)
     
     Ms. Itle suggested that if immature animals are included in
     the total AU computation fewer of the Nation's dairy farms
     would meet the SBA small business definition for the dairy
     sector (receiving less than $500,000 in annual gross
     revenue).  Ms. Itle urged EPA to refine its cost analysis
     and consider the results accordingly.

     Poultry
     One SER stated a concern about EPA's cost analysis.  Mr.
     Johnson indicated that while he only makes $.07 per dozen
     eggs, EPA used $.65 per dozen in its cost calculations.
     
     One SER indicated that the cost of implementing some of
     these changes will be high.  Another SER agreed.
     
     Written comments were received from two different SERs.  Mr.
     Johnson is concerned about the ability of small broiler
     contract growers to finance even small capital expenditures
     due to additional regulations and, to demonstrate this, he
     submitted two documents written by the University of Georgia
     Cooperative Extension Service, which detail layer and
     broiler income for contract growers.  The 1994 document
     shows projected cash-flow (money left over after expenses,
     including State and federal taxes) amortized over 10 years.
     Similarly, the 1998 document gives a year-by-year
     demonstration of cash-flow amortized over 15 years.  (Source
     materials are included with the comment letter in Appendix
     F.)
     
     Mr. Campbell had several other comments regarding the cost
     analysis, including the following:
       The estimates presented in the cost analysis for training
       and certification for manure application were too low
       considering program maintenance, travel and lost time on
       farms.
       The connection of groundwater links to surface water in
       the cost analysis are questionable, and he believes this
       is not used in the poultry industry.
       The cost estimate for soil testing is too low.

     The same SER also submitted independent cost estimates for
     the hauling of excess litter which accounts for the use of
     specialized equipment that he believes he would need and was
     not considered in the cost analysis for hauling excess
     litter greater than 5 miles.  He concludes that capital
     outlay would be much greater than indicated by the model
     presented in the cost analysis.  (Source materials are
     included with the comment letter in Appendix F.)


     8.6.2   Imposing Burden on Small Farms
     
     Multi-Sector Representatives
     Mr. Parrish asked EPA how they calculated costs associated
     with regulatory options.  He expressed concern that smaller
     operations would bear more of the costs because they have
     fewer measures already in place.  The same SER was concerned
     about the economic achievability of the CAFO Rules.
     
     Mr. Parrish also provided written comment on this issue,
     warning that excessive burden would result in a massive re-
     organization of the dairy and beef livestock sectors.

     Swine
     Three SER written comments were received on this issue.  The
     SERs stated their opposition(s) to imposing burden on small
     family farms.  The SERs also wanted to make EPA aware of the
     dire economic climate the U.S. Pork industry is currently
     experiencing.
     Mr. Petersen is concerned about the additional regulation of
     family farmers and thus the shifting of resources away from
     large-scale operations to family farmers.  To the extent
     that this occurs, family farmers would be placed at an
     economic disadvantage relative to large-scale producers,
     when large-scale producers are allowed to externalize costs.
     Since family farmers directly experience the consequences of
     environmental mismanagement via the quality of their own
     drinking water, productivity of the land, and direct
     exposure to other environmental hazards, it is in their
     interest to be good stewards, whereas large-scale operations
     (where owners tend not to live) do not face the same
     incentive.
     
     Mr. Petersen remarked that environmental regulations should
     address large-scale operations as the principle cause of
     environmental degradation.

     Beef, Dairy, and Exotic Animals
     One SER is concerned that CNMPs are another regulatory
     burden that small operations are facing.

     One exotic animal SER stated that imposing any additional
     costs to the family farm would be detrimental.
     
     Five written SER comments were received on this subject.
     
     Ms. Jarrett is concerned that expanding the scope of the
     current regulation to include the smaller facilities would
     create an undue burden on small family farms under 1,000
     AUs.
     
     Mr. Pemberton requested to see information on EPA's
     alternatives to lessen financial burden on small entities.
     The same SER commented that in EPA's economic analysis for
     ELGs the assumptions can result in unfair economic burdens
     on an entire region because EPA continues to ignore
     environmental factors and to focus on size when analyzing
     high-risk operations.  Size does not automatically equate to
     environmental risk.
     
     Mr. Handke appealed to common sense and asked EPA not to
     place a heavy burden on small operations.  Mr. Handke
     commented that tighter regulations will not only speed up
     concentration in the cattle feeding segment of the beef
     industry, but will impose too heavy of a burden on small
     producers.
     
     Mr. Frenzen noted that, despite a booming economy, the farm
     crisis is real and invited EPA to consult them, their
     financial statements, and rural bankers.  This SER was very
     concerned about additional regulations that will require
     expensive structures (e.g., retention ponds), burdensome
     paperwork and operate from the assumption that operators are
     guilty until proven innocent.
     
     Mr. Frenzen is also concerned about bureaucrats attempting
     to manage his farm, when it is in his family's interest not
     to environmentally mismanage it since they would directly
     experience the consequences, in terms of the quality of the
     drinking water.

     Ms. Itle commented that the regulatory burden should be
     tailored to be affordable for particular size categories -
     for operations with 300-1,000 AUs and those with less than
     300 AUs.  The same SER also indicated that burdensome
     regulations may restructure the industry, causing only
     larger entities with economies of scale to afford costs.


     8.6.3     Sound Science

     Multi-Sector Representatives
     Mr. Parrish recommended in a written comment, that EPA's
     regulation of AFOs be based on findings that AFOs are
     significant sources of water pollution, and that such
     findings should be based on reliable and credible water
     quality data (sound science) and not on assumptions about an
     AFOs polluting potential.  He noted that the water quality
     data provided by EPA does not suggest the need for increased
     federal regulation of AFOs.  The water quality problems
     appear to be limited to a few localized areas in the US.

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider Three SERs
     stated in their written comments that EPA should base CAFO
     rulemaking decisions on sound science.

     Beef, Dairy, and Exotic Animals
     Three written SER comments were provided on this issue.
     
     Mr. Handke encouraged EPA to base all decisions on good
     science, and furthermore, new regulatory requirements should
     be able to demonstrate solid environmental benefits.
     
     Mr. Mason questioned the whether the decision for a 100-foot
     buffer zone is based on sound science and stated that EPA
     has never explained why current regulations were
     insufficient or why EPA is considering lifting the 25-year,
     24-hour storm event NPDES permit exemption.
     
     Mr. Pemberton is concerned that EPA is considering changes
     to existing CAFO regulations without any scientific analysis
     or explanation of the environmental impacts driving these
     proposed changes - e.g., removing the 25-year, 24-hour storm
     permit exemption.  He noted that it is difficult for NCBA to
     have productive discussions regarding revisions without
     analysis or scientific data or to address the data
     supporting claims of nonpoint pollution from agriculture
     when the data are incomplete or outdated.  The USGS in their
     1993 scientific assessment of national water quality trends
     stated that the National Water Quality Inventory is so
     severely flawed and scientifically invalid that it could not
     be used to summarize water quality conditions and trends.
     Mr. Pemberton suggested that, before requiring large
     economic investments by AFOs into minimizing water quality
     impacts, NCBA recommended that accurate data be collected
     and analyzed to truly determine to what extent an impact
     exists and to what extent the proposed solutions will
     address this possible impact.  Mr. Pemberton is very
     concerned about politically motivated proposals that ignore
     science, regional differences, and other fact-based analysis
     to determine environmental risk.
     
     Mr. Clause is concerned that the desired environmental
     outcomes (i.e., water quality improvements) may not be
     realized even with massive expenditures by small livestock
     operations, since there is considerable question if they are
     in fact a problem.
     
     Poultry
     Two written SER comments were provided on this issue.  Mr.
     Johnson expressed concern that EPA does not give due
     consideration to scientific evidence during policy-making.
     To support his viewpoint, he submitted an excerpt from a
     Georgia agricultural association's newsletter about a former
     EPA scientist who contends he resigned from EPA because
     policy-makers at EPA failed to view use of good science as
     more than a recommendation.
     
     Mr. Campbell was also concerned that EPA not base any
     rulemaking decisions on the water quality data regarding
     303(d) listed watersheds, because he suspects they were
     listed without proper consideration of the scientific data
     on impairment.


     8.6.4     Regional & Industry Variation
     
     Beef, Dairy, and Exotic Animals
     Two beef SERs commented that there can not be a "one size
fits all" for CNMPs.
     One beef SER commented that EPA should consider different
     lots in an operation as separate locations based on the
     operation's impact on the environment.  Another beef SER
     added that such variability even within the same facility
     illustrates the inadequacies of a one-size-fits-all
     regulation.
     
     Another beef SER indicated that in regard to site-specific
     determinations, the regulations should "reach for a goal."
     He also indicated that there is no need to permit all
     operations.
     
     Mr. Pemberton provided a written comment on this issue.  The
     SER indicated that for the 300-1,000 AU category, EPA
     ignores the fact that not all livestock sectors are managed
     the same, and thus regulating them the same does not make
     environmental sense.  The SER also remarked that regional
     differences are a key environmental component (e.g.,
     operations in the Pacific Northwest will need larger
     retention ponds than operations in the Southwest, where such
     structures have to contain significantly less rainfall
     during 25-year, 24-hour storms).  He recommended that EPA
     consider regional differences not only in proposing
     additional regulations but also in terms of developing costs
     and estimates of the number of small entities that may be
     affected by these regulations.
     
     Poultry
     One written SER comment was received on this issue.  Mr.
     Campbell stated that EPA's analysis ignores a key issue that
     pork, poultry, dairy and beef cattle are managed or produced
     differently, so regulating them the same does not make
     environmental sense.  Also, to ignore regional differences
     in producing livestock is to ignore a key environmental
     component.
     
     
     8.6.5     Definition of "Animal Unit"

     Swine
     One written SER comment was received on this issue.  The SER
     stated that the current numbers corresponding to AUs should
     be maintained.  The SER also indicated that it is important
     to assess risk from different types of livestock.


     Poultry
     One written SER comment was received on this issue.  The SER
     indicated that because a one size fits all definition for
     the term "animal unit" does not exist, the current numbers
     corresponding to "animal units" should be maintained.


     8.6.6   Research Needs

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider stated in
     their written comments that the government, academia, and
     the pork production industry should encourage and support
     research on at least one of the following subjects:
         Odor measurements and control;
         Atmospheric deposition of pathogens and nitrogenous
          compounds;
         Manure and wastewater storage facility improvements;
         Improved monitoring technologies; and,
         Determination of soil nutrient capacities.
     
     8.6.7   Financial and Technical Assistance

     Swine
     Ms. Atwood, Mr. Foushee, and Ms. Reifshneider provided
     written comments on this issue.  They stated that EPA and
     USDA should provide financial and technical assistance tools
     for the various types and sizes of livestock operations.
     The SERs also believe that pork operations should be
     eligible to seek financial or technical assistance to adopt
     environmental practices to meet existing and new
     environmental requirements.

     Beef, Dairy, and Exotic Animals9
     Three SER written comments were received on this issue.
     
     Mr. Roos indicated that because EQIP funding is limited,
     many farmers may go out of business if they have to pay for
     100 percent of the costs derived from implementation.

     Another dairy SER also stated a concern over the lack of
resources to develop plans.
     
     Mr. Roos also commented that since EQIP money is limited,
     necessary funding for projects is difficult to maintain.  As
     a result, many farmers are faced with spending their own
     money to achieve compliance.  In his area, this will impact
     at least 60 of the 150 dairies.


     8.6.8     Legal Authority

     Multi-Sector Representatives
     Mr. Parrish requested an explanation of EPA's authority for
     permitting facilities to operate and that EPA provide SERs
     with the definition of "discharge."  The same SER also
     stated his view that discharges from land application of
     manure do not fall under the authority of the CWA permitting
     program because the law exempts "agricultural storm water"
     discharges.

     One SER provided a several written comments on this issue.
     To begin, the SER stated his belief that the following
     potential regulatory changes are unlawful:
         Expansion of CAFO regulations to include non "discharging"
          AFOs;
         Elimination of the 25-year, 24-hour storm event exception;
         Regulation of land application of organic nutrients and
          mandated "nutrient utilization plans";
         Regulation of poultry operations dry liter;
         Co-permits for corporate entities; and
             Regulation of the transfer of organic nutrients.
          
     The SER informed the Panel that the CWA defines a point
     source as "any discernible, confined, and discrete
     conveyance," not any activity associated with a CAFO land
     application, for instance.  Runoff from land where CAFO
     manure is applied has been exempted from the definition of a
     point source as agricultural storm water runoff.
     
     The SER continued that the ability of EPA to expand the
     definition of CAFO to include many heretofore unregulated
     AFOs is clearly limited by congressional intent underlying
     the CWA.  And, in his view, there is substantial evidence in
     the legislative history of the CWA that Congress intended to
     control only "end-of-pipe" release or "discharge."  CAFOs do
     not become permittable under NPDES program without a
     discharge.
     
     Therefore, Mr. Parrish recommended that EPA not include dry
     operations in the CAFO regulations.  Because of the absence
     of water or other liquids, dry manure management systems do
     not result in pollutants that can be discharged through a
     discrete point source.  The current NPDES CAFO definition
     correctly includes only layer and broiler operations that use
     continuous overflow watering or liquid manure systems because
     of their possibility to discharge pollutants.
     
     Mr. Parrish also recommended against removing the 25-year,
     24-hour storm permit exemption.  Regulations currently allow
     AFOs that otherwise meet the definition of CAFO to opt out
     of the NPDES permitting program if those AFOs discharge only
     in the event of a 25-year, 24-hour storm event.  Mr. Parrish
     supports this exemption and, based on the legislative
     history, believes that EPA must retain some type of storm-
     event exception in the NPDES CAFO regulations, based on the
     legislative history of the CWA.  Mr. Parrish added that the
     current exception provides adequate assurance that
     facilities (including those over 1,000 AUs) designed to such
     criteria will not discharge, while at the same time
     minimizing the need for livestock producers to comply with
     costly, onerous and unnecessary permitting requirements.  No
     permit conditions should be included for discharges so long
     as the CAFO maintains structures that are designed and
     constructed to contain a 25-year, 24-hour storm event.
     
     The SER remarked that while EPA does have the regulatory
     authority to require certain AFOs smaller that 1,000 AUs to
     obtain NPDES permits, the authority is limited to those  that
     discharge from confinement areas to waters of the U.S.
     
     The SER commented that the CNMP is more than "end of pipe"
     discharges.  The SER indicated that, because such plans
     control nonpoint sources of pollution, which are outside the
     scope of the CWA, CNMPs cannot be required a condition of an
     NPDES permit.
     
     Beef, Dairy, Exotic Animals
     One SER stated that EPA is "setting itself up for a huge
     legal battle" with these CAFO regulations.  Mr. Pemberton is
     especially concerned about expanding the scope of the NPDES
     program to include on-site and off-site land application.
     He is also concerned that EPA is shifting the burden of
     proof to operators, who would have to demonstrate under
     certain regulatory revisions that they have not violated the
     CWA, where as, under current regulations, the burden is on
     the permitting authority to identify such violations.

     Mr. Pemberton submitted a written comment on this issue.
     The SER claims that EPA confuses the terms discharge and
     overflow, terms which have distinct legal implications.
     Overflow does not necessarily reach the waters of the U.S.
     and thus are not discharges and so the CWA does not provide
     EPA jurisdiction over this situation.

     Ms. Itle was concerned about the legal implications of the
     certification approach.

     
     8.6.9   Air Emissions
     
     Swine
     One written SER comment was received on this issue.  Mr.
     Petersen indicated that he is concerned about the air
     emissions of hydrogen sulfide, endotoxins, ammonia, dust,
     and their effects on the workers and neighbors of large
     operations.
     
     
     8.6.10   Facility Closure
     
     Swine
     One SER indicated that bankruptcy may occur along with
     facility closure.  He inquired as to whether indemnity funds
     would be available to protect against bankruptcy.
     
     8.6.11  100 Foot Buffer Zone
     
     Beef, Dairy, and Exotic Animals
     One dairy SER is concerned about the location issue (within
     100 feet of U.S. waters).  The same SER noted the five
     citizen suits that are currently ongoing in the State of
     Washington.  He noted that a court ruled that irrigation
     canals are considered waters of the U.S.
     
     Mr. Mason indicated that the 100 foot buffer zone is a
     problem.  Due to this buffer zone restriction, he estimated
     he would lose 10-15 percent tillage on his farm alone, which
     would be extremely costly for him.
     
     
     8.6.12   Additional Recommendations
     
     Swine
     In their written comments, Ms. Atwood, Mr. Foushee, and Ms.
     Reifshneider expressed concern that the swine industry's
     environmental record was mischaracterized during the Panel
     process.  These SERs included in their written comments the
     recommendations of the Pork Dialogue, three SERs provided a
     list of recommendations, which are provided below:10
         Public participation for new or expanded operations;
         Management and location requirements to prevent
          pollution of surface and groundwater;
         Design standards for manure handling facilities;
         Restrictions on rates and methods for land application
     of manure and wastewater;
         Preparation of emergency response plans;
         Certification of all operators;
         Training of supervisors and employees involved in land
     application activities;
         Provision of financial guarantees by operators of new
     or expanded operations;
         Record keeping and inspections;
         Closure standards for manure storage facilities; and,
         Civil and criminal enforcement with stringent penalties
     for "bad actors."

     The Pork Dialogue also provides flexibility to the
     appropriate regulatory agency to waive recommendations or
     extend compliance deadlines for alternative approaches that
     achieve the same objectives with less costs, for operations
     that demonstrate hardship, which makes accomplishment of
     framework recommendations impracticable, and acts of god.
     
     
     8.6.13 Comments on the SBREFA Process
     
     Several SERs were concerned that they did not have
     sufficient opportunity to review, evaluate, and discuss
     information provided by the Panel.  Some felt they did not
     have sufficient information with which to provide informed
     comments and recommendations (e.g., an analysis of the
     benefits of additional regulations) and suggested that
     decisions had already been made, without a meaningful
     opportunity to provide input.
     
     8.6.14   Confusing Regulations
     
     Beef, Dairy and Exotic Animals
     Mr. Pemberton voiced general concern that federal CAFO
     regulations are becoming increasingly confusing, as EPA
     attempts to interpret and revise current regulations.  For
     instance, terms such as "discharge" and "man-made
     conveyance" - terms which have significant legal
     implications - need clarification, if EPA now intends
     through interpretation or otherwise to expand their scope to
     include "potential" (as well as actual) discharges and
     "nonintentional" man-made conveyances.  Mr. Pemberton
     elaborated upon this issue in his written comments by noting
     his concerns that revisions under consideration would cause
     much more confusion and further add vague terms that have
     significant legal implications and thus need definition,
     such as "certify and "pose a risk to water quality."
     
     9.0       PANEL FINDINGS AND DISCUSSION
     
9.1    Number and Types of Entities Affected

   For a complete description and estimate of the small entities
to which the proposed rule will likely apply, see Section 5.  EPA
developed these estimates for the sole purpose of the IRFA in
consultation with the Panel.  Based on input from SERs and the
Panel, EPA revised the methodology used in developing these
estimates and will continue to refine them before proposal.  The
Panel endorses EPA's efforts to date and encourages EPA to
continue refining these estimates as it develops the proposed
rule.

   The Panel notes, however, that the revised methodology
outlined in Section 4 may not accurately portray actual small
entities in all cases across all sectors.  On the one hand, the
revised methodology would indicate that a 10-house broiler
operation with 260,000 birds would be a small business.
Information from industry sources, however, suggests that a two-
house broiler operation with roughly 50,000 birds is small.
Therefore, it is likely that the revised methodology may result
in some medium and large size broiler operations being considered
small entities.

   On the other hand, the revised methodology may result in
failure to identify some small businesses as "small."  SBA's size
standards define as small about 98 percent of all firms in the
economy and 99 percent of all farms.  These firms account for
approximately 38 and 62 percent of sales, respectively.  While
not a goal in itself, SBA would generally use these coverage
rates as a guide in selecting from among alternative definitions
of small business.  However, the revised methodology would define
as small swine operations with less than 1,400 pigs and turkey
operations with less than 25,000 turkeys, even though these
operations would constitute less than 93 percent of farms and
would account for less than 30 percent of sales.  Therefore, it
is likely that there are additional small hog and turkey
businesses that are not captured under the revised methodology.

   The Panel recognizes that under this small business
definition, EPA will have to regulate some small facilities to
meet its obligations under the CWA, but urges EPA to consider the
small business impact of doing so.

9.2  Potential Reporting, Record Keeping, and Compliance
Requirements

9.2.1     Record Keeping Related to Off-Site Transfer of Manure

     EPA is considering requiring CAFO operators that send manure
off-site to maintain records of each transfer, including date,
quantity transferred, and recipient name and address, and an
analysis of the manure content.  EPA is also considering
requiring CAFO operators to provide any off-site recipient of
manure with the analysis of manure content and a brochure (to be
supplied by EPA) describing the recipient's responsibilities for
appropriate manure management.
     The Panel discussed the issue of whether such record keeping
and reporting requirements would have significant practical
utility, either to a CAFO operator or to regulatory authorities.
EPA believes it could potentially regulate excessive nutrient
discharges due to over-application at off-site locations as
separate point sources.  Some Panel members questioned how useful
records kept by CAFO operators would be in identifying such
situations, relative to other sources of information such as
citizen complaints or direct observation of the recipient's
operations.  Such records could aid in verification of compliance
with requirements in a CAFO operator's CNMP, by allowing a mass
balance comparison of waste generation with on-site and off-site
use and disposal.  One significant limitation of these records,
however, both for compliance verification and for identification
of potential off-site point sources, would be the lack of any
corresponding record keeping requirements on the manure
recipients.  Without such a requirement, the rule would provide
no mechanism for cross-checking the CAFO operator's records
against off-site receipts.  Thus, even if a CAFO operator's
records indicated significant quantities of manure shipped to a
specific off-site recipient, the rule would provide no mechanism
for reliably determining at the receiving end how, or over what
time frame, this manure was used or disposed of and thus whether
it was ultimately handled appropriately.

     The Panel recommends that EPA give careful consideration to
all proposed record keeping requirements and explore options to
streamline these requirements for small entities.  It may be that
the limited potential for environmental harm from relatively
small amounts of manure would justify less comprehensive record
keeping requirements for small operators than for large ones.
EPA should also explain the basis for any record keeping
requirements in the preamble to the proposed rule and request
comment on them.

     Regarding the requirement to provide nutrient content
information to manure recipients, the Panel believes that this
would be minimally burdensome if analysis of this content is
already required as part of the CNMP to ensure proper land
application.  However, if the CAFO operator has no need of this
information for his or her own purposes, and has not conducted
the appropriate analysis, it may be more efficient in some
situations to leave analysis of nutrient content to the manure
recipient, in order to ensure its relevance to conditions and the
intended use at the recipient site.  In other situations, such as
when manure from a single operator is being provided to multiple
off-site recipients, it may be more efficient for the operator to
conduct the analysis.  The Panel suggests that EPA consider
limiting any requirement to provide nutrient content analysis to
situations where such analysis is required as part of the CNMP to
ensure proper on-site land application, or  possibly where the
operator transfers manure to multiple recipients.

     Finally, the Panel notes that under the Paperwork Reduction
Act and its implementing regulations, all reporting and record
keeping requirements must be certified by the issuing agency to
have practical utility and to reduce, to the extent practicable
and appropriate, the burden on those required to comply,
including small entities (5 CFR 1320.9).

9.2.2     Permit Application and Certification Requirements

     EPA is considering several options that would revise the
applicability requirements for operations in the intermediate
size category, currently defined as 300 to 1,000 animal units
(AUs).  Under one option, all operations in this size range would
be required to either apply for an NPDES permit, or file a
certification check list indicating that they are not likely to
discharge significant quantities of pollutants to waters of the
US.  This check list could include such items as adequate
facility design to contain runoff in a large storm, use of
appropriate BMPs, and land application of manure at agronomic
rates.  An additional option would require facilities that are
not able to meet the certification requirements to file a more
comprehensive permit application, but still allow the permitting
authority to determine that no permit is required.  This could
increase flexibility for any operator who does not discharge to
waters of the U.S. or pose significant risk to water quality.
Under this approach, operations in the intermediate size range
would effectively be tiered, based on their potential to
discharge, and only operations with a reasonable potential to
discharge would ultimately be required to obtain a permit.

     The Panel notes the substantial number of small entities in
this size range and recommends that EPA carefully consider the
burden of any additional certification or application
requirements.  If EPA decides to propose a tiered approach, the
certification check list should be designed to minimize both the
required information and the substantive operational requirements
for facilities with the lowest potential to discharge.  For
example, the check list might include a simple default criterion
for demonstrating application of manure at agronomic rates, such
as the ratio of animals to crop land, rather than requiring the
operator to have a CNMP.  For operators that do have a CNMP, this
could be used to override the default criterion on a site-
specific basis.  Similarly, the check list could allow several
alternatives for appropriate manure storage, including cost-
effective BMPs (e.g., stacking manure in certain locations or in
certain ways to avoid discharge) in lieu of expanded structural
storage capacity.  The Panel recommends that EPA carefully
consider such options if it pursues a certification approach.

     The Panel further notes that EPA has not ruled out the
option of requiring a full permit application from all operations
in the intermediate size range.  The Panel is concerned that such
an approach may impose significant burden with limited
environmental benefits, and recommends that EPA carefully
consider appropriate streamlining options, such as the tiered
approach discussed above, before considering a more burdensome
approach.

     Finally, before adding any new application or certification
requirements for operators in this size range, EPA should
carefully weigh the burden and environmental benefits of
expanding the scope of the regulations in this way.

9.2.3     Frequency of Testing

     The Panel discussed the appropriate frequency of any testing
requirement for soil and manure that might be included in the
proposed rule.  The Panel believes it is important to balance the
burden on small entities against the need to ensure that
sufficient information about nutrient content is available to
support appropriate manure management.  EPA is currently
considering proposing that soil testing be required periodically
(e.g., once every 3 years).  EPA  is also considering proposing
that manure be tested more frequently (e.g., annually) because
its content is potentially more variable than soil.  The Panel
agrees that testing manure and soil at different rates may be
appropriate, but is concerned about the burden of any inflexible
testing requirements on small entities.  The Panel thus
recommends that EPA consider leaving the frequency of required
testing to the discretion of local permit writers, and request
comment on any testing requirements that are included in the
proposed rule.  It might be that small entities could test less
frequently and still generate sufficient information for proper
manure management.  The Panel recommends that EPA carefully weigh
the small business burdens relative to the need for information
in determining appropriate testing frequencies.


9.2.4     Groundwater Requirements Where Linked to Surface Water

     The Panel notes that EPA is exploring an option under which
CAFOs would be required to determine whether they have a
reasonable potential to discharge to ground water with a direct
hydrological connection to surface water. This determination
would likely require hiring an assessor.  If such a potential to
discharge were established, the proposed rule might specify
additional monitoring, record keeping and reporting requirements.
In order to monitor groundwater, an operator would likely have to
drill wells at appropriate monitoring locations.  The proposed
rule could also include compliance requirements (e.g., lining
existing lagoon(s) to prevent leaching) to prevent or reduce
discharges to groundwater.

     The Panel notes that this option was not explicitly
discussed in the outreach materials provided to SERs, although
EPA did include the costs of hiring an assessor, installing
monitoring wells, and sampling groundwater twice a year in
supporting cost documentation provided to SERs.  Several SERs
commented on these costs.

     The Panel is concerned with the potentially high costs to
small operators associated with such an option and notes the
comments of many SERs that small farmers, who live on the land,
have a strong incentive to be good stewards of both soil and
groundwater, which provides drinking water for most of them.  The
Panel thus recommends that, in exploring any option involving
requirements related to groundwater protection, EPA give careful
consideration to the associated small entities impacts, and in a
manner consistent with the law, balance these against any
identified environmental benefits.  The Panel also recommends
that, if EPA decides to propose any such requirements, EPA
consider streamlining the requirements for small entities (e.g.,
sampling at reduced frequencies) or exempting them altogether.


9.3  Related Federal Rules

     The Panel is not aware of any other Federal rules that
duplicate, overlap, or conflict with these proposed rules.
9.4  Regulatory Alternatives
     
     The Panel notes that EPA is considering deleting the current
permitting exemption for AFOs that discharge only in the event of
a 25-year, 24-hour storm and instead requiring permits for
operations with a potential to discharge.  Several of the options
for increasing small business flexibility addressed in sections
9.4 and 9.5 (e.g., requiring permits of all AFOs with between
300-1,000 AUs that cannot demonstrate they do not have a
reasonable potential to discharge - see section 9.4.2) presume
that this change in regulatory approach would be adopted.  The
Panel did not reach consensus on the appropriateness of such a
change in approach and, therefore, neither endorses nor opposes
it.  However, the Panel did consider a number of regulatory
options that presuppose such a change in approach, and has
provided recommendations regarding these options, focused on
minimizing costs and burden on small entities while still
maintaining environmental benefits.  These recommendations are
provided for EPA's consideration if it decides to adopt the
changed approach and do not imply Panel endorsement of the new
approach itself.

9.4.1     Revised Applicability Thresholds

     Currently, size thresholds for applying CAFO requirements
are included in both the ELG and NPDES regulations.  The ELG
regulation specifies a 1,000 AU threshold above which CAFOs are
subject to ELG guidelines; this is the ELG applicability
threshold.  The NPDES regulations provide different definitions
of CAFOs for operations in different size ranges.  All operations
above 1,000 AUs are defined as CAFOs, except as noted below.  An
operation with 300-1,000 AUs is also defined as a CAFO, if it
discharges pollutants to waters of the United States through a
manmade conveyance or directly into such waters that pass through
the facility.  However, any AFO that would otherwise be defined
as a CAFO is excluded from the definition if it discharges only
in the event of a 25-year, 24-hour storm event.  An operation
with 300 AUs or more may also be designated as a CAFO by the
permitting authority if, after inspection, it is  determined to
be a significant contributor  of pollutants to waters of the US.
In making this designation, the permitting authority shall
consider the size of the operation, the amount of wastewater
discharged, the location of any potential receiving waters, and
other factors such as slope, vegetation, and rainfall which may
affect the potential for any discharge to reach receiving waters.
Operations with less than 300 animal units are never
automatically defined as CAFOs,  and may only be designated as
such on a site specific basis if, after inspection, they are
found to meet either of the defining conditions applicable to
operations with 300-1,000 AUs.  Currently, 1,000 AUs serves as
the threshold for both ELG applicability and automatic definition
as a CAFO under NPDES.  While EPA is currently examining possible
revisions to these thresholds, its current preference is to
continue using a single threshold for both.

     EPA is not considering changing the designation criteria for
operations with less than 300 AUs. The panel strongly supports
this decision.  This includes the criterion that the permitting
authority must conduct an on-site inspection of any AFO, in
making a designation determination (40 CFR 122.23(c)(3)).

     As noted above in Section 9.2.2, EPA is considering changing
the criteria for defining and/or designating operations in the
300-1,000 size range as CAFOs by including different or
additional conditions.  Most SERs expressed the belief that the
major environmental problems associated with feedlots stem from
operations over 1,000 AUs.  Based on estimates of waste
generated, the Panel agrees that, generally, these operations
have the greatest potential to cause water quality impairments if
not properly controlled.  The Panel notes, however, that in some
cases factors other than the quantity of waste generated may play
a significant role in determining whether or not an operation is
causing a significant environmental concern.  At the same time,
the economic implications of expanding both the administrative
and the substantive operational requirements for facilities in
the intermediate size category are significant.  The Panel thus
recommends that the Agency carefully evaluate the potential
benefits of any expanded requirements for operations in this size
range and ensure that those benefits are sufficient to warrant
the additional costs and administrative burden that would result
for small entities.

     The Panel discussed in some detail possible ways of reducing
both the administrative burden (e.g., permit application,
reporting and record keeping requirements) and the compliance
costs of any expanded requirements.  The Panel's consideration of
options to reduce administrative burden is discussed in Section
9.2.

     As for compliance costs, one approach would be for EPA to
consider less stringent effluent limitations guidelines for
operations under 1,000 AUs.  Currently, no national guidelines
apply to operations in this size range.  Rather, for those
operations that are permitted, permit conditions are based on the
best professional judgement (BPJ) of the local permit writer.
EPA should give serious consideration to continuing this
approach.  One potential drawback with it, according to one of
the SERs, is that local permit writers may look to guidelines
designed for larger operations for guidance in determining BPJ,
even though these guidelines may be overly stringent for smaller
operations.  Establishing less stringent guidelines for smaller
facilities, based on consideration of economic achievability,
could result in permit conditions that are more appropriately
tailored to smaller operations, as discussed in the remainder of
this document.  For example, revised guidelines could allow,
under certain circumstances, a less stringent design standard
than the current one based on a 25-year storm, 24-hour (e.g., a
10-year, 24-hour storm), or allow cost-effective BMPs (e.g.,
filter strips or appropriate manure stacking) in lieu of expanded
manure storage facilities at smaller operations.  They could also
include different land application requirements such as smaller
buffer strips or more flexibility in determining whether to use N-
based or P-based agronomic rates.  And they could include less
stringent reporting and record keeping requirements.

     The Panel recommends that EPA give serious consideration to
the issues discussed by the Panel when determining whether to
establish less stringent effluent limitations guidelines for
smaller facilities, and whether to preserve maximum flexibility
for the best professional judgement of local permit writers.

     To the extent that EPA is considering incremental additions
to regulatory requirements, the Panel encourages EPA to reassess
its size thresholds in those sectors where there are a
significant number of small entities over 1,000 AUs.  EPA should
take into consideration the possibility for adverse economic
impacts to small entities with more than 1,000 AUs as it
considers economic achievability and environmental benefits in
deciding whether to adjust the threshold upward for a given
industry sector.  The Panel also encourages EPA to consider
additional ways of extending flexibility to operators with over
1,000 AUs in order to address the concern of small entities in
this size category.  For example, EPA might allow such operations
the option to  certify or demonstrate  through a permit
application that they do not have a reasonable potential to
discharge or do not pose a significant risk to water quality,
similar to the options discussed  in section 9.2 above for
operations below 1,000 AUs.

9.4.2     25-year, 24-hour Storm Event

     Currently, AFOs that do not discharge except in a 25-year,
24-hour storm event  are excluded from the definition of a CAFO
and, therefore, are not required to obtain an NPDES permit absent
designation as a CAFO.  EPA is considering removing this
exemption.  This would not affect the 25-year, 24-hour storm
design standard in the ELG for feedlots.  Many of the SERs
opposed removing this exemption.  They felt that it would be
unreasonable (and perhaps infeasible) to prohibit discharge in
such an extreme storm event, and that if facilities were designed
to prevent a discharge except in such an event they should not be
required to obtain a permit.

     The Panel discussed the effects of eliminating this permit
exemption, in terms of both the resulting burden on small
entities and the potential environmental improvements.  On the
one hand, it would significantly expand the scope of the
regulation.  However, it would also close a potential enforcement
loophole that currently exists because, as a practical matter, it
is only where a permitting authority demonstrates that discharges
occur in less than a 25-year, 24-hour storm event that facilities
are being required to obtain a permit, even for large facilities.
The Panel agreed that removing this exemption is reasonable for
large facilities (currently defined as those over 1,000 AUs),
because of their significant potential for environmental harm if
not properly managed.  However, the Panel is concerned that
removing this exemption may significantly impact small entities
with over 1,000 AUs and encourages EPA to explore options for
providing additional flexibility to operations in this size range
(see Sec 9.4.1 above).

     The Panel was divided on whether it would also be
appropriate to remove the exemption for facilities below the
1,000 AU threshold. All Panel members acknowledged the
possibility that there are facilities in this size range that
currently do not have sufficient manure management and
containment provisions in place to prevent discharge, and yet
believe that they do not  need a permit because of this
exemption.  The Panel noted that for some such facilities,
removing the exemption would not expand the scope of the current
regulation, but rather ensure coverage for facilities that should
already have obtained a permit. However, the Panel also
recognized that eliminating the exemption would require
facilities that do properly qualify for it - e.g., they do have
sufficient manure management and containment in place or, for
some other reason, do not discharge except in a 25-year, 24-hour
storm - to apply for a permit or certify that none is needed. As
discussed in Section 9.2.2 above, EPA is considering several
options to minimize the impacts of removing this exemption.
Under the certification checklist option, the exemption could
effectively be maintained, but with the added requirement that a
facility demonstrate to the permitting authority its ability to
comply with the terms of the exemption (no discharge except in a
25-year, 24-hour storm event) by filling out the checklist or, in
some cases, submitting a permit application.

     The Panel recommends that EPA carefully weigh the costs and
benefits of removing the exemption for small entities.  If EPA
decides to remove the exemption, it should fully analyze the
incremental costs associated with permit applications for those
facilities not presently permitted that can demonstrate they do
not discharge in less than a 25-year, 24-hour storm event, as
well as any costs associated with additional conditions related
to land application, nutrient management, or adoption of BMPs
that the permit might contain.  As discussed above, EPA should
also consider reduced application requirements for small
operations affected by the removal of the exemption.

     The Panel also recognizes the environmental benefits of
capturing within the permitting process those facilities that
discharge because they do not have sufficient measures in place,
but who might not apply for a permit if the 25-year, 24-hour
storm permit exemption were left in place in the regulations.

9.4.3     Manure and Wastewater Storage Capacity

     Several SERs expressed strong concerns about the high cost
of adding storage capacity to their facilities, including
lagoons, retention ponds, and storage sheds.  These SERs believe
that, in many cases, such technologies  are not economically
achievable and would not necessarily improve water quality.  They
suggested  allowing flexibility to adopt cost-effective
alternatives in lieu of such technologies.  These alternatives
included filter strips and appropriate field stacking of manure.
One SER  provided a study to support  the use of such
alternatives.  The Panel notes the SERs' concern about the high
cost of additional storage capacity and recommends that EPA
consider low-cost alternatives in  its assessment of best
available technologies economically achievable, especially for
any subcategories that may include small entities.

9.4.4     Land Application

     EPA is considering revising the criteria for defining and
designating operations in the 300-1,000 AU size category to
include over-application of manure and wastewater to farmland.
One SER stated his belief that EPA does not have the legal
authority to regulate land application under the CWA.  This SER
was concerned that such a revision potentially could define all
AFOs in this size category as CAFOs.  EPA believes it has the
authority to regulate over-application of manure and wastewater
(consistent with the agricultural stormwater exemption) and is
currently considering defining applications of manure in excess
of agronomic rates as  over-application.

     The Panel did not address the legal arguments concerning
EPA's authority to regulate land application under the CWA.
However, the Panel is concerned that requiring permits from
operations in this middle size category that do not pose a
significant risk to water quality may increase the regulatory
burden on small farmers without providing corresponding
environmental benefits.  The Panel agrees that if manure and
wastewater  are applied to land at agronomic rates and  a
facility is designed to contain the discharge from a 25-year, 24-
hour storm,  then that facility would have minimal potential to
discharge or adversely affect water quality.  However,  it is
also possible that an operation may land apply in excess of
agronomic rates but  still not discharge, depending on such
factors as annual rainfall, local topography, and distance to the
nearest stream.  The Panel recommends that EPA consider such
factors as it develops any certification and/or permitting
requirements related to land application.  The Panel also notes
the concerns of other SERs  regarding the practical difficulties
of ensuring that manure is always applied at agronomic rates
(e.g., during the rainy season).  In addition, one SER urged EPA
to maintain winter spreading of manure as an available management
option.  The Panel recommends that EPA continue to work with USDA
to explore ways to limit permitting requirements to the minimum
necessary to deal with threats to water quality from over-
application and to define what is "appropriate" land application,
consistent with the agricultural stormwater exemption.

     EPA is also considering including substantive compliance
requirements related to land application of manure and other CAFO
waste waters in the proposed rule.  These could include  the
development and implementation of CNMPs, as well as specific
requirements for applying at a phosphorous-based (P-based) rather
than a nitrogen-based (N-based) rate in certain circumstances.
SERs were concerned that application of manure at P-based rates
would require more land to fully utilize a given quantity of
manure, and would necessitate the purchase of commercial
fertilizer to provide adequate nitrogen to the soil.  When large
amounts of land are not available, an operator may be forced to
manage manure as a waste product rather than using it as an asset
and may have to transport it over long distances to get rid of
it.

     The Panel notes the high cost of P-based application
relative to N-based application, and supports EPA's intent to
require the use of P-based application rates only where necessary
to protect water quality, if at all, keeping in mind its legal
obligations under the CWA.  If the soil is not phosphorus-
limited, then N-based application should be allowed.  The Panel
recommends that EPA consider leaving the determination of whether
to require the use of P-based rates to BPJ, and continue to work
with USDA  in exploring such an option.

9.4.5     Co-permitting

     EPA is considering a regulatory change that would require
corporate entities that exercise substantial operational control
over a CAFO to be co-permitted.  A majority of SERs  expressed
opposition to such an approach.  They were concerned that co-
permitting could decrease the operator's leverage in contract
negotiations with the corporate entity, increase corporate
pressure on operators to indemnify corporate entities against
potential liability for non-compliance on the part of the
operator, encourage corporate entities to interfere in the
operational management of the feedlot in order to protect against
such liability, provide an additional pretext for corporate
entities to terminate a contract when it was to their financial
advantage to do so, restrict the freedom of  operators to change
integrators, and generally decrease the profits of the operator.
These SERs were not convinced that co-permitting would result in
any benefit to the environment, given that the operator generally
controls those aspects of a feedlot's operations related to
discharge, nor were they convinced that such an approach would
result in additional corporate resources being directed toward
environmental compliance, given the integrator's ability to pass
on any additional costs it might incur as a result of co-
permitting to the operator.  A few SERs, who were not themselves
involved in a contractual relationship with a larger corporate
entity, favored co-permitting as a way of either leveling the
playing field between contract and independent operators, or
extracting additional compliance resources from corporate
entities.

     Despite general concern over co-permitting due to the
economic implications for the contractor, several SERs voiced
their support for placing shared responsibility for the manure on
the integrators, especially in the swine sector.

     The Panel did not reach consensus on the issue of co-
permitting.  On the one hand, the Panel shares the SERs' concern
that co-permitting not serve as a vehicle through which the
bargaining power and profits of small contract growers are
further constrained with little corresponding environmental
benefit.  On the other, the Panel believes that there is
potential for environmental benefits from co-permitting.  For
example, co-permitted integrators may be able to coordinate
manure management for growers in a given geographic area by
providing centralized treatment, storage, and distribution
facilities - though this could also happen through market
mechanisms without co-permitting if it resulted in overall cost
savings.  Co-permitting could also motivate corporate entities to
oversee the environmental compliance of their contract growers,
in order to protect themselves from potential liability, thus
providing an additional layer of environmental oversight.

     The Panel also realizes, and is concerned, that any co-
permitting requirements may entail additional costs, and that co-
permitting can not prevent these costs from being passed on to
small operators, to the extent that corporate entities enjoy a
bargaining advantage during contract negotiations.  The Panel
thus recommends that EPA carefully consider whether the potential
benefits from co-permitting warrant the costs particularly in
light of the potential shifting of those costs from corporate
entities to contract growers.

     The Panel also recommends that if EPA does require co-
permitting in the proposed rule, EPA consider  an approach in
which responsibilities are allocated between the two parties
such that only one entity is responsible for compliance with any
given permit requirement.  This would be the party that has
primary control over that aspect of operations. Flexibility could
also be given to local permit writers to determine the
appropriate locus of responsibility for each permit component.
Finally, the Panel recommends that if EPA does propose any form
of co-permitting, it address in the preamble both the
environmental benefits and any economic impacts on small entities
that may result and request comment on its approach.  If EPA does
not propose the approach discussed above (in which responsibility
for each permit requirement is assigned to one party or the
other) it should discuss the strengths and weaknesses of this
approach and request comment on it.

9.4.6     CNMP Preparer Requirements

     One regulatory change currently under consideration would
require permittees to have CNMPs developed by certified planners.
Several SERs were concerned that requiring the use of a certified
planner could significantly increase the cost of plan
development, as well as limit the operator's influence over the
final product.  These SERs felt that, with adequate financial and
technical assistance, they could write their own plans and
suggested that EPA work to facilitate such an option through
expanded training and certification of farmers and provision of a
user-friendly computer programs to aid in plan development.

     The Panel recognizes the need for plan preparers to have
adequate training to write environmentally sound CNMPs.  This is
particularly true for larger operations, as the complexity of the
plan and, therefore, the level of training required increases
with the size of the operation.  However, the Panel also
recognizes the potential burden on small entities of having to
use certified planners, especially considering the large number
of AFOs and the limited number of certified planners currently
available.  The Panel recommends that EPA work with USDA to
explore ways for small entities to minimize costs when developing
CNMPs.  EPA should continue to coordinate with other federal,
state and local agencies in the provision of low-cost CNMP
development services, and should facilitate operator preparation
of plans by providing training, guidance and tools (e.g.,
computer programs).  EPA expects that many operations could
become certified through USDA or land grant universities to
prepare their own CNMPs.

9.4.7     General vs. Individual Permits

     Another regulatory change under consideration involves
requiring individual permits for CAFOs that meet certain
criteria, or increasing the level of public involvement in
general permits for CAFOs.  Several SERs commented that they did
not support increasing the use of individual permits for
operations under 1,000 AUs, because it would be too resource
intensive, both for operators and for permitting agencies.  SERs
also expressed concern that greater public involvement in the
permitting process could risk compromising confidential business
information and slow the permitting process down.  This latter
concern would be compounded if permit revisions to address
operational changes were repeatedly subject to public challenge.

     The Panel recommends that EPA not expand the use of
individual permits for operations with less than 1,000 AUs.  EPA
expects that general permits will be issued for operations with
less than 1,000 AUs, except where special circumstances warrant
otherwise, such as when an operation has a history of
noncompliance.

9.4.8     Immature Animals

     EPA is considering whether  to include immature animals for
all animal types in determining the total number of animal units
at a CAFO.  Currently, immature animals are counted (and given
equal weight as mature animals) in the poultry, beef and exotics
sectors, but are not counted in the dairy and swine sectors.  The
majority of SERs that commented on this issue did not support
this regulatory change.  Those who did  were mostly concerned
with equity across sectors and also pointed out that at some
facilities immature animals can contribute significantly to
runoff.  Those not  supporting such a change were concerned that
the inclusion of immature animals could push many operations into
larger size categories and thus require them to obtain a permit
and significantly increase their costs.  One SER also stated that
it would be difficult to equitably account for immature animals,
as there are many different ways of handling and raising them.
Another SER was concerned that such a change would particularly
impact small operations, as they are less likely than large
operations to send their immature animals off site.

     The Panel discussed this issue but did not come to any
recommendation as to whether or not immature animal should be
considered in the determination of who is a CAFO.  However,  to
the extent that immature animals are considered in this
determination, the Panel recommends that EPA consider an approach
that would  count immature animals proportionally to their waste
generation relative to  mature animals.  For example, if a calf
tends to generate only a half  the manure generated by a milk
cow, calves would only count as 0.35  animal units ( mature dairy
cow  count as 0.7  animal units).  Further, to the extent that
including immature animals would have the effect of  expanding
permit coverage  for small entities, EPA should consider the
effect this will have on small entities and consider establishing
less costly or burdensome requirements for these operations.

9.5  Other Issues

9.5.1     Additional Analysis

     Benefits
     
     Several SERs expressed concern that EPA had not developed an
assessment of the environmental benefits of the potential
regulatory changes.  EPA did provide the Panel with preliminary
information on the estimated total amount of manure and manure
nutrients generated on livestock and poultry operations
differentiated by sector and broad facility size class.  However,
the Panel felt that these estimates were too preliminary to
provide to SERs.
     
     The Panel  recognizes that SERs were not provided with
adequate information to comment on the relative costs and
environmental benefits of potential regulatory changes as they
relate to small business.  Although the Panel itself was provided
with some preliminary results from on-going EPA analyses, the
Panel feels that these results do not provide an adequate basis
for it to comment on relative costs and benefits either.  The
Panel recognizes that in choosing to conduct SER outreach and the
Panel process at a relatively early point in the rule development
process, when SER input is most able to have a significant effect
on the proposed rule, EPA is necessarily limited in the scope of
quantitative analysis that it can provide to both the SERs and
the Panel.  The Panel thus recommends that as EPA moves forward
in developing and ultimately selecting regulatory options, EPA
carefully evaluate, in a manner consistent with its legal
obligations, the relative costs and benefits (including
quantified benefits to the extent possible) of each option in
order to ensure that the options selected are affordable
(including to small farmers), cost-effective, and provide
significant environmental benefits.
     
     EPA  notes that it is conducting several analyses.  One
analysis looks at the waste generated in different parts of the
country and by different animal sectors using USDA National
Agriculture Statistics Service data and comparing that to
information on available cropland, to evaluate potential nutrient
loads.  EPA is assessing the degree to which a particular type
and size of operation is likely to have an excess of manure, and
how that might change pre- and post- regulation.
     
     EPA is also modeling loads in runoff from feedlots
(including the storage area) and land application areas and is
working to determine the amount reaching surface water.  Benefits
of CAFO controls to surface water are being calculated using the
National Water Pollution Control Assessment Model (NWPCAM)
developed by Research Triangle Institute (RTI).  This model
simulates over 633,000 miles of rivers and streams in the United
States  and estimates changes in water quality based on
regulatory options.  The model values these changes by applying
Mitchell/Carson estimates of willingness to pay to estimated
changes in water quality.  EPA is also estimating benefits of the
proposed regulation to groundwater, drinking water, and estuaries
as separate analyses.
     
     Costs
     
     Several SERs noted  their concerns that the model farm costs
were  underestimated because the unit costs did not account for
the wide variability of site-specific circumstances and because
EPA had overestimated the number of operations that had
implemented certain controls.  These SERs also provided
quantitative information  in support of these concerns.  The
Panel recommends that EPA continue to refine the estimated costs
of these proposed rules and, in doing so, consider the additional
information provided.
     
     9.5.2     Public Availability of CNMPs
     
     Several SERs provided written comments indicating that CNMPs
should be retained onsite and that operators should only have to
make CNMPs available to State and EPA authorities.  These SERs
further  suggested that CNMPs be treated as Confidential Business
Information that is exempt from public disclosure  when submitted
to State and EPA authorities.
     
     EPA  is currently evaluating what information in a CNMP (as
well as other information that feedlots might be required to
provide as part of the permitting or certification process) could
be considered proprietary business information that could harm a
CAFO  if it were made public.  EPA notes that most industrial
storm water permittees that are subject to NPDES requirements to
develop and implement a Storm Water Pollution Prevention Plan
(SWPPP) are not required to make those SWPPPs directly available
to the public.  If the SWPPP or CNMP is submitted to EPA or state
permitting authorities, however, it may not qualify for the
exclusion from public access that is provided to Confidential
Business Information - - EPA is continuing to research this
issue.
     
     The Panel urges EPA to consider the legitimate business
concerns of CAFO operators in keeping CNMPs and other proprietary
business information confidential.  To the extent allowed under
the law, EPA should continue to explore ways to balance the
operators' concerns over the confidentiality of information that
could be detrimental if revealed to the operators' competitors,
with the public's interest in knowing whether adequate practices
are being implemented to protect water quality.
     
     9.5.3     Dry Manure
     
     EPA's CAFO regulations currently apply to laying hen or
broiler operations which have liquid manure handling systems or
use  a continuous flow watering system.  Since these regulations
were issued, the trend in the laying hen industry has been to
move away from liquid manure handling systems in preference for
dry manure handling systems.  EPA believes (and SERs agreed) that
liquid manure handling systems  are not generally in use at
broiler operations.
     
     The continuous flow watering system, which delivered
drinking water to the birds, has been discontinued in favor of
more water conserving methods.  Thus, many broiler operations and
laying hen operations do not meet the definition of a CAFO and
are not subject to the Effluent Limitations Guidelines
requirements, although these facilities may still be designated
as a CAFO on an individual basis if they meet the individual
criteria for such designation (see Sec 9.4.1). EPA believes
proper management is necessary to ensure that dry manure handling
does not result in a discharge of pollutants.  EPA also believes
that control of land application of dry manure is important
because data indicate that over application results in nutrients
running off into surface water.  EPA currently plans to propose
to change the CAFO definition so that laying hen and broiler
operations with dry chicken manure handling systems would be
included within the definition of a CAFO,1 if they meet the other
regulatory criteria.
     
     The Panel agrees that dry manure systems may pose a risk to
water quality if not properly managed and that such systems
should not automatically be excluded from coverage under the
regulations.  However, the Panel recommends that in evaluating
potential requirements for dry manure poultry operations, EPA
consider the effects of any such requirements on small entities.
To the extent that small entities are regulated EPA should
consider less costly or burdensome requirements for the small
entities affected.
     
     9.5.4     Coordination with State Programs
     
     The Panel notes that some states already have effective
permitting programs for CAFOs in place.  Some SERs stated that
their states already have in place programs that are more
protective than required by current Federal regulations.  One SER
noted that the state of Alabama recently completed a broad-based
stakeholder process to revise its regulations governing the
poultry industry. The Panel recommends that EPA consider the
impact of any new requirements on existing state programs and
include in the proposed rule sufficient flexibility to
accommodate such programs where they meet the minimum
requirements of federal NPDES regulations.  The Panel further
recommends that EPA continue to consult with states in an effort
to promote compatibility between federal and state programs.


_______________________________
     1 The seven states not authorized to issue NPDES permits are
Alaska, Arizona, Idaho, Maine, Massachusetts, New Hampshire, and
New Mexico.

     2These multiplication factors are as follows: Slaughter and
feeder cattle - 1.0, Mature dairy cattle  - 1.4, Swine weighing
over 25 kilograms (approximately 55 pounds) - 0.4, Sheep - 0.1,
Horses - 2.0.  There are currently no animal unit conversions for
poultry operations.  However the regulations [40 C.F.R. 122,
Appendix B] define the total number of animals (subject to waste
handling technology restrictions) for specific poultry types that
make these operations subject to the regulation.  According to 40
C.F.R., Appendix B (a), when a poultry facility confines more
than the following numbers of animals, it is considered a CAFO:
100,000 laying hens or broilers (if the facility has continuous
flow watering), and 30,000 laying hens or broilers (if the
facility has a liquid manure system). Under certain conditions a
poultry operation may also be considered a CAFO when more than
the following numbers of animals are confined: 30,000 laying hens
or broilers (if the facility has continuous overflow
watering),and 9,000 laying hens or broilers (if the facility has
a liquid manure handling system).

     3The ELG for Subpart B (ducks) is not currently being
revised.

     4  USDA periodically published aggregated data from this
database.  ERS also makes available customized analyses of the
data to members of the public and other government agencies.  In
providing such analyses, ERS maintains a sufficient level of
aggregation to ensure the confidentiality of individual farm
level data.

     5  For many of the animal sectors, it is not possible to
estimate from available data what proportion of the total
livestock operations have feedlots and what proportion are
grazing operations only.  For these sectors (dairy, hog and
poultry), EPA assumed for analytical purposes that all livestock
operations are potentially AFOs.  The estimate of 376,000 AFOs is
thus likely an upper bound estimate of the total number of AFOs.
In the cattle feeding industry, however, EPA used data from USDA
that strictly identifies the number of beef cattle feedlots for
select size categories based on annual marketings.

     6  This is estimated as the sum of 4,370 AFOs (>1,000AUs) +
22,760 AFOs (300-1,000AUs) + 10 AFOs designated as CAFOs (<300
AUs), less 20 percent.

7EPA is no longer considering this option.

8EPA noted that it intends to clarify its interpretation so as
not to discourage the voluntary use of such best management
practices.

9    Refer to Section 8.4.10, entitled "CNMP Development" (beef,
dairy, and exotic animals) for related comments.

10 Many of these comments fit into other categories; however, the
recommendations were kept together to illustrate the entire range
of ideas put forth by these three SERs.

1Note turkey operations are currently regulated regardless of the
manure handling system used.  Most turkey operations house the
birds in a similar fashion to broiler operations and generate a
dry manure similar to broiler manure.