70082 Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 

1As discussed in section II of this document, on 

March 25, 2003 (68 FR 14502 at 14503), EPA 

revised the rule text to express the MCL as 0.010 

mg/L.

For these reasons, I respectfully concur. 

Nora Mead Brownell,

Commissioner.

[FR Doc. 04–26535 Filed 12–1–04; 8:45 am] 

BILLING CODE 6717–01–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 165

[Docket No. 2004N–0416]

Beverages: Bottled Water

AGENCY: Food and Drug Administration, 

HHS.

ACTION: Proposed rule.

SUMMARY: The Food and Drug 

Administration (FDA) is proposing to 

amend its bottled water quality standard 

regulations by revising the existing 

allowable level for the contaminant 

arsenic. As a consequence, bottled water 

manufacturers would be required to 

monitor their finished bottled water 

products for arsenic at least once each 

year under the current good 

manufacturing practice (CGMP) 

regulations for bottled water. Bottled 

water manufacturers would also be 

required to monitor their source water 

for arsenic as often as necessary, but at 

least once every year unless they meet 

the criteria for the source water 

monitoring exemptions under the CGMP 

regulations. This proposed rule, if 

finalized, will ensure that the minimum 

quality of bottled water, as affected by 

arsenic, remains comparable with the 

quality of public drinking water that 

meets the Environmental Protection 

Agency’s (EPA’s) standards.

DATES: Submit written or electronic 

comments by January 31, 2005.

ADDRESSES: You may submit comments, 

identified by Docket No. 2004N–0416, 

by any of the following methods:

• Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments.

• Agency Web site: http://

www.fda.gov/dockets/ecomments. 

Follow the instructions for submitting 

comments on the agency Web site.

• E-mail: fdadockets@oc.fda.gov. 

Include Docket No. 2004N–0416 in the 

subject line of your e-mail message.

• FAX: 301–827–6870.

• Mail/Hand delivery/Courier [For 

paper, disk, or CD-ROM submissions]: 

Division of Dockets Management, 5630 

Fishers Lane, rm. 1061, Rockville, MD 

20852.

Instructions: All submissions received 

must include the agency name and 

Docket No. for this rulemaking. All 

comments received will be posted 

without change to http://www.fda.gov/

ohrms/dockets/ohrms/dockets/

default.htm, including any personal 

information provided. For detailed 

instructions on submitting comments 

and additional information on the 

rulemaking process, see section VIII in 

the SUPPLEMENTARY INFORMATION section 

of this document.

Docket: For access to the docket to 

read background documents or 

comments received, go to http://

www.fda.gov/ohrms/default.htm and 

insert the docket number, found in 

brackets in the heading of this 

document, into the ‘‘Search’’ box and 

follow the prompts and/or the Division 

of Dockets Management, 5630 Fishers 

Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT:

Jennifer A. Burnham, Center for Food 

Safety and Applied Nutrition (HFS–

306), Food and Drug Administration, 

5100 Paint Branch Pkwy., College Park, 

MD 20740, 301–436–2030.

SUPPLEMENTARY INFORMATION:

I. Background

In the Federal Register of January 22, 

2001 (66 FR 6976), EPA published the 

arsenic rule to address potential public 

heath effects from the presence of 

arsenic in drinking water. This 

rulemaking finalized a proposed rule 

that EPA published in the Federal 

Register of June 22, 2000 (65 FR 38888).

Arsenic is an element that occurs 

naturally in rocks, soil, water, air, 

plants, and animals. In addition to the 

numerous natural sources of arsenic, 

human activities may also introduce 

arsenic into food and drinking water. 

Major present and past sources of 

arsenic include wood preservatives, 

agricultural uses, industrial uses, 

mining and smelting. The human 

impact on arsenic levels in water 

depends on the level of human activity, 

the distance from the pollution sources, 

and the dispersion and fate of the 

arsenic that is released. Because arsenic 

is naturally occurring, the entire 

population is exposed to low levels of 

arsenic through food, water, air, and 

contact with soil. Studies have shown 

long-term exposure to inorganic arsenic 

in drinking water may result in 

increased risk of cancer (e.g., skin, 

bladder, lung, kidney, liver, prostate, 

and nasal passage) and is associated 

with noncancer effects, such as 

alterations in gastrointestinal, 

cardiovascular, hematological (e.g., 

anemia), pulmonary, neurological, 

immunological, and reproductive/

developmental function (66 FR 6976 at 

7001 through 7003).

National primary drinking water 

regulations (NPDWRs) are issued by 

EPA to protect the public health from 

the adverse effects of contaminants in 

drinking water. NPDWRs specify 

maximum contaminant levels (MCLs) or 

treatment techniques for drinking water 

contaminants. In addition, at the same 

time that it issues NPDWRs, EPA 

publishes maximum contaminant level 

goals (MCLGs), which are not regulatory 

requirements but rather are 

nonenforceable health goals that are 

based solely on considerations of 

protecting the public from adverse 

health effects of drinking water 

contamination.

In the arsenic rule, EPA issued an 

NPDWR containing an MCL of 0.01 

milligram per liter (mg/L)1 or 10 parts 

per billion (ppb) and an MCLG of zero 

for arsenic. EPA based the MCL on total 

arsenic, because drinking water contains 

almost entirely inorganic forms, and the 

analytical methods for total arsenic are 

readily available and capable of being 

performed by certified laboratories at an 

affordable cost. EPA’s effective date of 

March 23, 2001, for this rule was 

temporarily delayed for 60 days to a 

new effective date of May 22, 2001, in 

accordance with the memorandum of 

January 20, 2001, from the Assistant to 

the President and Chief of Staff, entitled 

‘‘Regulatory Review Plan’’ (66 FR 7702, 

January 24, 2001). On May 22, 2001, 

EPA announced that it would further 

delay the effective date for the rule until 

February 22, 2002, to allow time to 

complete a reassessment of the 

information on which the revised 

arsenic standard is based. On February 

22, 2002, the arsenic MCL of 0.01 mg/

L in public drinking water rule became 

effective and water systems must 

comply with the new standard for 

arsenic in public drinking water by 

January 23, 2006.

Under section 410(b)(1) of the Federal 

Food, Drug, and Cosmetic Act (the act) 

(21 U.S.C. 349(b)(1)), not later than 180 

days before the effective date of an 

NPDWR issued by EPA for a 

contaminant under section 1412 of the 

Safe Drinking Water Act (SDWA) (42 

U.S.C. 300g-1), FDA is required to issue 

a standard of quality regulation for that 

contaminant in bottled water or make a 

finding that such a regulation is not 

necessary to protect the public health 

because the contaminant is contained in 

water in public water systems but not in

Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 70083

water used for bottled water. The 

effective date for any such standard of 

quality regulation is to be the same as 

the effective date of the NPDWR. In 

addition, section 410(b)(2) of the act 

provides that a quality standard 

regulation issued by FDA shall include 

monitoring requirements that the agency 

determines to be appropriate for bottled 

water. Further, section 410(b)(3) of the 

act requires a quality standard for a 

contaminant in bottled water to be no 

less stringent than EPA’s MCL and no 

less protective of the public health than 

EPA’s treatment technique requirements 

for the same contaminant.

II. EPA Standards

The SDWA, as amended in 1996, 

requires EPA to publish an NPDWR that 

specifies either an MCL or a treatment 

technique requirement for contaminants 

that may ‘‘have an adverse effect on the 

health of persons,’’ are ‘‘known to occur 

or [have] a substantial likelihood [of 

occurring] in public water systems with 

a frequency and at levels of public 

health concern,’’ and for which 

‘‘regulation * * * presents a meaningful 

opportunity for health risk reduction for 

persons served by public water 

systems’’ (SDWA section 1412(b)(1)(A)). 

The SDWA (section 300g-1(a)(3)) also 

requires that EPA issue MCLGs at the 

same time it issues NPDWRs. MCLGs 

are nonenforceable health goals that are 

based solely on considerations of 

protecting the public from the adverse 

health effects of contaminants, and not 

on other considerations, such as 

potential costs of regulating 

contaminants and potential technical 

difficulties of achieving the health goals 

(59 FR 38668 at 38671). In general, EPA 

sets MCLs, the enforceable contaminant 

levels, as close as feasible to the 

nonenforceable MCLGs.

In its arsenic rule (65 FR 38888), EPA 

proposed an MCL of 0.005 mg/L and 

requested comment on the alternate 

MCLs of 0.003 mg/L, 0.010 mg/L, and 

0.020 mg/L for arsenic in drinking 

water. However, after conducting 

reanalysis of costs, benefits, and health 

risk reduction, and factoring in the 

uncertainties in these analyses and the 

degree and nature of risk, EPA 

established an MCL of 0.01 mg/L in the 

arsenic rule. EPA believed the final 

MCL of 0.01 mg/L represents the level 

that best maximizes health risk 

reduction benefits at a cost that is 

justified by the benefits and that other 

regulatory options considered in the 

proposal did not satisfy the statutory 

requirements of section 1412(b)(6), 

Additional Health Risk Reduction and 

Cost Considerations, of SDWA (66 FR 

6976 at 7023).

On March 25, 2003 (68 FR 14502 at 

14503), EPA revised the rule text in its 

January 2001 final rule that established 

the 10 ppb arsenic drinking water 

standard to express the standard as 

0.010 mg/L, in order to clarify the 

implementation of the original rule. 

EPA made this change in response to a 

concern raised by a number of States 

and other stakeholders that State laws 

adopting the Federal arsenic standard as 

0.01 mg/L might allow rounding of 

monitoring results above 0.01 mg/L so 

that the effective standard (in 

consideration of rounding of results) 

would be 0.014 mg/L (or 14 ppb), not 

0.010 mg/L (10 ppb).

III. FDA Standards

A. The Agency’s Approach to the 

Bottled Water Quality Standards 

Established Under Section 410 of the 

Act

Under section 401 of the act (21 

U.S.C. 341), the agency may issue a 

regulation establishing a standard of 

quality for a food under its common or 

usual name, when in the judgment of 

the Secretary of Health and Human 

Services such action will promote 

honesty and fair dealing in the interest 

of consumers. On November 26, 1973 

(38 FR 32558), FDA established a 

quality standard for bottled water that is 

set forth in § 165.110 (21 CFR 165.110).

Producers of bottled water are 

responsible for assuring, through 

appropriate manufacturing techniques 

and sufficient quality control 

procedures, that all bottled water 

products introduced or delivered for 

introduction into interstate commerce 

comply with the quality standard 

(§ 165.110(b)). Bottled water that is of a 

quality below the prescribed standard is 

required by § 165.110(c) to be labeled 

with a statement of substandard quality. 

Moreover, any bottled water containing 

a substance at a level that causes the 

food to be adulterated under section 

402(a)(1) of the act (21 U.S.C. 342(a)(1)) 

is subject to regulatory action, even if 

the bottled water bears a label statement 

of substandard quality.

FDA has traditionally fulfilled its 

obligation under section 410 of the act 

to respond to EPA’s issuance of 

NPDWRs by amending the quality 

standard regulations for bottled water 

introduced or delivered for introduction 

into interstate commerce to maintain 

compatibility with EPA’s drinking water 

regulations. In general, FDA believes 

that, with few exceptions, EPA 

standards for contaminants in drinking 

water are appropriate as allowable 

levels for contaminants in the quality 

standard for bottled water when bottled 

water may be expected to contain the 

same contaminants.

FDA generally has not duplicated the 

efforts of EPA in judging the adequacy 

of MCLs or treatment techniques in 

NPDWRs for contaminants when 

determining their applicability to 

bottled water in order to protect the 

public health. FDA believes that, in 

general, it would be redundant for FDA 

to reevaluate the drinking water 

standards prescribed by EPA. Further, 

because bottled water is increasingly 

used in some households as a 

replacement for tap water, consumption 

patterns considered by EPA for tap 

water can be used as an estimate for the 

maximum expected consumption of 

bottled water by some individuals. 

Therefore, FDA’s view is that generally 

in cases where bottled water is subject 

to the same contaminants as tap water, 

FDA should establish standard of 

quality levels in bottled water at the 

same levels that EPA establishes as 

MCLs for such contaminants in tap 

water.

B. Quality Standard for Arsenic

The quality standard for bottled 

water, as set forth in 

§ 165.110(b)(4)(i)(A), prescribes that 

bottled water shall not contain arsenic 

in excess of 0.05 mg/L.

FDA has evaluated the MCL for 

arsenic established by EPA for drinking 

water. FDA has tentatively concluded 

that EPA’s MCL for arsenic, as a 

standard of quality level for bottled 

water, is adequate for the protection of 

public health. Certain waters used for 

bottled water may be expected to 

contain arsenic; thus, FDA believes that 

adopting EPA’s MCL for arsenic will 

ensure that the quality of bottled water 

is equivalent to the quality of public 

drinking water that meets EPA 

standards.

Therefore, FDA is proposing to 

establish in § 165.110(b)(4)(iii)(A), 

which includes allowable levels for 

inorganic substances, an allowable level 

for arsenic at 0.010 mg/L and remove 

the existing entry for arsenic in 

§ 165.110(b)(4)(i)(A).

C. Analytical Methods for Arsenic

In the arsenic rule, EPA listed the 

analytical methods that it had approved 

for use by public water systems to 

determine compliance with the arsenic 

MCLs (66 FR 6976 at 6988 to 6989). 

Therefore, FDA is proposing in new 

§ 165.110(b)(4)(iii)(E)(14) to incorporate 

by reference EPA approved analytical 

methods (66 FR 6976 at 6988) for 

determining compliance with the 

quality standard for arsenic in bottled 

water. FDA believes that these methods 

70084 Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 

are sufficient to use for determining the 

level of arsenic in bottled water.

D. Monitoring and Recordkeeping 

Provisions of CGMP Regulations for 

Bottled Water

FDA has established CGMP 

regulations for bottled water in part 129 

(21 CFR part 129). Under 

§ 129.35(a)(3)(i), source water must be 

analyzed by the plant as often as 

necessary, but at a minimum frequency 

of once each year for chemical 

contaminants. Bottlers would be 

required to test their source water as 

often as necessary, but at least once each 

year for arsenic, unless the bottlers meet 

the provisions in § 129.35(a)(4) for 

source water monitoring exemptions. 

Further, to ensure that a plant’s 

production complies with applicable 

standards, § 129.80(g)(2) requires 

chemical analysis by the plant, at least 

annually, of a representative sample 

from a batch or segment of a continuous 

production run for each type of bottled 

water produced during a day’s 

production. Under § 129.80(h), records 

of analytical test results for 

contaminants shall be maintained at the 

plant for not less than two years and 

shall be available for official review at 

reasonable times. Therefore, once this 

rule becomes effective, bottlers would 

be required to test their finished bottled 

water products at least once a year for 

arsenic and maintain a record of the 

arsenic test results for at least two years. 

In addition, bottled water must comply 

with the allowable levels for arsenic in 

the quality standard for bottled water 

(§ 165.110(b)(4)(iii)(A)) unless the label 

bears a statement of substandard quality 

under § 165.110(c). As stated in 

§ 165.110(d), bottled water is deemed 

adulterated if it contains a substance at 

a level considered injurious to health 

under section 402(a)(1) of the act.

IV. Environmental Impact

The agency has determined under 21 

CFR 25.32(a) that this action is of a type 

that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required.

V. Economic Impact

A. Regulatory Impact Analysis

FDA has examined the economic 

implications of this proposed rule as 

required by Executive Order 12866. 

Executive Order 12866 directs agencies 

to assess all costs and benefits of 

available regulatory alternatives and, 

when regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health, 

public safety, and other advantages; 

distributive impacts; and equity). 

Executive Order 12866 classifies a rule 

as significant if it meets any one of a 

number of specified conditions, 

including: Having an annual effect on 

the economy of $100 million, adversely 

affecting a sector of the economy in a 

material way, adversely affecting 

competition, or adversely affecting jobs. 

A regulation is also considered a 

significant regulatory action if it raises 

novel legal or policy issues. Office of 

Management and Budget (OMB) has 

determined that this proposed rule is a 

significant regulatory action as defined 

by Executive Order 12866.

1. Need for Regulation

In the Federal Register of January 22, 

2001 (66 FR 6976), EPA published a 

final rule on arsenic in drinking water. 

This rulemaking finalized a proposed 

rule that EPA published in the Federal 

Register of June 22, 2000 (65 FR 38888). 

Under section 410 of the act, when EPA 

issues a regulation establishing an MCL 

for a particular contaminant in drinking 

water, we are required to issue a 

standard of quality regulation governing 

that contaminant in bottled water or 

make a finding that such a regulation is 

unnecessary to protect the public 

health. Our quality standard must also 

include appropriate monitoring 

requirements. If we do not issue a 

quality standard for arsenic in bottled 

water by 180 days before the effective 

date of EPA’s NPDWR or make a finding 

that such a regulation is not necessary 

to protect the public health, then EPA’s 

regulation becomes applicable to bottled 

water as well as drinking water.

We are proposing to amend the 

quality standard for arsenic in bottled 

water rather than taking no action to 

allow EPA’s NPDWR for arsenic to 

become applicable to bottled water 

because the costs and benefits of 

requiring any given maximum arsenic 

level may be different for bottled water 

than for drinking water. For detailed 

information on FDA’s objectives, legal 

basis, and compliance requirements for 

this rule, see section III in the 

SUPPLEMENTARY INFORMATION of this 

document.

2. Regulatory Options

We considered five regulatory options 

in this analysis:

• Reestablish a quality standard for 

arsenic in bottled water that maintains 

the current allowable level of 0.05 mg/

L.

• Take no action. Under this option, 

EPA’s regulation on arsenic in drinking 

water would become applicable to 

bottled water.

• Establish a quality standard for 

arsenic in bottled water that adopts 

EPA’s MCL for arsenic in drinking water 

of 0.010 mg/L. Under this option, 

bottled water producers would be 

subject to CGMP monitoring 

requirements in §§ 129.35 and 129.80.

• Establish a quality standard for 

arsenic in bottled water that sets the 

allowable level of arsenic at 0.02 mg/L.

• Establish a quality standard for 

arsenic in bottled water that sets the 

allowable level of arsenic at 0.005 mg/

L.

We request comments on any other 

reasonable regulatory option that we 

may have overlooked.

Data and Assumptions Applicable to 

all Options

(1) The Dun’s Market Identifiers 

database lists 378 establishments under 

North American Industry Classification 

System (NAICS) code 312112 Bottled 

Water Manufacturing. This corresponds 

to 318 firms after restricting 

establishments to headquarters, ultimate 

locations, or single establishments (Ref. 

1).

(2) We assume that the regulatory 

options we consider will not affect the 

organoleptic qualities of bottled water 

and thus will not reduce the value that 

consumers place on bottled water. The 

cost of the regulation will be limited to 

the direct cost of abatement, monitoring, 

and other compliance activity.

(3) We request comments on our 

estimate of the benefits and costs 

generated by the various regulatory 

options and on the assumptions and 

data on which we have based our 

estimates.

Option One—Reestablish a quality 

standard for arsenic in bottled water 

that maintains the current allowable 

level of 0.05 mg/L. We consider this 

option to be the baseline for this 

analysis. Therefore, by convention, we 

define the costs and benefits of this 

option to be zero. Usually, we define the 

baseline to be the option of taking no 

action because it implies the 

continuation of the current regulatory 

environment. However, in this case, 

taking no action implies a change in the 

regulatory environment because it 

would mean that EPA’s drinking water 

regulations would be applied to bottled 

water.

Option Two—Take no action.

Benefits of Option Two

If we take no action, then EPA’s 

regulations governing arsenic in 

drinking water would become 

applicable to bottled water. EPA 

Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 70085

characterized the benefit of their 

regulation revising the MCL for arsenic 

in drinking water in terms of a 

reduction in adverse health effects and 

a reduction in the need for consumers 

to take relatively costly steps, such as 

purchasing bottled water, to reduce 

their exposure to arsenic. According to 

EPA’s analysis, epidemiological studies 

have found that arsenic ingestion is 

associated with an increased risk of 

cancer and a variety of other adverse 

health effects. The relevant forms of 

cancer include skin, liver, bladder, 

kidney, and lung. The other adverse 

health effects include cardiovascular, 

pulmonary, immunological, 

neurological, endocrine, reproductive, 

and developmental effects (Ref. 2). 

However, EPA was only able to find 

sufficient information to quantify the 

benefits associated with reductions in 

the incidence of bladder and lung 

cancer. We have also limited our 

quantified estimate of benefits to these 

two types of cancer because we have 

also not found any information that 

would allow us to quantify the benefits 

from reducing other types of adverse 

health effects.

Cases of Cancer Avoided

Exposure. EPA estimated the mean 

daily average per capita consumption of 

community drinking water in the 

United States to be 1 L/person/day and 

the mean daily average per capita 

consumption of total water, which 

includes bottled water, to be 1.2 L/

person/day. Therefore, EPA found that 

bottled water represents approximately 

17 percent of the mean daily average per 

capita consumption of water from all 

sources (Ref. 3).

Risk and valuation of risk. EPA 

estimated the number of bladder and 

lung cancer cases that they will 

eliminate by reducing the MCL for 

arsenic in drinking water from 0.05 mg/

L to 0.010 mg/L. The lower bound of 

their estimated range of cases did not 

include exposure to arsenic in bottled 

water, but the upper bound did include 

exposure to arsenic in bottled water. We 

extrapolated the number of cancer cases 

that would be eliminated if EPA’s 

regulations were applied to bottled 

water using EPA’s estimates for total 

water and bottled water consumption. 

We multiplied EPA’s upper bound 

estimate by 17 percent ([0.2 L/person/

day bottled water consumption]/[1.2 L/

person/day total water consumption]), 

and we multiplied their lower bound 

estimate by 20 percent ([0.2 L/person/

day bottled water consumption])/[(1.2 

L/person/day total water consumption - 

0.2 L/person/day bottled water]). Under 

this approach, we estimate that applying 

EPA’s arsenic regulations to bottled 

water would eliminate between 4.3 and 

5.1 fatal cases of cancer per year and 

between 3.2 and 4.4 nonfatal cases of 

cancer per year. We used a range of $5 

to $6.5 million for the value of a 

statistical life (VSL) to value this 

reduction in health risks. This range 

includes the VSL of $6.1 million that 

EPA used in their analysis. We used 

EPA’s estimate of $607,162 for the value 

of avoiding a nonfatal case of bladder or 

lung cancer. Applying these values to 

our estimated range of eliminated 

adverse events, we estimate that the 

benefit of applying EPA regulations to 

bottled water would be $23 to $36 

million per year.

Sensitivity analysis. EPA considered a 

number of other factors in a sensitivity 

analysis. These factors included various 

potential latency periods for the 

relevant types of cancer (5, 10, or 20 

years), the growth of income over the 

latency period using a range of income 

elasticity of demand for the willingness 

to pay to reduce the risk of death of 

between 0.22 and 1.0, discounting over 

the latency period (3 and 7 percent), and 

corrections for differences in 

voluntariness and controllability of the 

risks from arsenic in water and the risks 

that formed the basis of their VSL. The 

income elasticity of demand for 

willingness to pay to reduce risk of 

death is the percent increase in 

willingness to pay to reduce risk of 

death for every 1 percent change in 

income. Accounting for these issues 

results in an adjusted VSL of $1.72 to 

$6.25 million (Ref. 4). The low end of 

the range is based on a latency period 

of 20 years, adjusting for the growth of 

income over the latency period at an 

income elasticity of 0.22, discounting at 

7 percent over the latency period, and 

adjusting for differences in 

voluntariness and controllability. The 

high end of the range is based on a 

latency period of 5 to 20 years (no effect 

on estimate) with only an adjustment for 

income growth over the latency period 

at an income elasticity of 1.0. The low 

end of the adjusted range of VSL falls 

outside the range of $5 to $6.5 million 

that we used for the VSL in the previous 

section. Expanding the range of 

estimated benefits to incorporate this 

adjusted lower bound results in a range 

of estimated benefits of $9 to $36 

million per year.

Costs of Option Two

Abatement. In order to estimate 

abatement costs, we must first estimate 

the number of bottled water 

establishments producing water having 

arsenic levels over EPA’s revised MCL 

of 0.010 mg/L. EPA estimated that 5.3 

percent of community water systems 

using ground water sources produce 

water with arsenic levels higher than 

0.010 mg/L (Ref. 5). Most bottled water 

establishments obtain their water from 

either a community water system or a 

ground water system (66 FR 16858 at 

16863; March 28, 2001). Bottled water 

establishments using community water 

systems would be using water that falls 

under EPA’s drinking water regulations 

irrespective of our findings on bottled 

water. If the water systems were not in 

compliance with EPA’s regulations, 

then the bottled water establishments 

might need to take steps to bring the 

water into compliance with EPA 

regulations. However, in the long run, 

abatement costs should devolve onto the 

community water system. We do not 

know how many bottled water 

establishments using community water 

systems would need to take short-term 

abatement action on their own behalf. 

About 75 percent of bottled water 

establishments use water that does not 

come from a community water system 

(66 FR at 16863, March 28, 2001). The 

cost for bottled water firms using 

community water systems will probably 

be lower than the costs for bottled water 

firms using ground water sources 

because community water systems 

generally already will be in compliance 

with EPA’s drinking water regulations. 

However, to simplify the analysis, we 

have based our estimated costs on the 

assumption that all bottled water 

establishments use ground water 

sources. Based on EPA’s estimate of 

arsenic levels in ground water sources 

used by community water systems, we 

assume that 5.3 percent of bottled water 

establishments currently use source 

water with arsenic levels higher than 

0.010 mg/L. Based on these assumptions 

and estimates, we estimate that 20 

bottled water establishments would face 

additional arsenic abatement costs if 

EPA’s regulations revising the MCL for 

arsenic to 0.010 mg/L were applied to 

bottled water.

EPA’s analysis estimated the annual 

costs associated with thirteen different 

methods of reducing arsenic to a level 

of 0.010 mg/L based on the initial 

arsenic concentration and the size of the 

water system involved, defined in terms 

of the number of people served by that 

system (Ref. 6). We have insufficient 

information to determine how many of 

the affected bottled water 

establishments would adopt each of the 

potential treatment methods. If any 

establishments could choose any 

treatment method, then we would base 

our cost estimate on the least costly 

treatment method. However, there may 

be technical reasons why a given 

establishment cannot adopt certain 

70086 Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 

treatment methods or cannot adopt 

them at the costs estimated by EPA. 

Therefore, we have used the average 

cost across all treatment methods. EPA 

reported cost results for two different 

initial arsenic concentrations: 0.011 mg/

L and 0.050 mg/L. We do not know the 

distribution of initial concentrations of 

arsenic in bottled water establishments. 

We have used these two initial 

concentrations to estimate a range of 

treatment costs. We present our cost 

estimates in table 1 of this document. 

The annual costs are based on 

annualizing one time costs using an 

interest rate of 7 percent over 20 years 

and adding the annual costs. The costs 

are reported in 1999 dollars. Rounding 

to the nearest million, we estimate 

abatement costs to be approximately $7 

to $11 million per year.

TABLE 1.—ABATEMENT COSTS

Number of Establishments Annual Cost Per Establishment Total Annual Cost 

20 $565,925 $11,337,739

20 $366,758 $7,347,620

Testing. In order to consider the 

incremental change resulting from 

EPA’s testing requirements, we must 

consider current testing requirements. 

Our current regulations require bottled 

water establishments to analyze source 

water for arsenic as often as necessary 

to ensure compliance with the 

maximum allowable level of arsenic but 

at least once per year, unless the 

establishments meet the provisions in 

§ 129.35(a)(4) for source water 

monitoring exemptions. The exemptions 

most relevant to arsenic testing allow 

establishments using community water 

systems to use the test results or 

compliance certifications from those 

systems in lieu of testing the source 

water themselves and allow firms that 

do not use public water systems as the 

source of their water to reduce the 

frequency of testing if they can 

document that such a reduction is 

consistent with a State-issued waiver 

under EPA regulations. As we discussed 

previously in this document, our cost 

estimates are based on the simplifying 

assumption that all bottled water 

establishments use ground water 

sources rather than community water 

systems. Therefore, we have not 

adjusted the estimated number of tests 

because of the exemption for 

establishments that use community 

water systems. We do not know how 

many bottled water establishments 

currently face reduced testing 

requirements because they are able to 

document that such a reduction is 

consistent with a State-issued waiver 

under EPA regulations. However, it is 

unlikely that all establishments qualify 

for such a waiver. Therefore, we assume 

that between 0 and 90 percent of bottled 

water establishments obtain waivers in 

any given year and will therefore not 

need to test source water for arsenic in 

that year. Finally, we assume that 

establishments that do not meet the 

exemption test for arsenic once per year. 

In addition to source water testing, we 

also require bottled water 

establishments to analyze at least once 

a year a batch or segment of a 

continuous production run for each type 

of bottled water produced during a day’s 

production. We assume that each 

bottled water establishment produces 

only one type of bottled water. Based on 

these assumptions, we estimate that 

bottled water establishments 

collectively run 416 to 756 tests for 

arsenic per year.

EPA’s drinking water regulations 

require ground water systems to test for 

arsenic once every 3 years. If a test 

shows a violation, then that system 

must test for arsenic once every 3 

months until the State determines that 

the system is reliably and consistently 

below the MCL for arsenic or until the 

system installs treatment technology. 

However, States can only determine that 

a ground water system is reliably and 

consistently below the MCL if that 

system has taken at least two samples at 

3-month intervals. We do not know how 

many bottled water establishments 

might fail a test and need to take 

additional tests, nor do we know how 

many additional tests beyond the 

mandatory two such tests States would 

require before allowing such 

establishments to resume testing once 

every 3 years. We estimated above that 

5.3 percent of firms would need to take 

abatement action to reduce arsenic 

levels to 0.010 mg/L. However, we 

expect that most bottled water 

establishments in any given year would 

pass the required tests. Therefore, we 

assume that between 0 and 10 percent 

of establishments that do not have 

waivers will be testing on a 3-month 

basis during a given year. In addition, 

under EPA’s regulations, bottled water 

establishments would be able to apply 

for a 9-year waiver from the testing 

requirements, which the States may 

grant if the establishment demonstrates 

adequate source water protection by 

completing a vulnerability assessment 

and also demonstrates that three 

previous samples were below the 

maximum contaminant level. We do not 

know how many bottled water 

establishments will request waivers and 

how many of those waivers States will 

grant. However, it is unlikely that all 

establishments would qualify for such a 

waiver. Therefore, we assume that 

between 0 and 90 percent of facilities 

will obtain a waiver and will therefore 

not need to test for arsenic in a given 

year. The remaining facilities that do 

not have waivers will be testing on a 3-

year basis. Based on these assumptions, 

we estimate that bottled water 

establishments would collectively run 

approximately 5 to 101 tests for arsenic 

per year under EPA’s regulation. 

Therefore, we estimate that adopting 

EPA’s regulations would result in the 

elimination of between 163 and 745 

tests per year.

Finally, EPA regulations require that 

ground water systems must begin testing 

by the end of 2007. Therefore, if EPA 

regulations were to become effective for 

bottled water at the end of 2004, then 

bottled water establishment would have 

a 3-year period during which they 

would not be required to test for arsenic 

by either us or EPA.

For community water systems, EPA 

assumed that collecting a sample and 

reporting a sample would each require 

1 hour of the system operator’s time. 

EPA estimated the hourly rate of the 

system operator to be approximately $15 

for systems serving less than 3,000 

customers. EPA also assumed that all 

systems are already equipped to collect 

samples, so that no system would need 

to install taps, repipe wells, or take 

other actions to make sampling possible. 

Finally, EPA assumed that systems 

would utilize one of two laboratory 

methods: (1) Stabilized temperature 

platform graphite furnace atomic 

absorption (STP–GFAA) or (2) graphite 

furnace atomic absorption (GFAA) (Ref. 

7). They estimated that both techniques 

cost $40 per sample. Therefore, they 

found the cost per sample to be 

approximately $70. We assume that 

Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 70087

bottled water establishments would face 

similar monitoring costs.

Based on the difference in the current 

testing requirements under our 

regulations and EPA’s drinking water 

regulations, we estimate that if EPA’s 

regulations on arsenic in drinking water 

became applicable to bottled water it 

would reduce arsenic testing costs by 

$30,000 to $53,000 per year for the first 

3 years and by $11,000 to $52,000 for 

every year thereafter. These costs 

reductions round to $0 when rounded to 

the nearest million.

State monitoring costs. EPA also 

discussed monitoring costs accruing to 

States for recording test sample results, 

issuing violation letters, and reviewing 

waiver applications. EPA estimated that 

for community water systems serving 

less than 10,000 customers, States 

would require 1 hour to record a testing 

result, 4 hours to issue a violation letter, 

and 8 hours to review a waiver 

application. In all cases, EPA estimated 

the relevant wage rate to be $41.47 per 

hour. We estimated the enforcement 

costs if States were to enforce EPA’s 

arsenic regulations for bottled water 

establishments based on EPA’s costs 

estimates for community water systems 

and our estimate of the number of tests, 

violative tests, and waiver applications 

that would be generated by these 

establishments, which we discussed in 

the preceding section. However, for the 

number of waiver applications, we 

assumed that only one-ninth of the 

establishments that we assumed would 

be operating under an approved 9-year 

waiver in any given year actually 

applied for that waiver in that year. 

Under these assumptions, we assume 

State enforcement costs would be 

approximately $500 to $29,000 per year. 

This cost rounds to $0 when rounded to 

the nearest million.

Administrative costs. EPA also 

estimated administrative costs relating 

to establishing and maintaining the 

programs necessary to comply with the 

revised arsenic standard and the new 

monitoring requirements. For 

community water systems having fewer 

than 10,000 customers, EPA estimated 

that water system employees would 

spend 8 hours on reading and 

understanding the rule and 16 hours on 

training employees to comply with the 

rule. Again, EPA estimated an average 

hourly wage of $15.03 for the employees 

of such systems. Applying these cost 

estimates to 378 bottled water 

establishments results in an estimated 

one-time administrative cost of 

approximately $137,000. This cost 

rounds to $0 million.

EPA also estimated one-time 

administrative costs for State activity 

such as developing and adopting State 

regulations that meet the new Federal 

arsenic requirements and training 

community water systems in the new 

regulations. EPA estimated these costs 

on the basis of full-time equivalents 

(FTEs), which they assumed to cost 

$64,480, including overhead and fringe 

benefits. EPA estimated that States 

would require 0.2 FTEs for regulation 

adoption and program development, 0.5 

FTEs for system training and technical 

assistance for both community water 

systems and ‘‘non-transient noncommunity water systems,’’ and 0.12 

FTEs for system staff training. We have 

assumed that States would face 

comparable costs in developing a 

system to apply EPA’s regulations to 

bottled water establishments. However, 

we have adjusted the total FTEs to 

include systems training and technical 

assistance for just one category of 

entities, which in this case is bottled 

water establishments. Under these 

assumptions, one-time State 

administrative costs would be 

approximately $4 million.

Public notification costs. EPA 

regulations require community water 

systems to prepare and distribute public 

notifications of water analyses. EPA did 

not analyze the costs of these 

requirements in their analysis of their 

final rule on arsenic in drinking water 

because they already require community 

water systems to provide these analyses. 

However, if EPA’s regulations were to 

be applied to bottled water 

establishments, then bottled water 

establishments would also need to 

prepare and send out public 

notifications of water analyses. It is not 

clear how EPA would adapt these 

regulations to bottled water 

establishments because such 

establishments do not have a simple 

way to identify their customers for 

purposes of sending out public 

notifications. Therefore, we have not 

attempted to quantify this cost.

Total Costs and Benefits of Option 

Two

Based on the preceding analysis, we 

estimate that taking no action and 

allowing EPA’s arsenic regulations to 

become applicable to bottled water 

would generate quantified benefits of $9 

to $36 million per year, quantified costs 

of $11 to $15 million in the first year 

and $7 to $11 million in every year after 

the first year, plus any costs associated 

with public notification requirements.

Option Three—Establish a quality 

standard for arsenic in bottled water 

that adopts EPA’s MCL for arsenic in 

drinking water of 0.010 mg/L.

If we establish a quality standard 

regulation for arsenic in bottled water 

that adopts EPA’s revised MCL for 

arsenic in drinking water but maintains 

our testing requirements and 

enforcement mechanisms, then we 

would maintain the quantified benefits 

of $9 to $36 million per year and the 

abatement costs of $7 million to $11 

million that we estimated for Option 

Two. In addition, this option would 

generate some additional testing costs 

for firms that fail to meet the level of 

0.010 mg/L but that would have met the 

level of 0.05 mg/L. These additional 

testing costs would probably only take 

place during the initial transition period 

from 0.05 mg/L to 0.010 mg/L. Once 

firms adopt abatement procedures and 

establish the effectiveness of those 

procedures, then annual testing costs 

would probably be similar to current 

testing costs. We do not have sufficient 

information to estimate how many 

additional tests this option might 

generate. However, based on an 

estimated cost of $70 per sample that we 

discussed under Option Two, any 

additional testing costs would probably 

be small.

Option Four—Establish a quality 

standard for arsenic in bottled water 

that sets the allowable level of arsenic 

at 0.02 mg/L.

Benefits. Using the same approach 

that we used in Option Two, but 

applying EPA’s benefits estimates for a 

revised MCL of 0.02 mg/L, we estimate 

that this option would eliminate 

between 1.9 and 2.0 fatal cases of cancer 

per year and between 1.5 and 1.7 

nonfatal cases of cancer per year. This 

corresponds to a quantified benefit 

between $4 to $14 million per year 

under the expanded range of adjusted 

VSL estimates that we discussed in the 

sensitivity analysis section of Option 

Two.

Costs. EPA did not provide detailed 

cost estimates for an MCL of 0.02 mg/

L; therefore, we cannot estimate costs 

using the same approach that we used 

in Option Two. However, EPA’s 

estimate of the total abatement costs 

under this option was 36 percent of the 

estimated total abatement costs under 

an MCL of 0.010 mg/L (Ref. 8). If this 

relationship held for bottled water, then 

the abatement costs of this option would 

be $3 to $4 million per year. In addition, 

this option would generate some 

additional testing costs for firms that fail 

to meet the level of 0.02 mg/L but that 

would have met the level of 0.05 mg/L. 

These additional testing costs would 

probably only accrue during the initial 

transition period from 0.05 mg/L to 0.02 

mg/L. Once firms adopt abatement 

procedures and establish the 

effectiveness of those procedures, then 

annual testing costs would probably be 

70088 Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 

similar to current testing costs. We do 

not have sufficient information to 

estimate how many additional tests this 

option might generate. However, any 

additional testing costs would probably 

be small.

Option Five—Establish a quality 

standard for arsenic in bottled water but 

that sets the allowable level of arsenic 

at 0.005 mg/L.

Benefits. Using the same approach 

that we used in Option Two, but 

applying EPA’s benefits estimates for a 

revised MCL of 0.005 mg/L, we estimate 

that this option would eliminate 

between 5.8 and 9.1 fatal cases of cancer 

per year and between 4.4 and 7.9 

nonfatal cases of cancer per year. This 

corresponds to a quantified benefit of 

$13 to $64 million per year under the 

expanded range of adjusted VSL 

estimates that we discussed in the 

sensitivity analysis section of Option 

Two.

Costs. EPA did not provide detailed 

cost estimates for an MCL of 0.005 mg/

L; therefore, we cannot estimate costs 

using the same approach that we used 

in Option Two. However, EPA’s 

estimate of the total abatement costs 

under this option was 233 percent of the 

estimated total abatement costs under 

an MCL of 0.010 mg/L (Ref. 8). If this 

relationship held for bottled water costs, 

then the abatement costs of this option 

would be $17 to $26 million. In 

addition, this option would generate 

additional testing costs for firms that fail 

to meet the level of 0.005 mg/L but that 

would have met the level of 0.05 mg/L. 

These additional testing costs would 

probably only accrue during the initial 

transition period from 0.05 mg/L to 

0.005 mg/L. Once firms adopt abatement 

procedures and establish the 

effectiveness of those procedures, then 

annual testing costs would probably be 

similar to current testing costs. We do 

not have sufficient information to 

estimate how many additional tests this 

option might generate. However, any 

additional testing costs would probably 

be small.

Summary of Benefits and Costs for 

Regulatory Options

We present a summary of the 

estimated costs and benefits in table 2 

of this document. Option 3 (adopting 

EPA’s MCL) appears to generate higher 

net benefits than either maintaining the 

current allowable level of arsenic in 

bottled water of 0.05 mg/L or taking no 

action and allowing EPA’s regulations to 

become applicable to bottled water. The 

estimated net benefits of adopting an 

allowable level of 0.010 mg/L overlaps 

with the estimated benefits of adopting 

an allowable level of 0.05 mg/L. The 

lower end of the range of potential net 

benefits is higher for 0.010 mg/L, but the 

higher end of the range is higher for 0.05 

mg/L.

TABLE 2.—SUMMARY OF COSTS AND BENEFITS ($ MILLIONS)

Option Cost Benefit Net Benefit 

Option 1—Maintain 

0.05 mg/L

Baseline Baseline Baseline

Option 2—Take no action$11 to $15 in first year, $7 to $11 

every year after first year, plus 

public notification costs

$9 to $36 plus unquantified benefits -$6 to $25 minus notification costs plus 

unquantified benefits in first year, $4 to 

$33 minus notification costs plus 

unquantified benefits in subsequent 

years

Option 3—Adopt 0.010 

mg/L

$7 to $11 $9 to $36 plus unquantified benefits -$2 to $29 plus unquantified benefits

Option 4—Adopt 0.02 

mg/L

$3 to $4 $4 to $14 plus unquantified benefits $0 to $11 plus unquantified benefits

Option 5—Adopt 0.005 

mg/L

$17 to $26 $13 to $64 plus unquantified benefits -$13 to $47 plus unquantified benefits

B. Small Entity Analysis

We have examined the economic 

implications of this proposed rule as 

required by the Regulatory Flexibility 

Act (5 U.S.C. 601–612). If a rule has a 

significant economic impact on a 

substantial number of small entities, the 

Regulatory Flexibility Act requires us to 

analyze regulatory options that would 

lessen the economic effect of the rule on 

small entities. We find that this rule 

would have a significant economic 

impact on a substantial number of small 

entities.

We discussed the compliance costs 

that bottled water establishments would 

face as a result of proposing to amend 

the quality standard regulation for 

arsenic in bottled water in the 

Regulatory Impact Analysis section of 

this document. In this Small Entity 

Analysis section, we discuss in greater 

detail the impact of the proposed 

regulatory action on small entities.

The Small Business Administration’s 

definition of a small business for NAICS 

code 312112 Bottled Water 

Manufacturing is an entity with 500 or 

fewer employees. Under this definition, 

82 percent of the bottled water firms 

(260 of 318) identified in the Dun’s 

Market Identifiers database are small 

firms (Ref. 1). Therefore, this rule would 

affect small bottled water 

manufacturers.

A trade magazine listed a preliminary 

estimate of total producer revenues for 

all U.S. bottled water manufacturers in 

2003 of $8,277 million (Ref. 9). 

According to this magazine, the top five 

bottled water firms accounted for 69 

percent of total wholesale dollar sales in 

2003. This suggests that 31 percent of 

total revenue, or $2,566 million, accrues 

to firms other than the five largest firms. 

We do not know the portion of this 

revenue that accrues specifically to 

small firms. If the revenue of the 53 

large firms other than the five largest 

firms were similar to the revenue of the 

260 small firms, then each small firm 

would have annual revenue of $8.2 

million. However, the revenue per firm 

of the large firms other than the five 

largest firms is probably greater than the 

revenue per firm of the small firms; so 

many small firms probably have annual 

revenue of less than $8.2 million. The 

1997 economic census also has some 

information relevant to estimating the 

revenue of small firms. A Census report 

based on this data suggests that the 

value of shipments per establishment 

for all establishments with less than 500 

employees ranged from approximately 

$0.6 million to $20.5 million in 1997 

Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 70089

(Ref. 10). To calculate this range, we 

subtracted the total value of shipments 

of all the establishments in the size 

categories for which the Census report 

provided value of shipment information 

from the total value of shipments for 

firms of all sizes to obtain the value of 

shipments of the establishments in the 

size categories for which the Census 

report did not provide value of 

shipments information. We then 

divided the resulting value by the 

number of establishments in the size 

categories for which the Census report 

did not produce value of shipments 

information. The Census report 

provided information on value of 

shipments based only per 

establishment. We do not know the 

average number of establishments per 

small firm; however, most small firms 

probably consist of only one 

establishment. The Census report did 

not provide information on revenue by 

establishment size. However, value of 

shipments is a reasonable proxy for 

revenue. Therefore, the estimate of the 

value of shipments per small 

establishment is probably a reasonable 

estimate of the revenue per small firms.

We do not know the profit rates of 

small firms. According to one account, 

the median profit rate across all Fortune 

500 firms in 2000 was approximately 5 

percent (Ref. 11). If we assume a profit 

margin of between 1 percent and 10 

percent, then each small firm would 

have annual profit of between 

approximately $0.01 million and $2.1 

million.

We do not have sufficient information 

to estimate the proportion of industry 

compliance costs that would be borne 

by small firms. In the preceding 

regulatory impact analysis, we 

estimated that 20 establishments would 

need to undertake arsenic abatement 

action if we chose Option 3, and we 

estimated that each establishment 

would face compliance costs of 

approximately $0.4 million to $0.6 

million, based on EPA’s cost estimates 

for community water systems. These 20 

establishments might belong to either 

large or small firms. Again, we assume 

that most small firms probably consist 

of only one establishment. Therefore, 

we estimate that 0 to 20 small firms 

would face compliance costs of 

approximately $0.4 million to $0.6 

million per year. Thus, some small firms 

may face annual compliance costs that 

exceed estimated annual profits or that 

represent a considerable portion of 

estimated annual profits.

To investigate the potential 

significance of these impacts, we 

entered these costs into a model 

prepared for us under contract by ERG. 

[Model for Estimating the Impacts of 

Regulatory Costs on the Survival of 

Small Businesses and its Application to 

Four FDA-Regulated Industries. Final. 

July 12, 2002.] The model is designed to 

estimate the percentage of small firms 

that would go out of business (i.e., go 

from a positive cash flow to a negative 

cash flow) because of given compliance 

costs if those costs accrued to all small 

firms in a given industry. However, 

these results can also be interpreted as 

the probability that any given small firm 

that faces those compliance costs will go 

out of business. According to this 

model, an annual cost of $0.4 million 

would generate a 56 percent probability 

that a small firm with less than 20 

employees that faced those costs would 

go out of business and a 10 percent 

probability that any firm with 20 to 499 

employees that faced those costs would 

go out of business, if the distribution of 

cash flow across firms fits the normal 

distribution. Similarly, an annual cost of 

$0.6 million would generate a 67 

percent probability that a small firm 

with less than 20 employees that faced 

those costs would go out of business 

and a 14 percent probability that any 

firm with 20 to 499 employees that 

faced those costs would go out of 

business, if cash flow across firms fits 

the normal distribution. Thus, the 

model suggests that these costs could 

have a significant impact on some firms 

under certain conditions. Therefore, in 

the absence of more detailed 

information on the distribution of 

revenues and costs and the profit 

margins of small firms, we find that this 

rule might have a significant economic 

impact on a substantial number of small 

entities. We request comments and 

information on the annual revenue and 

profit margins of small bottled water 

manufacturers and on the impact of this 

rule on those firms. We also request 

comments on our approach to 

estimating costs, which we discussed in 

the regulatory impact analysis under 

Option 2.

The primary regulatory option that 

would reduce the burden on small firms 

would be to allow them to produce 

bottled water with a higher allowable 

level of arsenic than we allow larger 

firms to produce. This would reduce 

yearly abatement costs, which represent 

most of the compliance costs of this 

rule. We could also reduce the number 

or frequency of tests that we require 

such firms to perform. However, that 

would have only a minor impact on 

estimated costs. In the preceding 

regulatory flexibility analysis, we 

considered the option of setting the 

allowable level of arsenic in bottled 

water to 0.02 mg/L rather than the 

proposed 0.01 mg/L. We estimated that 

this option would reduce total 

compliance costs to a range of $3 

million to $4 million per year. However, 

we did not discuss the number of 

establishments that would face these 

costs. EPA estimated that 2.0 percent of 

community water systems using ground 

water sources produce water with 

arsenic levels higher than 0.02 mg/L. 

(Ref. 5) We assumed in the regulatory 

impact analysis that all bottled water 

firms used ground water systems. Under 

this assumption, 2.0 percent of bottled 

water establishments, or 8 

establishments, currently use source 

water with arsenic levels higher than 

0.02 mg/L. Therefore, we estimate that 

0 to 8 small firms would face 

compliance costs of approximately $0.4 

million to $0.5 million per year. These 

per firm costs remain significant in 

relation to estimated per firm profits. 

The reduction in the impact on small 

firms under this option occurs because 

fewer small firms would face these 

costs.

However, allowing small firms to 

produce bottled water with a higher 

level of arsenic than we allow larger 

firms to produce might also reduce 

benefits. If all 20 of the establishments 

that we estimated would need to take 

abatement action to meet an allowable 

arsenic level of 0.01 mg/L were small 

firms, then setting the allowable arsenic 

levels for small firms to 0.02 mg/L 

would reduce benefits by the full 

amount that we discussed in the 

regulatory impact analysis in the 

context of setting the allowable arsenic 

levels for all firms to 0.02 mg/L rather 

than 0.01 mg/L. Specifically, it would 

reduce estimated benefits from a range 

of $9 million to $36 million plus 

unquantified benefits to a range of $4 

million to $14 million plus unquantified 

benefits. On the other hand, if none of 

the 20 establishments that we estimated 

would need to take abatement action to 

meet an allowable arsenic level of 0.01 

mg/L were small firms, then setting the 

allowable arsenic levels for small firms 

to 0.02 mg/L would have no impact on 

benefits. In that case, small firms would 

also face no compliance costs. We 

request comments on any other 

reasonable alternative that would 

reduce the burden of this rule on small 

entities.

We have not been able to identify any 

Federal rules that duplicate, overlap or 

conflict with the proposed rule. We 

currently regulate arsenic levels in 

bottled water. If we were to take no 

action, EPA’s NPDWR for arsenic would 

apply to bottled water.

70090 Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 

C. Unfunded Mandates

The Unfunded Mandates Reform Act 

of 1995 (Public Law 104–4), requiring 

cost-benefit and other analyses, in 

section 1531(a) defines a significant rule 

as ‘‘a Federal mandate that may result 

in the expenditure by State, local, and 

tribal governments in the aggregate, or 

by the private sector, of $100 million 

(adjusted annually for inflation) in any 

1 year.’’ We have determined that this 

proposed rule does not constitute a 

significant rule under the Unfunded 

Mandates Reform Act.

VI. Paperwork Reduction Act

FDA tentatively concludes that this 

proposed rule contains no collections of 

information. Therefore, clearance by 

OMB under the Paperwork Reduction 

Act of 1995 is not required.

VII. Federalism

FDA has analyzed this proposed rule 

in accordance with the principles set 

forth in Executive Order 13132. FDA 

has determined that the proposed rule, 

if finalized as proposed, would have a 

preemptive effect on State law. Section 

4(a) of the Executive order requires 

agencies to ‘‘construe * * * a Federal 

Statute to preempt State law only where 

the statute contains an express 

preemption provision, or there is some 

other clear evidence that the Congress 

intended preemption of State law, or 

where the exercise of State authority 

conflicts with the exercise of Federal 

authority under the Federal statute.’’

Section 403A(a)(1) of the act provides 

that ‘‘no State or political subdivision of 

a State may directly or indirectly 

establish under any authority or 

continue in effect as to any food in 

interstate commerce—(1) any 

requirement for a food which is the 

subject of a standard of identity 

established under section 401 that is not 

identical to such standard of identity or 

that is not identical to the requirement 

of section 403(g) * * *.’’ FDA has 

interpreted this provision to apply to 

standards of quality (21 CFR 

100.1(c)(4)). Although this proposed 

rule, if finalized as proposed, will have 

preemptive effect in that it would 

preclude States from issuing 

requirements for arsenic levels in 

bottled water that are not identical to 

the allowable level for arsenic as set 

forth in this proposed rule, this 

preemptive effect is consistent with 

what Congress set forth in section 403A 

of the act.

Section 4(c) of the Executive order 

further requires that ‘‘any regulatory 

preemption of State law shall be 

restricted to the minimum level 

necessary’’ to achieve the regulatory 

objective. Under section 410 of the act, 

not later than 180 days before the 

effective date of an NPDWR issued by 

EPA for a contaminant under section 

1412 of the SDWA (42 U.S.C. 300g-1), 

FDA is required to issue a standard of 

quality regulation for that contaminant 

in bottled water or make a finding that 

such a regulation is not necessary to 

protect the public health because the 

contaminant is contained in water in 

public water systems but not in water 

used for bottled water. Further, section 

410(b)(3) of the act requires a quality 

standard for a contaminant in bottled 

water to be no less stringent than EPA’s 

MCL and no less protective of the public 

health than EPA’s treatment techniques 

required for the same contaminant. On 

January 22, 2001, EPA issued an 

NPDWR containing an MCL for arsenic 

(66 FR 6976). FDA has determined that 

the MCL for arsenic that EPA 

established for public drinking water is 

appropriate as a standard of quality for 

bottled water, and is issuing this 

proposed regulation consistent with 

section 410 of the act.

Further, section 4(e) of the Executive 

order provides that ‘‘when an agency 

proposes to act through adjudication or 

rulemaking to preempt State law, the 

agency shall provide all affected State 

and local officials notice and an 

opportunity for appropriate 

participation in the proceedings.’’ Given 

the statutory framework of section 410 

of the act for bottled water, EPA’s 

issuance of an MCL for arsenic in public 

drinking water provided notice of 

possible FDA action for a standard of 

quality for arsenic in bottled water. FDA 

did not receive any correspondence 

from State and local officials regarding 

an arsenic standard for bottled water 

subsequent to EPA’s NPDWR on the 

MCL for arsenic. Moreover, FDA is not 

aware of any States that have 

requirements for arsenic in bottled 

water that would be affected by FDA’s 

decision to establish a bottled water 

quality standard for arsenic that is 

consistent with EPA’s standard for 

public drinking water. In addition, we 

are providing an opportunity for State 

and local officials to comment on FDA’s 

standard of quality for arsenic in bottled 

water in the context of this rulemaking. 

For the reasons set forth previously in 

this document, the agency believes that 

it has complied with all of the 

applicable requirements under the 

Executive order.

In conclusion, FDA has determined 

that the preemptive effects of the final 

rule are consistent with Executive Order 

13132.

VIII. Comments

Interested persons may submit to the 

Division of Dockets Management (see 

ADDRESSES) written or electronic 

comments regarding this document. 

Submit a single copy of electronic 

comments or two paper copies of any 

mailed comment, except that 

individuals may submit one paper copy. 

Comments are to be identified with the 

docket number found in brackets in the 

heading of this document. Received 

comments may be seen in the Division 

of Dockets Management between 9 a.m. 

and 4 p.m., Monday through Friday.

IX. Effective Date of the Related Final 

Rule

The agency intends to make any final 

rule based on this proposal effective 

January 23, 2006. The agency will 

publish a confirmation document for a 

final rule in the Federal Register no 

later than 180 days before the effective 

date. The agency is providing 180 days 

before the effective date to permit 

affected firms adequate time to take 

appropriate steps to bring their product 

into compliance with the standard 

imposed by the new rule.

X. References

The following references are on 

display in the Division of Dockets 

Management (see ADDRESSES) and may 

be seen by interested persons between 9 

a.m. and 4 p.m., Monday through 

Friday.

1. Puro, E., Memo to the Record, June 22, 

2004.

2. Arsenic in Drinking Water Rule 

Economic Analysis, Abt Associates Inc. for 

U.S. Environmental Protection Agency, EPA 

815–R–00–026, pp. 5–7, December 2000. 

Available on the internet on November 15, 

2004, at http://www.epa.gov/safewater/ars/

econ_analysis.pdf.

3. Ibid. pp. 5–9.

4. Ibid. Exhibit 5–12, pp. 5–30.

5. Ibid. Exhibit 4–10, pp. 4–12.

6. Ibid, pp. 6–1 to 6–38.

7. Ibid. pp. 6–14.

8. Ibid. Exhibit 6–10, pp. 6–28.

9. Rodwan, J. G., ‘‘Solid Gains Put Bottled 

Water in No. 2 Spot,’’ Bottled Water Reporter,

p. 17, April/May 2004.

10. Bottled Water Manufacturing, 1997 

Economic Census Manufacturing Industry 

Series, EC97M–3121B, 1997, U.S. Census 

Bureau, U.S. Department of Commerce, table 

4, p. 9.

11. Drug industry most profitable, survey. 

CNBC and the Wall Street JournalBusinesses, November 30, 2001.

List of Subjects in 21 CFR Part 165

Beverages, Bottled water, Food grades 

and standards, Incorporation by 

reference.

Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

Federal Register / Vol. 69, No. 231 / Thursday, December 2, 2004 / Proposed Rules 70091

authority delegated to the Commissioner 

of Food and Drugs, it is proposed that 

21 CFR part 165 be amended as follows:

PART 165—BEVERAGES

1. The authority citation for 21 CFR 

part 165 continues to read as follows:

Authority: 21 U.S.C. 321, 341, 343, 343–1, 

348, 349, 371, 379e.

2. Section 165.110 is amended by 

removing the entry for ‘‘Arsenic’’ in the 

table in paragraph (b)(4)(i)(A), by 

revising paragraph (b)(4)(iii)(A) and the 

introductory text of paragraph 

(b)(4)(iii)(E), and by adding paragraph 

(b)(4)(iii)(E)(14) to read as follows:

§ 165.110 Bottled water.

* * * * *

(b) * * *

(4) * * *

(iii) * * *

(A) The allowable levels for inorganic 

substances are as follows:

Contaminant Concentration in milligrams per liter (or as specified) 

Arsenic ..................................................................................................................... 0.010.

Antimony .................................................................................................................. 006.

Barium ...................................................................................................................... 2.

Beryllium .................................................................................................................. 0.004.

Cadmium .................................................................................................................. 0.005.

Chromium ................................................................................................................ 0.1.

Copper ..................................................................................................................... 1.0.

Cyanide .................................................................................................................... 0.2.

Lead ......................................................................................................................... 0.005.

Mercury .................................................................................................................... 0.002.

Nickel ....................................................................................................................... 0.1.

Nitrate ...................................................................................................................... 10 (as nitrogen).

Nitrite ........................................................................................................................ 1 (as nitrogen).

Total Nitrate and Nitrite ........................................................................................... 10 (as nitrogen).

Selenium .................................................................................................................. 0.05.

Thallium ................................................................................................................... 0.002.

* * * * *

(E) Analyses to determine compliance 

with the requirements of paragraph 

(b)(4)(iii)(A) of this section shall be 

conducted in accordance with an 

applicable method and applicable 

revisions to the methods listed in 

paragraphs (b)(4)(iii)(E)(1) through 

(b)(4)(iii)(E)(14) of this section and 

described, unless otherwise noted, in 

‘‘Methods for Chemical Analysis of 

Water and Wastes,’’ U.S. EPA 

Environmental Monitoring and Support 

Laboratory (EMSL), Cincinnati, OH 

45258 (EPA–600/4–79–020), March 

1983, which is incorporated by 

reference in accordance with 5 U.S.C. 

552(a) and 1 CFR part 51. Copies of this 

publication are available from the 

National Technical Information Service 

(NTIS), U.S. Department of Commerce, 

5825 Port Royal Rd., Springfield, VA 

22161, or may be examined at the 

Center for Food Safety and Applied 

Nutrition’s Library, Food and Drug 

Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, or at 

the Office of the Federal Register, 800 

North Capitol St. NW., suite 700, 

Washington, DC.

* * * * *

(14) Arsenic shall be measured using 

the following methods:

(i) Method 200.8—‘‘Determination of 

Trace Elements in Water and Wastes by 

Inductively Coupled Plasma-Mass 

Spectroscopy,’’ contained in the manual 

entitled ‘‘Methods for the Determination 

of Metals in Environmental Samples—

Supplement 1,’’ EPA/600/R–94/111, 

May 1994, which is incorporated by 

reference in accordance with 5 U.S.C. 

552(a) and 1 CFR part 51. Copies of this 

publication are available from NTIS, 

PB95–125472, U.S. Department of 

Commerce, 5825 Port Royal Rd., 

Springfield, VA 22161, or may be 

examined at the Center for Food Safety 

and Applied Nutrition’s Library, Food 

and Drug Administration, 5100 Paint 

Branch Pkwy., College Park, MD 20740, 

or at the Office of the Federal Register, 

800 North Capitol St. NW., suite 700, 

Washington, DC.

(ii) Method 200.9—‘‘Determination of 

Trace Elements by Stabilized 

Temperature Platform Graphite Furnace 

Atomic Absorption Spectrometry,’’

contained in the manual entitled 

‘‘Methods for the Determination of 

Metals in Environmental Samples—

Supplement 1,’’ EPA/600/R–94/111, 

May 1994, which is incorporated by 

reference in accordance with 5 U.S.C. 

552(a) and 1 CFR part 51. The 

availability of this incorporation by 

reference is given in paragraph 

(b)(4)(iii)(E)(14)(i) of this section.

* * * * *

Dated: October 6, 2004.

Jeffrey Shuren,

Assistant Commissioner for Policy.

[FR Doc. 04–26531 Filed 11–26–04; 4:44 pm]

BILLING CODE 4160–01–S

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117

[CGD05–04–209] 

RIN 1625–AA09

Drawbridge Operation Regulations; 

Elizabeth River-Eastern Branch, 

Norfolk, VA

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Coast Guard proposes to 

change the regulations that govern the 

operation of the Norfolk Southern (NS) 

Railroad Bridge (NS #V2.8) across 

Eastern Branch of the Elizabeth River, at 

mile 2.7, in Norfolk, VA. The proposed 

change would allow the NS #V2.8 

bridge to be operated from a remote 

location, and to be operated from a 

remote location, and to remain open for 

vessel traffic and only close for train 

crossings and periodic maintenance. 

This proposed rule would make the 

operation of the bridge more efficient, 

because currently the bridge only opens 

on signal, or on signal after notice.

DATES: Comments and related material 

must reach the Coast Guard on or before 

January 18, 2005.

ADDRESSES: You may mail comments 

and related material to Commander 

(obr), Fifth Coast Guard District, Federal 

Building, 1st Floor, 431 Crawford Street, 

Portsmouth, VA 23704–5004. The Fifth