Regulatory Flexibility Act Section 610 Review of the National Pollutant Discharge Elimination System (NPDES) Permit Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations (CAFOs)

Uni ted States Environmental Protection Agency Office of Water

June 3, 2014

1Results of Section 610 Review of the National Pollutant Discharge Elimination System Regulations and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations

Summary

The U.S. Environmental Protection Agency (EPA) completed its review of the 2003 National Pollutant Discharge Elimi nation System ( NPDES) Permit Regulation and Effluent Limitation Guidelines (ELG) and Standards for Concentrated Animal Feeding Operations (CAFOs) (the “2003 CAFO Rule”), pursuant to Section 610 of the Regulatory Flexibility Act (RFA). Section 610 of the RF A requires that an agency review, within 10 years of promulgation, each regulation that was determined to have, or will have, a significant economic impact on a substantial number of small entities. The EPA undertakes Section 610 reviews to determine whether a rule’s provisions as they relate to small entities should be continued unchanged, amended, or withdrawn. Upon completion of this review, the EPA has concluded that revisions or amendments to minimize economic impacts on small entities from the CAFO regulations are not warranted at this time.

The EPA promulgated the 2003 CAFO Rule on February 12, 2003. 1 This rule expanded the number of operations covered by the CAFO regulations, required all CAFOs to seek NPDES permit coverage, and included requirements to address the land application of manure from CAFOs. There have been two revisions to the regulations since 2003 , which were finalized in 2008 and 2012 . These revisions were due to court decisions based on a legal challenge to the 2003 rulemaking, and then a challenge to the 2008 rulemaking.

The EPA initiated its Section 610 review of the 2003 CAFO Rule’s impact on small entities on October 31, 2012. 2 The EPA solicited and considered comments on the following factors: (1) the continued need for the rule; (2) the nature of complaints or comments received from the public concerning the rule; (3) the complexi ty of the rule; (4) the extent to which the rule overlaps, duplicates, or conflicts with other f ederal, state, or local government rules; and (5) the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule since promulgation. The public comment period was scheduled originally to end on December 31, 2012, but was extended to March 1, 2013, in response to requests received for additional time to submit comments. 3

The EPA received 211 comment letters

, wh ich are available in the docket at www.regulations.gov

, Docket ID number EPA- HQ

- OW -2012-0813. Many comments received fell outside the scope of the review process required under Section 610 of the RFA for the 2003 CAFO Rule. Many of these comments discussed the 2008 or 2012 revisions to the CAFO regulations. Although the Section 610 review only needs to address the 2003 CAFO Rule, the EPA exercised its discretion to consider relevant comments on the 2008 and 2012 regulation revisions. Much of the CAFO program’s implementation since 2003 has been affected by these revisions and/or the decisions of the Second Circuit Court of Appeals in Waterkeeper Alliance v. EPA
, 4 and the Fifth Circuit Court of Appeals, in National Pork Producers Council v. EPA
, 5 which led to those regulatory revisions.

1 68 Fed. Reg. 7,175.
2 77 Fed. Reg. 65,840.

3 78 Fed. R eg. 277.
4 Waterkeeper Alliance et al. v. EPA
, 399 F.3d 486 (2d Cir. 2005).
5 National Pork Producers Council v. EPA , 635 F.3d 738 (5th Cir. 2011).

2Pursuant to Section 610 of the RFA , the EPA reviewed th e CAFO regulations to determine if they should be continued without change, or should be rescinded or amended to minimize adverse economic impacts on small entities. In promulgating the 2003 CAFO Rule, the EPA developed a Final Regulatory Flexib ility Analysis and took several steps to minimize impacts on small businesses, including regulatory revisions designed to focus on the largest producers. The Agency provided a detailed assessment of economic impacts of the regulations on small businesses a s part of the 2003 and 2008 economic analyses and determined that the requirements were economically feas ible for small businesses . In examining the burdens of the CAFO regulations on small entities during this Section 610 review, the EPA also revisited th e administrative burden analyses performed for the NPDES CAFO rulemakings since 2003, which showed that the overall burden on regulated facilities decreased

. Upon completing this review, the Agency has concluded that there is a continued need for the CAFO regulations, and that the comments received did not demonstrate that revisions are necessary at this time to minimize impacts on small entities. The results of the Section 610 review of the 2003 CAFO Rule are presented in this report , which has been placed in the docket.

3Discussion of Factors Required by Section 610 of the Regulatory Flexibility Act

1. Continued need for the rule

. Many commenters supported a continued need for the rule and/or regulations. Some commenters called for increased regulation of CAF Os. Most of these comments referenced a need for clean water and many expressed concerns about increased manure production at CAFOs; bacteria and nutrients from farm runoff; and resulting risks to water quality (ground water, surface water, aquifers), air quality, and public health. Some commenters voiced concerns regarding bacteria l resistance due to increased use of antibiotics at CAFOs. A commenter stated that CAFOs should not be allowed to generate more waste than can be absorbed by the land. A commente r referenced the EPA ’s preamble to its 2003 CAFO Rule in noting that industry consolidation is leading to a greater concentration of nutrients on an inadequate land base, and that there is a trend toward increased reports of large discharges. Some commente rs noted that the EPA has a responsibility to regulate pollution from CAFOs. One commenter stated that t he 2003 CAFO Rule is needed to ensure CAFO discharges meet the Clean Water Act (CWA) objectives and, in fact, it should be strengthened to fulfill the r equirements of the CWA and address continued water quality impairments

. Several commenters correlated weakened permitting requirements on CAFOs with negative economic impacts on other types of small farms and businesses. For example, a number of non-indust ry small business owners supported continued regulation of CAFOs, stating that their livelihoods depend on clean water resources and a clean environment, which they say are or wou ld be adversely affected by manure production at CAFOs. Many non-regulated s mall businesses such as restaurants supported regulation of CAFOs because their businesses depend on clean crops; one mentioned it could not afford technology to irradiate produce contaminated with pathogens. S everal commenters supported regulation of CAFO s due to potential negative impacts on surrounding property values. Some commenters stated that CAFOs need to be regulated, even if they are classified as “small businesses .”

State commenters supported continuing regulation with specific enhancements, and suggested that the development of state programs that are more comprehensive than federal requirements was accelerated by the EPA’s establishment of the “federal floor.”

T he EPA agrees with the general view of many commenters that there is a continued need for the 2003 CAFO Rule, as revised in 2008 and 2012, to ensure protection of the nation’s water quality . The purpose of the CWA is “to restore and maintain the chemical, physical and biological integrity of the nation’ s waters .” 6 CWA Section 402(a) establishes the NPDES program to regulate the discharge of any pollutant from point sources into waters of the United States. 7 As discussed in the preamble to the 2003 CAFO Rule, the rule was promulgated to “ ensure that CAFOs take appropriate actions to manage

m anure effectively in order to protect the nation’s water quality.” 8

Since promulgation of the 2003 CAFO Rule, the EPA has found that research supports a continued need for the regulation of CAFOs. As discussed in the preamble to the 2011 Proposed NPDES CAFO Reporting Rule, “[ d]espite more than 35 years of regulating CAFOs, reports of water quality impacts from large animal feeding operations persist.” 9 In 2013 the EPA published a Literature Review of

6 33 U.S.C. 1251(a).
7 33 U.S.C. 1342(a).
8 68 Fed. Reg. 7,176.
9 76 Fed. Reg. 65,433.

4Contaminants in Livestock and Poultry Manure and Impli cations for Water Quality , as part of the Agency’s ongoing efforts to better understand the environmental occurrence and potential water quality effects related to contaminants of emerging concern in animal manure

. 10 Given the potential impacts from contami nants of emerging concern such as pathogens, viruses, antimicrobials , heavy metals, and hormones, effectively managing manure is critical to protecting water quality, the environment, and human health.

Based on th e U.S. Department of Agriculture’s ( USDA’s ) Census of Agriculture data and standard USDA methods, an estimated 2.2 billion head of livestock and poultry generated approximately 1.1 billion tons of manure in 2007. 11 CAFOs will commonly apply m anure, litter, and process wastewater as fertilizer to crops on- site or transfer it to be applied to crops in other locations because they can provide value as fertilizer ; however, manure can degrade the environment and surface water and ground water quality if it is not managed properly. 12 Whe n manure is over-applied to land, or applied to land before precipitation events, excess nutrients can run off and caus e harmful aquatic plant growth ( i.e., “algal blooms”) which can contribute to low dissolved oxygen, fish kills , or release of toxins that are harmful to human health. 13 A continued trend towa rd fewer but larger operations has concentrated more manure nutrients, which, in some geographic areas, can exceed the amount of nutrients needed by the farmland around where that manure is produced. 14 This trend has coincided with increased reports of large- scale discharges from CAFOs, as well as continued runoff that has contribut ed to the significant increase in nutrients and resulting impairment of many U.S. water bodies. 15

Regulations r equiring adequate storage of manure, litter, and process wastewater, including proper operation and maintenance of the storage facilities, are an important step in protecting water quality. Ensuring adequate storage capacity for manure enables operators to store manure during times of the year when no crops are growing and avoid applying manure on frozen or snow-covered ground, immediately before, during, or after precipitation events, or when the land is saturated

. 16 Manure storage enables confined operations to better implement their nutrient management plans (NMPs) and apply manure to address crop needs. 17 Storing manure for extended periods of time may also minimize pathogen loads and promote degradation or adsorption of antimicrobials and hormones. 18

10 U.S. EPA, Literature Review of Contaminants in Livestock and Poultry Manure and Implications for Water Quality , EPA 820-R-13-002 v (2013), http://water.epa.gov/scitech/cec/upload/Literature

- Review

of-Contaminants- in

- Livestock -and- Poultry

- Manure -and- Implications

- for

- Water -Quality.pdf

. 11 USDA
, 2007 Census of Agriculture: United States Summary and State Data AC -07-A-51, Volume 1 (2009), availabl e at http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf

. 12 76 Fed. Reg. 65,434.
13 Id.
14 68 Fed. Reg. 7,180; Noel Gollenhon et al ., USDA Economic Research Service, Confined Animal P roduction and Manure N utrients , Agricultural Information Bull etin No. 771 (2001).
15 68 Fed. Reg. 7,180.
16 Z. Zhao et al., Hormones in Waste from Concentrated Animal Feeding Operations in D.S. Aga (ed.) Fa te and Transport of Pharmaceuticals in the Environment and Water Treatment Systems , 1st ed. 291– 329 (2008).
17 Id.

18 L. S. Shore et al., Relationship of Fertilization with Chicken Manure and Concentration of Estrogens in Small Streams in K. Steele (ed.) Animal Waste and the Land- Water Interface 152–162 (1995); L. S. Lee et al., Agricultural Contributions of Antimicrobials and Hormones on Soil and Water Quality , 93 Adv Agron 1–68 (2007).

5The EPA acknowledges that water quality impacts from CAFOs may be due, in part, to inadequate compliance with existing regulations or due to limitations in CAFO permitting programs

. 19 The Agency has determined that there is a continued need for regulation to protect the n ation’s water quality. Although many commenters also supported a continued need for the rule, a number of commenters suggested that the EPA should improve specific aspects of the CAFO regulations. Such comments have been summarized in the sections that fol low.

2. Nature of complaints or comments received concerning the rule

. In promulgating the CAFO regulations, the EPA considered impacts on small entities. The recordkeeping, reporting, and monitoring requirements of the CAFO regulations remain economically achievable and necessary to ensure protection of water quality and demonstrate compliance with technical requirements of the CAFO regulations. As discussed below, the Agency promulgated certain requirements in order to comply with court decisions, but attempted to afford owners and operators as much flexibility as possible by allowing for consideration of site- specific variations in the NPDES CAFO permits.

Court decisions since the 2003 CAFO Rule , in Waterkeeper Alliance v. EPA 20 and National Po rk Producers Council v. EPA 21 led to revisions of the CAFO regulations in 2008 and 2012 that eliminated burdens for many CAFOs

. 22 The 2011 decision by the U.S. Court of Appeals for the Fifth Circuit vacated the requirement that CAFOs that “discharge or propose to discharge” seek NPDES permit coverage and ruled instead that only those CAFOs that discharge need permits. 23 The resulting projected decline in NPDES CAFO permittees was estimated to result in a reduction in administrative burden for CAFOs and state p ermitting authorities. 24

In examining the burdens of the CAFO regulations on small entities during this review, the EPA revisited the administrative burden analyses performed for the NPDES CAFO rulemakings since 2003. In its 2013 Information Collection Request for Animal Sectors ( analyses completed as part of meeting the requirements of the Paperwork Reduction Act and reviewed and approved by the Office of Management and Budget ), the Agency analyzed the cost and impacts associated with recordkeeping, reporting, and monitoring requirements. Th e analyses showed that the overall burden on regulated facilities decreased because there was no substantive increase in technical requirement s subsequent to the issuance of the 2003 CAFO Rule , and because the percentage of permitted entities declined based on the 2008 and 2012 revisions to the regulations. 25

The EPA has organized comments received pertaining to this topic of the review under fou r main categories of issues , as outlined below : (1) programmatic, (2) economic, (3) technical, and (4) implementation.

19 76 Fed. Reg. 65,434.
20 399 F.3d 486

. 21 635 F.3d 738.
22 40 CFR 122.2 3(b)(6), (b)(9), (c).
23 635 F.3d 738 at 756.

24 U.S. EPA, Information Collection Request for Animal Sectors , OMB Control No. 2040-0250, EPA ICR No. 1989.08 23–38 (2013).
25 Id. at 23.

6• Programmatic Issues

Most commenters who discussed programmatic requirements of the CAFO regulations suggested that burdens associated wit h permit applications, recordkeeping, reporting, or public noticing should be decreased.

A state commented about the relevancy of some of the information required on NPDES permit application forms to permitted activities , and suggested that states could collect it under existing state authorities if needed. The EPA notes that permit applications are th e primary mechanism s to ensure that NPDES permits are adequately protective of the requirements of the CWA , and permitting authorities need the information required under the NPDES CAFO regulations to implement CWA requirements. 26 The EPA notes that in the administrative burden analysis performed by the Agency and approved by the Office of Management and Budget under the terms of the Paperwork Reduction Act, t he EPA assumed that completing the NPDES CAFO permit application form would result in a 9- hour labor burden. 27 This burden is comparatively minor because it occurs only every 5 years when the permit is renewed and it represents a small fraction of the overall compliance costs associated with implementing the manure storage, handling, and land application requirements called for elsewhere in the permitting regulations.

Another commenter indicated th at documenting weather conditions at the time of, and 24 hour s before and after, land application of manure is overly burdensome and the data are likely to be inaccurate. The EPA requires t his information because of its importance in determining whether manure has been applied in accordance with timing limitations s et by the permitting authority outweighs the burden of documenting the information. Such regulatory requirements are reasonable and necessary for effective program implementation, given the direct relationship of precipitation to discharges from CAFOs that occur as a result of land application.

Some commenters stated that requiring producers to document daily inspections of water lines is unnecessary because producers are already motivated to detect and fix water leaks and overflows in the production area daily, and recordkeeping of these normal activities is excessively burdensome and not beneficial. Another commenter stated more generally that the 2003 CAFO Rule’s daily and weekly recordkeeping requirements for NMPs are not manageable for most farmers. The EPA carefully considered the reporting requirements and analyzed the cost and impacts associated with these requirements. As stated in the preamble to the 2003 CAFO Rule: “Production area inspection data allow operators to actively manage and maintain their surface and liquid impoundments to ensure the structural integrity of the system and avoid catastrophic failure of such systems. These records also assist the CAFO operator to minimize discharges to the extent possible and demonstrate that any overflows that do occur are consistent with the proper operation and maintenance of storage structures to contain all process wastewater including the runoff from a 25 -year, 24-hour rainfall event.” 28 Based on the EPA’s analysis, the recordkeeping, reporting, and mo nitoring requirements of the CAFO regulations are economically achievable for the reasons discussed in the 2003 CAFO Rule and its supporting documents, and they continue to be necessary to ensure protection of water quality and demonstrate compliance with technical requirements of the CAFO regulations.

State commenters criticized the reporting, public notice, and recordkeeping requirements of the CAFO regulations that were revised in the 2008 CAFO Rule. Some commenters requested revisions to annual reportin g requirements, including elimination of requirements for operators to report soil test results and

26 Id. at 2.
27 Id. at 26.
28 68 Fed. Reg. 7,176 and 7,216.

7data used in calculating manure application rates, in order to reduce burdens on states and producers and be consistent with other NPDES programs. The EPA n otes that the Second Circuit Court of Appeals held that the terms of a CAFO’s NMP are effluent limitations subject to public review, consistent with the requirements of the CWA

. 29 In order to comply with the Second Circuit’s holding while affording CAFO owners and operators maximum flexibility to make adjustments consistent with the terms of the NMP during the period of permit coverage, the EPA developed the narrative rate approach. As discussed in the preamble to the 2008 CAFO Rule, the annual reporting requirements of the CAFO regulations established in the 2008 CAFO Rule revisions are necessary to allow the flexibility afforded by the rule for CAFOs that land apply manure and wish to take advantage of the narrative rate approach. See, for example, 73 Fed. Reg. 70,449–70, 450 regarding use of annual reports as a check on the narrative rate approach. The 2008 CAFO Rule added these annual reporting requirements as an essential step in implementing the narrative rate approach, so as to ensure public availability of information directly related to the terms of the NMP.

Sev eral commenters stated that the public notice requirements for site -specific NMPs in the 2008 CAFO Rule is burdensome for producers and diminishes the benefits of general permits, which generally do not require facilities to undergo individual public notice processes. The EPA notes that for many types of permitted facilities, one of the benefits of using general permits t o cover multiple facilities is a streamlined permit issuance process. However, the individual public notice requirements for the sitespecific terms of the NMP included in the general permitting process for CAFOs, as modified in the 2008 CAFO Rule, were promulgated in response to the Second Circuit Court of Appeals decision in Waterkeeper Alliance v. EPA
, which found that the terms of a CAFO’s NMP are effluent limitations subject to public review, as required by the CWA. 30

A state commenter indicated that th e complexity of nutrient management planning, recordkeeping, and reporting requirements, as well as increased public notice requirements in the 2008 CAFO Rule revisions are especially burdensome to small and medium animal feeding operations ( AFOs ), and are likely to cause those operations that voluntarily comply with a general permit to discontinue permit coverage, thereby reducing environmental protection. The EPA notes that small and medium AFOs are not required to apply for permits unless they are defined or designated as CAFOs, and that small and medium facilities may be defined or designated as CAFOs only if they discharge (and other specified criteria are satisfied). Moreover, small and medium CAFOs may, depending on circumstances, take steps to elimin ate discharges and obviate the need for permits. The federal CAFO regulations do not impose requirements on small or medium AFOs that are not CAFOs.

A state commenter recommended that that the process to make changes to NMPs should not prioritize public notification over technically sound NMP implementation. The commenter suggested that facilities should be allowed flexibility in how they meet the technical standards. The commenter suggested that states could require CAFOs to consult with certified planners prior to adjusting NMPs to ensure technical standards are met, and that certified planners should be viewed as a mechanism to both improve compliance by regulated entities and reduce burdens on states to review every NMP modification. The EPA notes that the CAFO regulations do not prioritize public notification over technically sound implementation. On the contrary, the CAFO regulations specify the many conditions that must be addressed to ensure technically sound implementation of an NMP. One purpose of the public notice process is to ensure that the terms of an NMP included in a permit will result in the NMP being implemented in a technically sound manner. Moreover, the regulations do not prohibit states from

29 399 F.3d 486 at 502–503.
30 Id.

8allowing or requiring the use of certified planners. In fact, the EPA strongly supports the use of certified planners in the development of NMPs and subsequent revisions to NMPs. Public notice of NMPs is consistent with the decision by the Second Circuit Court of Appeals, in Waterkeeper Alliance v. E PA
, which found that the terms of a CAFO’s NMP are effluent limitations subject to public review, as required by the CWA. 31 The EPA developed the narrative rate approach to allow CAFO operators maximum flexibility to anticipate adjustments that may be required during the course of implementing an NMP, and to make adjustments consistent with the terms of the NMP during the period of permit coverage, without the need for permit modification and a formal public notice process.

A co mmenter supported flexibility for restricting land application of manure during winter months. The EPA notes that the regulations do not specifically address winter application; however, the regulations do require that manure, litter, and process wastewater be land applied in accordanc e with nutrient management practices that ensure appropriate agricultural utilization of manure nutrients. In applying this consideration, a number of states have prohibited or limited land application to frozen, saturated, or snow-covered ground or during winter months.

A commenter sug gested that all poultry operations be required to obtain permits, regardless of size or location. The EPA notes that the CAFO regulations apply to only CAFOs because the CWA defines CAFOs as point sources. Not all poultry ope rations are defined or designated as CAFOs. Moreover, the Fifth Circuit Court held in National Pork Producers Council v. EPA that only CAFOs that discharge must have NPDES permits. 32

A commenter suggested that the CAFO regulations be tailored to specific types of animals or operations in order to minimize negative impacts on operations that were not intended to be addressed by the regulations. The EPA notes that the CAFO regulations are, in fact, tailored to different types of operations as well as to cons ideration of site

- specific variations. For example, the regulations require development of site- specific NMPs and associated permit terms. In addition, the CAFO ELGs are sector -specific and are applicable based on the number and type (e.g., horses, ducks, dairy cattle, beef cattle, swine, and poultry) of animals produced. The EPA has no knowledge of negative economic impacts on unregulated facilities resulting from the CAFO regulations . Secondary impacts are not considered relevant within economic analyses for rules or the rule development process.

• Economic I ssues

This section summarizes c omments received regarding economic issues related to the rule.

A commenter stated that since elimination of the rule is not likely, the EPA should review the rule with consideration of the ability of agriculture operations to comply without going out of business. Another commenter did not challenge the need for regulation but generally stated that CAFOs are over- regulated and requested that the rule be revised with consideration for the economic impact of heavy regulation of small businesses. Some commenters suggested that the EPA should review or revise the rule with consideration for economic impacts on small businesses. Conversely, a commenter felt that the EPA has suffic iently minimized the impact of its CAFO rules on small businesses. The EPA provided a detailed assessment of economic impacts of the rule on small businesses as part of the 2003 and 2008 economic analyses and determined that the requirements were economically feasible for small businesses . None of the changes to the CWA CAFO regulations since 2003 involved revisions to the ELG requirements, nor have they required any new capital expenditures for permittees. Rather, the regulatory changes that the

31 Id.
32 635 F.3d 738 at 751.

9EPA finali zed in response to litigation have yielded a net burden reduction to CAFO owners and operators, including small business owners and operators, since now only those operations with discharges are required to seek NPDES permit coverage. The EPA finds that th e CAFO regulations have not had a direct economic impact on the vast majority of small- and medium- sized operations, as few medium AFOs have NPDES permits, and even fewer small AFOs have NPDES permit coverage.

Some commenters did not challenge the need for regulation or explicitly request eliminating it, but expressed general support for the EPA to review or revise the regulations with consideration for the economic impact of regulation of small businesses. The EPA did consider the economic impacts of the CAFO regulations on small entities as part of the 2003 and 2008 economic analyses, and reviewed such impacts as part of th e Section 610 review.

A commenter stated that, by limiting the universe of operations required to apply for CAFO permit s, the 2008 and 2012 rules reduced the potential economic impact of the regulations on all CAFOs, including those that would be considered small entities. As noted above, the EPA has made the same determination.

A commenter stated that the 2003 CAFO Rule has resulted in a significant cost to the U.S. cattle feeding industry. The commenter stated that the number of smaller beef operations has declined since 2003, and further indicated that the CAFO regulations have exacerbated consolidation of small - and medium

- sized operations, and that high costs of compliance have made it difficult to enter the industry or expand existing operations. The EPA notes that NPDES CAFO permits usually are issued only to cattle feedlots with more than 1,000 head of cattle. As previously noted, s mall and medium AFOs are not required to apply for permits unless they are defined or designated as CAFOs. Small and medium facilities may only be defined or designated as CAFOs if they discharge. Per a comparison with the Small Business Administration’s definitions of small entities, most medium and s mall CAFOs are small entities and

some l arge CAFOs will be small entities as well. Broadly, CAFO ELG requirements apply to l arge CAFOs, and permitting authorities, which are mainly state agencies, will establi sh technology-based limitations and standards for small and medium CAFOs on the basis of best professional judgment. 33 Based on USDA Census of Agriculture data, the EPA estimates that there are a total of 212,000 AFOs in the United States. 34 Of the approximately 6,600 NPDES permits issued to CAFOs, the vast majority are held by l arge CAFOs. Few medium AFOs are permitted, and even fewer small AFOs have permit
coverage. Thus, the EPA has determined that the CAFO regulations do not have a direct e conomic impact on the vast majority of small- and medium- size d operations or an impact on the industry as a whole.

A commenter requested that permit fees for CAFOs be controlled. Permit fees are established by state permitting authorities, and not by the f ederal CAFO regulations. The EPA notes that it does not set state permit fees.

A commenter objected to the EPA’s position that dust particles, feathers, manure, and other materials blown from animal house ventilation exhaust fans, when mixed with precipitation, become process wastewater and a regulated discharge. The commenter stated that discharges associated with such emissions were not considered in the cost analyses conducted to support rule development, and were not specifically identified in the propo sed or final rules. The commenter noted that the final 2003 CAFO

33 U.S. EPA, Information Collection Request for Animal Sectors , OMB Control No. 2040-0250, EPA ICR No. 1989.08 23 (2013); 40 CFR 122.44(a)(1); 40 CFR 125.3.
34 USDA
, 2007 Census of Agriculture: United States Summary and State Data AC -07-A-51, Volume 1 (2009), available at http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf

. 10Rule explicitly rejected the use of the CWA to regulate air emissions. The EPA notes that the CWA prohibits the discharge of pollutants from a point source to waters of the United States , exc ept as authorized by an NPDES permit. 35 The EPA did not establish specific technology-based requirements for this source of wastewater pollution in the 2003 CAFO Rule, and therefore did not estimate the cost for controlling this source, but it is neverthele ss a source of wastewater pollutants from CAFOs and permit limits may be established on a case -by- case basis. 36 In exercising best professional judgment, the permit writer may take into account the specific circumstances of the CAFO structure and any environmental risks posed in considering limits that should be imposed.

A f ew commenters requested that the EPA consider the economic impacts of continued regulation on small ranchers and other livestock and bird growers that depend on CAFOs to make a living. The EPA notes that secondary impacts are not considered relevant within economic analyses for rules or the rule development process.

• Technical I ssues
As noted above, the EPA promulgated certain requirements in order to comply with court decisions, but attempted to afford owners and operators flexibility. The Agency finds that technical burdens have been minimized for regulated small entities as much as possible. Some comments discussed below concerned substantial modifications to NMPs that are subject to public review. The NMP requirements established in 2008 were based on the decision of the Second Circuit Court of Appeals in the Waterkeeper Alliance

v. EPA case. 37 In general, the Agency believes that producers with well-designed NMPs should be able to i mplement the terms of their NMPs in a flexible manner, with minimal need for state oversight and public notice of adjustments made to accommodate changing circumstances at the CAFOs. The EPA also discusses comments below on other technical issues such as t he ELG’s “no discharge” standard and runoff that is subject to it, and the definition of the production area.

A state commenter recommended removing the 5-year crop rotation requirement and alternative crop requirements from the narrative rate approach outlined in the 2008 CAFO Rule, as long as a state has a process for calculating application rates. The EPA notes that, in Waterkeeper Alliance v. EPA , the Fifth Circuit Court of Appeals held that the terms of a CAFO’s NMP are effluent limitations subject to public review, and that these effluent limitations must be included as terms of the permit

— even if the permit term is for 5 years, as required by the CWA. 38 The EPA designed the regulatory requirements in the 2008 CAFO Rule to allow permittees to implement the terms of the NMP over the entire course of a 5- year permit term, unless the operator needs to make one of four types of substantial modifications to the NMP, in which case public review would be required. Thus, the EPA worked to minimize the number of instances when public review would be required. States may address NMP requirements on a short- term basis if they prefer to do so. In general, however, the narrative rate approach allows CAFO operators flexibility to anticipate adjustments that may be requ ired during the course of implementing an NMP and to make adjustments consistent with the terms of the NMP during the period of permit coverage. A producer with a well-designed NMP should, in general, be able to implement the terms of the NMP in a flexible manner, with minimal need for public notice of adjustments made to accommodate changing circumstances at the CAFO.

35 33 U.S.C. 1251(a).
36 33 U.S.C.1342(a )(1); 40 C.F.R. 125.3(c), (d).
37 399 F.3d 486.
38 Id. at 502.

11Commenters remarked on the procedures promulgated in the 2008 CAFO Rule for making changes to NMPs. A state commenter observed that addition s of fields to land application areas should be reviewed by states, but should not be subject to public notice because the time involved in the public notice process creates risk for operators to miss seasonal windows for land application. The commenter

su ggested that the EPA could allow CAFOs to temporarily implement substantial changes for up to 180 days prior to public notice, consistent with a provision proposed by the EPA in its 2006 proposed CAFO Rule, whereby there would be a temporary waiver of the approval period for certain substantial changes to NMPs. The EPA found that public comments on the proposed 2006 Rule were generally unsupportive of this proposal. 39 As noted above, in Waterkeeper Alliance v. EPA
, the Fifth Circuit Court of Appeals held that the terms of a CAFO’s site

- specific NMP must be made available to the public for review. 40 As discussed in the preamble to the 2008 CAFO Rule, the addition of new fields to the NMP is a substantial modification of the NMP, and must be subject to public review, consistent with the Waterkeeper decision.

A state commented that the review and public notice requirements for substantial changes to the terms of the NMP are administratively burdensome to both CAFO operators and the permitting authority, and can delay crop management decisions, causing operational and management challenges. The commenter added that changes to the permit term, “the outcome of a field risk assessment,” [ sic ] should not be considered a substantial change needing public notice if the risk assessment is determined using the Phosphorus Index (PI). The state explained that, even when the risk rating increases, the potential for phosphorus site runoff remains unchanged because application rates mus t be decreased when the PI increases. The state recommended that the permitting authority have flexibility in determining when subsequent revisions of NMPs need review and which of those revisions require public notice. As the EPA notes above, in Waterkeeper Alliance v. EPA
, the Fifth Circuit Court of Appeals held that the terms of a CAFO’s site

- specific NMP must be made available to the public for review. 41 Following the Waterkeeper decision, the EPA issued the 2008 CAFO regulations, which require changes t o the NMP to be reported to the state Director, in order for the Director to determine whether or not the changes require revising the terms of the NMP . Such changes can be implemented without public comment, unless the Director determines that the changes are substantial. The regulations require certain changes to be treated as substantial changes, thus requiring public notice and comment. The EPA notes that changes to “the outcome of the field-specific potential for nitrogen and phosphorus transport” do not, per se, constitute a substantial change needing public notice if the risk assessment is determined using the PI. Moreover, if the operator is following the requirements of the narrative rate approach, changes to the rate of application resulting from r ecalculations based on the most recent soil test data are not subject to the provisions for substantial changes. 42 Thus, where the narrative rate approach is used for determining rates of application, changes in field -specific rates of application and concomitant changes to the PI ratings for those fields would not result in a substantial modification, so long as other extrinsic factors have not resulted in changes to “the maximum amounts of nitrogen and phosphorus derived from all sources for each crop.”

A commenter suggested that the ELG’s “no discharge” standard up to a certain size storm event is confusing and inconsistent with establishment of effluent limitations on actual discharges from other types of regulated industries. The commenter added that run off from rainfall that occurs when the ELG is exceeded should be classified as stormwater and not subject to the CAFO “no discharge”

39 73 Fed. Reg. 70,455.
40 399 F.3d 486 at 502–503.
41 Id.
42 40 CFR 122.42(e)(6).

12requirements. The EPA notes that effluent limitations for CAFOs are based on the nature of the activities associated with t his unique industry. Effluent limitations in the form of best management practices , in conjunction with the prohibition of discharge (except as provided in the ELGs), are particularly suited to the regulation of CAFOs. For many CAFOs, controlling discharge s to surface waters is largely associated with controlling runoff and controlling overflows from manure storage
structures. For this reason, the EPA has determined that the use of numeric ELGs to control these discharges is generally infeasible

. A state commenter suggested that the “support area,” including raw materials storage area, should not be subject to the regulations, in order to reduce burdens on operators associated with production area requirements. The EPA regulations define the entire production area as part of the CAFO. The production area includes the raw materials storage areas, which in turn includes feed silos, silage bunkers, and bedding materials storage. These areas must be managed to ensure that any wastewater generated is properly captured in order to meet the applicable ELGs. In the same way that releases and runoff of manure, litter, and process wastewater can cause adverse environmental impacts, releases of raw materials themselves can cause adverse effects.

• I mplemen tation Issues

In general, the EPA did not receive relevant comments concerning implementation of the regulations for regulated small entities. Most comments regarding implementation were outside the scope of this review, such as concerning implementation o f the regulations by state agencies.

State commenters requested that the EPA address differences in nutrient management planning requirements between CAFOs and non

- CAFOs that receive manure from CAFOs. Some commenters thought the EPA should do this through rulemaking, and some thought the EPA should do this by highlighting best practices in states that have already addressed this concern. The EPA notes that the federal CAFO regulations do not include requirements for recipients of manure that are not CAFOs, but states may address recipients of CAFO -generated manure under non- NPDES state programs. The EPA recommends that states that have addressed concerns such as this share their experiences with other states that may be seeking to address this issue. To fac ilitate this information sharing, the Agency is developing a summary of state manure transfer programs and incentives, which the EPA will make publicly available

.

3. Complexity of the rule.

As discussed above, burdens from the 2003 CAFO Rule have been eliminated for many CAFOs in the 2008 and 2012 revisions by virtue of the fact that they do not have to apply for permits if they do not discharge. A number of the comments addressed in the preceding discussion involved issues relating to the complexity of the CAFO regulations for those facilities that do discharge. This section does not repeat comments that have already been addressed in other sections of this report, but acknowledges that those concerns were raised by a number of commenters. This section summari zes the remaining comments that explicitly referred to complexity of the regulations, which generally indicated that the regulations are not too complex or unreasonable.

Some commenters highlighted the fact that the regulatory burden for CAFO operators is less than for most other NPDES permittees because CAFOs are not required to conduct water quality monitoring and reporting , as is required of most other NPDES permittees. In addition, a commenter stated that modifications to the 2003 CAFO Rule have reduced the complexity of the regulations for most CAFOs,

13since only CAFOs that discharge are required to apply for permits and comply with the regulatory requirements. The EPA notes that the burden and complexity of the CAFO regulations have been reduced or elim inated for some small entities, as discussed above.

4. Extent to which the rule overlaps, duplicates, or conflicts with other federal, state, or local government rules.

The CAFO regulations are designed to support and complement the array of voluntary and oth er programs implemented by the USDA, the EPA, and the states. The EPA finds that the CAFO regulations accommodate differences in state -specific requirements and provide flexibility to allow state and local rules to be stronger than the federal CAFO regulations. In its 2013 renewal of the Information Collection Request for Animal Sectors , the EPA found that a lmost all of the information requested from respondents is required by statute or regulation and, in most cases, not available from other sources. The EPA examined requirements contained in the CWA and 40 CFR Parts 122, 123, 124, 125, 403, 501, and 503 , as well as consulted the EPA’s Inventory of Information Collection Requests , ICIS

- NPDES, Government Information Locator Service, and USDA Census of Agriculture. Examination of these databases and discussions with other federal agencies did not identify any reporting requirements that duplicated existing requirements for CAFO facilities

. 43

Several commenters indicated that the federal CAFO regulations are necessary because other regulatory programs or other portions of the CWA do not otherwise adequately address CAFOs. A commenter stated that the federal regulations are necessary because state permitting programs are inconsistent with each other ; do not exist in all states; and, in the commenter’s view, do not meet CWA requirements on their own. The EPA notes that although state programs may be stronger in areas not addressed by the federal program, such programs often lack the opportunity for public involvement and oversight, as well as state oversight of nutrient management planning, that the CWA provides. The statutorily mandated transparency requirements that EPA has implemented in the CAFO regulations ensure that citizens are able to learn about and influence actions that affect their neighborhoods and the quality of their local
water bodies and environment.

Several commenters stated that the availability of federal and state (as well as industry) funding resources to assist CAFO operators in complyin g with the rule’s zero

- discharge effluent limitation significantly reduces the economic burden on regulated entities. The EPA notes that the economic analysis the Agency performed for the 2003 CAFO Rule revisions included consideration of federal and/or st ate cost

- share assistance and the effects of this assistance on the economic achievability of the revised regulations.

A state commenter voiced support for the discretion provided to state d irectors or regional administrators in designating medium or small AFOs as CAFOs because it allows states to consider the seriousness of a discharge from a medium or small AFO before designating an AFO as a CAFO. Some comments expressed support for the flexibility allowed for states to base their CAFO programs on regiona l variations such as weather and climate. Some commenters described specifically how certain state programs both overlap with and differ from federal regulations. These commenters supported the EPA continuing to provide states flexibility to implement state- specific requirements. Another state commenter expressed the opinion that many state animal agriculture programs are more robust, comprehensive, and protective of water quality, while not identically matching the current federal

43 U.S. EPA
, Information Collection Request for Animal Sectors , OMB Control No. 2040-0250, EPA ICR No. 1989.08 5 (2013).

14regulations. The commenter suggested that the EPA consider allowing states to continue programs without having to change them to match the federal regulations . A commenter suggested that the EPA allow state and local rules to be stronger than the federal CAFO regulations. The EPA finds that the CAFO regulations provide the flexibility requested by these commenters, as the federal regulations accommodate differences in state

- specific requirements. The EPA’s regulations ensure that “States are not precluded from omitting or modifying any [NPDES regulatory] provisions to impose more stringent

re quirements.” 44 In addition , state technical standards are developed by each state to address the particular agricultural operations in that state. When federal regulations are modified, program revisions may be necessary to ensure that the state programs are consistent with federal law. 45 The EPA generally works closely with state agencies to incorporate any new federal requirements as seamlessly as possible into existing state programs. If the sta te program modifications are substantial, the EPA provides the opportunity for public notice and comment. 46

5. Th e degree to which technology, economic conditions, or other factors have changed in the area affected by the rule

. Most commenters who spoke to the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule, s tated that the 2003 CAFO Rule’s impact on small entities either has not changed or has diminished based on changes in technology, economic conditions, or other factors.

A commenter stated that contraction of the livestock industry, including small livestock businesses, is due to market factors such as milk and hog prices, and not due to economic burden from the NPDES CAFO regulations. The comme nter stated that CAFO operations have become larger since the EPA performed its initial analysis, such that fewer small businesses are affected by the rule. As discussed above, in promulgating these regulations, the Agency evaluated the risk that the regul ations would cause businesses to fail and found that they would result in only a limited economic effect on the regulated community.

Some commenters stated that the CAFO regulations have had diminished impacts on small businesses as a result of rule revisi ons that reduced the number of operations covered.

A commenter stated that the fact that the EPA has not introduced new technology requirements, but rather, twice narrowed the scope of the 2003 CAFO Rule, supports a finding that CAFO regulations are not a burden on small entities. As noted above, the EPA agrees that the regulatory burden for CAFOs as a whole has declined since regulation changes have reduced the total number of facilities that need to apply for permits.

6. Comments outside the scope of the review

. Comments or suggestions that pertained to the impact of the CAFO regulations on regulated small entities were within the scope of this review. Most of the comments pertaining to the impact of CAFO regulations on non -regulated or non- small entities (such as impacts on states, large regulated entities, or

non- regulated small businesses ) were outside the scope of this review. Some commenters also discussed

44 40 CFR 123.25(a).
45 40 CFR 123.62(a), (b).

46 40 CFR 123.62(b).

15suggestions for future or potential rulemaking (i.e., regarding prospective regulations, and not regarding regulations that currently exist). These comments were considered outside the scope of this review unless they pertained specifically to impacts on small regulated entities. Some of the topics raised in
comments that were outside the scope of this review included:

• the EPA’s authority under the CWA ;

• the frequency of CAFO rulemaking activity;

• suggested revisions for future rulemaking (not directly tied to comments on the rule’s impact on small entities);

• NPDES regulations not related to CAFOs;

• b urdens faced by states that regulate CAFOs;

• e nforcement and compliance issues;

• e nvironmental issues not associated with CAFO discharges covered by the CWA ; and

• complaints about specific existing or proposed CAFO facilities.

Conclusion

After reviewing the C AFO regulations and the comments received for this RFA Section 610 review, the EPA has concluded that revisions to minimize the regulations’ economic impacts on small entities are not warranted at this time

. The EPA finds a continued need for regulation of CAFOs, as promulgated in the 2003 CAFO Rule and amended in 2008 and 2012, to manage manure effectively in order to protect the nation’s water quality and human health.

Based on economic analyses and cost analyses conducted by the EPA in the 2003 CAFO rulemaking, the Agency determined that the requirements were economically feasible for small businesses. The revisions to the CAFO regulations in 2008 and 2012 have further reduced th e universe of CAFOs that must have NPDES permits and yielded a net reduction in burden to CAFO owners and operators, including small business owners and operators.

In addition, the EPA has taken a number of measures to assist small entities inclu ding training, guidance and other materials, and support for states in their implementation of the CAFO regulations. The EPA will continue to evaluate the effectiveness of the CAFO regulations, consider ways to minimize burdens associated with implementati on, and continue to work with states and assist small entities in ensuring the protection of the nation’s water quality.

16