## Econom**ic Analysis for the**  **Water Quality Standards Regulat ory**  **Clarifications (Proposed Rule)**

**July 201**  **3**

U.S. Environmental Protection Agency

Office of Water Office of Science and Technology 1200 Pennsylvania Avenue N.W. Washington, D.C. 20460**July 2013**  **i** 

### Table of Contents **1. Introduction**  **................................ ................................**  **................................ ......................**  **1 -**  **1** 1.1 Background ................................ ................................ ................................ ........................ 1 - 1 1.2 Scope of the Analysis ................................ ................................ ................................ ......... 1 - 2 1. 3 Organization of this Report ................................ ................................ ................................ 1 - 2 **2. Baseline and Proposed Rule**  **................................ ................................**  **............................ 2**  **- 1**  2.1 Administrator’s Determinations ................................ ................................ ......................... 2 - 1 2.1.1 Current Regulatory Framework ................................ ................................ ................ 2 - 1 2.1.2 Proposed Revisions ................................ ................................ ................................ ... 2 - 1 2.2 Designated Uses ................................ ................................ ................................ ................. 2 - 1 2.2.1 Current Regulatory Framework ................................ ................................ ................ 2 - 2 2.2.2 Proposed Revisions ................................ ................................ ................................ ... 2 - 2 2. 3 Triennial Reviews ................................ ................................ ................................ .............. 2 - 3 2.3.1 Current Regulatory Framework ................................ ................................ ................ 2 - 3 2.3.2 Proposed Revision ................................ ................................ ................................ .... 2 - 3 2.4 Antidegradation ................................ ................................ ................................ .................. 2 - 3 2.4.1 Current Regulatory Framework ................................ ................................ ................ 2 - 3 2.4.2 Proposed Revisions ................................ ................................ ................................ ... 2 - 4 2.5 Variances ................................ ................................ ................................ ............................ 2 - 5 2.5.1 Current Regulatory Framework ................................ ................................ ................ 2 - 5 2.5.2 Proposed Revisions ................................ ................................ ................................ ... 2 - 5 2.6 Compliance Schedule Authorizing Provision ................................ ................................ .... 2 - 6 2.6.1 Current Regulatory Framework ................................ ................................ ................ 2 - 6 2.6.2 Proposed Revisions ................................ ................................ ................................ ... 2 - 7 **3. Potential Incremental Costs and Burdens of the Proposed Revisions**  **......................... 3**  **- 1**  3.1 Data and Methods ................................ ................................ ................................ ............... 3 - 1 3.2 Es timated Burden and Costs ................................ ................................ .............................. 3 - 2 3.2.1 Rulemaking Activities ................................ ................................ .............................. 3 - 2 3.2.2 Administrator’s Determinations ................................ ................................ ............... 3 - 3 3.2.3 Designated Uses ................................ ................................ ................................ ........ 3 - 3 3.2.4 Antidegradation ................................ ................................ ................................ ........ 3 - 5 3.2.5 Variances ................................ ................................ ................................ .................. 3 - 9 3.2.6 Summary

of Estimated Burden and Costs to States and Tribes ............................. 3 - 13 3.3 Estimated Burden and Costs to the Agency ................................ ................................ ..... 3 - 13 3.4 Summary

of Potential Burden, Costs, and Uncertainties ................................ ................. 3 - 15**July 2013**  **ii**

**4. Potential Incremental Benefits of the Proposed Revisions**  **................................ ...........**  **4 -**  **1** 4.1 Benefits by

Proposed Program Area Change ................................ ................................ ..... 4 - 1 4.1.1 Administrator’s Determinations ................................ ................................ ............... 4 - 1 4.1.2 Designated Uses ................................ ................................ ................................ ........ 4 - 2 4.1.3 Triennial Reviews ................................ ................................ ................................ ..... 4 - 3 4.1.4 Antidegradation ................................ ................................ ................................ ........ 4 - 3 4.1.5 Variances ................................ ................................ ................................ .................. 4 - 4 4.1.6 Compliance Schedule Authorizing Provisions ................................ ......................... 4 - 5 4.2 Benefits of Improved Water Quality ................................ ................................ .................. 4 - 6 4.2.1 Market Benefits ................................ ................................ ................................ ........ 4 - 6 4.2.2 Nonmarket Benefits ................................ ................................ ................................ .. 4 - 8 **5. References**  **................................ ................................**  **................................ .........................**  **5 -**  **1 Appendix A. If the EPA Required Adoption of Antidegradation Implementation Methods**  **as WQS ................................**  **................................ ................................**  **............................. A** **- 1** **July 2013**  **iii** 

### List of Exhibits Exhibit 3 - 1: Summary

of State Government Average Hourl y Wage Rates (2010 $) .................. 3 - 2 Exhibit 3 - 2: Potential One - time Burden and Costs Associated with Rulemaking Activities ...... 3 - 3 Exhibit 3 - 3: Potential Annual Burden and Costs Associated with Proposed Revisions to Designated Use Provisions 1

................................ ................................ ................................ .. 3 - 4 Exhibit 3 - 4: Potential Annual Burden and Costs Associ ated with Choosing Pollution Prevention Alternative in Tier 2 Antidegradation Requests ................................ ................................ ... 3 - 7 Exhibit 3 - 5: Potential Annual Burden and Costs Associated with Providing Tier 2 Protection for Waters where at least one of the uses specified in CWA section 101(a)(2) is attained ....... 3 - 9 Exhibit 3 - 6: Potential Annual Burden and Costs Associated with Additional Documentation Requirements for Variance Submissions ................................ ................................ ............ 3 - 11 Exhibit 3 - 7: Potential Annual Burden and Costs Associated with Renewing Varianc es .......... 3 - 13 Exhibit 3 - 8: Summary

of Potential Incremental Administrative Burdens and Costs Associated with the Proposed Rule ................................ ................................ ................................ ....... 3 - 13 Exhibit 3 - 9: Potential Incremental Burden and Costs to the Agency Associated with the Proposed Rule ................................ ................................ ................................ ................................ ..... 3 - 15 Exhibit 3 - 10: Summary

of Potential Incremental Administrative Burdens and Costs Associated with the Proposed Rule to States, Tribes, and the Agency ................................ ................. 3 - 16 Exhibit 3 - 1 1: Uncertainties in the Anal ys is ................................ ................................ ............... 3 - 16 Exhibit A - 1: Potential One - time Burden and Costs Associated with Developing or Revising and adopting Antidegradation Implementation Methods as WQS ................................ ............. A - 2 Exhibit A - 2: Summary

of Potential Incremental Administrative Burdens and Costs Associated with the Proposed Rule, including Requirement to Adopt Antidegradation Implementation Methods as WQS ................................ ................................ ................................ ................. A - 3 Exhibit A - 3: Potential Incremental Burden and Costs to the Agency Associated with the Proposed WQS Regulation Revisions, including Requirement to Adopt Antidegradation Implementation Methods as WQS ................................ ................................ ....................... A - 4 Exhibit A - 4: Summary

of Potential Incremental Administrative Burdens and Costs Associated with the Proposed Rule to States, Tribes, and the Agency ................................ .................. A - 5**July 2013**  **iv** 

### Acronyms and Abbreviations BL S Bureau of Labor Statistics CWA Clean Water Act EPA Environmental Protection Agency FTE Full - time equivalent GS General Schedule HAU Highest attainable use IC IS Integrated Compliance Information System IDNR Io wa Department of Natural Resources MODNR Missouri Department of Natural Resources NPDES National Pollutant Discharge Elimination System OES Occupational employ ment statistics ONRW Outstanding National Resources Water PCS Permit Compliance System States and tribes S tates, authorized tribes , and territories TAS Treatment - as - s tate TMDL Total maximum daily load UAA Use attainability anal ys is WQBEL W ater quality-b ased effluent limit WQS Water Quality Standards**July 2013**  **1. Introduction 1**  **- 1** 



### 1. **Introduction** The U.S. Environmental Protection Agency (the EPA) is proposing changes to specific program areas of its Water Quality Standards (WQS) regulation at 40 CFR part 131 . This report provides discussion and anal ys is of the potential costs and benefits that may be associated with these proposed revisions. **1.1 Background**  Section 303 of the Clean Water Act (CWA) requires state s , authorized tribes , and territories (“states and tribes”) to specify designated uses for water bodies within their jurisdictions . These uses reflect the national goals for water quality defined in s ection 101(a)(2) of the CWA as the “protection and propagation of fish, shellfish, and wildlife, and recreation in and on the water. ” States and tribes can also designate uses other than those specified in section 101(a)(2) such as public water suppl y, agricultural water supply, industrial use, and navigational us e. Once states and tribes designate the uses of waters under their jurisdiction , they must establish water quality criteria protective of the designated uses . The EPA’s regulations at §131.11(a)(1) provide that states and tribes shall “adopt those water quality criteria that protect the designated use,” and that such criteria “must be based on sound scientific rationale and must contain sufficient parameters or constituents to protect the designated use.” States and tribes must also adopt antidegradation po licies to protect and maintain high quality waters, and existing uses of all waters, and identify

specific methods to implement those policies (§131.12). To remove a designated use under section 101(a)(2), the EPA’s regulations require a use attainability anal ys is (UAA). As an alternative to removing designated uses, states and tribes may also allow variances from WQS. A variance is a time - limited designated use and water quality criteria targeted to a specific pollutant(s), permittee (s), and water body or water body segment. Variances are different from changes to the permanent designated use and associated criteria in that they

provide state s and tribes time to improve water quality when there is uncertainty regarding whether the WQS is ultimately attainable and

/or what the highest attainable use (HAU) could be . The EPA regulation requires that states and tribes hold a public hearing to review applicable WQS and gain input from the public at least once every three years (i.e., a “triennial review”) . Public hearings on WQS provide an essential opportunity for the public to become involved in the WQS setting process , provide input, and make their concerns known to public officials. In addition, the regulation requires states and tribes to consider whether any new information has become available, and revise standards accordingly , if uses specified in section 101(a)(2) of the Act that were previousl y unattainable are now attainable. The results of these reviews , regardless of whether the review results in the state or authorized tribe making revisions to their regulation , along with any information supporting a WQS revision (e.g. , UAA , methodologies for site specific criteria, general information aiding in determining a submission’s adequacy) , must be submitted to the EPA for review and approval. The EPA is proposing to revise the current WQS regulation to address several issues governing Administrator’s determinations, designated use s , antidegradation , variances to WQS , triennial reviews , and provisions authorizing the use of permit -based compliance schedules .**July 2013**  **1. Introduction 1**  **- 2** 

**1.2 Scope of the A**  **naly sis**  This report provide s estimates of the potential administrative costs that may result from the proposed regulatory

revisions, above and beyond the costs associated with implementation of the current WQS regulation. Because the proposed regulation does not establish any requirements directly applicable to regulated entities, the focus of this analysis is the potential impact on s tates and tribes . Although some of the proposed provisions may lead to increased administrative costs , some of th e se costs m ay

be offset b y reduced costs resulting from improved understanding of the WQS regulation and clarification of the requireme nts of certain provisions . This analysis does not address this potential for offsetting reductions in administrative costs. **1.3 Organization of this Report**  The remainder of this report is organized as follows:  Section 2 describes the specific WQS program area s to which the EPA is prop osing changes , and the proposed regulatory revisions .  Section 3 describes the data and method for estimating the administrative costs that may be associated with the proposed revisions, and the results.  Section 4 qualitatively describes the benefits that m ay be associated with the proposed revisions.  Section 5 provides references.**July 2013**  **2. Baseline and Proposed Rule 2**  **- 1** 



### 2. **Baseline and Proposed Rule** The EPA is proposing changes to specific program areas of the WQS regulation at 40 CFR part 131. This section describes the current regulatory framework and the proposed regulatory revisions in the following program areas: A dministrator’s determinations, designated uses, triennial reviews, antidegradation, variances, and compliance schedule authorizing provision s . **2.1 Ad**  **ministrator’s Determinations**  Se ction 303(c)(4)(B) of the CWA requires the EPA Administrator to promptly prepare and publish proposed regulations setting forth new or revised WQS when the Administrator determines that new or revise d standards are necessary to meet the requirements of the Act. **2.1.1 Current**  **Regulatory Framework**  Currently , the EPA Administrator uses discretion in issuing determinations , after evaluating all relevant factors. After a state or tribe submits its adopted WQS, the EPA has 60 days to approve the standards, or 90 days to disapprove the standards and to specify changes necessary

for compliance with the regulations. I f the state or tribe does not adopt the recommended changes, or the EPA Administrator determines that additional WQS are necessary to meet the requirements of the CWA, then the EPA is responsible for promptly promulgating new or revised WQS. The current process b y which the Administrator determines that new or revised federal standards are necessary

is not always clearl y understood or interpreted b y the public and stakeholders. In some instances , this lack of understanding has led to a mistaken conclusion that the EPA has made a 303(c)(4)(B) determination when, in fact, the EPA has not made and does not intend to make one . For example, Agency memoranda or documents articulating areas where states and tribes’ WQS may

need improvements have sometimes been construed or alleged by stakeholders to be official Administrator determinations that obligate the EPA to propose and promulgate federal WQS for such states and tribes . **2.1.2 Proposed Revisions**  The EPA is proposing to amend §131.22 to add a requirement that an Administrator’s determin ation must be signed b y the Administrator or his or her dul y authorized delegate, and must include a statement that the document is a determination under section 303(c)(4)(B) of the CWA. The proposed revision would allow the EPA to effectivel y provide direct , clear, and transparent feedback on state and tribal actions, and to maintain an open and constructive dialogue with states , tribes and stakeholders on important water quality issues without potentially triggering a mandatory

duty on the part of the EP A to develop WQS before either a state , tribe, or the Agency believes such a course is appropriate and necessary . The burden and cost implications of the proposed revisions regarding Administrator’s determinations on states and tribes are discussed in Section 3.2.2 . **2.2 Designated Uses**  Designated uses communicate a state’s or tribe’s environmental management objectives for its waters and drive on - the - ground water quality decision - making and improvements. Designated**July 2013**  **2. Baseline and Proposed Rule 2**  **- 2** 

uses are a key

component of a water quality standard and, as such, play an important role in the effective implementation of the CWA. **2.2.1 Current Regulatory**  **Framework** Under section 303 (33 U.S.C. 1313) of the CWA, states and tribes are required to develop WQS for waters of the United States within their state or tribe . WQS shall include a designated use or uses to be made of the water and criteria necessary to protect the uses (CWA 303(c)(2)(A)). The CWA specifies that public water supplies, propagation of fish and wildlife, recreation, agricultural uses, industrial uses and navigation are the beneficial uses to be considered by states and tribes in establishing WQS . Des ignated uses are defined at §131.3(f) as the “uses specified in WQS for each water body or segment whether or not they are being attained.” A “use” is a particular function of, or activity in, a particular water body that requires a specific level of water quality . States and tribes have flexibility when managing their designated uses as long as they meet the requirements of the CWA and the implementing regulation . Specifically , the WQS regulation requires states and tribes to conduct a UAA when designating uses that do not include the uses specified in section 101(a)(2) of the CWA, when removing a designated use specified in section 101(a)(2) of the Act, or when adopting sub - categories of such uses which require less stringent criteria. **2.2.2 Proposed Revisions**  The EPA is proposing to amend paragraph (g) at §131.10 to provide that where a state or tribe demonstrates through the UAA process that a use specified in section 101(a)(2), or a sub category of such a use, is not attainable, then the state or tribe shall adopt the highest attainable use and criteria that protect such a use ( HAU). The HAU is defined in the proposed rule as “the aquatic life, wildlife, and/or recreation use that is found to be both closest to the uses specified in section 101(a)(2) of the Act and are feasible to attain , as determined using best available data and information through an appropriate UAA .” The purpose of identifying and adopting the HAU after conducting a defensible UAA is to ensure protection of whatever aquatic life, wil dlife, or recreation use and criteria that are feasible to attain in light of the associated UAA data evaluation and public process. The proposed rule offers examples of how states and tribes may choose to articulate the HAU :  Use a refined designated use s tructure that is already adopted into state or tribal regulation .  Revise the current designated use structure to include more refined uses and/or sub categories of uses .  Designate a location - specific use and adopt criteria to protect that use . The EPA is also proposing to add the definition of HAU , as defined in the proposed rule, to §131.3(m) . In addition, the EPA is proposing clarifying changes to 131.10(g), 131.10(j), and 131.10(k) to clarify

when a UAA is required and when a UAA is not required . The burden and cost implications of the proposed revisions regarding designated uses on states and tribes are discussed in Section 3.2.3 .**July 2013**  **2. Baseline and Proposed Rule 2**  **- 3** 

**2.3 Triennial Review**  **s** Public hearings on WQS provide an essential opportunity for the publi c to become involved in the WQS setting process , provide input, and make their concer ns known to public officials . **2.3.1 Current Regulatory**  **Framework** Sections 303(a) through (c) of the CWA require that states and tribes adopt WQS applicable to their interstate and intrastate waters and that the EPA review and approve or disapprove these standards within 60 or 90 days , respectively . Section 303(c)(1) further requires states and tribes to hold public hearings at least once every three ye ars for the purpose of reviewing applicable WQS and, as appropriate, modifying and adopting new or revised standards. Any such rev ised standards must be submitted to the EPA for review and approval or disapproval . The results of these reviews , regardless of whether the review results in the state or authorized tribe making revisions to their regulation , along with any information supporting a WQS revision (e.g. , UAA , methodologies for site - specific criteria, general information aiding in determining a submission’s adequacy) , must be submitted to the EPA for review. **2.3.2 Proposed Revision**  § 131.20(a) requires that any water body segment with WQS that do not include the designated uses specified in CWA section 101(a)(2) be re - examined and updated if new information becomes available to indicate that previously unattainable CWA 101(a)(2) uses are now attainable . However, because § 1 31.20(a) does not include a parallel statement regarding water quality criteria, states and tribes might not re - evaluate their existing water quality criteria once every three ye ars to ensure the criteria continue to be protective of the designated uses, even if new information such as the EPA’s new or updated 304(a) recommendations has become available. Although the CWA and WQS regulation clearl y require states and authorized tribes to review the applicable WQS at least once every three years, including de signated uses and criteria, the EPA is proposing to include an explicit reference to 304(a) recommended criteria at 131.20(a) , to parallel the existing reference to designated uses . Because the proposed revision regarding triennial reviews clarif ies an ex isting requirement and do es not establish a new regulatory requirement, the EPA estimates that thi s revision is unlikely to result in incremental burden and costs to state s and tribes. **2.4 An**  **tidegradation** The CWA antidegradation provisions are intended to help states and tribes protect and maintain high quality waters , as well as waters identified as outstanding national resource waters, and existing uses . While designated uses and criteria are tools states and tribes use to achieve the CWA 101(a)(2) go als, antidegradation complements these tools by providing additional protection for high quality waters that are already

achieving the CWA goals . **2.4.1 Current Regulatory**  **Framework** Currently , s tate and tribal antidegradation polic ies must provide protection for existing uses of all waters of the state or tribe , whether or not the waters are of high quality . The current rule requires that states and tribes adopt specific antidegradation policies and identify methods for implementing such policy (§131.12). The regulation also requires that, where thermal discharges are involved, the antidegradation policy and implementation methods must be consistent with section 316 of the CWA.**July 2013**  **2. Baseline and Proposed Rule 2**  **- 4** 

Generally , states and tribes establish their antidegradation policies in three tiers:  Tier 1 protects the existing use s for all water bodies.  Tier 2 protects high quality waters with water quality higher than necessary

to attain all CWA 101(a)(2) goals. State s and tribes develop method s to determine whether and when the lowering of water quality in Tier 2 waters is necessary . When allowing the lowering of water quality , however, states and tribes must ensure that existing use s are protected .  Tier 3 protects water quality in Outstanding National Resources Waters (ONRWs), which are est ablished by

states and tribes . N o lowering of water quality is allowed for these waters. States and tribes adopt antidegradation policies into their WQS and submit them to the EPA for review and approval . States and tribes also must identify the implementation methods used to implement their antidegradation policy . States and tribes continue to have the flexibility to, but are not required to, adopt antidegradation implementation methods directly into regulation or through incorporation by

reference, as long as the state or tribe meets the requirements of §131, Subpart C. Although the current WQS regulation requires that states and tribes adopt antidegradation polices and identify implementation methods, it does not contain specific implementation requirements n or specify the nature and degree of the EPA’s authority over implementation. **2.4.2 Proposed Revisions**  The proposed rule requires that state s and tribe s ensure they provide antidegradation protection consistent with §131.12(a). Specifically , the EPA is proposing that states and tribes:  Id entify

high quality

waters on either a parameter - by-parameter basis or water body- bywater body basis, provided waters are not excluded from Tier 2 protection solely because not all of the uses specified in CWA section 101(a)(2) are attained .  M ake a finding that lowering high water quality is necessary, per 131.12(a)(2), only after conducting an alternatives analysis that evaluates a range of non - degrading and minimally

degrading practicable alternatives that have the potential to prevent or minimize the degradation associated with the proposed activity . If the State can identify any practicable alternatives, the State must choose one of those alternatives to implement when authorizing a lowering of high water quality. Reviewing antidegradation requests that include alternative s anal ys es will result in potential incremental burden and costs for states and tribes that do not already do so . In addition , prohibiting the denial of Tier 2 protection solel y because not all of the uses specified in CWA section 101(a)(2) are attained may potentially result in increased burden and costs by increasing the number of Tier 2 antidegradation reviews b y s tates and tribes that currently engage in such practices . The burden and cost implications of the proposed revisions regarding requiring alternative anal ys es , and prohibiting the denial of Tier 2 protection solel y because not all of the uses specified in CWA section 101(a)(2) are attained are discussed in Secti on 3.2.4 . The EPA’s proposal specifies that the EPA is also considering and requesting public comment on whether to require states and tribes to adopt antidegradati on implementation methods as WQS . Such requirement may improve program implementation, ensure consistency with the CWA, and**July 2013**  **2. Baseline and Proposed Rule 2**  **- 5** 

provide transparency

as to applicable state and tribal antidegradation review requirements. Requiring states and tribes to adopt antidegradation implementation methods may result in a potential one - time incremental burden and costs for states and tribes. Therefore, the EPA is including a discussion of potential costs in Appendix A if the EPA were to finalize a rule requiring adoptio n of antidegradation implementation methods. **2.5 Variances**  A WQS variance is a time - limited designated use and water quality criteri on for a specific pol lutant(s), permittee (s), and water body or water body

segment. A WQS v ariance can sometimes be preferable to changing the designated use and associated criteria because it provide s time to improve water quality when there is uncertainty about whether the WQS is ultimately

attainable or uncertainty regarding what the HAU s are for the water body . **2.5.1 Current Regulat**  **ory Framework** The current WQS regulation provides only brief mention of WQS variances in § 131.13 . This provision indicates that WQS variances are general policies affecting the application and implementation of WQS , and that state s and tribes may include variances in their state and tribal standards at their discretion. S tates and tribes have expressed that variances are useful when WQS are not attainable today (or for a limited period of time), but may be attainable in the longer term. The E PA has encouraged state s and tribes to make use of variances where appropriate, as an important WQS tool that provides state s and tribes time to make feasible progress towards meeting WQS prior to considering a permanent use downgrade. Although the EPA has addressed variances through guidance, memoranda, and approval actions for many ye ars, the EPA’s WQS regulation lacks any regulatory specifications on variances . **2.5.2 Proposed Revisions**  The EPA is proposing a new regulatory section for variances at §131.14 , whi ch will address the following key

topic areas: applicability , submission requirements , implementation through permits, renewal, and v ariances in s tates with p romulgated v ariance p rocedures . Specifically , the EPA is proposing that :  State s and tribes include in formation in the variance identifying the permittee(s) to which the variance applies, the pollutant(s) for which the variance applies, and the exact location, water body

segment, or water body

to which the variance applies. For a water body vari ance, a state or tribe must include identif ication and documentation of any cost effective and reasonable best management practices for nonpoint sources related to the pollutant(s) and location(s) specified in the variance that could be implemented water b ody- wide to make progress towards attaining the designated use and criterion. A state or tribe must provide public notice and comment for any such documentation.  V ariance s specify

either the highest attainable interim use and numeric criterion that will apply during the term of the variance, or an interim numeric water quality based effluent condition that reflects the highest attainable condition for a specific permittee(s) during the term of the variance.  Where a state or tribe adopts a variance, the s tate ’s or tribe’s regulations continue to reflect the underl ying designated use and criterion unless the state adopts and the EPA**July 2013**  **2. Baseline and Proposed Rule 2**  **- 6** 

approves a revision to the designated use and criterion consistent with §131.10 or §131.11 . The interim requirements specified in the variance appl y for CWA section 402 permitting purposes and in issuing certifications under section 401 of the Act for the pollutant(s), permittee(s) and /or waterbody or water body segment(s) covered by the variance . All other WQS not specificall y addressed by the variance remain applicable.  No variance shall be granted if the designated use and criterion can be achieved by implementing technology- based effluent limits required under sections 301(b) and 306 of the CWA .  V ariances include an expiration date that are as short as possible , but expire no later than 10 years after the date that the state or tribe adopts the variance.  S tate s and tribe s demonstrate that attaining the designated use and criteri on is not feasible during the term of the variance . This demonstration must be based on one of the six factors listed under §131.10(g), or because actions necessary to facilitate restoration through dam removal or other significant wetland or stream reconfiguration activities preclude attainment of the designated use and criteria while the action is implemented.  V ariances serve as the basis of a water quality-based effluent limitation (WQBEL) included in a National Pollutant Discharge Elimination System (NPDES ) permit for the period the varianc e is in effect . Any activities required to implement the variance shall be included as conditions of the NPDES permit for the permittee (s) subject to the variance.  To obtain the EPA’s approval of a variance renewal, the state must meet the requirements of §131.14 and provide appropriate documentation of the steps taken to meet the requirements of the previous variance. Renewal of the variance may be disapproved if the applicant did not comply

with the conditions of the original variance, or otherwise does n ot meet the requirements of this section. For renewal of a waterbody variance, the state must also include documentation of the cost - effective and reasonable BMPs implemented to address the pollutant(s) subject to the variance and the water quality progres s achieved during the variance period. The burden and cost implications of the proposed revisions regarding variances on states and tribes are discussed in Section 3.2.5 . **2.6 Compliance Schedule A**  **uthorizing Provision** In In The Matter of Star
-Kist Caribe, Inc. , (( 3 EAD 172, 175, 177 (1990 )), the EPA Administrator (in an appeal of an EPA - issued NPDES permit) interpreted CWA s ection 301(b)(l ) (C) to mean that 1) after July 1, 1977, permits must require immediate compliance with (i.e., may not contain compliance schedules for) effluent limitations based on WQS adopted before July 1, 1977 , and 2) permit compliance schedules are allowed for effluent limitations based on standards adopted after July 1, 1977 onl y if the state or tribe has clearly indicated in its WQS or implementing regulations that it intends to allow them. The latter requirement ensures that a permit including such a compliance schedule still meets WQS under CWA s ection 301(b)(1)(C). **2.6.1 Current Regulatory**  **Framework** The EPA’s current WQS regulation is silent regarding compliance schedules and compliance schedule authorizing provisions. As a result, despite Star-Kist, the EPA is concerned that state/tribal permitting authorities may be including compliance schedules in permits, thus**July 2013**  **2. Baseline and Proposed Rule 2**  **- 7** 

delaying compliance with a WQS -based WQBEL, even though the state may not have authorized the use of such compliance schedules in its WQS or implementing regulations. **2.6.2 Proposed R** **evisions** The EPA is proposing to add a new regulatory provision at §131.15 to codify th e decision in In the Matter of Star Kist Caribe, Inc. ( 1990 WL 324290 (EPA), 1990 EPA App. LEXI S 45, 3 EAD 172 (April 16, 1990)). This new provision would clarify that a permitting authority may issue compliance schedules for WQBEL s in NPDES permits only if the state or tribe has authorized issuance of such compliance schedules pursuant to state or trib al law in its WQS or implementing regulations . The provision would als o clarify that individual compliance schedules issued under such authorizing pro visions are not WQS but must be consistent with CWA section 502(17), the state or tribe ’s EPA - approved compliance schedule authorizing provision , and the requirements of § §122.2 and 122.47 . Th e proposed revision s would require state s and tribes to adopt compliance schedule authorizing provisions in order to include compliance schedules in NPDE S permits. States and tribes would need to submit such provision s to the EPA for review and approval as part of WQS . The incremental burden and costs associated with adoption of such a provision to state and tribal WQS are already accounted for in the rulemaking costs described in Section 3.2.1 .**July 2013**  **3. Potential Incremental Costs 3**  **- 1** 



### 3. **Potential Incremental Costs and Burdens of the Proposed**  **Revisions** The EPA’s proposed WQS regulation revisions do not establish any new requirements directly applicable to regulated entities . Thus , the focus of this analysis is on the potential impact of the proposed regulation revisions on states and tribes that implement WQS . This section describes the data and m ethods that the EPA used to anal yz e th e potential administrative burdens and costs that may be associated with the proposed WQS regulation revisions (Section 3.1 ) , presents the results of this analysis for states and tribes (Section 3.2 ) and for the Agency (Section 3.3 ) , and discusses the uncertainties associated with the estimates (Section 3.4 ) . Section 3.2 follows the same organization as Section 2 . **3.1 Data and Method**  **s** The EPA assesse d the potential incremental costs and burdens associated with the proposed WQS regulation revisions by first estimating the incremental number of labor hours required b y states and tribes to comply with the revised regulation . The EPA then calculate d incremental costs associated with those additional labor hours as the product of the average number of additional hours each state and tribe require for each provision, the number of states and tribes potentially

affected by

the provision, and the average hourl y wage rate to perform the activity . For some proposed provisions (e.g., those related to antidegradation), the EPA estimated incremental labor hours on the basis o f the number of permitted dischargers in applicable jurisdictions . For these estimates, the EPA used data from its Integrated Compliance Information System for the National Pollutant Discharge Elimination System (ICI S -NPDES) database to calculate the number of permitted dischargers . The EPA estimate d the incremental number of labor hours potentially needed to comply

with the proposed rule using historical EPA information and data, and the historical knowledge and best professional judgment of the EPA ’s pers onnel with experience administering the WQS program . The EPA first identified elements of the proposed rule that could potentially require additional labor hours for compliance . The EPA then solicited e stimates of the incremental labor hours that may be required to comply

with each element of the proposed rule from the EPA ’s personnel at the EPA H eadquarters and all 10 regional offices . Most of the e stimates were based on best professional judgment . The EPA compiled and summarized the es timates of required labor hours and develop ed a single final estimate range for each regulation revision element by consensus . The EPA estimate d the cost of labor for states and tribes from data on state g overnment hourl y wage rates (data are not available for tribes). The labor categories chosen as applicable to WQS regulatory

revision efforts are Environmental S cientist, D epartment M anager, Environmental Engineer, and E conomist . Exhibit 3 - 1 shows the 2012 labor rates for these categories, inflated to March 2013 dollars using the Bureau of Labor Statistics (BL S) Employ ment Cost Index for professional and related state and local government workers ( 116.0/115.0 = 1.01 ), and accounting for benefits using the BL S Employer Cost for Employee Compensation for state and local professional government workers ( 3 2 .7% of total compensation is attributable to benefits ). An average wage rate was used because the EPA did not have information on the division of labor hours b y professional category that states and tribes use to administer their WQS program s .**July 2013**  **3. Potential Incremental Costs 3**  **- 2** 

**Exhibit 3**  **- 1**  **: Summary of State Government Average Hourly Wage Rates (2010 $)**  **Labor Category (OES Category)**  **Hourly Labor Rate**  **Hourly Benefits Hourly**  **Wage Rate**  Environmental Scientist (19

- 2041) $28 $14 $42 Environmental Engineer (17

- 2081) $33 $16 $50 Economist (19

- 3011) $30 $15 $45 Manager (11

- 9121) $36 $18 $54 **Average --**  **-- $48**  OES = Occupational employment statistics Source: BLS (2012 ; 2013a ; 2013b) **3.2 Estimated**  **B urden**  **and Costs** The sections below describe the EPA’s incremental labor hour estimates associated with the proposed rule and the resulting estimated costs. The potential burdens and costs include those that are likel y to occur only once, and those that are likely to occur on a regular basis. **3.2.1 Rulemaking A** **ctivities** The proposed rule may result in the need for states and tribes to modify their WQS for the purpose of adding specific requirements for the issuance of variances or provisions authorizing compliance schedules . Thus, states and tribes may need to initiate new rulemaking efforts or increase the scope of other planned regulatory changes to accommodate th e revised federal regulation . The incremental labor hours required for rulemaking efforts will likely be state - and tribe specific, and depend on exi sting WQS, the level of public interest, and state - and tribe - specific administrative procedures . For the purpose of this anal ys is, h owever, the EPA estimated the incremental level of effort rang e s on average from approximately 100 hours for relativel y small rule changes ( or tho se that may be performed in conjunction with the triennial review pro cess) to 500 hours for new or more complex rulemakings involving more than one provision . U sing the estimated average hourl y wage rate shown in Exhibit 3 - 1 ( $ 4 8 ) , the administrative cost associated with rulemaking activities for each governmental entity could range from approximately $4, 8 00 ($ 4 8  100 hours ) to $ 24,000 ($ 4 8  50 0 hours ) per entity . Fifty state s, 5 territories , the District of Columbia, and 39 tribes with authority to administer WQS programs have adopted EPA - approved WQS . Thus, a total of 95 (50 + 1+ 5 + 39 ) governmental entities could potentially be affected by

the proposed revisions to the federal WQS regulation . Using the conservative assumption that all 95 entities would undertake rulemaking activities as a result of the proposed regulation revisions , one - time incremental costs could range from approximately

$ 456 , 0 00 ($4, 8 00  95 ) to $ 2,280 , 0 00 ($ 24,000  9 5 ).**July 2013**  **3. Potential Incremental Costs 3**  **- 3** 

Note that s tate and tribal rulemaking activities associated with the proposed WQS regulation revisions will most likely be required only once . Thus, the estimated burden and costs associated with these activities are one - time costs . Furthermore, these costs may be overestimated for some state s and tribes that currently have WQS in compliance with the proposed regulation revisions, or if current state or trib al polic y does not permit WQS actions applicable to the proposed rule . Exhibit 3 - 2 summarizes the potential incremental one - time burden and costs associated with rulemaking activities. **Exhibit 3**  **- 2**  **: Potential One**  **- time**  **Burden and Costs Associated with Rulemaking Activities Bu** **rden per Rulemaking**  **( h**  **ours) 1**  **Cost per**

**Rulemaking 2**  **Number of**

**Potentially Affected Entiti**  **es 3**  **Total Burden**

**(h ours)**  **4 Total**  **Cost**

**( 2013$;**  **one -**  **time) 5**  **Annual ized** 

**Cost (** **2013 $/year)**  **6** 100

- 50 0 $4, 8 00

-

$ 24,000 95 9 , 5 00

– 47,500 $456,000

- $2,280,000 $30,700

-

$153,300 1. Reflects potential new or increased rulemaking activities to adopt provisions consistent with the proposed rule into WQS. 2. Hours per entity multiplied by average hourly wage of $ 48 . 3 . Includes 50 states, 5 territories , the District of Columbia, and 39 tribes with authority to administer WQS programs and that have adopted EPA

- approved WQS . 4 . Burden per entity multiplied by total number of potentially affected entities . 5 . Costs per entity multiplied by total number of potentially affected entities . 6. Although the EPA expects rulemaking costs to be incurred over an initial 3 year period, total one - time costs are annualized at 3% discount rate over 20 years for comparative purposes . **3.2.2 Ad**  **ministrator’s Determination s**  The proposed rule clarifies the definition of an Administrator determination . The EPA assumes that such a clarification will not result in incremental burden or cost to states and tribes . To the contrary , in creasing the clarity of what constitutes an Administrator ’s determination may result in burden reduction and cost savings by reducing litigation due to regulatory uncertainty . However, the EPA has not estimated such a potential reduction in burden and costs. As a result, the EPA’s estimate of the total potential incremental impact associated with the proposed rule may be over estimated . **3.2.3 Designated Uses**  The EPA is proposing to revise the WQS regulation to require adoption of the use representing the highest attainable use (HAU) when a state or tribe demonstrates through a UAA that a use specified in section 101(a)(2) or sub - category of such a use is not attainable . The current WQS regulation s require state s and tribes to conduct a UAA to remove designated use s . However, the current WQS regulations do not require identification and adoption of the HAU . Because the removal of a designated use and the adoption of a designated use are similar**July 2013**  **3. Potential Incremental Costs 3**  **- 4** 

WQS actions, the EPA is assuming for the purpose of this anal ys is that there is no incremental administrative burden or cost associated with adopting the HAU instead of removing the current designated use. However , the proposed WQS regulation revision may require some states and tribes to modify

current procedures for conducting a UAA to include i dentification of the HAU . For states and tribes that do not already conduct UAAs that identify the HAU , the requirement to do so may involve additional labor hours resulting in incremental costs . The EPA estimate s that approximately 8 states do not consistently identify the HAU when conducting UAAs. The EPA further estimates that a single UAA that does not determine the HAU require s approximately 1 0 0 to 50 0 labor hours to develop , and that as much as 30 percent additional effort may be required to determining the HAU . Thus, the EPA estimates that an additional 30 hours (10 0 hours  30 % ) to 15 0 hours ( 50 0 hours  30 % ) per UAA may be required to determine the HAU for states that do not already do so . Using these estimates and the hourly wage rate shown in Exhibit 3 - 1 ($ 48 ), the EPA estimates that incremental costs associated with identifying the HAU can range from approximately $ 1,400 to $ 7,200 for each UAA. The EPA considers UAA activities recurring events to the extent that states and tribes periodicall y conduct UAAs as need ed . However, the ir frequency of occurrence is highl y variable across states and tribes . The EPA estimates that state s and tribes conduct an average of 1 UAA per year . A ssuming that 8 states do not consistently identify the HAU when conducting a UAA, and states and tribes conduct on average 1 UAA per year , a total of 8 additional UAAs per ye ar may be associated with the proposed WQS regulation revision. Using the previously estim ated additional cost of $ 1,400 to $ 7,200 for each UAA , the EPA estimates the total incremental labor hours and costs associated with the proposed WQS regulation revision requiring identification and adoption of the HAU could range from approximately $ 11,00 0 (8  $1, 400 ) to $ 58 ,000 (8  $ 7 ,2 00) per ye ar . Exhibit 3 - 3 summarizes the potential incremental annual burden and costs associated with proposed WQS regulation revisions associated with designated uses . **Exhibit 3**  **- 3**  **: Potential Annual**  **Burden and Costs Associated with Proposed Revisions to Designated Use Provisions**  **1 B**  **u rden per**  **Entity (hours**  **/year )**  **1 C**  **os t per**  **Entity**

**($/year) 2**  **Number of**

**Potentially Affected**  **Entities Annual** 

**Burden 3**  **(hours /year** **) Annual**  **Costs**

**($/year) 4**  30

- 150 $ 1, 400

- $ 7 , 2 00 8 240

– 1,200 $ 11 ,0 00

- $ 58 , 0 00 1. Reflects potential incremental effort to identify the highest attainable use ( HAU) in the context of a use attainability analysis (UAA) , a ssuming one UAA per year . 2. Hours per entity multiplied by average hourly wage of $ 48 . 3. Burden per entity multiplied by total number of potentially affected entities . 4. Costs per entity multiplied by total number of potentially affected entities .**July 2013**  **3. Potential Incremental Costs 3**  **- 5** 

**3.2.4 An**  **tidegradation** The proposed revisions to the WQS regulation s may result in incremental administrative burden and costs associated with antidegradation implementation . The current regulation s require states and tribes to adopt an antidegradation policy into state or tribal WQS , which are subject to review and approval by the EPA and identify antidegradation implementation methods . The proposed WQS regulation revisions will add specific implementation requirements that could result in incremental burden and costs associated with the following activities :  Reviewing antidegradation requests that evaluate a range of non - degrading and minimally

degrading practicable alternatives that have the potential to prevent or minimize the degradation associated with the proposed activity .  Reviewing additional Tier 2 antidegradation requests due to an increase in the number of waters subject to Tier 2 review . For the purposes of this analysis, the EPA classified the potential incremental burden and costs associated with the antidegradation provisions of the proposed WQS regulation revisions into the following two categories:  Recurring burden and costs associated with the additional need to review antide gradation requests that evaluate a range of non - degrading and minimally degrading practicable alternatives that have the potential to prevent or minimize the degradation associated with the proposed activity .  Recurring burden and costs associated with an increase in the number of Tier 2 antidegradation reviews because waters will no longer be denied Tier 2 protection solely because not all of the uses specified in CWA section 101(a)(2) are attained . **3.2.4.1 Al**  **ternatives A nalysis**  When a discharger proposes an activity that would lower the water quality of Tier 2 receiving water s , the proposed WQS regulation revisions would require states and tribes to:  Evaluate a range of non - degrading and minimally degrading practicable alternatives that have the potential to prevent or minimize the degradation associated with the proposed activity .  Implement one of those practicable alternative s identified by the state that either prevents or minimizes degradation associated with the activity if the lowering of high water quality is permitted . These additional requirements may result in additional administrative burden and costs to states and tribes that do not already perform these activities. **Incremental Burden per Review** The current regulati on s require states and tribes to adopt antidegradation polic ies in their WQS . F or the purposes of this analysis, the EPA assumes that all states and tribes already review requests to lower water quality in Tier 2 waters . Nonetheless , the EPA recognizes that the proposed WQS regulation revisions may increase state or trib al administrative burden associated with Tier 2 antidegradation reviews because request s may now include analyses of pollution prevention alternative s where they previously

did not . The EPA estimates that a single Tier 2 antidegradation review requires an average of approximately 1 0 0 hours to 150 labor hours .**July 2013**  **3. Potential Incremental Costs 3**  **- 6** 

Furthermore, the EPA assumes that a Tier 2 review that include s an analysis of pollution prevention alternative s require s approximately 30 percent more time than a Tier 2 review that do es not include anal ys es of pollution prevention alternative s . Thus , states and tribes that receive requests to lower water quality in Tier 2 waters that include anal ys es of pollution prevention alternative s where such analyses were not previously provided c ould incur an additional administrative burden of approximately 30 hours (100 hours  0. 3 0) to 45 hours ( 15 0 hours  0. 3 0) for each request reviewed . **Number of A ntidegradation**  **Reviews** E stimating the total burden and costs associated with an increase in Tier 2 antidegradation review effort requires information on the total number of reviews performed. The EPA estimates that 1 6 states, 4 territories, 34 tribes , and the District of Columbia currentl y do not require identif ication and implementation of pollution prevention alternative s consistently for all Tier 2 antidegradation reviews . However, only 7 of the affected tribes with approved WQS programs have dischargers (according to the ICIS -NPDES database ) . In addition , the EPA does not have data on the number of Tier 2 antidegradation reviews each of these entities perform . Therefore, the EPA use d information on antidegradation implementation available from states with available information (Missouri and Iowa) to estimate the number of antidegradation reviews performed b y all potentially affected states and tribes. F or the purpose of this analysis , the EPA estimated the number of antidegradation requests in all potentially

affected states and tribes by using the ratio of antidegradation requests to total dischargers in the states of Iowa and Missouri. The Missouri Department of Natural Resources (MODNR) estimate s that it receives approximately 68 antidegradation requests each ye ar (MODNR, 2008). The EPA’s IC IS -NPDES database indicates that as of 201 3 there are 3, 243 individual NPDES -permitted dischargers for which in Missouri MODNR would be responsible for conducting potential antidegradation reviews (i.e., excludes dischargers on tribal land) . Thus, the number of antidegradation requests received by the state of Missouri is approximately 2 percent of the total number of NPDES -permitted dischargers each year . The Iowa Department of Natural Resources (IDNR) estimate s that it receives approximately 104 to 164 antidegradation requests each ye ar (IDNR, 2008). The EPA’s PCS database indicates that as of 201 3 Iowa has 1, 6 13 individual NPDES -permitted dischargers for which IDNR would be responsible for conducting p otential antidegradation reviews . Thus, the number of antidegradation requests received b y the state of Iowa is approximately 6 percent to 10 percent of the total number of NPDES -permitted dischargers each ye ar. On the basis of the information available from these two states, the EPA used 6% as the ratio of antidegradation requests each year to total NPDES permitted dischargers for all states and tribes because it is the average of 2% (Missouri) and 10% (upper range of Iowa). **Total Incremental Burden and Co st**  The EPA estimated the incremental burden and costs associated with potentially increased effort required to review antidegradation requests using the estimated total number of antidegradation reviews of potentially

affected states and tribes , the estimated additional labor hours required for each review, and the estimated cost for each of those additional labor hour. These potential incremental costs are shown in Exhibit 3 - 4 . The EPA identifie d the number of dischargers in affected states and tribes using its PCS and ICI S -NPDES databases , and estimated the number of antidegradation reviews b y multiplying the total number of dischargers by the estimate d rati o of**July 2013**  **3. Potential Incremental Costs 3**  **- 7** 

antidegradation reviews to total NPDES permits ( 6 % ) . The EPA then estimated the total incremental burden hours of affected state s and tribe s by calculating the product of the number of estimated antidegradation reviews and the number of additional hours for each review ( 30 to 45 hours per review) . Finally , the EPA estimate d the range of incremental costs for each state and tribe by

multiplying the range of incremental burden hours by the estimated average hourl y wage rate of $ 4 8 ( Exhibit 3 - 1 ). The EPA estimate d that 744 antidegradation reviews may require additional effort because they include anal ys es of pollution prevention alternative s where such anal ys es were not previously provided . The EPA estimate d that the total incremental burden for all states and tribes to perform this activity could range between 22,320 hours and 33,480 hours , and the total cost s associated with this incremental burden range between approximately $ 1,041,600 and $ 1,636,800 . Note that these are average estimates , and do not reflect potential differences in water quality and the geographical distribution of dischargers relative to Tier 2 wate rs . Exhibit 3 - 4 summarizes the potential incremental annual burden and costs associated with reviewing pollution prevention alternative s in Tier 2 antidegradation requests . **Exhibit 3**  **- 4**  **: Potential Annual Burden and Costs Associated with**  **Choosing P**  **ollution**

**P revention**  **A lternative**  **in Tier**  **2 Antidegradation**  **Requests Total**  **Number of Dischargers in All Affected States and**  **Tribes 1**  **Potential Number of**

**Antidegradation Re** **views 2**  **Annual Burden** **3**

**(hours/year) Annual**  **Costs 4** 

**($/year)** 12,402 744 22,320

– 33,480 $ 1,041,600

- $1 , 636,800 1. Based on data from the EPA’s ICIS

- NPDES database for 17 states, 4 territories, 34 tribes (only 7 of which have dischargers) , and the District of Columbia . Note that the number of dischargers in each state, exclude any dischargers on tribal lands since the state would not be responsible for reviewing antidegradation requests for such dischargers. 2 . Represents 6 % of the total number of dischargers in each affected state or tribe , the midpoint between 2% (MODNR, 2008) and 10% (IDNR, 2008). 3 . Calculated by multiplying number of antidegradation reviews in each affected state and tribe by potential per review burden of 30 to 45 hours , and s umming across all affected states and tribes . 4 . Calculated by multiplying number of antidegradation reviews in each affected state and tribe by potential per- review costs of $ 1, 400 to $ 2,200 , and summing across all affected states and tribes . **3.2.4.2 Identification of**  **H igh**  **Q uality**  **W aters**  The proposed rule does not permit states and tribes to deny Tier 2 protection to a water body solely because not all of the uses specified in CWA section 101(a)(2) are attained (termed the waterbody-by- waterbody approach) . Thus the proposed rule has the potential to result in the identification or designation of a greater number of high quality waters, increasing the number of antidegradation requests states and tribes receive and would need to review , resulting in incremental burden and costs.**July 2013**  **3. Potential Incremental Costs 3**  **- 8** 

The EPA estimates that approximately 7 states and tribes are currently using a waterbody- bywaterbody approach to identify high quality waters . These states and tribes are excluding waters from Tier 2 protection solely becau se not all of the uses specified in CWA section 101(a)(2) are attained . 1 The EPA estimated that , in order to comply with the proposed rule , these 7 states and tribes will choose to continue using the water body- by- water body approach . However, the EPA assumes that these states and tribes will most likely revise their implementation methods so that they are no longer excluding waters from Tier 2 protection solely because not all of the uses specified in CWA section 101(a)(2) are attained . Th e costs of the one - time rulemaking to revise implementation methods are estimated in Section 3.2.1 . Once th e estimated 7 states and tribes revise their implementation methods, th ey will likel y provide Tier 2 protection to additional waters . The EPA previously used information on the annual number of antidegradation requests in Missouri and Iowa to estimate the number of antidegradation requests states and tribes ty picall y receive. The EPA assume d that the number of antidegradation applications as a percentage of total permitted dischargers in these 2 states is representative of the number of antidegradation requests in other states and tribes that currently exclude waters from Tier 2 protection based on the impairment of a single parameter. The EPA also previously

estimated the number of Tier 2 reviews as the ratio of annual antidegradation to total number of NPDES - permitted dischargers in Missouri and Iowa ( 6 % ) . The EPA use d this percentage to estimate the number of additional Tier 2 requests requiring review by the 7 states and tribes that currentl y exclude waters from Tier 2 protection on the basis of the impairment of one water quality parameter . Using the EPA’s IC IS -NPDES data base of dischargers, the EPA’s estimated that 575 additional antidegradation requests may need to be reviewed in 7 states and tribes that do not currentl y provide Tier 2 protection to waters on the basis of impairment of a single parameter or group of parameters ( 9,578 dischargers in the 7 states × 6%) . The EPA estimated the number of labor hours required to review a single Tier 2 request that includes an analysis of pollution prevention alternatives b y adding the range of additional hours the EPA previ ousl y estimated to review pollution prevention alternatives to the estimated number of hours required to review a single antidegradation request that does not include an analysis of pollution prevention alternatives . Thus, the EPA estimates the number of h ours required to review a single antidegradation review that includes the anal ys is of pollution prevention ranges between 130 hours (1 00 hours + (1 00 hours × 30%)) and 195 hours (150 hours + (150 hours × 30%)) . Hence , the EPA estimates that the total incremental burden for all affected states and tribes rang es from 74,750 hour s (130 hours × 575 requests) to 112,125 0 hours (195 hours × 575 requests) each year . Assuming an estimated average hourl y wage rate of $4 8 /hour yi elds total incremental costs that range from approximately $ 3,565,000 to $ 5,405,000 . Exhibit 3 - 5 summarizes the potential incremental annual burden and costs associated with providing Tier 2 protection for waters where at least one of the uses specified in CWA section 101(a)(2) is attained .

1 Additional states and tribes exclude waters from Tier 2 protection based on the impairment of a group of parameters . Since the EPA’s assumption applies only to states and tribes that exclude waters based on a single parameter, this assumption i s likely to result in an underestimation of costs.**July 2013**  **3. Potential Incremental Costs 3**  **- 9** 

**Exhibit 3**  **- 5**  **: Potential Annual Burden and Costs Associated with**  **Provid ing**  **Tier 2 Protection**  **f**

**or Waters where at least one of**  **the uses specified in CWA section 101(a)(2) is attained**  **Number of Dischargers 1**  **Potential Number of Antidegradation**  **Re views**  **2 Annual** 

**Burden 3**  **(hours/year) Annual**  **Costs 4**  **($/year)** 9,578 575 74,750

– 112,125 $ 3,565,000

- $ 5,405,000 1. Based on data from the EPA’s ICIS

- NPDES database for 4 known states , and the national average number of dischargers per state for the three other states and tribes (i.e., 3 times the average number of dischargers in states currently using a waterbody

- by

-waterbody approach ( 1,422) ) . Note the number of dischargers excludes those on tribal lands because the state would not be responsible for antidegradation reviews for such dischargers. 2 . Represents 6 % of total number of disc hargers , the midpoint between 2% (MODNR, 2008) and 10% (IDNR, 2008). 3 . Calculated by multiplying number of antidegradation reviews in each affected state and tribe by potential per review burden of 1 3 0 to 195 hours , and summing across all affected states and tribes . 4 . Calculated by multiplying number of antidegradation reviews in each affected state and tribe by potential per

- review costs of $ 6,200 to $ 9,400 , and summing across all affected states and tribes . **3.2.5 Variances**  The EPA is proposing to revise the WQS regulations to provide more specificity and clarity in the development and use of variances . Most of the proposed revisions specify or clarify current practices and thus are unlikely to result in significant incremental administrative burden and costs . H owever, the proposed WQS regulation revisions also include new requirements that specify the type of information and documentation to be submitted to the EPA for review and approval of variances , and specif ies 10 ye ars as the maximum allowable duration of a variance . These provisions in the proposed WQS regulation revisions may result in incremental burden and costs. P otential incremental burden and costs associated with the requirement that states and tribes adopt certain variance conditions into state or trib al rule have already been accounted for in Section 3.2.1 . This section estimate s the potential incremental burden and cost s associated with providing additional documentation when submitting variances for review and approval , and the expected incre ase in the number of variances submissions that states and tribes will review because variances with a duration longer than 10 years will be subject to review and approval more frequently . **3.2.5.1 Submission requirements**  The proposed revisions to the WQS regulatio n will establish a standardized format for all variance submissions to the EPA that include s information and documentation to justify the granting of the variance . At a minimum, states and tribes will need to include a description of the pollutant(s) for which the variance applies, the location, stream reach, or water body to which the variance applies, and either (1) the highest attainable interim use and numeric criterion that will**July 2013**  **3. Potential Incremental Costs 3**  **- 10** 

apply during the term of the variance , or (2) a numeric water quality based effluent condition that reflects the highest attainable condition for a specific permittee(s) during the term of the variance. To document that a variance is needed, state s and tribes must also demon strate that attaining the designated use and criteri on is not feasible during the term of the variance because of one of the factors listed in §131.10(g) or because actions necessary to facilitate short - term restoration through dam removal or other signifi cant wetland or stream reconfiguration activities preclude attainment of the designated use and criteri on while the action is implemented . For a water body variance, submissions to the EPA would also require identification and documentation of the cost - ef fective and reasonable best management practices for nonpoint source controls related to the pollutant(s) and location(s) specified in the variance that could be implemented in the waterbody to attain the designated use s and criteri a . Finally , if a varianc e renewal is needed, states and tribes would be required to submit documentation showing the steps that were taken to meet the requirements of the previous variance. For renewal of a water body variance, the state or tribe must also include documentation o f the best management practices implemented to address the pollutant(s) subject to the variance and the water quality progress achieved during the variance period. States and tribes that do not currentl y develop and document variances to the extent required b y the proposed WQS regulation revisions may need to develop and review more detailed variances. However, much of the additional required information may already be available from assessing the need for a variance . For example, states and tribes c ould use effluent and receiving water data provided b y applicants to specify interim WQS measures applicable to a variance . In addition, information provided in the variance application documenting existing operations should indicate whether technology

in place is properl y operated and maintained. Analyses needed to support the justification of a variance will likely yield information that can be used to develop the numeric values of the interim water quality criteria necessary to support interim designate d uses . It is also important to note that , although the majority of factors that may be used to justify

the need for a variance are the same as those listed for a permanent use change, the se anal ys es are not the same . The EPA expects that in most scenarios , states and tribes can determine a numeric criterion or numeric effluent condition reflecting the highest attainable condition during the term of the variance . This is largel y because anal ys es needed to support the justification for a variance based on on e of the regulatory factors specified in §131.14(b)(2) will likel y yi eld information that can be used to develop the necessary numeric values . In consideration of the above conditions, the EPA estimate s that there may be incremental burden and cost associated with additional development and documentation of variance requests . The EPA estimate s that the development and documentation of a single variance request currentl y require s, on average , approximately 1 25 to 150 labor hours . The EPA further estimate s that if the information and documentation explicitly described in the proposed revisions are not currentl y included in a variance, including them would increase the labor hours require b y states and tribes to fully

develop and document variance requests by approximately 30%. Thus, the incremental burden associated with fulfilling the variance submission requirements in the proposed WQS regulation revision c ould range from approximately 40 hours (1 25 hours × 30% ) to 45 hours ( 150 hours × 30% ) for each variance request.**July 2013**  **3. Potential Incremental Costs 3**  **- 11** 

The EPA estimates that , on average each state or tribe review s on average approximately 3 variance requests each ye ar . States and tribes review these requests and submit them to the EPA for review and approval as a modification to their WQS. The EPA further estimates that approximately 22 states and tribes do not currentl y fulfill all of the submission requirements specified in the proposed WQS regulation revisions . Thus, the EPA estimates that the total incremental burden associated with the additional development, documentation, and review of variance requests for each entity is approximately 120 hours per ye ar (40 additional hours per variance × 3 variances per year) to 135 hours per year (45 additional hours per variance × 3 variances per year) , and the total incremental burden associated with development, documentation, and review of variance requests is approximately 2,640 hours per ye ar ( 120 additional hours × 22 states and tribes ) to 2,970 hours per ye ar ( 135 additional hours × 22 states and tribes ) . Using the EPA’s estimated average hourly wage rate of $ 48 ( Exhibit 3 - 1 ), the cost per variance is estimated to be $1, 900 (40 additional hours per variance  $ 48 per hour) to $ 2,200 (45 additional hours per variance  $ 48 per hour). Thus, the estimated total cost is approximately

$ 125,400 per year ($1 , 900 per variance × 3 variances per ye ar × 22 states and tribes) to $ 145,200 per year ($ 2,200 per variance × 3 variances per year × 22 states and tribes). Exhibit 3 - 6 summarizes the potential incremental annual burden and costs associated with additional documentation requirements for variance submissions . **Exhibit 3**  **- 6**  **: Potential Annual**  **Burden and Costs Associated with Additional** 

**Documentation Requirements for Variance Submissions Bu** **rden per Entity** **1 (hours**  **/year )**  **Cost per Entity** **2**

**($/ y** **ear) Number of** 

**Potentially Affected**  **Entities Annual** 

**Burden (hours**  **/year )**  **3 Annual**  **Costs**

**($/year) 4**  120

– 1 35 $ 5,700

– $ 6,600 22 2,640

– 2,970 $ 125,400

– $ 145,200 1. Assuming states issue three variances per year. 2. Hours per state per year multiplied by average hourly wage of $ 48 . 3. Burden per state per year multiplied by total number of potentially affected states and tribes. 4. Costs per state per year multiplied by total number of potentially affected states and tribes. **3.2.5.2 Renewals**  The proposed WQS regulation revisions will not allow variance s to exceed a duration of 10 ye ar s after the date that the state or tribe adopts the variance . By requiring an expiration date for the variance and specifying the maximum duration in federal regulation , the EPA can ensure that variances are time - limited and that the conditions of a variance will be thoroughl y re - evaluated and subject to a public review on a regular and predictable basis . These reviews will determine whether (1) conditions have changed such that the designated use and criteria are now attainable ; (2) additional information has been gathered to indicate that the designated use and criteria are not attainable in the future (i.e. , data could support a use change/refinement) ; or (3) feasible progress is being made towards the WQS but additional time m ay be needed to make further progress (i.e., renewing the variance) .**July 2013**  **3. Potential Incremental Costs 3**  **- 12** 

S ome states and tribes already grant variance s that expire within the proposed maximum duration of 10 years , while other s grant variances with duration s longer than 10 years or with no expiration date . States and tribes that grant variances with duration s longer than 10 years or no expiration date may incur incremental burden and costs as a result of the proposed WQS regulation revisions because of an increase in the frequency of variance renewal applications requiring state review and subsequent submittal to the EPA for review and approval. The EPA estimates that states and tribes process approximately 3 variance requests each year, and approximately

4 states and tribes at least occasionally issue variances with a duration longer than 10 ye ars ( EPA , 2011 b ) . The EPA further estimates that these 4 states and tribes will grant variances with a duration of 10 years , resulting in an additional 3 variance renewal requests each ye ar. These additional variance renewal requests account for the previousl y issued variances that do not have expiration dates, and newl y issued variances that may result from clarification of when and how variances may be granted. Thus , the EPA estimates states and tribes may need to process a total of 12 additional variance renewal requests per ye ar (3 additional variance renewal requests for each state or tribe per ye ar × 4 states and tribes) . For the purpose of this analysis, the EPA assumes that the labor hours needed to process an application to renew a variance are the same as the labor hours required to process a new variance application that satisfies the new submission requirements . The EPA used estimated labor hours to process variances that are described in Section 3.2.5.1 and estimated the labors hours required for each additional variance request as ranging from 165 hours ( 125 hours + ( 125 hours × 30% ) ) to 195 hours (150 hours + (150 hours × 30% )) for each variance . The EPA assumes this equivalency b ecause the proposed WQS regulation revisions require that renewal applications evaluate whether : (1) conditions have changed allowing the designated use and criteria to be attain ed ; (2) additional information has been gathered that indicate s the designated use and criteria are not attainable in the future (i.e. , data could support a use change/refinement) ; and (3) feasible progress was made towards the WQS but additional time is needed to make further progress . Thus, the EPA estimates that the total incremental burden associated with a potential increase in the number of variance requests is approximately 1,980 hours per ye ar ( 16 5 hours per variance × 12 additional variance renewal requests ) to 2,3 4 0 hours per year ( 195 hours per variance × 12 additional variance renewal requests ) . Multiplying these estimated burden hours by the EPA’s estimated average hourl y wage rate of $ 48 ( Exhibit 3 - 1 ) results in an estimated total cost of approximately $ 95,200 per year to $ 112,400 per year . Exhibit 3 - 7 summarizes the potential incremental annual burden and costs associated with proposed revisions to the WQS regulation requiring that the duration of a variance be no longer than 10 years .**July 2013**  **3. Potential Incremental Costs 3**  **- 13** 

**Exhibit 3**  **- 7**  **: Potential Annual**  **Burden and Costs Associated with Renewing Variances Annual B**  **u rden**  **1 (hours**  **/year )**  **Annual C osts**  **2 ($**  **/year )**  1, 9 8 0

– 2,34 0 $ 95,200

– $ 112,400 1. Assuming that an increase in variance requests applies to 4 states and tribes that review 3 variances per year. 2. Calculated by multiplying the h ours per year by the average hourly wage of $ 48 . **3.2.6 Summary** 

**of Estimated**  **Burden and Costs to States and Tribes** Exhibit 3 - 8 provides a summary of the estimated national costs to all states and tribes. Costs for rulemaking are one - time (nonrecurring) costs, while the costs associated with the proposed p rovisions for designated uses and variances occur annually . The one - time rulemaking activities will occur over an initial three - ye ar period after promulgation of the proposed rule. **Exhibit 3**  **- 8**  **: Summary of Po tential Incremental Administrative**  **Burdens and Costs**  **Associated with the Proposed Rule Provision**  **One -**  **time Activities**  **Annual Activities** 

**Burden (hours)**  **Total**

**Cost (2013$**  **millions) Annual** **ized**

**Cost 1**  **(2013$ million/year)**  **Burden**

**(hours/year) Annual**  **Cost**

**(2013$ millions/year)**  Rulemaking Activities 9 ,500

–

47,500 $0. 46

-

$ 2.28 $0.03

- $0.15

-- -- Designated Uses

-- -- -- 240

– 1 , 200 $0.01

- $0.0 6 Antidegradation

-- -- -- 97,070

– 145,605 $ 4.61

- $ 7.04 Variances

-- -- -- 4 , 620

– 5 , 310 $0. 22

- $0.2 6 National Total 9,500

–

47,500 $ 0.46

-

$ 2.28 $0.03

- $0.15 101,930

– 152,115 $ 4.84

- $ 7.36
‘

-- ‘ = not applicable 1. Although the EPA expects o ne - time rulemaking activit y costs to be incurred over an initial three

- year period , costs are annualized at 3% discount rate over 20 years for comparative purposes . **3.3 Estimated**  **Burden and Costs to the A gency**  In addition to the potential burden and costs to states and tribes, the proposed WQS regulation revisions may potentiall y be associated with incremental burden and costs to the EPA. These incremental burden and costs to the EPA are associated with the potential increase in workload to review the additional WQS program materials submitted by states and tribes as a result of the proposed WQS regulation revisions . On the basis of best professional judgment, the EPA conservativel y estimates the incremental burden and costs to the EPA based on costs being up to 20% of the costs to states and tribes. Thus, the EPA estimates that one - time incremental costs to**July 2013**  **3. Potential Incremental Costs 3**  **- 14** 

the Agency would range from $ 91,000 ($ 456,000 × 20%) to $ 456,000 ($ 2,280,000 × 20%) , and e stimated annual incremental costs to the EPA range from $ 968,000 ($ 4,838,200 × 20%) to $ 1,471,000 ($ 7,357,400 × 20%). The EPA assumes that the EPA staff who conduct reviews of WQS program materials are General Schedule (GS) 13, Step 5 federal employees (including EPA regional staff). In 201 3 , the average hourl y wage rate for all federal employees at this grade and step was $ 47.22 per hour (U.S. Office of Personnel Management 201 3 ) 2 . Assuming that benefits and overhead are equal to 60% of the hourl y wage, the average loaded hourly wage rate for federal employees is equal to $ 75.55 ($ 47.22 per hour + (60% × ($ 47.22 per hour)). Full - time equivalent (FTE) employees work 2,080 hours p er ye ar (40 hours per week × 52 weeks). Using the average loaded wage rate and the number of hours worked per FTE, the EPA estimated the number of burden hours and the EPA FTEs associated with the increased workload under the proposed WQS regulation revisi ons . Estimated one - time incremental burden to the EPA ranges from 1,200 hours ($ 91,000 ÷ $ 75.55 per hour) to 6,040 hours ($ 456,000 ÷ $ 75.55 per hour). These one - time incremental burden estimates correspond to 0.58 FTEs ( 1,200 burden hours ÷ 2,080 hours worked per FTE per year) to 2.90 FTEs ( 6,040 burden hours ÷ 2,080 hours worked per FTE per ye ar). Estimated annual incremental burden to the EPA ranges from 12,810 hours per ye ar ($ 968,000 ÷ $ 75.55 per hour) to 19,470 hours per ye ar ($ 1,471,000 ÷ $ 75.55 per h our). These annual incremental burden estimates correspond to 6.16 FTEs per year ( 12,810 burden hours ÷ 2,080 hours worked per FTE per year) to 9.36 FTEs per ye ar ( 19,470 burden hours ÷ 2,080 hours worked per FTE per year). Exhibit 3 - 9 summarizes the potential incremental annual burden and costs to the Agency associated with the proposed WQS regulation revisions .

2 The employees reviewing and approving WQS materials submitted by states and tribes include EPA staff in the Washington, DC area and EPA regional staff. Hence, we calculate the average of all locality wag e rates for federal employees at GS 13, Step 5 in 2013.**July 2013**  **3. Potential Incremental Costs 3**  **- 15** 

**Exhibit 3**  **- 9**  **: Potential Incremental Burden and Costs to the Agency Associated with the Proposed**  **Rule One**  **- time**  **Activities Annual**  **Activities Costs to**  **States and Tribes**  **( 2013$**  **million )**  **Costs to**

**the Agency** **1 (** **2013$ million** **) Annualized** 

**Costs to the Agency**  **(2013$ million per**  **year) 2**  **Burden Costs to**  **States and Tribes**  **( 2013$**  **million per year** **) Costs to** 

**the Agency** **1 (** **2013$ million per**  **year )**  **Burden Hours**  **3 FTEs**  **4 Hours**  **per year** **3 FTEs**  **per year** **4** $0.46

- $2.28 $0.09

-

$0.46 $0.01

- $0.03 1,200

-

6,040 0.58

- 2.9 $4.84

- $7.36 $0.97

-

$1.47 12,810

-

19,470 6.16

- 9.36 1. Assuming that the incremental costs to the EPA are equal to 20% of the costs to states and tribes. 2. Although the EPA expects these one

- time costs to be incurred over an initial three year period, the costs are annualized at 3% discount rate over 20 years for comparative purposes. 3. Total costs to the Agency divided by hourly wage rate ($ 75.55 per hour). 4 . Burden hours to the Agency divided by hours worked by full

- time equivalent (FTE) employees per year (2,080 hours per year). **3.4 Summary** 

**of Potential Burden**  **, Costs, and Uncertainties**  Exhibit 3 - 10 provides a summary of the estimated costs to all potentially affect states and tribes , and to the EPA . To obtain a total cost estimate that accounts for both one - time and recurring costs, the EPA cho s e a period for anal ys is, calculated the costs for each year within that period, calculated the present value of the costs, and then estimated a total annualized cost . The costs of the proposed rule are the same in each ye ar after the first year. Therefore, the EPA chose a 20 ye ar period because 20 years extends past the time when costs have reached a steady state and for which it is reasonable to project into the future. Note that this time period may result in an overestimation of total costs beca use most of the one - time costs will probably have already occurred before 20 year s . Using a 20 - year period of anal ys is and a discount rate of 3%, the net present value of all costs associated with the proposed rule ranges from $ 86.99 million to $ 134.11 mil lion, while the total annualized costs range from $ 5.85 million ($0.04 million + $5.81 million) to $ 9.01 millio n ($0.18 million + $8.83 million) .**July 2013**  **3. Potential Incremental Costs 3**  **- 16** 

**Exhibit 3**  **- 10**  **: Summary of Potential Incremental Administrative Burdens and**  **Costs Associated with the Proposed Rule**  **to States, Tribes, and the Agency Entities**  **One -**  **time Activities**  **Annual Activities** 

**Burden (hours)**  **Cost (2013$**

**million) Annual** **ized**

**Cost 1**  **(2013$ million/year)**  **Burden**

**(hours/year) Annual**  **Cost**

**(2013$ million/year)**  States and tribes 9,500

-

47,500 $0.46

- $2.28 $0.03

- $0.15 101,930

- 152,115 $4.84

- $7.36 Agency 1,200

- 6,040 $0.09

- $0.46 $0.01

- $0.03 12,810

- 19,470 $0.97

- $1.47 Total2 10,700

-

53,540 $0.55

- $2.74 $0.04

- $0.18 114,740

- 171,585 $5.81

- $8.83 1. Although the EPA expects rulemaking costs to be incurred over an initial three

- year period , one - time costs are annualized at 3% discount rate over 20 years for comparative purposes . 2. The net present value of total costs over a 20

- year period (using a 3 percent discount rate) ranges from $ 86.99 million to $ 134.11 million, while the annualized costs range from $ 5.85 million to $ 9.01 millio n . Exhibit 3 - 11 provides a summary of the potential uncertainties associated with the estimates of burden and costs . **Exhibit 3**  **- 11**  **: Uncertainties in the Analysis**  **Key Assumptions/Uncertainties Potential Impact**  **on Estimated Burdens and Costs**  **Comment**

Labor hours required to implement various provisions based on best professional judgment. ? Labor hours needed depends on a number of factors including state and tribe sizes, level of economic activity involving dischargers to water, existing regulatory framework, and may be higher or lower than the EPA’s estimates. The estimates do not account f or potential reductions in burden resulting from the increased clarity provided by the proposed rule. Number of states and tribes affected by each provision is uncertain. ? Actual number of states and tribes that will incur costs could be higher or lower than the EPA estimates.**July 2013**  **3. Potential Incremental Costs 3**  **- 17**  **Exhibit 3**  **- 11**  **: Uncertainties in the Analysis**  **Key Assumptions/Uncertainties Potential Impact**  **on Estimated Burdens and Costs**  **Comment**

Labor costs based are state government wage rates. ? The mix of labor categories (e.g., environmental scientist, engineer, etc.) may be different for individual states from the mix that the EPA used to calculate a wage rate. Also, labor costs for authorized tribes and territories may differ from states. No states or tribes set time limits for variances and none review variances during triennial review periods. + Costs would be overestimated for states and tribes that already set expiration or renewal dates or adopt variances as part of their WQS. All states and tribes would undertake a rulemaking effort in response to the proposed rule. + States and tribes that already have policies and method s consistent with the EPA’s proposed rule would not incur costs. The number of Tier 2 antidegradation requests per year is based on information from two states (Iowa and Missouri). ? The actual number of Tier 2 antidegradation requests per state or tribe may be higher or lower than the EPA’s estimates.
States and tribes renew three variances per year. ? States and tribes may review fewer variance requests because current variances may not qualify for renewal under the new requirements, or discharger progress toward interim goals may allow them to meet the standard. States and tribes may be required to undertake activities related to the proposed rule that the EPA has not identified in this analysis. - To the extent that affected states and tribes may be required to undertake additional activities that the EPA has not identified in this analysis, the analysis may underestimate actual burdens and costs. Incremental costs to the Agency are equal to 20% of the costs to states and tribes. + The EPA may be overestimating the burden on the Agency to review and approve WQS materials submitted by states and tribes.**July 2013**  **3. Potential Incremental Costs 3**  **- 18**  **Exhibit 3**  **- 11**  **: Uncertainties in the Analysis**  **Key Assumptions/Uncertainties Potential Impact**  **on Estimated Burdens and Costs**  **Comment** Key: “+” = Burdens and costs potentially overestimated
“

- “ = Burdens and costs potentially underestimated “?” = Impact on burdens and costs uncertain**July 2013**  **4. Potential Incremental Benefits 4**  **- 1** 



### 4. **Potential Incremental Benefits of the Proposed Revisions** The CWA establishes the national objective to “restore and maintain the chemical, phys ical, and biological integrity of the Nation’s waters,” and achieving “wherever attainable, an interim goal of water quality

which provides for the protection and propagation of fish, shellfish, and wildlife and for recreation in and on the water . ” One tool used to achieve the goals of the CWA is the WQS regulation and program. The core requirements of the current WQS regulation have been in place for over 27 ye ars. These requirements have provided a strong foundation for water quality-based controls, including water quality assessments, impaired waters lists, and total maximum daily

loads (TMDL s) under CWA section 303(d), as well as for WQBEL s in NPDES discharge permits. As with the development and operation of any program, however, a number of policy and technical issues have recurred over the past 27 ye ars in individual standards reviews, stakeholder comments, and litigation . These issues may be addressed and resolved more efficientl y b y clarifying, updating and revising the WQS regulation to en sure greater public transparency , better stakeholder information, and more effective implementation. A ll states and tribes that implement a WQS program should benefit to some degree from the proposed clarifications and revision to the regulation. In addition , the proposed revisions should improve the CWA’s effectiveness of restoring and maintaining the chemical, physical, and biological integrity of the n ation’s waters . Because these effects could be wide ranging and are difficult to quanti f y, the sections below describe the benefits of the proposed revisions qualitatively . Th ese sections describe both the direct and indirect benefits of the proposed rule . The first section outlines the benefits of the proposed rule b y program area . The second section describes the potential benefits of improving and maintaining the nation’s waters as a result of the proposed rule. **4.1 Benefits by** 

**Proposed Program A rea Change**  The proposed rule will increase clarity and specificity

in the following key

program areas: (1) Administrator’s determinations that new or revised WQS are necessary , (2) designated uses, (3) triennial reviews , (4) antidegradation, and ( 5 ) variances to WQS. The WQS regulation revisions would also provide regulatory clarification as a result of the EPA decisions relating to compliance schedules following the court decision in In the Matter of Star-Kist Caribe, Inc . (1990 WL324290 (EPA), 3EAD 172 (April 16, 1990)) . S tates and tribes, other stakeholders, and the public will benefit from clarification in these key areas by being able to better understand and make proper use of available CWA tools and flexibilities, while maintaining open and transparent public participation. Clear regulatory requirements and improved implementation will provide a more transparent and well - defined pathway for maintaining and restoring the biological, chemical, and physical integrity of the nation’s waters. **4.1.1 Ad**  **mi nistrator’s Determinations**  Section 303(c)(4)(B) of the CWA provides the EPA Administrator with authority to determine that a new or revised WQS is necessary to meet the CWA requirements in those situations where a state fails or is unable to act in a mann er consistent with CWA provisions. Such a determination is made at the Administrator’s discretion, after evaluating all relevant factors. An**July 2013**  **4. Potential Incremental Benefits 4**  **- 2** 

Administrator’s determination triggers the requirement for the EPA to promptly prepare and publish proposed regulations setting forth a revised or new WQS for the waters of the United States that are involved. The process whereb y the Administrator determines that new or revised standards are necessary is not always clearl y understood or interpreted b y the public and stakeholders. In order to ensure effective implementation of the national WQS program, provide direct, clear, and transparent feedback on state and tribal actions, and maintain an open and constructive dialogue with states and tribes and stakeholders on important water quality issues, it is essential that states and tribes have the opportunity to seek advice and views from the EPA. The proposed revision will establish a more transparent process for the Administrator to announce any determination made under section 303(c)(4)(B) of the CWA. This revision will allow states and tribes to develop their WQS without fear of litigation triggering a mandatory duty on the part of the EPA to develop WQS for a state or tribe before the Agency believes it is appropriate or necessary and before the state or tribe has the opportunity to act on the EPA ’s comments and guidance. **4.1.2 Designated Uses**  Designated uses communicate a state’s or tribe’s environmental management goals for its waters and drive on - the - ground water quality decision - making and improvements. To establish appropriate WQS, states and tribes define the water quality goals of a water body

first by designating the use(s) and second b y setting criteria necessary to protect those uses. WQS are the foundation for other CWA requirements applicable to a water body , such as WQBEL s for point source dischargers, as well as assessment of waters and establishment of TMDL s for waters not meeting applicable WQS. Because designated uses play such an important role in the effective implementation of the CWA, it is essential to provide clear and concise regulatory requirements to states and tribes for designated uses. The EPA acknowledges that the current regulation may be leading to conflicting interpretations, resulting in case -by- case anal ys is , which can direct resources away from water quality restoration and maintenance efforts . The EPA has found when stakeholders , states and tribes collectivel y understand and determine the management goals for a particular water body or water bodies, stakeholders are more likel y to become involved and work closely with the states and tribes in the establishment and attainment of WQS, leading to improved stewardship and watershed protection efforts. The c learer, more accurate, and refined the designated uses are in describing the state’s or tribe’s objective for a water body to support aquatic life, human health, recreation and other uses , the more effective those use designations can be in driving the management actions necessary to restore and protect water quality . Under the proposed rule, if a state or tribe demonstrates through a defensible UAA that the use specified in section 101(a)(2)b or a sub - category of such a use is not attainable and subsequently removes the use, then the state or tribe shall adopt as replacement standards the highest degree of use that is attainable (i.e., the HAU) . States and tribes have flexibility to adjust current designated uses through a UAA process in accordance with the provisions of §131.10(g). However, that flexibility

is provided in the context of meeting the overall goals of the CWA. As part of the UAA pro cess, a state or tribe may be able to adequatel y demonstrate that , for example, historic mining activities in an area result in nonattainment of applicable water quality criteria and the aquatic life use. However, if some less sensitive aquatic organisms are able to survive at the site, the goals of the CWA are not achieved b y simply removing the aquatic life**July 2013**  **4. Potential Incremental Benefits 4**  **- 3** 

use designation and applicable criteria without considering if existing water quality can be maintained or, where applicable, restored. Rather, the revised provision would require that states and tribes determine through the UAA the level of aquatic life protection that would be attainable , and then designate that use. This revision will ensure that the HAU for water body is as protective of water quality as possible. **4.1.3 Triennial Revie** **ws** Sections 303(a) through (c) of the CWA require that states and tribes adopt WQS applicable to their interstate and intrastate waters. Section 303(c)(1) further requires states and tribes to hold public hearings at least o nce every 3 years for the purpose of reviewing applicable WQS and, as appropriate, modifying and adopting new or revised standards, pending the EPA ’s approval of any proposed revisions. Public hearings on WQS provide an essential opportunity for stakeholders and the general public to participate in the WQS - setting process, provide input, and make their concerns known to public officials. In addition, the regulation requires states and tribes to consider whether any new information has become available and t o revise standards accordingl y, if uses specified in CWA section 101(a)(2) that were previously unattainable are now attainable. Stakeholders have expressed frustration that states and tribes may retain criteria in their state or tribe standards that are no longer protective of designated uses for multiple triennial review cycles, despite the availability of new or revised EPA CWA section 304(a) criteria recommendations. The EPA is aware of instances in which states and tribes have retained certain criteri a in their WQS for multiple triennial review cycles, even with new or revised criteria recommendations available, and is concerned that the existing regulatory language might be leading to confusion. Th e proposed rule will ensure that state or tribe standards incorporate the most current EPA criteria recommendations at the time of each triennial review , thus improving protection of the nation’s waters. **4.1.4 An**  **tidegradation** Section 101(a) of the CWA emphasizes the prevention of water pollution and expressly includes the objective of restoration and maintenance of the chemical, physical and biological integrity of the nation’s waters (33 U.S.C. 1251). The antidegradation requirements that the EPA incorporated b y regulation in 1983 into § 131.12 implement the maintenance aspect of CWA section 101(a) and are an essential component of the overall WQS program. Antidegradation plays a critical role in allowing states and tribes to maintain and protect the valuable resource of high quality water , and ensuring that decision s to allow a lowering of high quality water are made in a public manner that serve s the public good. High quality water provides support for aquatic life , recreation , unique and significant ecologies , and species habitat. High quality waters can provide a greater diversity of biological species and a more complex community structure than other waters. These attributes confer a special degree of resiliency and resistance to adverse effects, particularly

as the nation’s waters face an increasing degree of stress from anthropogenic influences. Protection of high quality waters is central to supporting both economic and social development. High quality water contributes to public health, aquatic ecos ys tems, drinking water supplies, and to the welfare of familie s and communities. The health and growth of tourism, recreation, fishing, and businesses and the jobs they create rely

on a high quality and sustainable source of water . Degradation of water quality increase public health risks , is detrimental to aquatic**July 2013**  **4. Potential Incremental Benefits 4**  **- 4** 

communities, and can increas e treatment costs that must be borne by ratepayers and local governments. Maintenance of high quality waters can save time and economic resources to a community in the long - term. If a high quality water becomes impaired, it can take significant amounts of time and financial resources to develop a TMDL , and implement activities to restore the water body . Effectivel y using an antidegradation program to prevent the degradation of a water body in the first place is very

often more c ost - effective and efficient. In addition, maintaining a water body in its initial high quality

state helps ensure the preservation of unique attributes that might be impossible to fully

restore. Section 4.2 of this report contains a more detailed discussion on the benefits associated with high quality water. **4.1.4.1 Identify**  **ing High Quality**  **Waters** The proposed rule requires states and tribes to identify high quality waters on a parameter-byparameter basis or on a water body-by- water body approach, unless the state or tribe describes an alternate approach that considers the chemical, physical, and biological integrity of the water body . In the absence of data for such holistic evaluation, the state or tribe shall apply high quality water protection per §131.12(a)(2). The EPA expects states and tribes to consider a combination of chemical, biological, and physical characteristics, using all the relevant availab le data to conduct an overall holistic assessment of one or more of these characteristics in order to determine whether a water body would receive Tier 2 protection. The approach should not simply limit the applicability

of Tier 2 through a list of disqual ifiers for Tier 2 protection (e.g., listing on the state’s 303(d) list) that are potentially

poor indicators of the overall quality of a surface water and the value of affording it Tier 2 protection under antidegradation. This proposed revision will ensure protection of a larger number of high quality

waters under antidegradation requirements. **4.1.4.2 Al**  **ternatives A nalysis**  Under the proposed rule, states and tribes will only make a finding that lowering water quality is necessary , as required in §131.12(a)(2), aft er conducting an alternatives analysis. This anal ys is must evaluate a range of alternatives that would prevent or minimize the degradation associated with the proposed activity . Further, the state or tribe will implement an alternative from a group of leas t degrading alternatives, each of which prevents or minimizes degradation to a comparable extent. This revision provides clarification to the existing requirement that a state or tribe must make a finding that a lowering of high water quality is “necessary” before allowing it. The proposed rule ensures that, where the alternatives anal ys is identifies one or more feasible alternatives to allowing the degradation, a proposed project would be modified to minimize degradation of water quality . This balanced co nsideration of water quality impacts along with other holistic considerations is the most thorough and publicly transparent way

to determine that lower water quality is allowed only when necessary , consistent with the EPA’s regulation. **4.1.5 Variances**  The objec tive of the CWA is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” However, as environmental challenges become more complex, states and tribes may

require more time to determine and implement the best strategies to improve water quality

and attain applicable designated uses while striving to achieve the CWA goal. As an alternative to a permanent use downgrade, the EPA has encouraged states and tribes**July 2013**  **4. Potential Incremental Benefits 4**  **- 5** 

to utilize WQS variances as an important WQS tool to provide states and tribes time to make progress towards attaining a designated use and criteria. The EPA’s existing WQS regulation lacks explicit provisions on the issue of variances, and as a result, the EPA has heard from states and tribes, and stakeholders that there is confusion, inconsistency , and mixed interpretations about how, when, and where variances may be used. The proposed rule provide s greater regulatory specification for implementation of a WQS variance as a time - limited designated use and criterion. This revision will encourage proper use of variances as a tool for achieving WQS and facilitating water quality improvements. Variances are different from changes to the permanent designated use and associated criteria in that they are intended as a mechanism to provide time for stakeholders to implement adaptive management approaches that will improve water quality where the designated use and criterion currentl y in place are not being met. The EPA is proposing that whenever feasible, numeric criterion that reflects the highest attainable condition during the term of the variance is used . This numeric criterion must protect the interim designated use and be based on sound scientific rationale . Such a requirement is essential because it provides regulatory assurance that the variance will result in more than just maintaining the current water quality, and stakeholders may be less likely

to perceive variances as a means of locking ambient conditions in place and delaying environmental improvements . Variances allow stakeholders to implement actions that will achieve interim uses and criteria that are known to be attainable when there is uncertainty as to whether the designated use and criterion is ultimately

attainable. Variances are limited in their scope, ty pically , to one pollutant. Variances are an environmentally preferable tool to a permanent designated use change in that designated use protection is retained for all pollutants as they apply to all sources with the exception of those specified in the variance. When properl y applied, a variance can lead to improved water quality

over time, and in some cases, full attainment of designated uses due to advances in treatment technologies, control practices, or other changes in circumstances, thereb y furthering the objectives of the CWA. The proposed revisions will establish a standardized set of requirements to facilitate efforts to improve water quality

by allowing stakeholders to address any challenges and uncertainties associated with attaining the designated use and the associated criterion . The revisions would ensure that states and tribes base their identification and water body assessments decisions (under CWA sections 303(d) and 305(b)) , and development of WQBELS in permits for pollutants and dischargers not specified in the variance , on the designated use and criterion, even under the water body

variance scenario . These revisions will also provide assurance that further feasible progress toward the designated use and criterion will be made d uring the variance period and will also help meet CWA goals. **4.1.6 Compliance Schedule A**  **uthorizing Provisions** CWA section 502(17) defines “schedule of compliance” to mean “a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an effluent limitation, other limitation, prohibition, or standard.” The EPA’s NPDES regulation at 40 CFR 122.2 defines a schedule of compliance as “a schedule of remedial measures included in a ‘permit,’ including an enforceabl e sequence of interim requirements...leading to compliance with the CWA and regulations.” Section 301(b)(1)(C) of the CWA specifies that there shall be achieved “...not later than July 1, 1977, any more stringent limitation, including those necessary**July 2013**  **4. Potential Incremental Benefits 4**  **- 6** 

to meet W QS, treatment standards, or schedules of compliance, established pursuant to any State or tribe law or regulations (under authority preserved by section 1370 of this title) or any other Federal law or regulation, or required to implement any applicable water quality

standard established pursuant to this chapter.” The EPA’s current WQS regulation is silent regarding compliance schedules and compliance schedule authorizing provisions . As a result, the EPA is concerned that state and tribal permitting authorities may

be including compliance schedules in permits, thus delaying compliance with a WQS -based WQBEL, even though the state or tribe may not have authorized the use of such compliance schedules in its WQS or implementing regulations. The proposed rule add s a new regulatory

provision at §131.15 to clarify that a state or tribe may

onl y issue compliance schedules for WQBELS in NPDES permits if the state or tribe has authorized issuance of such compliance schedules pursuant to state or tribe law in its WQS or implementing regulations. Any such compliance schedule authorizing provision is a WQS subject to the EPA ’s review and approval. The proposed provision would also clarify that individual compliance schedules issued pursuant to such authorizing provisions are not WQS but must be consistent with CWA section 502(17), the state or tribe ’s EPA - approved compliance schedule authorizing provision, and the requirements of 40 CFR §§122.2 and 122.47. Compliance schedule authorizing provisions allow the state or tribe to provide a permittee additional time to comply with a WQBEL that derives from and complies with the applicable WQS beyond the date of permit issuance, which is the date upon which a permittee is otherwise required to compl y with its WQBEL . Thus, a compli ance schedule authorizing provision allows the state or tribe to delay

when it will meet the applicable WQS . By requiring states and tribes to authorize the use of compliance schedules in their WQS or implementing regulations, the EPA ensures that WQBELs subject to appropriately issued compliance schedules are full y consistent with the requirements of WQS . Once approved pursuant to CWA 303(c)(3), the compliance schedule authorizing provision itself becomes part of the applicable WQS; therefore, any delay in compliance with a WQBEL pursuant to that permit compliance schedule would be consistent with WQS . These revisions will ensure that permittees do not unnecessarily delay implementation of WQS that are protective of water quality . **4.2 Benefits of Improved Wat**  **er Quality** As stated above, the proposed rule will improve the e ffectiveness of the WQS regulation in restoring and maintaining the chemical, phys ical, and biological integrity of the nation’s waters. Improved water quality has many human health and ecolo gical benefits , described below . **4.2.1 Market Benefits**  The market benefits of improved water quality are reflected in its value to water suppl y and use, commercial fishing, and public and private ownership. **4.2.1.1 Water Supply** 

**and Use**  **Drinking Water Treatment and Hou sehold Water Use.**  Reducing contaminants, nutrients, and sediment in potable water supplies lowers the cost of treating these waters , reduces the health risk from potential exposure to contaminated drinking water, and avoids the need to develop alternative raw water sources. Discharged pollutants**July 2013**  **4. Potential Incremental Benefits 4**  **- 7** 

negativel y affect water quality, and require increased spending on treatment measures such as settlement ponds, filtration, and chemical treatment. Reducing nutrient loadings to surface waters reduces eutrophication , which is one of the main causes of taste and odor impairment in drinking water. Taste and odor in drinking water has a major negative impact on the public perception of drinking water safety and result in a significant increase in drinking water treatment costs to address foul taste and odor in the source waters. If adequate water treatment is not available, a temporary water source needs to be substituted (if available). If an alternative water supply is not at hand, urban areas might need to be supplied with bottled or tankered water, as has been the case in Australia and elsewhere (Steffensen, 2008). Long - term solutions might require the development of new raw water supplies, which would involve investments for acquisition of land (if available), regulatory

review and permitting, development of infrastructure (dams, pumps, pipes), and watershed protection.  **Agricultural Water Use.** Irrigation water that contains pollutants can harm crops and reduce agricultural productivity (Clark et al. 1985). Although el evated nutrient concentrations in irrigation water would not adversely affect its usefulness for plants, concerns exist for potential residual effects due to contaminants entering the food chain. More importantly , eutrophication promotes cyanobacterial blo oms that can kill livestock and wildlife that drink the contaminated surface water. The reduction in nutrients loading due to adoption or improved implementation of WQS, for example, can provide benefits in increased cattle production or avoided cost due to cattle sickness or death.  **Reservoir Dredging.** Water storage facilities (e.g., reservoirs) serve many functions, including providing drinking water, flood control, hydropower suppl y, and recreational opportunities. Sediment, one of the pollutants likely to be reduced by improved implementation of WQS , can be carried from streams into reservoirs, where it can settle and build up layers of silt over time. This increase in sedimentation rates will reduce reservoir capacity. To replace this capacity, sediment must be dredged from reservoirs, or new reservoirs must be constructed (Clark et al. 1985). Water quality criteria reduce the amount of sediment entering reservoirs and, as a result, the need for sediment mitigation measures in these reservoirs and the co st of reservoir maintenance. Because sediment mitigation is often accomplished through dredging, which itself is environmentally destructive, an additional benefit to reduced reservoir sediment buildup is the reduced environmental impact of dredging sediment and disposing of it.  **Industrial Water Use.** Sediment discharges may also have negative effects on industrial water users. Suspended sediment increases the rate at which hydraulic equipment, pumps, and other equipment wear out, causing accelerated depreci ation of capital equipment. Sediment can also clog cooling water s ys tems at power plants and other large industrial facilities (Clark et al. 1985). Improved water quality standard implementation will reduce sediment concentrations in source waters and thus increase the useful life of industrial equipment. **4.2.1.2 Commercial Fishing**  Pollutants regulated b y WQS can greatl y reduce fish populations , and therefore the size of commercial harvest, by

inhibiting reproduction and survival of an aquatic species. These chan ges negativel y affect subsistence anglers, commercial anglers and fish sellers, and consumers of fish**July 2013**  **4. Potential Incremental Benefits 4**  **- 8** 

and fish products. Improvement of water quality due to the more efficient implementation of WQS will enhance aquatic life habitat and thus contribute to reproduction and survival of commerciall y harvested species, which in turn will lead to an increase in producer and consumer surplus. **4.2.1.3 Public and Private Property**  **Ownership** Aesthetic degradation of land and water resources resulting from pollutant discharge s (e.g., increased water turbidity) can reduce the market value of property and thus affect the financial status of property owners. Conversel y, w ater quality improvement and protection can increase or maintain waterfront property values . Studies suggest that waterfront property is more desirable when located near unpolluted water, and therefore property values increase with improved water quality . For example, a hedonic price study b y Bejranonda et al. (1999) found that “the rate of sediment inflow entering the lakes has a negative influence on lakeside property rent” (p. 216). Sediment discharges also have a significant impact on stream morphology . For example, higher coarse sediment load leads to an increase in width of the riverbed and, as a result, bank erosion (Wheeler et al. 2003). A 1993 study of Lake Erie’s housing market found that “erosion -prone lakeshore property will be discounted” (Kriesel et al. 1993). Likewise, stabilization of stream banks leads to an increase in the value of surrounding property (Streiner and Loomis 1996). **4.2.2 Nonmarket Benefits**  The nonmarket benefits of improving or protecting water quality include those associated with human health, recreation, and nonmarket nonuse values. **4.2.2.1 Human Health Improvements**  Cleaner water may

lead to a reduction in illness either through reduced consumption of contaminated seafood or reduced exposure to infectious disease while recreating in contaminated waters. Some contaminants , such as mercury , PCBs, chlordane, dioxins, and DDT, may persist for long p eriods of time and bioaccumulate (e.g., they can be found in levels several time higher than ambient water in large fish (such as Bass), that consume contaminated bottom dwelling animals ) . Eating fish contaminated with mercury or PCBs may

lead to developmental and neurological problems and is especiall y hazardous for children and pregnant wom en. Consumption of shellfish may lead to exposure to bacterial and other viruses that that have accumulated in the shellfish from the water in which they grow. Swimmer s, boaters, and other recreational water users may also suffer from gastrointestinal and other illnesses due to ingesting, immersing, or wading in water that contains enteric pathogens such as fecal bacteria and viruses. To the extent that the proposed rul e increases the nation’s water quality by reducing current exposures and illness and preventing future exposures and illness, society benefits . The benefits are reflected in the avoided cost of illness, including treatment costs and lost wages, or in the public’s willingness - to -pay , which also includes the value of avoided pain and suffering. **4.2.2.2 Recreational Benefits**  Benefits also include the value of improved environmental goods and services used and valued by people (even if these services and goods are not traded in markets). Aesthetic degradation of water resources can reduce owner satisfaction with the property and the residential area in**July 2013**  **4. Potential Incremental Benefits 4**  **- 9** 

general. Itcan also adversely affect recreational opportunities. Improved water quality from reducing pollutant discharges or preventing degradation may translate into two components of recreational benefits: (1) an increase in the value of a recreational trip resulting from a more enjoyable experience, and (2) an increase in recreational participation. Recreational activities that may be adversel y impacted b y water pollution are summarized below.  **Outings.** Activities that take place near water such as hiking, jogging, picnicking, and wildlife viewing may

be adversel y affected b y pollutant discharges into the water. While these activities do not involve contact with the water, murky and visuall y unpleasant water and odors associated with some ty pes of pollutants may

greatly detract from the enjoy ment of these activities. Decreases in fish populations may cause a reduction in wildlife near the resource, affecting wildlife viewing. Pollutants may negatively

affect local flora and fauna, reducing the aesthetic appeal of the area near the resource and negativel y impacting wildlife viewing.  **Recreational Fishing.** Degraded water c an reduce fish populations by inhibiting reproduction and survival of an aquatic species. This effect may lead to fewer and smaller fish, and a reduction of the game fish population. In addition, pollutants may reduce the aesthetics of the water body , which may reduce anglers’ utility (enjo ym ent) of their fishing experience. Additionally , turbidity caused by

pollutant discharges may affect recreational anglers b y reducing the distance over which fish can see lures, resulting in lower catch rates (Clark et al. 1985).  **Boating.** Polluted water greatl y reduces the aesthetic appeal of recreational boating activities. Turbidity

caused by

sediment and other pollutant discharges may affect the safety of boating. Turbidity may obscure underwater obstacles, making coll isions more likely . Increased sediment concentrations may also create sandbars, increasing the chances of running aground. Clark et al. (1985) estimated that turbidity (from all sources) may be responsible for as many as 200 boating fatalities and many more injuries each ye ar. Using the value for a statistical life’s worth of risks ($7 million) and multiplying it by the number of boating fatalities yields the value of preventing these fatalities of $1.4 billion per year. Even if reducing discharges prevents onl y a small number of fatalities and injuries each year, the expected monetary value of preventing boating accidents can be significant.  **Swimming.** Pollution of water b y toxic chemicals or by fecal indicator bacteria may cause closure of water bodies for swimming. Eutrophication caused b y nutrients and turbidity caused by

sediment and other pollutants also may greatl y reduce a swimmer’s aesthetic enjo ym ent of a water body . Additionall y, turbidity may create safety

hazards for the swimmer by

reducing the a

bility to see underwater hazards or increasing diving accidents b y impairing the ability to gauge water depth.  **Hunting.** Similar to the effect on outings, discharged pollutants may greatl y detract from the hunters’ aesthetic enjoy ment of a water resource. Damage to flora and fauna may also cause a reduction in the game population, reducing the number and quality of the game available.**July 2013**  **4. Potential Incremental Benefits 4**  **- 10** 

**4.2.2.3 Nonmarket Nonuse Benefits**  Even if no human activities or uses are affected b y the potential positive environmental changes caused b y the proposed rule, such environmental changes may still affect social welfare. For a variety of reasons, including bequest, altruism, and existence motivations, individuals may value the knowledge that water quality is being maintained, that ecos ys tems are being protected, and that populations of individual species are healthy , completely independent of their use value. It is often difficult to quantify the relationship between changes in pollutant discharges and the improvements in societal well -being that are not associated with current use of the affected ecos ys tem or habitat. That these values exist, however, is indisputable, as evidenced, for example, by

society’s willingness to contribute to organizations whose mission is to purchase and pres erve lands or habitats to avert development (although some portion of these donations may be motivated by

use values). Notwithstanding challenges involved in estimation of nonuse values, there is a substantial literature devoted to such issues (Bateman et al. 2002). This literature provides insight into analysts’ ability to estimate nonuse values within various ty pes of policy contexts, and for various ty pes of resources.**July 2013**  **5. References 5**  **- 1** 



### 5. **References** Bateman, I. J., R. T. Carson, B. Day , M.; Hanemann, N. Hanley , T. Hett, M. Jones - Lee, G. L oomes, S. Mourato, E. Özdemirog lu, D. W. Pearce, R. Sugden, J. Swanson. Economic Valuation with Stated Preference Techniques: a Manual. Edward Elgar Publis hing. 2002. Bejranonda, S. F.J. Hitzhusen; and D. Hite. 1999. “Agricultural Sedimentation Impacts on Lakeside Property

Values.” Agricultural and Resource Economics Review 28(2): 208 - 18. Bureau of Labor Statistics (BLS). 2013a . Employer Costs for Employee C ompensation. Employer costs per hour worked for emplo yee compensation and costs as a percent of total compensation: State and local government workers, by occupational and industry group, Professional and related Bureau of Labor Statistics (BLS). 2013b . Employment Cost Index for wages and salaries, for State and local government workers, b y occupational group and industry , Professional and related. Bureau of Labor Statistics (BLS). 2012 . May 2012 National Occupational Employ ment and Wage Estimates, United S tates . http://www.bls.gov/oes/current/oes_nat.htm Clark, E., J.A. Haverkamp, and W.Chapman. 1985. “Eroding Soils: The Off - Farm Impacts.” Washington, DC: The Conservation Foundation. http://www.cabdirect.org/abstracts/19871912023.html;jsessionid=3A1DF6C954FBAC1013D 4203E5052C706 Io wa Department of Natural Resources (IDNR). 2008. Fiscal Imp act Statement Associated with the Notice of Intended Action: Antidegradation

– Water Quality Standards (Chapter 61). Kriesel, W., A. Randall, and F. Lichtkoppler. 1993. “Estimating the Benefits of Shore Erosion Protection in Ohio’s Lake Erie Housing Market.” Water Resources Research. 29(4). 795 - 801. Missouri Department of Natural Resource (MODNR). 2008. Missouri Register: Proposed Amendment: 10 CSR 20 - 7.031 Water Quality Standards. January

16, 2008. Steffensen, D. 2008. “Economic cost of cyanobacterial blooms” in Cyanobacterial Harmful Algal Blooms: State of the Science and Research Needs. H.K. Hudnell (ed.) Springer Press. Streiner, C.F. and Loomis, J.B. 1996. “Estimating the Benefits of Urban Stream Restoration Using the Hedonic Price Method.” Rivers. 5(4): 267 - 278. United States Environmental Protection Agency (U.S. EPA). 2007. Water Quality Standards Handbook, Second Edition. Available at: http://water.epa.gov/sc itech/swguidance/waterquality /standards/handbook/ . United States Environmental Protection Agency (U.S. EPA). 2011 b . Variance Compendium. Available at: http://www.deq.state.or.us/wq/standards/docs/toxics/humanhealth/rulemaking/VarianceComp endium110124.pdf

. United States Office of Personnel Management. 2012 . Salary Table 2012 - GS . Available at: http://www.opm.gov/policy- data - oversight/pay- leave/salaries - wa ges/2012/general - schedule/ .**July 2013**  **5. References 5**  **- 2** 

Wheeler, A.P., A.E. Keiter Rosenberger and P.L . Angermeier. 2003. Potential Impacts of I - 73 on Stream Habitat and Biota,with Emphasis on the Federall y Endangered Roanoke Lo gperch. Department of Fisheries and Wildlife services, Virginia Pol yt echnic Institute and State University .**July 2013**  **Ap pendix A** **. If the EPA Required A** 

**doption of A ntidegradation Implementation Methods as**  **WQS A**  **- 1**  

### Ap **pendix A .**  **If the**  **EP A**  **R equired**  **Ad option of**  **An tidegradation**  **Implementation Methods as WQS**  The EPA ’s proposal specifies that it is considering and requesting public comment on whether to require states and tribes to adopt antidegradation implementation methods as WQS, subject to the EPA ’s review and approval or disapproval. This revision to the WQS regulations may result in incremental administrative burden a nd rulemaking costs associated with adoption of legall y binding antidegradation implementation methods. The current regulations require states and tribes to adopt an antidegradation policy into state or tribal WQS, which are subject to review and approval by

the EPA , and to identify

antidegradation implementation methods . Because adoption of an antidegradation policy into state or tribal WQS is required b y current regulations, the EPA assumes for the purpose of this analysis that all states and tribes currentl y have adequate antidegradation policies adopted in state or tribal WQS. However, the current regulation requires states and tribes to only identify methods that implement the antidegradation policy . Although some states and tribes have implementation methods adopted into their WQS, other states and tribes either document implementation methods outside of state or tribal statute or rule (i.e., not as a WQS), or have no formal implementation methods despite the current regulation requiring them . Bec ause the requirement that the EPA is considering would require states and tribes to adopt antidegradation implementation methods into regulation (or by reference) and submit them to the EPA for review and approval, some states and tribes may need to adopt their antidegradation implementation methods after making any necessary revisions to their existing methods or develop new methods to adopt into rule . For the purposes of this analysis, the EPA estimated the o ne - time burden and costs associated with developing/revising and adopting antidegradation implementation methods as WQS . Revising or developing and adopting as WQS antidegradation implementation methods consistent with the WQS regulation revision that the EPA is considering may result in several additi onal administrative activities. These activities include developing or revising implementation method language , adopting the implementation methods into a legall y binding document according to state or tribal administrative procedures and the EPA’s public participation requirements, conducting public hearing s , responding to public comments, revising the implementation methods as necessary , and submitting the implementation methods to the EPA for review and approval. The EPA estimates that revising existing implementation methods or developing new implementation methods could require on average approximately 400 to 800 labor hours, with the range representing the difference between minor revisions to existing methods and developing methods anew. Using the EP A’s estimated hourly wage rate shown in Exhibit 3 - 1 ($48/hour), the EPA estimated the average incremental cost associated with revising or developing antidegradation implementation methods as ranging between $19,200 (400 hours  $48/hour) to $ 38,400 (800 hours  $48/hour) for a state or tribe. The EPA estimates that 39 states have antidegradation implementation methods that do not meet the requirement that the EPA is considering . Because little information is available on antidegradation implem entation methods for territories and tribes, for the purpose of this anal ys is, the EPA used the conservative assumption that all 5 territories, the District of**July 2013**  **Ap pendix A** **. If the EPA Required A** 

**doption of A ntidegradation Implementation Methods as**  **WQS A**  **- 2**  Columbia, and all 39 tribes authorized to administer WQS programs and that have EPA - approve WQS do not have antidegradation implementation methods adopted as WQS . Thus, one - time incremental costs associated with developing or revising and adopting as WQS antidegradation implementation methods could range from approximately $1,613,000 ((39 + 5 + 1 + 3 9)  $19,200) to $3,226,000 ((39 + 5 + 1 + 39)  $38,400). These costs may be overestimated if territories and authorized tribes require less effort compared to states. Exhibit A - 1 summarizes the potential incremental one - time burden and costs associated with developing or revising and adopting as WQS antidegradation implementation methods. **Exhibit A** **- 1**  **: Potential One -**  **time Burden and Costs Associated with Developing or Revising**  **and adopting**  **Antidegradation Implementation Methods as WQS**  **Bu rden per**  **Entity (hours)**  **1 Cost per** 

**Entity 2**  **Number of**

**Potentially Affected Entities**  **3 Total** 

**Burden (hours)**  **4 Total**  **Costs**

**(2013$; one**   ** time)** **5 Annualized** 

**Cost 6**  **(2013$/year)** 400

- 800 $ 19,200

–

$ 38,400 84 33,600

– 67,200 $1,613,000

–

$3,226,000 $108,400

-

$216,800 1. Reflects potential incremental effort to develop or revise adequate implementation methods. 2. Hours per entity multiplied by average hourly wage of $48. 3. Includes 39 states, 6 territories (including the District of Columbia), and 39 authorized tribes with author

ity to administer WQS programs. 4. Burden per entity multiplied by total number of potentially affected entities. 5. Costs per entity multiplied by total number of potentially affected entities. 6. Although the EPA expects rulemaking costs to be incurred over an initial 3 year period, one

time costs are annualized at 3% discount rate over 20 years for comparative purposes. If the EPA includes the requirement to adopt antidegradation implementation methods as WQS in the final rule, the total one - time burden and costs to states and tribes could be 43,100 hours to 114,700 hours and $2.07 million to $5.51 million, respectivel y, and total annual burden and costs would remain the same at 101,930 hours to 152,115 hours and $4.84 million to $7. 36 million, respectivel y as shown in Exhibit A - 2 .**July 2013**  **Ap pendix A** **. If the EPA Required A** 

**doption of A ntidegradation Implementation Methods as**  **WQS A**  **- 3**  **Exhibit A** **- 2**  **: Summary of Potential Incremental Administrative Burdens and**  **Costs Associated with the Proposed Rule**  **, including Requirement to Adopt Antidegradation Implementation Methods as WQS**  **Provision One**  **- time**  **Activities Annual**  **Activities**

**Burden (hours)**  **Cost (2013$**

**millions) Annualized** 

**Cost 1**  **(2013$ millions/year)**  **Burden**

**(hours/year) Annual Cost** 

**(2013$ millions/year)**  Rulemaking Activities 9 ,500

–

47,500 $0. 46

- $ 2.28 $0.03

- $0.15

-- -- Designated Uses

-- -- -- 240

– 1 , 200 $0.01

- $0.0 6 Antidegradation 33,600

–

67,200 $1. 61

- $ 3.23 $0.11

- $0.22 97,070

– 145,605 $ 4.61

- $ 7.04 Variances

-- -- -- 4 , 620

– 5 , 310 $0. 22

- $0.2 6 National Total 43,100

–

114,700 $ 2.07

- $ 5.51 $0.14

- $0.37 101,930

– 152,115 $ 4.84

- $ 7.36
‘

-- ‘ = not applicable 1. Although the EPA expects one

- time rulemaking activit y costs to be incurred over an initial three

- year period , costs are annualized at 3% discount rate over 20 years for comparative purposes. If the EPA includes the requirement to adopt antidegradation implementation methods as WQS in the final rule, the total one - time burden and costs to the Agency could be 5,480 hours to 14,570 hours and $0.41 million to $1.10 million, respectivel y, and total annual burden and costs would remain the same at 12,180 hours to 19,470 hours and $4.84 million to $7.36 million, respectivel y as shown in Exhibit A - 3 .**July 2013**  **Ap pendix A** **. If the EPA Required A** 

**doption of A ntidegradation Implementation Methods as**  **WQS A**  **- 4**  **Exhibit A** **- 3**  **: Potential Incremental Burden and Costs to the Agency Associated with the Proposed WQS Regulation Revisions, includ**  **ing Requirement to Adopt Antidegradation**  **Implementation Methods as WQS One**  **- time Activities**  **Annual Activities Costs to**  **States and Tribes**  **( 2013$**  **million )**  **Costs to**

**the Agency** **1 (** **2013$ million** **) Annualized** 

**Costs to the Agency**  **(2013$ million per**  **year) 2**  **Burden Costs to**  **States and Tribes**  **( 2013$**  **million per year** **) Costs to** 

**the Agency** **1 (** **2013$ million per**  **year )**  **Burden Hours**  **3 FTEs**  **4 Hours**  **per year** **3 FTEs**  **per year** **4** $2.07

- $5.51 $0.41

-

$1.1 $0.03

- $0.07 5 , 480

–

14 , 570 2.63

-

7.01 $ 4.84

- $ 7.36 $ 0.97

-

$ 1.47 12,180

– 19,470 6.16

– 9.36 1. Assuming that the incremental costs to the EPA are equal to 20% of the costs to states and tribes. 2. Although the EPA expects these one

- time costs to be incurred over an initial three year period, the costs are annualized at 3% discount rate over 20 years for comparative purposes. 3. Total costs to the Agency divided by hourly wage rate ($75.55 per hour). 4. Burden hours to the Agency divided by hours worked by full

- time equivalent (FTE) employees per year (2,080 hours per year). Exhibit A - 4 provides a summary of the estimated costs to all potentially affect states and tribes, and to the EPA. Using a 20 - ye ar period of anal ys is and a discount rate of 3%, the total annualized costs range from $ 5.97 million ($0.17 million + $5.81 million) to $ 9.27 millio n ($0.44 million + $8.83 million).**July 2013**  **Ap pendix A** **. If the EPA Required A** 

**doption of A ntidegradation Implementation Methods as**  **WQS A**  **- 5**  **Exhibit A -**  **4 : Summary of Potential Incremental Administrative**  **Burdens and Costs**  **Associated with the Proposed Rule to States, Tribes, and the Agency**  **Entities One**  **- time**  **Activiti es**  **Annual Activities** 

**Burden (hours)**  **Cost (2013$**

**million) Annualized** 

**Cost 1**  **(2013$ million/year)**  **Burden**

**(hours/year) Annual Cost** 

**(2013$ million/year)**  States and tribes 43,100

-

114,700 $2.07

- $5.51 $0.14

- $0.37 101,930

- 152,115 $4.84

- $7.36 Agency 5,480

- 14,570 $0.41

- $1.10 $0.03

- $0.07 12,810

- 19,470 $0.97

- $1.47 Total2 48,580

-

129,270 $2.48

- $6.61 $0.17

- $0.44 114,740

- 171,585 $5.81

- $8.83 1. Although the EPA expects rulemaking costs to be incurred over an initial three

- year period , one - time costs are annualized at 3% discount rate over 20 years for comparative purposes. 2. The net present value of total costs over a 20

- year period (using a 3 percent discount rate) ranges from $ 86.99 million to $ 134.11 million, while the annualized co sts range from $ 5.85 million to $ 9.01 millio n . **Potential Benefits** The requirement to adopt antidegradation implementation methods as WQS that the EPA is considering and requesting comment on could help to improve program implementation, en sure consistency

with the CWA, and provide transparency as to applicable state or tribe antidegradation review requirements . By including antidegradation implementation methods into regulation via a state or tribe rulemaking process, the public is assured reliable and e ffective opportunities to participate in important antidegradation decisions. This re quirement would also facilitate and expedite the EPA’s review of key provisions and elements in a transparent and public context to ensure that the antidegradation compon ent of a state’s or tribe’s WQS protects the public health and welfare, enhances the quality of the water, and serves the purposes of the CWA.