Discharge permits establish limits on the amounts and types of pollutants that can be released into waterways. Under the Clean Water Act, concentrated animal feeding operations that discharge pollutants to surface waters must obtain permits from EPA or authorized states. However, unlike municipal and most industrial facilities that are allowed to discharge some waste, concentrated animal feeding operations are required to construct and operate facilities that do not release any waste to surface waters, except in extraordinary circumstances. Under EPA’s prior regulations, animal feeding operations could be defined as CAFOs and require discharge permits if they, among other things had more than 1,000 animal units, had more than 300 animal units and either discharged through a man-made device into navigable waters or directly into waters of the United States that originate outside the facility, or were of any size but had been determined by EPA or the state permitting authority to contribute significantly to water pollution. Under these regulations, a large animal feeding operation did not need a permit if it only discharged during a 25-year, 24-hour storm event—the amount of rainfall during a 24-hour period that occurs on average once every 25 years or more. In addition, the regulations did not generally require permits for chicken operations that use dry manure-handling systems—that is, systems that do not use water to handle their waste. Further, animal wastes that were applied to crop and pastureland were generally not regulated. EPA has authorized 44 states and the U.S. Virgin Islands to administer the discharge permit program for CAFOs. To become an authorized state, the state must have discharge permit requirements that are at least as stringent as the requirements imposed under the federal program and must contain several key provisions. These provisions include allowing for public participation in issuing permits; issuing permits that must be renewed every 5 years; including authority for EPA and authorized states to take enforcement action against those who violate permit conditions; and providing for public participation in the state enforcement process by either allowing the public to participate in any civil or administrative action or by providing assurance that the state will investigate citizen complaints. According to EPA, public participation in the permitting and enforcement process is critical because it allows the public to express its views on the proposed operations and to assist EPA and state authorities in ensuring that permitted operations remain in compliance. The CAFO program has had two major shortcomings that have led to inconsistent and inadequate implementation by the authorized states. These shortcomings include (1) exemptions in EPA’s regulations that have allowed as many as 60 percent of the largest animal feeding operations to avoid obtaining permits and (2) minimal oversight of state CAFO programs by EPA. Although EPA maintains that it has limited tools to compel states to properly implement the CAFO program, it recently has had limited success in persuading some authorized states to begin issuing discharge permits that include all program requirements. Two exemptions in CAFO regulations have allowed large numbers of animal feeding operations to avoid obtaining discharge permits. However, EPA believes that many of these operations may degrade water quality. The first exemption allowed operations to avoid obtaining discharge permits if they discharge waste only during 25-year, 24-hour rainstorm events. However, based on its compliance and enforcement experience, EPA believes that many of the operations using this exemption should, in fact, have a discharge permit because they are likely discharging more frequently. For example, when EPA proposed changes to the CAFO regulations, it stated that operations using this exemption were not taking into consideration discharges that may occur as a result of overfilling the waste storage facility, accidental spills, or improper land application of manure and wastewater. The second exemption allowed about 3,000 confined chicken operations that use dry manure-handling systems to avoid obtaining permits. EPA believes that chicken operations using dry manure-handling systems should obtain permits because EPA and state water quality assessments found that nutrients from confined chicken operations, similar to other large livestock operations, contaminate waters through improper storage, accidental spills, and land application. As a result of these exemptions, we estimate that only about 40 percent (4,500 of 11,500) of confined animal feeding operations currently have discharge permits. In addition, EPA believes about 4,000 smaller animal feeding operations may threaten water quality and may also need to be permitted. According to EPA and state officials, these smaller operations are generally not permitted because federal and state programs have historically focused their limited resources dedicated to CAFOs on regulating only the largest operations. EPA’s limited oversight of the states has contributed to inconsistent and inadequate implementation by the authorized states. In particular, our surveys show that 11 authorized states—with a total of more than 1,000 large animal feeding operations–do not properly issue discharge permits. Although eight of these states issue some type of permit to CAFOs, the permits do not meet all EPA requirements, such as including provisions for public participation in issuing permits. The remaining three states do not issue any type of permit to CAFOs, thereby leaving facilities and their wastes essentially unregulated. EPA officials believe that most large operations either discharge or have a potential to discharge animal waste to surface waters and should have discharge permits. The two states that lead the nation in swine production illustrate how programs can meet some EPA permit requirements but not others. For example, while Iowa’s permits for uncovered operations (see fig. 1) meet all program requirements, its permits for covered operations (see fig. 2) do not. Contrary to EPA requirements that permits are renewed every 5 years, Iowa issues these permits for indefinite periods of time. While North Carolina issues permits to both covered and uncovered animal feeding operations, these permits do not include all EPA requirements, such as provisions for public participation or allowing for EPA enforcement of the state permit. Michigan and Wisconsin also illustrate how two authorized states with a similar number of animal feeding operations differ in program implementation. According to USDA estimates, both states have over 100 operations with more than 1,000 animal units that could be defined as CAFOs. While Wisconsin had issued 110 permits to these operations, Michigan had not issued any, according to our survey. As a result, waste discharges from facilities in Michigan remained unregulated under the CAFO program. EPA officials acknowledged that until the mid-1990s the agency had placed little emphasis on and directed few resources to the CAFO program and that this inattention has contributed to inconsistent and inadequate implementation by authorized states. Instead, the agency gave higher priority and devoted greater resources to its permit program for the more traditional point sources of pollution—industrial and municipal waste treatment facilities. However, as EPA’s and the states’ efforts have reduced pollution from these sources, concerns grew in the 1990s that the increasing number of large concentrated animal feeding operations could potentially threaten surface water quality. In response, EPA began placing more emphasis and directing more resources to the CAFO program. As a result, some states that had not previously issued discharge permits began to do so. As shown in figure 3, EPA has historically assigned significantly more personnel resources to the industrial and municipal portions of the NPDES permit program. In the four regions we reviewed, the number of full-time equivalent positions dedicated to the CAFO program has increased since 1997—from 1 to 6 percent—but this increase has, for the most part, been at the expense of the industrial and municipal portions of the permit program. EPA officials told us that due to budget constraints, any increase in resources in one program area requires the reduction of resources in others. In addition to resource constraints, EPA officials say that the agency has little leverage to compel states to issue permits with all required elements because the agency’s primary recourses in such situations are to either (1) withhold grant funding it provides to states for program operations or (2) withdraw the states’ authority to run the entire NPDES permit program, including the regulation of industrial and municipal waste treatment facilities. EPA has been reluctant to use these tools because it maintains that withholding grant funding would further weaken the states’ ability to properly implement the program and EPA does not have the resources to directly implement the permit program in additional states. To date, EPA has never withheld grants or withdrawn a state’s authority. However, EPA has had limited success in persuading some authorized states to begin issuing discharge permits with all EPA requirements. For example, Michigan has been an authorized state since 1973, but only agreed in 2002 to begin issuing discharge permits. This agreement followed an EPA investigation that revealed several unpermitted CAFOs. Similarly, EPA recently persuaded Iowa to increase the issuance of discharge permits to uncovered feedlots. However, to date the agency has not been able to convince the state to issue permits to its covered operations, even though EPA believes these types of operations should also have permits. In 2002, EPA was also successful in persuading three other authorized states—Florida, North Carolina, and South Carolina—to begin issuing discharge permits that meet all program requirements. According to our surveys of the regions and states, EPA’s revised regulations—eliminating the 25-year, 24-hour storm exemption; explicitly including dry-manure chicken operations; and extending permit coverage to include the land application areas under the control of CAFO—address some key problems of the CAFO program. However, they will also increase EPA’s oversight responsibility and require authorized states to increase their permitting, inspection, and enforcement activities. Furthermore, neither EPA nor the states have planned how they will face these challenges or implement the revised program. EPA’s decision to eliminate regulatory exemptions should strengthen the permit program because the revised regulations will extend coverage to more animal feeding operations that have the potential to contaminate waterways. As previously mentioned, the 25-year, 24-hour storm exemption has proven particularly problematic for EPA and the states because it allowed CAFO operators to bypass permitting altogether. By eliminating this exemption, we estimate that an additional 4,000 large animal feeding operations will require permits. According to our survey results, the elimination of this exemption could significantly improve the program.