[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Proposed Rules]
[Pages 11270-11281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5879]



[[Page 11269]]

_______________________________________________________________________

Part IV





Environmental Protection Agency





_______________________________________________________________________



40 CFR Parts 123 and 501



Streamlining the State Sewage Sludge Management Regulations; Proposed 
Rule

  Federal Register / Vol. 62, No. 47 / Tuesday, March 11, 1997 / 
Proposed Rules  

[[Page 11270]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 123 and 501

[FRL-5702-1]
RIN 2040-AC87


Streamlining the State Sewage Sludge Management Regulations

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) today proposes to 
amend its regulations that establish the requirements for States 
seeking approval to operate sewage sludge permit programs pursuant to 
section 405(f)(1) of the Clean Water Act. These requirements are now 
found at 40 CFR parts 123 (for National Pollutant Discharge Elimination 
System (NPDES) programs) and 501 (for non-NPDES programs). Both sets of 
requirements were modeled on the NPDES requirements for authorization 
of wastewater effluent discharge programs. Many States manage sewage 
sludge through their solid waste programs which are often structured 
differently from the NPDES programs. As a result, existing State sewage 
sludge programs may require significant changes in order to meet all 
the requirements of parts 123 or 501. EPA is eager for States with 
well-run sewage sludge management programs to obtain approval to 
operate their own permit programs under section 405(f)(1) without 
having to make unnecessary administrative and programmatic changes 
unrelated to protection of public health and the environment. The 
proposed changes would streamline the regulations to ease the 
authorization process for States, provide flexibility to States in 
implementing their permit programs and ensure that permitting 
determinations are based on environmental and public health 
considerations.

DATES: In order to be considered, comments must be received on or 
before May 12, 1997.

ADDRESSES: Comments should be addressed to State Sewage Sludge 
Management Rule Comment Clerk, Water Docket MC-4101; U.S. Environmental 
Protection Agency, 401 M Street, SW., Washington, DC, 20460. Commenters 
are requested to submit an original and 3 copies of their written 
comments as well as an original and 3 copies of any attachments, 
enclosures, or other documents referenced in the comments. Commenters 
who want receipt of their comments acknowledged should include a self-
addressed, stamped envelope. All comments must be postmarked or 
delivered by hand by May 12, 1997. No facsimiles (faxes) will be 
accepted.
    EPA will also accept comments electronically. Comments should be 
addressed to the following Internet address: [email protected]. 
Electronic comments must be submitted as an ASCII file avoiding the use 
of special characters and any form of encryption. Electronic comments 
will be transferred into a paper version for the official record. EPA 
will attempt to clarify electronic comments if there is an apparent 
error in transmission. Comments provided electronically will be 
considered timely if they are submitted electronically by 11:59 p.m. 
(Eastern time), May 12, 1997. EPA is experimenting with electronic 
commenting; therefore commenters may want to submit both electronic 
comments and duplicate paper comments. This document has also been 
placed on the Internet for public review and downloading at the 
following location: gopher.epa.gov.
    The public may inspect the administrative record for this 
rulemaking at EPA's Water Docket, 401 M Street, SW., Washington, DC 
20460, Room L-102 between the hours of 9 a.m. and 3:30 p.m. on business 
days. For access to docket materials, please call (202) 260-3027 for an 
appointment during the aforementioned hours. A reasonable fee will be 
charged for copying.

FOR FURTHER INFORMATION CONTACT: Wendy Bell, (202) 260-9534, Permits 
Division (4203), U.S. EPA, 401 M Street, SW., Washington, DC 20460.

SUPPLEMENTARY INFORMATION:

Regulated entities

    Entities potentially regulated by this action are governmental 
entities responsible for implementation of the State Sewage Sludge 
Management Program. Regulated entities include:

------------------------------------------------------------------------
                                                Examples of regulated   
                  Category                             entities         
------------------------------------------------------------------------
State government...........................  States that request        
                                              authorization of their    
                                              State sewage sludge       
                                              management program.       
Federal government.........................  EPA regional offices that  
                                              approve State sewage      
                                              sludge management         
                                              programs.                 
Local government...........................  Owners and operators of    
                                              treatment works treating  
                                              domestic sewage.          
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your organization is regulated by this action, you should carefully 
examine the applicability criteria in parts 123 and 501 of title 40 of 
the Code of Federal Regulations. If you have questions regarding the 
applicability of this action to a particular entity, consult the person 
listed in the preceding ``FOR FURTHER INFORMATION CONTACT'' section.
    Information in the preamble is organized as follows:
I. Background
    A. Water Quality Act of 1987
    B. EPA's Sewage Sludge Management Program
II. Discussion of Proposed Rule
    A. General
    B. Part 123
    C. Part 501
III.Regulatory Requirements
    A. Executive Order 12866
    B. Executive Order 12875
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates

I. Background

    Implementation of the Clean Water Act (CWA) has increased the 
extent to which wastewater is treated before being discharged to 
surface waters. At publicly owned treatment works (POTWs), 
implementation of secondary and advanced treatment requirements under 
the NPDES Program has improved effluent quality while increasing the 
amount of sewage sludge being generated. Proper management of this 
growing amount of sewage sludge is becoming increasingly important as 
efforts to remove pollutants from wastewater become more effective.
    Several options exist for dealing with these vast quantities of 
sewage sludge. One such option is beneficial use. EPA considers sewage 
sludge a valuable resource since it contains nutrients and has physical 
properties that make it useful as a fertilizer and soil

[[Page 11271]]

conditioner. Sewage sludge has been used for its beneficial qualities 
on agricultural lands, in forests, for landscaping projects, and to 
reclaim strip-mined land. EPA will continue to encourage such 
practices.
    Regulation of the use or disposal of sewage sludge is important, 
however, because improper use or disposal can adversely affect surface 
water, ground water, wetlands, and public health through a variety of 
exposure pathways. The multi-media nature of the risks and exposure 
pathways requires a comprehensive approach to protect public health and 
the environment in order to promote the beneficial use of sewage sludge 
and ensure that solving problems in one medium will not create problems 
for another.
    EPA recognizes that the term ``biosolids'' is now being used by 
professional organizations and other stakeholders in place of ``sewage 
sludge'' to emphasize that it is a resource that can be recycled 
beneficially. EPA intends to work with these stakeholders to establish 
a definition for ``biosolids'' that is consistent with the definition 
of ``sewage sludge'' in the CWA. In the meantime, EPA encourages the 
use of the term ``biosolids'' in order to promote beneficial use of 
residuals of wastewater treatment.

A. Water Quality Act of 1987

    Section 406 of the Water Quality Act of 1987, which amended section 
405 of the CWA, established a comprehensive program for reducing the 
risks to public health and the environment from the use or disposal of 
sewage sludge, including promulgation of sewage sludge standards. 
Furthermore, the 1987 amendments required that all NPDES permits issued 
to POTWs and other treatment works treating domestic sewage (TWTDS) 
contain conditions implementing sewage sludge standards, unless such 
conditions are included in other permits. The other permits may either 
be other federal permits or State permits issued under approved State 
programs. The amendments also provided that the Administrator may issue 
separate sewage sludge permits to TWTDS that are not subject to section 
402 of the CWA or to any of the other listed permit programs. Moreover, 
the amendments provided that the standards for use or disposal are 
enforceable directly against any user or disposer of sewage sludge 
under section 405(e) of the CWA. In other words, a TWTDS, as well as 
any user or disposer, must comply with the standards by the statutory 
compliance deadlines whether or not a permit incorporating the 
standards has been issued to the TWTDS.

B. EPA's Sewage Sludge Management Program

    In 1989, EPA published regulations that establish the requirements 
and procedures a State must follow to obtain approval to operate a 
State sewage sludge management program under section 405(f)(1) of the 
CWA. These regulations established the requirements for States that 
chose to implement their sewage sludge programs through existing State 
National Pollutant Discharge Elimination System (NPDES) programs (40 
CFR part 123) as well as requirements for States that chose non-NPDES 
sewage sludge programs (40 CFR part 501) as the vehicle for managing 
sewage sludge in their States. These regulations also revised the NPDES 
permit requirements and procedures (parts 122 & 124) to incorporate 
sewage sludge permitting requirements. See 54 FR 18716 (May 2, 1989). 
On February 19, 1993 (58 FR 9404) these regulations were modified to 
allow for phased permit application submittal procedures. The basic 
requirements and procedures for States which seek EPA approval to 
administer a sewage sludge management program are the same under Part 
123 and Part 501. EPA published the requirements in both places based 
on the belief that States that choose to add sewage sludge to their 
NPDES program would find it easier if the requirements and approval 
procedures for the sewage sludge program were included along with the 
other NPDES requirements in Part 123.
    State assumption of the sewage sludge program is optional and until 
State sewage sludge programs are authorized, EPA will administer the 
program. Two States (Utah and Oklahoma) have been authorized at this 
time. EPA is working with a number of other States seeking 
authorization for the federal sewage sludge permit and management 
program.
    In discussions with these States, EPA found that the sewage sludge 
management program regulations were often a barrier to authorization. 
Given the wide and successful regulation of sewage sludge use or 
disposal by a number of States, EPA undertook a review of its 
regulations looking at ways to simplify the approval process.
    In order to provide greater flexibility to the States, EPA is 
proposing modifications to its sewage sludge management program 
regulations that accommodate more variations in State programs. EPA 
stresses that its willingness to allow greater variation in the State 
permit programs does not mean that the Agency will approve State 
programs that do not provide adequate public health and environmental 
protection.

II. Discussion of Proposed Rule

A. General

    EPA started the process that led to today's proposal by reviewing 
information provided by States with active State sewage sludge 
programs. EPA then solicited input on two successive draft proposals 
from various stakeholders, including States, associations and 
environmental groups. Today's proposal is an outgrowth of that process 
and incorporates many of the comments received on both drafts. EPA 
today proposes changes to Parts 123 & 501 that will provide more 
flexibility to States and ease the process of authorization. Under the 
current regulations, States that choose to implement sludge 
requirements through their NPDES program must meet the requirements and 
follow the procedures in Part 123. States that want to obtain approval 
for an existing non-NPDES program must comply with the procedures and 
requirements in Part 501. However, these requirements for authorization 
under an NPDES or other type of program are very similar.
    As part of an overall effort to eliminate unnecessary regulations, 
EPA is today proposing to delete the provisions of Part 123 that 
contain State program requirements applying solely to sewage sludge. 
Under today's proposal, States seeking approval to operate a State 
sewage sludge management program under section 405(f)(1) would meet the 
requirements and procedures in Part 501 when submitting sewage sludge 
management programs. A State would be free to operate an approvable 
sewage sludge management program as part of its existing State NPDES 
regulatory program or as part of its State solid waste management 
program or as part of another program. The requirements and procedures 
for approval are the same. Today's proposal is not intended to preclude 
States from amending their existing, approved NPDES programs to include 
sewage sludge. In fact, EPA believes that many States will choose this 
route when they seek approval of their sewage sludge programs. States 
that intend to rely on their existing NPDES programs for regulation of 
sewage sludge may need to modify their program to comply with Part 501.
    All sewage sludge programs approved under Part 501 must provide for 
citizen suits and public participation in state enforcement 
proceedings, whether a

[[Page 11272]]

State program is managed through an NPDES program or not. Section 
501.17(d) contains the same requirements for public participation in 
State enforcement proceedings as Sec. 123.27(d). Section 505 of the CWA 
allows citizen suits to be brought for any violation of Part 503 or an 
equivalent State regulation.
    Because existing Part 501 was modeled on the NPDES program, States 
that manage their sewage sludge through solid waste or other programs 
may have difficulties in meeting some of its procedural requirements 
because these programs have different requirements. Today's proposal 
modifies some of the requirements in Part 501 to make it easier for 
States with well-run sewage sludge programs to obtain approval for 
their programs.

B. Part 123

    Part 123 establishes the program requirements and approval 
procedures for States that seek EPA approval to administer an NPDES 
permit program pursuant to section 402 of the CWA. Today's proposal 
would modify Part 123 by deleting certain specific references to sewage 
sludge requirements in order to make it clear that all State sewage 
sludge programs (both NPDES and non-NPDES) would be subject to the 
requirements in Part 501. The deleted references occur in Secs. 123.1, 
123.2, 123.22, 123.24 through 123.26, and 123.45. The proposal also 
amends Secs. 123.42, 123.44, and 123.62 through 123.64 to clarify the 
cross-references in the Part 123 sections that apply to sewage sludge 
and NPDES State programs.

C. Part 501

1. Purpose and Scope
    Section 501.1 describes the general requirements for EPA approval 
of a State sewage sludge program. Today's proposal would modify 
Sec. 501.1(b) to explain that Part 501 specifies the requirements and 
procedures for approval of all State sludge management programs, both 
NPDES and non-NPDES.
    Section 501.1(d)(1) and the rest of paragraph (d) have been 
renumbered because the existing text does not have a Sec. 501.1(d)(2). 
Section 501.1(d)(1) currently requires a State sludge management 
program to have the authority to address sewage sludge transport and 
storage. Today's proposal would delete this requirement because there 
are no Federal standards that regulate the storage of sewage sludge for 
less than two years or sewage sludge transport. Where sewage sludge 
remains on the land for longer than two years, it is deemed to be 
surface disposal rather than storage under 40 CFR 503.20(b) and is 
regulated under Part 503. EPA is considering development of a guidance 
document to provide information on appropriate sewage sludge storage 
methods.
    The existing language in this section includes a requirement for 
State sewage sludge programs to include Federal facilities. This 
requirement is not being changed in today's proposal. A State does not 
have to have Federal facility authority for NPDES in order for its 
sewage sludge program to be approved. If a State does not have Federal 
facility authority, these facilities would be regulated under a non-
NPDES program, whether or not other facilities are regulated under 
NPDES.
    The proposed language in this section would clarify that a State 
must have the authority to regulate only those sewage sludge management 
activities covered by Part 503. A State would not need the authority to 
regulate a practice not covered by Part 503, such as making bricks out 
of sewage sludge. The current Sec. 501.1(d)(1)(ii) contains a list of 
the covered sewage sludge use or disposal practices. For consistency 
with the terminology used in Part 503, today's proposal would delete 
the phrase ``distribution and marketing'' since this sewage sludge use 
is regulated as ``land application,'' and clarify that ``landfilling'' 
takes place at ``municipal solid waste landfills.'
    Existing Sec. 501.1(d)(1) contains a reference to a nonexistent 
section--40 CFR 123.30. Today's proposal replaces this with a reference 
to a new paragraph (m) that is added to this section. Proposed 
Sec. 501.1(m) describes the requirements for a partial sewage sludge 
program.
    CWA Section 405(f) authorizes the Administrator to approve State 
programs which assure compliance with section 405 requirements. 
Pursuant to this authority, EPA is proposing in today's notice to allow 
partial sewage sludge management programs under Part 501. Proposed 
Sec. 501.1(m) would allow a State to submit a partial sewage sludge 
management program covering one or more of the sludge use and disposal 
practices falling under the jurisdiction of the administering State 
agency or department. The State agency seeking program approval would 
be required to assume a complete permitting program with respect to the 
covered practice(s). Some States regulate septage use and disposal 
under different management programs than sewage sludge. In the case of 
those States, EPA would approve a partial program for land application, 
for example, that regulated only sewage sludge and excluded septage 
from its regulatory scope.
    Section 405(f)(1) of the Clean Water Act (CWA) requires that any 
NPDES permit issued to a publicly owned treatment works or other 
treatment works treating domestic sewage must include conditions to 
implement the sewage sludge regulations issued under Section 405(d) 
unless these conditions have been included through certain other 
specified permits, including permits under a State permit program if 
EPA determines ``such programs assure compliance with any applicable 
requirements'' of section 405. The provisions of current 
Sec. 501.1(c)(2) require that any complete sludge management program 
submitted for approval must include such authority. EPA is proposing to 
implement its approval of partial programs in the same manner. An 
approvable partial program must include the authority to permit both 
POTWs and other treatment works associated with the identifiable use 
and disposal option for which the State seeks authorization.
    With respect to the practice(s) covered by the partial program, the 
State agency would be required to meet the requirements of CWA section 
405, and would have to be able to implement the applicable requirements 
of 40 CFR part 503. The State must be able to clearly identify who 
falls within the State program, and there must be no area in which 
authority over a particular group is unclear.
    The proposal would also clarify requirements for the partial 
program with respect to the Attorney General's Statement, the Program 
Description, and the Memorandum of Agreement (MOA) between EPA and the 
State.
    In addition to the information required for the Program Description 
under Sec. 501.12, the State submission would have to explain how the 
program will operate, including the relationship between the partial 
program and the unassumed part which would remain under EPA control. In 
addition to the information required for the MOA under Sec. 501.14, the 
State submission would have to delineate responsibilities of both the 
State and EPA in administering the partial program.
2. Definitions
    Today's proposal adds a definition of ``TWTDS,'' the acronym for 
``treatment works treating domestic sewage.'' The acronym replaces the 
phrase throughout the regulation.

[[Page 11273]]

3. Program Description
    In order to ensure that a State program can be properly run, 
Sec. 501.12 requires a description of various program elements. EPA 
does not believe the current level of detail is necessary. Today's 
proposal would revise the language in Secs. 501.12(b) and 501.12(d) to 
contain the information that EPA believes is necessary in a program 
description.
    The current language in Secs. 501.12(b) (2) and (3) requests 
information on program costs and funding sources for a program's first 
two years. This information is necessary to show that a State has the 
resources to properly carry out a new sewage sludge management program. 
Many States have had programs established for many years. For States 
that have at least 2 years of active experience implementing a sewage 
sludge regulatory program, cost and funding information is not 
necessary since they have already shown that they have the necessary 
resources to run effective programs. The proposed language would 
require this information only for State programs that have been in 
existence for less than two years.
    The current language in Sec. 501.12(d) requires submittal of forms 
that the State intends to use in its program.
    EPA wants to ensure that the required information is collected but 
does not require use of specific forms. Therefore, the proposed 
language would require either submittal of forms or the procedures used 
for obtaining information.
    EPA agrees with several commenters that States should have an 
inventory of all TWTDS but should not be required to develop an 
inventory of land application sites. The language in proposed 
Sec. 501.12(f) has been modified accordingly.
4. Memorandum of Agreement With the Regional Administrator
    The proposed changes to Sec. 501.14(a) would clarify that the 
Regional Administrator approves the memorandum of agreement (MOA).
    The proposed change to Sec. 501.14(b)(1)(i) would clarify that 
permit-related information is only transferred from EPA to a State with 
respect to the portion of the State program for which the State has 
obtained approval. For example, if a State were seeking a partial 
program for land application, information on pending permit 
applications or compliance information for incinerators would not be 
transferred to the State.
    The other changes in Sec. 501.14(b) would delete some of the 
current waiver prohibitions. EPA believes that waiver of review of 
permits for ``Class 1 sludge management facilities'' is an issue that 
should be decided by the affected State and EPA Regional office. EPA 
believes that the Regional Administrator should be able to terminate a 
waiver, but only after providing a written explanation of the reason 
for the termination.
    The current language in Sec. 501.14(c) requires all permit related 
documents to be sent to EPA. The proposed language would require 
documents to be sent only when requested by EPA. This would eliminate 
the transmission of documents that EPA does not intend to review. This 
change would not reduce EPA's ability to obtain any permit related 
documents. Section 501.19 requires compliance with Sec. 123.41, the 
NPDES section that requires a State to make available to EPA ``any 
information obtained or used in the administration of a State program'.
    Section 501.14 also States that the Regional Administrator will 
normally notify the State at least 7 days before an EPA facility 
inspection. Today's rule would delete that language and allow the 
region and State to decide whether such a time period should be 
included in the MOA.
5. Requirements for Permitting
    The current provisions of Sec. 501.15 describe the procedural 
requirements that a State must follow in issuing permits in order to 
obtain EPA authorization to operate a section 405(f) sewage sludge 
management program. Many States operate well-managed sewage sludge 
programs that are organized differently than the NPDES model. EPA 
believes that the specific permitting requirements prescribed in 
Sec. 501.15 are not always necessary to ensure compliance with the part 
503 regulations and may have provided unnecessary obstacles to 
authorization of State sludge management programs. EPA considered 
removing the majority of these requirements from Sec. 501.15. However, 
a number of States have laws that prohibit the State's adoption of more 
stringent requirements than EPA. EPA is concerned that removal of these 
permitting procedural requirements--a move aimed at simplifying the 
approval process--may, because of these State law provisions, have the 
perverse result of requiring a State to modify its existing program in 
order to obtain EPA approval for the program. In this case, deletion of 
the permitting requirements could make the authorization process more 
difficult for some States while easing it for others. EPA is asking for 
further information on this issue.
    Today's proposal would retain most of the requirements for 
permitting but would allow States to follow their existing practices in 
many instances. In some cases the Regional Administrator would have to 
decide whether the State's procedural requirements are comparable to 
those required by this provision. EPA recognizes that this may result 
in inconsistency in State program implementation, but believes that 
procedural inconsistency is not a significant concern in this program 
and that the added flexibility far outweighs any potential problems. 
EPA requests comments on this approach.
    EPA is proposing to delete Sec. 501.15(a)(2) that contains the 
specific information requirements for permit applications. Instead, in 
Sec. 501.15(d)(1)(ii), EPA proposes to require the information listed 
in 40 CFR 122.21(q). EPA proposed these revised requirements on 
December 6, 1995 (60 FR 62546). EPA is currently reviewing all comments 
received on that proposal. As proposed, Sec. 122.21(q) would reduce the 
burden on permittees by allowing State directors to waive information 
requirements if they have access to substantially identical 
information, and by modifying the land application plan requirements to 
require advance public notice in the manner prescribed by State and 
local law.
    Today's proposal would also remove Secs. 501.15(a) (3) and (4) 
because these requirements are repeated in Sec. 501.15(b). The CWA 
limits the terms of NPDES permits to no more than five years. Today's 
proposal would modify current Sec. 501.15(a)(5) to allow a State to 
issue non-NPDES sewage sludge permits for terms of no more than 10 
years. EPA believes this is a good compromise between those who want to 
limit all sewage sludge permits to 5 years to insure that the 
permitting authority is aware of changed circumstances and those who 
believe permits do not need to expire, but should simply be modified if 
circumstances change. EPA realizes that some States issue permits for 
longer than 10 years and requests comments on this issue of how best to 
use scarce resources effectively and insure adequate protection of 
public health and the environment.
    Today's proposal would modify Sec. 501.15(b) to require that all 
permits issued by the State include the listed permit conditions unless 
comparable conditions are provided for in the MOA. This would provide 
flexibility to both the Region and the State. This proposed change is 
not intended to imply that permittees can choose which conditions to 
put into permits. EPA recognizes that States have different types of 
permitting

[[Page 11274]]

systems. Some of the permit conditions in Sec. 501.15(b) are 
established by States as regulatory requirements for all TWTDS. Other 
conditions are required by 40 CFR part 503. Since all users or 
disposers of sewage sludge must comply with Part 503 whether or not 
they have a permit, requirements contained in part 503 do not have to 
be repeated in a permit to require compliance.
    This section also contains several other specific proposed changes. 
Section 501.15(b)(10) would delete the language that requires a minimum 
of once per year monitoring. This change is necessary if Part 503 is 
modified as proposed to allow less than once per year monitoring. This 
proposal was published on October 25, 1995 (60 FR 54771).
    The last sentence in Sec. 501.15(b)(13) would be deleted because 
this permit condition has already been stated in Sec. 501.15(b)(2). EPA 
is also proposing to modify Sec. 501.15(b)(14) to clarify that a 
permittee that has applied for reissuance of a permit does not need to 
cease operations if the new permit is not issued before the term of an 
existing permit expires. This provision is consistent with section 
558(b) of the Administrative Procedure Act that provides for the 
continuing effectiveness of permits and licenses when the permittee has 
filed a timely and sufficient application for renewal.
    Today's proposal would modify Sec. 501.15(d) to require the listed 
permit procedures unless comparable State requirements are in place. 
This provision would provide flexibility for accommodating varying 
State requirements that protect public health and the environment.
    EPA is proposing to change Sec. 501.15(d)(1)(i) to clarify which 
TWTDS must apply for a permit. Applications are only required from 
TWTDS whose use or disposal method is regulated under part 503. A POTW 
that made bricks out of all of its sewage sludge would not be required 
to submit an application. An industrial facility (except a privately 
owned treatment works treating domestic sewage) would also not be 
required to apply at this time because such facilities are not 
currently covered by part 503. See 54 FR 18727 and 58 FR 9406.
    Permit applications are to be submitted to the State only for a use 
or disposal practice for which the State has obtained approval to 
operate a section 405(f) sewage sludge management program. If a State 
implements a partial program, permit applications for use or disposal 
practices not covered by the State program must still be submitted to 
the EPA region.
    Finally, if a TWTDS is covered under a State's sewage sludge 
general permit, it would follow the State's notification procedures 
rather than submit an individual permit application.
    EPA is proposing to delete existing Sec. 501.15(d)(1)(ii)(A). This 
provision was intended to allow the permitting authority to obtain 
applications for incinerators and others who requested site-specific 
pollutant limits before other applications because these permits would 
take the most time to issue and incinerators were believed to pose the 
greatest risk to public health. However, there have been few requests 
for site-specific permits. In addition, proposed changes to Part 503 
(60 FR 54771) would make the incineration standard totally self-
implementing along with the rest of the rule, i.e., the standard must 
be met whether or not a permit is issued. Therefore, this paragraph is 
no longer necessary. As described in Sec. 501.15(d)(1)(ii)(C), the 
Director may require permit applications from any TWTDS at any time if 
necessary to protect public health and the environment.
    EPA is proposing to redesignate existing Sec. 501.15(d)(1)(ii)(B) 
as Sec. 501.15(d)(1)(ii)(A) and to change the regulatory citation for 
the required application information.
    EPA is proposing to redesignate existing Sec. 501.15(d)(1)(ii)(C) 
as Sec. 501.15(d)(1)(ii)(B). This section lists the limited background 
information requested of non-NPDES TWTDS. EPA is also proposing to 
modify proposed Sec. 501.15(d)(1)(ii)(B)(3) to be consistent with the 
full permit information requirements as proposed in Sec. 122.21(q). If 
sewage sludge meets the ``exceptional quality'' requirements, no 
additional information is required about land application sites or 
facilities that further treat the sewage sludge.
    Section 501.15(d)(4) currently requires fact sheets for draft 
permits containing case-by-case permit conditions or land application 
plans. They are also required for Class I sludge management facilities 
or draft permits that are the subject of widespread public interest or 
raise major issues. EPA is proposing to revise this section to require 
a fact sheet only when a permit is the subject of widespread public 
interest or raises major issues. In addition, EPA would revise this 
provision to delete the list of the specific information required to be 
included in a fact sheet.
    EPA is proposing these changes to provide additional flexibility to 
States in operating their sewage sludge permit programs. EPA believes 
that the basis for a permit should be available to the public but does 
not believe that a fact sheet is the only available option. For 
example, in some States the basis for the permit may be the State's 
sewage sludge regulations. In this situation a fact sheet would not be 
necessary.
    EPA is proposing to change Sec. 501.15(d)(5) by inserting the 
phrase ``meeting or hearing'' in place of ``hearing'' throughout the 
section. This change would simplify the approval process for States 
whose public participation requirements for permit issuance call for 
public ``meetings'' rather than ``hearings''. This modification in the 
regulations would obviate the need in States with such requirements for 
a change in State law in order to obtain approval.
    Today's proposal would modify the requirement that the State 
provide at least a 30-day comment period on the draft permit. Some 
States require public notification of a permit application so the 
public has the opportunity to review the application and request a 
public hearing before a draft permit is issued. In this situation a 30-
day comment period after issuance of a draft permit may not be 
necessary. Today's proposal would also delete the requirement for 30 
days notice before a meeting or hearing. These changes are not intended 
to suggest that a State should not provide an adequate comment period 
or adequate advance notice of any hearing or meeting. State law must 
provide the public both timely and meaningful opportunity to 
participate in its permitting determinations. This means that a State's 
procedures must be reasonably calculated to apprise the public of the 
nature of any proposed permitting action as well as provide the public 
with an opportunity to submit its view on the proposed permitting 
action.
    Today's proposal is merely intended to allow the States the 
flexibility to follow their current public notice procedures that may 
provide for public notice at different times in the permitting process.
    Proposed changes to Sec. 501.15(d)(5) would allow the State 
flexibility in the method used to provide public notice. The MOA could 
be used to specify required methods, if deemed necessary by an EPA 
Region.
6. Requirements for Enforcement Authority
    EPA is proposing to revise the language of Sec. 501.17 to clarify 
the intent of the section. A State must have the authority to assess 
civil penalties or criminal fines in, at least, the amounts listed. 
States are not required to impose these or any other specific penalties 
in any civil or criminal proceeding, and

[[Page 11275]]

State law may, of course, authorize the imposition of larger penalties.
7. Program Reporting to EPA
    The current requirements in Sec. 501.21 require extensive 
information on noncompliance to be reported semiannually to EPA by the 
State program director. EPA is attempting to streamline all of its 
reporting requirements, including the information requested from 
States. The proposal would reduce the information required from States 
and would require annual reports that contain only the information that 
EPA believes would be of most value in reviewing a States's sludge 
management program.
8. Procedures for Revision of State Programs
    The current language in Sec. 501.32 requires a State to revise its 
program within one or two years of promulgation of changes to the 
sewage sludge regulations. The proposed change would allow EPA and the 
State to agree to a different schedule in the MOA. As the MOA is part 
of the State program submittal, comments on this or any other issue in 
the MOA can be raised when the State program is public noticed in the 
Federal Register. Because the sewage sludge regulations are directly 
enforceable, TWTDS must comply with any new Federal sewage sludge 
requirements, whether or not the State has modified its regulations to 
conform with the Federal rule.

III. Regulatory Requirements.

A. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Executive Order 12875

    Under Executive Order 12875 (58 FR 58093, October 28, 1993), 
entitled Enhancing the Intergovernmental Partnership, the Agency is 
required to develop an effective process to permit elected officials 
and other representatives of State, local, and tribal governments to 
provide meaningful and timely input in the development of regulatory 
proposals.
    EPA began development of today's proposal by soliciting suggested 
changes from a group of volunteer States. Their suggestions were used 
to develop a first draft of proposed rule changes that was sent on 
February 7, 1996 to States, tribes, environmentalists, and other 
stakeholders. On May 10, 1996, EPA sent out a second draft to the same 
stakeholders. The comments received on both drafts were used to develop 
today's rule.

C. Paperwork Reduction Act

    The information collection requirements for parts 123 and 501 were 
approved by OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. (See OMB 2040-0057, June 14, 1995.) The proposed rule changes are 
designed to streamline the regulatory process and will not impose any 
new information collection requirements.

D. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, EPA 
must prepare a regulatory flexibility analyses for regulations that 
have a significant impact on a substantial number of small entities.
    Today's proposal would only apply to States seeking to obtain EPA 
authorization for their State sewage sludge permit programs and States 
are not considered small entities under the RFA. EPA is not proposing 
to establish any requirements that are applicable to small entities as 
defined by the statute. Pursuant to section 605(b) of the Regulatory 
Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities.

E. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, or tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    Today's rule contains no Federal mandates under the regulatory 
provisions of Title II of the UMRA for State, local, or tribal 
governments or the private sector because the UMRA generally excludes 
from the definition of ``Federal intergovernmental mandate'' duties 
that arise from participation in a voluntary Federal program. In any 
event, EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local or tribal governments or the private sector in any one 
year. The proposed amendments provide additional flexibility to the 
States in complying with current regulatory requirements and lesson the 
burden on affected governments. As noted above, there are no costs 
associated with the changes proposed today. Thus, today's proposed rule 
is not subject to the requirements in sections 202 and 205 of the UMRA.

[[Page 11276]]

    EPA has determined that this rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments. The proposed amendments would not significantly affect 
small governments because as explained above, the proposed amendments 
would provide additional flexibility in complying with pre-existing 
regulatory requirements. The proposed amendments also would not 
uniquely affect small governments because the increased flexibility 
provided by the proposed changes would be available to POTWs operated 
by small governments to the same extent as to other sewage sludge users 
or disposers.

List of Subjects

40 CFR Part 123

    Confidential business information, Hazardous materials, Reporting 
and recordkeeping requirements, Sewage disposal, Waste treatment and 
disposal, Water pollution control, Penalties.

40 CFR Part 501

    Confidential business information, Environmental protection, 
Reporting and recordkeeping requirements, Publicly owned treatment 
works, Sewage disposal, Waste treatment and disposal.

    Dated: February 28, 1997.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, parts 123 and 501 of title 
40 of the Code of Federal Regulations are proposed to be amended as 
follows:

PART 123--STATE PROGRAM REQUIREMENTS

    1. The authority citation for part 123 continues to read as 
follows:

    Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

    2. Section 123.1 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec. 123.1  Purpose and Scope.

    (a) This part specifies the procedures EPA will follow in 
approving, revising, and withdrawing State programs and the 
requirements States programs must meet to be approved by the 
Administrator under sections 318, 402, and 405(a) (National Pollutant 
Discharge Elimination System--NPDES) of the CWA. This part also 
specifies the procedures EPA will follow in approving, revising, and 
withdrawing State programs under section 405(f) (sludge management 
programs) of the CWA. The requirements that a State sewage sludge 
management program must meet for approval by the Administrator under 
section 405(f) are set out at 40 CFR part 501.
* * * * *
    (c) The Administrator shall approve State programs which conform to 
the applicable requirements of this part. A State NPDES program will 
not be approved by the Administrator under section 402 of CWA unless it 
has authority to control the discharges specified in sections 318 and 
405(a) of CWA. Permit programs under sections 318 and 405(a) will not 
be approved independent of a section 402 program.
* * * * *
    3. Section 123.2 is revised to read as follows:


Sec. 123.2  Definitions.

    The definitions in Part 122 apply to all subparts of this part.
    4. Section 123.22 is amended by removing paragraph (f) and 
redesignating paragraph (g) as paragraph (f).
    5. Section 123.24 is amended by removing paragraph (d)(8).
    6. Section 123.25 is amended by revising the introductory text of 
paragraph (a) and paragraph (a)(37) to read as follows:


Sec. 123.25  Requirements for permitting.

    (a) All State Programs under this part must have legal authority to 
implement each of the following provisions and must be administered in 
conformance with each, except that States are not precluded from 
omitting or modifying any provisions to impose more stringent 
requirements:
* * * * *
    (37) 40 CFR parts 129, 133, and subchapter N.
* * * * *
    7. Section 123.26 is amended by revising paragraph (e)(5) to read 
as follows:


Sec. 123.26  Requirements for compliance evaluation programs.

* * * * *
    (e) * * *
    (5) Inspecting the facilities of all major dischargers at least 
annually.
    8. Section 123.42 is amended by revising the introductory paragraph 
to read as follows:


Sec. 123.42  Receipt and use of Federal Information.

    Upon approving a State permit program, EPA shall send to the State 
agency administering the permit program any relevant information which 
was collected by EPA. The Memorandum of Agreement under Sec. 123.24 
(or, in the case of a sewage sludge management program, Sec. 501.14) 
shall provide for the following, in such manner as the State Director 
and the Regional Administrator shall agree:
* * * * *
    9. Section 123.44 is amended by revising paragraphs (d)(1), (d)(2), 
(e), and (j) to read as follows:


Sec. 123.44  EPA review of and objection to State permits.

* * * * *
    (d)* * *
    (1) Shall consider all data transmitted pursuant to Sec. 123.43 
(or, in the case of a sewage sludge management program, Sec. 501.21);
    (2) May, if the information provided is inadequate to determine 
whether the proposed permit meets the guidelines and requirements of 
CWA, request the State Director to transmit to the Regional 
Administrator the complete record of the permit proceedings before the 
State, or any portions of the record that the Regional Administrator 
determines are necessary for review. If this request is made within 30 
days of receipt of the State submittal under Sec. 123.43 (or, in the 
case of a sewage sludge management program, Sec. 501.21), it shall 
constitute an interim objection to the issuance of the permit, and the 
full period of time specified in the Memorandum of Agreement for the 
Regional Administrator's review shall recommence when the Regional 
Administrator has received such record or portions of the record; and
* * * * *
    (e) Within 90 days of receipt by the State Director of an objection 
by the Regional Administrator, the State or interstate agency or any 
interested person may request that a public hearing be held by the 
Regional Administrator on the objection. A public hearing in accordance 
with the procedures of Sec. 124.12 (c) and (d) (or, in the case of a 
sewage sludge management program, Sec. 501.15(d)(7)) shall be held, and 
public notice provided in accordance with Sec. 124.10, (or, in the case 
of a sewage sludge management program, Sec. 501.15(d)(5)), whenever 
requested by the State or the interstate agency which proposed the 
permit or if warranted by significant public interest based on requests 
received.
* * * * *
    (j) The Regional Administrator may agree, in the Memorandum of 
Agreement under Sec. 123.24 (or, in the case of a sewage sludge 
management program, Sec. 501.14), to review draft permits rather than 
proposed permits. In such a case, a proposed permit need not

[[Page 11277]]

be prepared by the State and transmitted to the Regional Administrator 
for review in accordance with this section unless the State proposes to 
issue a permit which differs from the draft permit reviewed by the 
Regional Administrator, the Regional Administrator has objected to the 
draft permit, or there is significant public comment.
    10. Section 123.45 is amended by removing paragraph (e).
    11. Section 123.62 is amended by revising paragraphs (b)(3), and 
(c) to read as follows:


Sec. 123.62  Procedures for revision of State programs.

* * * * *
    (b)* * *
    (3) The Administrator shall approve or disapprove program revisions 
based on the requirements of this part (or, in the case of a sewage 
sludge management program, 40 CFR part 501) and of the CWA.
* * * * *
    (c) States with approved programs shall notify EPA whenever they 
propose to transfer all or part of any program from the approved State 
agency to any other State agency, and shall identify any new division 
of responsibilities among the agencies involved. The new agency is not 
authorized to administer the program until approved by the 
Administrator under paragraph (b) of this section. Organizational 
charts required under Sec. 123.22(b) (or, in the case of a sewage 
sludge management program, Sec. 501.12(b)) shall be revised and 
resubmitted.
* * * * *
    12. Section 123.63 is amended by revising the introductory text of 
paragraph (a) and paragraph (a)(4) to read as follows:


Sec. 123.63  Criteria for withdrawal of State programs.

    (a) In the case of a sewage sludge management program, references 
in this section to ``this part'' shall be deemed to refer to 40 CFR 
part 501. The Administrator may withdraw program approval when a State 
program no longer complies with the requirements of this part, and the 
State fails to take corrective action. Such circumstances include the 
following:
* * * * *
    (4) Where the State program fails to comply with the terms of the 
Memorandum of Agreement required under Sec. 123.24 (or, in the case of 
a sewage sludge management program, Sec. 501.14).
* * * * *
    13. Section 123.64 is amended by revising the introductory text of 
paragraph (a) and paragraph (b)(1) to read as follows:


Sec. 123.64  Procedures for withdrawal of State programs.

    (a) A State with a program approved under this part (or, in the 
case of a sewage sludge management program, 40 CFR Part 501) may 
voluntarily transfer program responsibilities required by Federal law 
to EPA by taking the following actions, or in such other manner as may 
be agreed upon with the Administrator.
* * * * *
    (b) * * *
    (1) Order. The Administrator may order the commencement of 
withdrawal proceedings on his or her own initiative or in response to a 
petition from an interested person alleging failure of the State to 
comply with the requirements of this part as set forth in Sec. 123.63 
(or, in the case of a sewage sludge management program, Sec. 501.33). 
The Administrator shall respond in writing to any petition to commence 
withdrawal proceedings. He may conduct an informal investigation of the 
allegations in the petition to determine whether cause exists to 
commence proceedings under this paragraph. The Administrator's order 
commencing proceedings under this paragraph shall fix a time and place 
for the commencement of the hearing and shall specify the allegations 
against the State which are to be considered at the hearing. Within 30 
days the State shall admit or deny these allegations in a written 
answer. The party seeking withdrawal of the State's program shall have 
the burden of coming forward with the evidence in a hearing under this 
paragraph.
* * * * *

PART 501--STATE SLUDGE MANAGEMENT PROGRAM REGULATIONS

    14. The authority citation for part 501 continues to read as 
follows:

    Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

    15. Section 501.1 is amended by revising paragraphs (b) and (d), 
and adding paragraph (m) to read as follows:


Sec. 501.1  Purpose and scope.

* * * * *
    (b) This part specifies the procedures EPA will follow in 
approving, revising, and withdrawing State sludge management programs 
under section 405(f), and the requirements State programs must meet to 
be approved by the Administrator under section 405(f) of CWA. Sludge 
Management Program submissions may be developed and implemented under 
any existing or new State authority or authorities as long as they meet 
the requirements of this part.
* * * * *
    (d) In addition, any complete State Sludge Management Program 
submitted for approval under this part shall have authority to address 
all sewage sludge management activities used in the State that are 
practiced or planned to be practiced in the State and are covered by 40 
CFR part 503, unless the State is applying for partial sludge program 
approval in accordance with paragraph (m) of this section. The State 
sludge management program shall also be applicable to all federal 
facilities in the State. Sludge management activities shall include as 
applicable:
    (1) Land application,
    (2) Landfilling in a Municipal Solid Waste Landfill regulated under 
40 CFR part 258,
    (3) Incineration,
    (4) Surface disposal, and
    (5) Any other sludge use or disposal practices as may be regulated 
by 40 CFR part 503.
* * * * *
    (m) A State whose sludge permitting program has not been approved 
under part 501 may submit to the Regional Administrator an application 
for approval of a partial sewage sludge program that meets the 
following requirements:
    (1) A partial program submission must constitute a complete 
permitting program covering one or more categories of sewage sludge use 
or disposal. A complete permitting program includes the issuance of 
permits, the monitoring of compliance and, in the event of violations, 
enforcement action for all TWTDS engaging in the sewage sludge use or 
disposal practice that is the subject of the partial program.
    (2) The partial program submission must also address the following 
requirements:
    (i) The Attorney General's Statement, in addition to the 
information required by Sec. 501.13, must clearly explain the 
jurisdiction of the administering agency or department;
    (ii) The program description, in addition to the information 
required by Sec. 501.12, must explain in detail how the program will 
operate, including which use and disposal practice(s) the State will 
cover. The program description must also explain the relationship and 
coordination between the proposed partial sewage sludge program and 
that part of the program for which EPA will remain the permitting 
authority, including a discussion of the division of

[[Page 11278]]

permitting, enforcement, and compliance monitoring responsibilities 
between the State and EPA; and
    (iii) The Memorandum of Agreement between EPA and the State, in 
addition to the information required by Sec. 501.14, must set out in 
detail the responsibilities of EPA and the State in administering the 
partial program, including specific provisions for transfer of 
information and determination of which TWTDS are included in the 
partial program.
    16. Section 501.2 is amended by adding a definition to read as 
follows:


Sec. 501.2  Definitions.

* * * * *
    ``TWTDS'' means treatment works treating domestic sewage.
    17. Section 501.12 is amended by revising paragraphs (b), (d), 
(f)(1)(iv), (f)(1)(v), and (f)(2), and removing paragraph (f)(3) to 
read as follows:


Sec. 501.12  Program description.

* * * * *
    (b) A description (including organization charts) of the 
organization and structure of the State agency or agencies which will 
have responsibility for administering the program. If more than one 
agency is responsible for administration of a program, the 
responsibilities of each agency, and their procedures for coordination 
must be set forth, and an agency must be designated as a ``lead 
agency'' (i.e., the ``State sludge management agency'') to facilitate 
communications between EPA and the State agencies having program 
responsibility. If the State proposes to administer a program of 
greater scope of coverage than is required by federal law, the 
information provided under this paragraph shall indicate the resources 
dedicated to administering the federally required portion of the 
program. This description shall include:
    (1) A description of the general duties and the total number of 
State agency staff carrying out the State program;
    (2) An itemization of the estimated costs of establishing and 
administering the program for the first two years after approval 
including cost of the personnel described in paragraph (b)(1) of this 
section, cost of administrative support, and cost of technical support, 
except where a State is seeking authorization for an established sewage 
sludge management program that has been in existence for a minimum of 
two years and is at least as stringent as the program for which the 
State is seeking authorization; and
    (3) An estimate of the sources and amounts of funding for the first 
two years after approval to meet the costs listed in paragraph (b)(2) 
of this section, except where a State is seeking authorization for an 
established sewage sludge management program that has been in existence 
for a minimum of two years and is at least as stringent as the program 
for which the State is seeking authorization.
* * * * *
    (d) Copies of the permit, application, and reporting forms or 
procedures the State intends to employ in its program.
* * * * *
    (f)(1) * * *
    (iv) NPDES, UIC, RCRA, Clean Air Act, and State permit number, if 
any, and;
    (v) Compliance status.
    (2) States may submit either:
    (i) Inventories which contain all of the information required by 
paragraph (f)(1); or
    (ii) A partial inventory with a detailed plan showing how the State 
will complete the required inventory within five years after approval 
of its sludge management program under this part.
* * * * *
    18. Section 501.14 is amended by revising paragraphs (a), 
(b)(1)(i), (b)(2), (b)(3), and (c) to read as follows:


Sec. 501.14  Memorandum of Agreement with the Regional Administrator.

    (a) Any State that seeks to administer a program under this part 
shall submit a Memorandum of Agreement. The Memorandum of Agreement 
shall be executed by the State Program Director and the Regional 
Administrator and shall become effective when approved by the Regional 
Administrator. In addition to meeting the requirements of paragraph (b) 
of this section, the Memorandum of Agreement may include other terms, 
conditions, or agreements consistent with this part and relevant to the 
administration and enforcement of the State's regulatory program. The 
Administrator shall not approve any Memorandum of Agreement which 
contains provisions which restrict EPA's oversight responsibility.
    (b) * * *
    (1)(i) Provisions for the prompt transfer from EPA to the State of 
pending permit applications applicable to the State program and any 
other information relevant to program operation not already in the 
possession of the State Director (e.g., support files for permit 
issuance, compliance reports, etc.). If existing permits are 
transferred from EPA to the State for administration, the Memorandum of 
Agreement shall contain provisions specifying a procedure for 
transferring the administration of these permits. If a State lacks the 
authority to directly administer permits issued by the federal 
government, a procedure may be established to transfer responsibility 
for these permits.
* * * * *
    (2) Provisions specifying classes and categories of permit 
applications, draft permits, and proposed permits that the State will 
send to the Regional Administrator for review, comment and, where 
applicable, objection. These provisions shall follow the permit review 
procedures set forth in 40 CFR 123.44.
    (3) The Memorandum of Agreement shall also specify the extent to 
which EPA will waive its right to review, object to, or comment upon 
State-issued permits.
* * * * *
    (c) The Memorandum of Agreement shall also provide for the 
following:
    (1) The circumstances in which the State must promptly send 
notices, draft permits, final permits, or related documents to the 
Regional Administrator; and
    (2) Provisions on the State's compliance monitoring and enforcement 
program, including:
    (i) Provisions for coordination of compliance monitoring activities 
by the State and by EPA. These may specify the basis on which the 
Regional Administrator will select facilities or activities within the 
State for EPA inspection; and
    (ii) Procedures to assure coordination of enforcement activities.
    (3) When appropriate, provisions for joint processing of permits by 
the State and EPA for facilities or activities which require permits 
from both EPA and the State under different programs (see for example 
40 CFR 124.4).
    (4) Provisions for modification of the Memorandum of Agreement in 
accordance with this part.
* * * * *
    19. Section 501.15 is amended by revising paragraph (a), the 
introductory text of paragraph (b), paragraphs (b)(10)(i), (b)(13), 
(b)(14), the introductory text of paragraph (d), paragraph (d)(1), and 
(d)(4) through (d)(8), to read as follows:


Sec. 501.15  Requirements for permitting.

    (a) General requirements. All State programs under this part shall 
have legal authority to implement each of the following provisions and 
must be administered in conformance with each, except that States are 
not precluded from omitting or modifying any provisions to impose more 
stringent requirements:

[[Page 11279]]

    (1) Confidentiality of information. Claims of confidentiality shall 
be denied for the following information:
    (i) The name and address of any permit applicant or permittee;
    (ii) Permit applications, permits, and sewage sludge data. This 
includes information submitted on the permit application forms 
themselves and any attachments used to supply information required by 
the forms.
    (2) Duration of permits. (i) NPDES permits issued to treatment 
works treating domestic sewage pursuant to section 405(f) of the CWA 
shall be effective for a fixed term not to exceed five years.
    (ii) Non-NPDES Permits issued to treatment works treating domestic 
sewage pursuant to section 405(f) of the CWA shall be effective for a 
fixed term not to exceed ten years.
    (3) Schedules of compliance--(i) General. The permit may, when 
appropriate, specify a schedule of compliance leading to compliance 
with the CWA and the requirements of this part. Any schedules of 
compliance under this section shall require compliance as soon as 
possible, but not later than any applicable statutory deadline under 
the CWA.
    (ii) Interim dates. If a permit establishes a schedule of 
compliance which exceeds one year from the date of permit issuance, the 
schedule shall set forth interim requirements and the date for their 
achievement. The time between interim dates shall not exceed six 
months.
    (iii) Reporting. The permit shall be written to require that no 
later than 14 days following each interim date and the final date of 
compliance, the permittee shall notify the Director in writing of its 
compliance or noncompliance with the interim or final requirements, or 
submit progress reports if paragraph (a)(3)(ii) of this section is 
applicable.
    (b) Conditions applicable to all permits. In addition to permit 
conditions which must be developed on a case-by-case basis in order to 
meet applicable requirements of 40 CFR part 503, paragraphs (a)(1) 
through (3) of this section, and permit conditions developed on a case-
by-case basis using best professional judgment to protect public health 
and the environment from the adverse effects of toxic pollutants in 
sewage sludge, all permits shall contain the following permit 
conditions (or comparable conditions as provided for in the Memorandum 
of Agreement):
* * * * *
    (10) Monitoring and records. (i) The permittee shall monitor and 
report monitoring results as specified elsewhere in this permit with a 
frequency dependent on the nature and effect of its sludge use or 
disposal practices. At a minimum, this shall be as required by 40 CFR 
part 503.
* * * * *
    (13) Reopener. If a standard for sewage sludge use or disposal 
applicable to permittee's use or disposal methods is promulgated under 
section 405(d) of the CWA before the expiration of this permit, and 
that standard is more stringent than the sludge pollutant limits or 
acceptable management practices authorized in this permit, or controls 
a pollutant or practice not limited in this permit, this permit may be 
promptly modified or revoked and reissued to conform to the standard 
for sludge use or disposal promulgated under section 405(d) of the CWA.
    (14) Duty to reapply. If the permittee wishes to continue an 
activity regulated by this permit after the expiration date of this 
permit, the permittee must apply for a new permit.
* * * * *
    (d) Permit procedures. All State programs approved under this part 
shall have the legal authority to implement, and be administered in 
accordance with, each of following provisions, unless the Regional 
Administrator determines that the State program includes comparable or 
more stringent provisions.
    (1) Application for a permit. (i) Any TWTDS whose sewage sludge use 
or disposal method is covered by 40 CFR part 503 and covered under the 
State program, except TWTDS covered by sewage sludge general permits, 
shall complete, sign, and submit to the Director an application for a 
permit within the time specified in paragraph (d)(1)(ii) of this 
section.
    (ii)(A) TWTDS with a currently effective NPDES permit must submit 
the application information required by 40 CFR 122.21(q) when the next 
application for NPDES permit renewal is due.
    (B) Other existing TWTDS not addressed under paragraph 
(d)(1)(ii)(A) of this section must submit the information listed in 
paragraphs (d)(1)(ii)(B)(1) through (5) of this section, to the 
Director within one year after publication of a standard applicable to 
its sewage sludge use or disposal practice(s). The Director shall 
determine when such TWTDS must submit a full permit application.
    (1) Name, mailing address and location of the TWTDS;
    (2) The operator's name, address, telephone number, ownership 
status, and status as Federal, State, private, public or other entity;
    (3) A description of the sewage sludge use or disposal practices. 
Unless the sewage sludge meets the requirements of 40 CFR 
122.21(q)(8)(iv), the description shall include the name and address of 
any facility where sewage sludge is sent for treatment or disposal, and 
the location of any land application sites;
    (4) Annual amount of sewage sludge generated, treated, used or 
disposed (dry weight basis); and
    (5) The most recent data the TWTDS may have on the quality of the 
sewage sludge.
    (C) Notwithstanding paragraph (d)(1)(ii)(A) or (B) of this section, 
the Director may require permit applications from any TWTDS at any time 
if the Director determines that a permit is necessary to protect public 
health and the environment from any potential adverse effects that may 
occur from toxic pollutants in sewage sludge.
    (D) Any TWTDS that commences operations after promulgation of an 
applicable standard for sewage sludge use or disposal shall submit an 
application to the Director at least 180 days prior to the date 
proposed for commencing operations.
    (iii) The Director shall not begin the processing of a permit until 
the applicant has fully complied with the application requirements for 
that permit.
* * * * *
    (4) Fact sheets. A fact sheet shall be prepared for every draft 
permit which the Director finds is the subject of widespread public 
interest or raises major issues. The fact sheet shall briefly set forth 
the principal facts and the significant factual, legal, methodological 
and policy questions considered in preparing the draft permit. The 
Director shall send this fact sheet to the applicant and, on request, 
to any other person.
    (5) Public notice of permit actions and public comment period. (i) 
The Director shall give public notice that the following actions have 
occurred:
    (A) A draft permit has been prepared. At least 30 days shall be 
allowed for public comment on the draft permit unless there has been a 
previous public comment period such as during the permit application.
    (B) A meeting or hearing has been scheduled.
    (ii) Methods. Public notice of activities described in paragraph 
(d)(5)(i) of this section shall be given in the area affected by these 
activities by any method reasonably calculated to

[[Page 11280]]

give actual notice of the action in question to any person potentially 
affected or requesting notice of the action, including publication of a 
notice in a daily or weekly newspaper within the area affected by the 
facility or activity, press releases, or any other forum or medium to 
elicit public participation.
    (iii) Contents--(A) All public notices. All public notices issued 
under this part shall contain the following minimum information:
    (1) Name and address of the office processing the permit action for 
which notice is being given;
    (2) Name and address of the permittee or permit applicant and, if 
different, of the facility or activity regulated by the permit;
    (3) A brief description of the activity described in the permit 
application (including the inclusion of land application plan, if 
appropriate);
    (4) Name, address and telephone number of a person from whom 
interested persons may obtain further information, including copies of 
the draft permit, fact sheet, and the application;
    (5) A brief description of the comment procedures required by 
Sec. 501.15(d)(6) and the time and place of any meeting or hearing that 
will be held, including a Statement of procedures to request a meeting 
or hearing (unless a meeting or hearing has already been scheduled) and 
other procedures by which the public may participate in the final 
permit decision; and
    (6) Any additional information considered necessary or proper.
    (B) Public notices for meetings or hearings. In addition to the 
general public notice described in paragraph (d)(5)(iii)(A) of this 
section, the public notice of a meeting or hearing shall contain the 
following information:
    (1) Date, time and place of the meeting or hearing; and
    (2) A brief description of the nature and purpose of the meeting or 
hearing, including the applicable rules and procedures.
    (6) Public comments and requests for public meetings or hearings. 
During the public comment period, any interested person may submit 
written comments on the draft permit and may request a public meeting 
or hearing, if no meeting or hearing has already been scheduled. A 
request for a public meeting or hearing shall be in writing and shall 
State the nature of the issues proposed to be raised in the meeting or 
hearing. All comments shall be considered in making the final decision 
and shall be answered as provided in paragraph (d)(8) of this section.
    (7) Public meetings or hearings. The Director shall hold a public 
meeting or hearing whenever he or she finds, on the basis of requests, 
a significant degree of public interest in a draft permit. The Director 
may also hold a public meeting or hearing at his or her discretion, 
(e.g., where such a hearing might clarify one or more issues involved 
in the permit decision).
    (8) Response to comments. At the time a final permit is issued, the 
Director shall issue a response to comments. The response to comments 
shall be available to the public, and shall:
    (i) Specify which provisions, if any, of the draft permit have been 
changed in the final permit decision, and the reasons for the change; 
and
    (ii) Briefly describe and respond to all significant comments on 
the draft permit raised during the public comment period or during any 
meeting or hearing.
* * * * *
    20. Section 501.17 is amended by revising paragraphs (a)(3) and 
(b)(1) to read as follows:


Sec. 501.17  Requirements for enforcement authority.

    (a)*  *  *
    (3)*  *  *
    (i) Civil penalties shall be recoverable for the violation of any 
permit condition; any applicable standard or limitation; any filing 
requirement; any duty to allow or carry out inspection, entry or 
monitoring activities; or any regulation or orders issued by the State 
Program Director. The State shall at a minimum, have the authority to 
assess penalties of up to $5,000 a day for each violation.
    (ii) Criminal fines shall be recoverable against any person who 
willfully or negligently violates any applicable standards or 
limitations; any permit condition; or any filing requirement. The State 
shall at a minimum, have the authority to assess fines of up to $10,000 
a day for each violation. States which provide the criminal remedies 
based on ``criminal negligence,'' ``gross negligence'' or strict 
liability satisfy the requirement of this paragraph (a)(3)(ii).
    (iii) Criminal fines shall be recoverable against any person who 
knowingly makes any false Statement, representation or certification in 
any program form, or in any notice or report required by a permit or 
State Program Director, or who knowingly renders inaccurate any 
monitoring device or method required to be maintained by the State 
Program Director. The State shall at a minimum, have the authority to 
assess fines of up to $5,000 for each instance of violation.
    (b)(1) The civil penalty or criminal fine shall be assessable for 
each instance of violation and, if the violation is continuous, shall 
be assessable up to the maximum amount for each day of violation.
* * * * *
    21. Section 501.21 is revised to read as follows:


Sec. 501.21  Program reporting to EPA.

    The State Program Director shall prepare annual reports as detailed 
in this section and shall submit any reports required under this 
section to the Regional Administrator. These reports shall serve as the 
main vehicle for the State to report on the status of its sludge 
management program, update its inventory of sewage sludge generators 
and sludge disposal facilities, and provide information on incidents of 
noncompliance. The State Program Director shall submit these reports to 
the Regional Administrator according to a mutually agreed-upon 
schedule. The reports specified in this section may be combined with 
other reports to EPA (e.g., existing NPDES or RCRA reporting systems) 
where appropriate and shall include the following:
    (a) A summary of the incidents of noncompliance which occurred in 
the previous year that includes:
    (1) The non-complying facilities by name and reference number;
    (2) The type of noncompliance, a brief description and date(s) of 
the event;
    (3) The date(s) and a brief description of the action(s) taken to 
ensure timely and appropriate action to achieve compliance;
    (4) Status of the incident(s) of noncompliance with the date of 
resolution; and
    (5) Any details which tend to explain or mitigate the incident(s) 
of noncompliance.
    (b) Information to update the inventory of all sewage sludge 
generators and sewage sludge disposal facilities submitted with the 
program plan or in previous annual reports, including:
    (1) Name and location;
    (2) NPDES, UIC, RCRA, Clean Air Act, and State permit number, if 
any;
    (3) Sludge management practice(s) used; and
    (4) Sludge production volume.
    22. Section 501.32 is amended by revising paragraph (a) to read as 
follows:


Sec. 501.32  Procedures for revision of State programs.

    (a) Any approved State program which requires revision to comply 
with

[[Page 11281]]

amendments to federal regulations governing sewage sludge use or 
disposal (including revisions to this part) shall revise its program 
within one year after promulgation of applicable regulations, unless 
either the State must amend or enact a statute in order to make the 
required revision, in which case such revision shall take place within 
2 years; or a different schedule is established under the Memorandum of 
Agreement.
* * * * *
[FR Doc. 97-5879 Filed 3-10-97; 8:45 am]
BILLING CODE 6560-50-P