[Federal Register Volume 66, Number 14 (Monday, January 22, 2001)]
[Rules and Regulations]
[Pages 6976-7066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1668]



[[Page 6975]]

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Part VIII





Environmental Protection Agency





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40 CFR Parts 9, 141, and 142



National Primary Drinking Water Regulations; Arsenic and Clarifications 
to Compliance and New Source Contaminants Monitoring; Final Rule

  Federal Register / Vol. 66, No. 14 / Monday, January 22, 2001 / Rules 
and Regulations  

[[Page 6976]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 141 and 142

[WH-FRL-6934-9]
RIN 2040-AB75


National Primary Drinking Water Regulations; Arsenic and 
Clarifications to Compliance and New Source Contaminants Monitoring

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today EPA is establishing a health-based, non-enforceable 
Maximum Contaminant Level Goal (MCLG) for arsenic of zero and an 
enforceable Maximum Contaminant Level (MCL) for arsenic of 0.01 mg/L 
(10 g/L). This regulation will apply to non-transient non-
community water systems, which are not presently subject to standards 
on arsenic in drinking water, and to community water systems.
    In addition, EPA is publishing clarifications for monitoring and 
demonstration of compliance for new systems or sources of drinking 
water. The Agency is also clarifying compliance for State-determined 
monitoring after exceedances for inorganic, volatile organic, and 
synthetic organic contaminants. Finally, EPA is recognizing the State-
specified time period and sampling frequency for new public water 
systems and systems using a new source of water to demonstrate 
compliance with drinking water regulations. The requirement for new 
systems and new source monitoring will be effective for inorganic, 
volatile organic, and synthetic organic contaminants.

DATES: This rule is effective March 23, 2001, except for the amendments 
to Secs. 141.23(i)(1), 141.23(i)(2), 141.24(f)(15), 141.24(h)(11), 
141.24(h)(20), 142.16(e), 142.16(j), and 142.16(k) which are effective 
January 22, 2004.
    The compliance date for requirements related to the clarification 
for monitoring and compliance under Secs. 141.23(i)(1), 141.23(i)(2), 
141.24(f)(15), 141.24(f)(22), 141.24(h)(11), 141.24(h)(20), 142.16(e), 
142.16(j), and 142.16(k) is January 22, 2004. The compliance date for 
requirements related to the revised arsenic standard under 
Secs. 141.23(i)(4), 141.23(k)(3), 141.23(k)(3)(ii), 141.51(b), 
141.62(b), 141.62(b)(16), 141.62(c), 141.62(d), and 142.62(b) is 
January 23, 2006. For purposes of judicial review, this rule is 
promulgated as of January 22, 2001.

ADDRESSES: Copies of the public comments received, EPA responses, and 
all other supporting documents are available for review at the U.S. EPA 
Water Docket (4101), East Tower B-57, 401 M Street, SW, Washington DC 
20460. For an appointment to review the docket, call 202-260-3027 
between 9 a.m. and 3:30 p.m. and refer to Docket W-99-16.

FOR FURTHER INFORMATION CONTACT: The Safe Drinking Water Hotline, 
phone: (800) 426-4791, or (703) 285-1093, e-mail: [email protected] 
for general information about, and copies of, this document and the 
proposed rule. For technical inquiries, contact: Jeff Kempic, (202) 
260-9567, e-mail: [email protected] for treatment and costs, and 
Dr. John B. Bennett, (202) 260-0446, e-mail: [email protected] for 
benefits.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    A public water system (PWS), as defined in 40 CFR 141.2, provides 
water to the public for human consumption through pipes or ``other 
constructed conveyances, if such system has at least fifteen service 
connections or regularly serves an average of at least twenty-five 
individuals daily at least 60 days out of the year.'' A public water 
system is either a community water system (CWS) or a non-community 
water system (NCWS). A community water system, as defined in 
Sec. 141.2, is ``a public water system which serves at least fifteen 
service connections used by year-round residents or regularly serves at 
least twenty-five year-round residents.'' The definition in Sec. 141.2 
for a non-transient non-community water system (NTNCWS) is ``a public 
water system that is not a [CWS] and that regularly serves at least 25 
of the same persons over 6 months per year.'' EPA has an inventory 
totaling over 54,000 community water systems and approximately 20,000 
non-transient non-community water systems nationwide. Entities 
potentially regulated by this action are community water systems and 
non-transient non-community water systems. The following table provides 
examples of the regulated entities under this rule.

                       Table of Regulated Entities
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             Category                  Examples of regulated entities
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Industry..........................  Privately owned/operated community
                                     water supply systems using ground
                                     water, surface water, or mixed
                                     ground water and surface water.
State, Tribal, and Local            State, Tribal, or local government-
 Government.                         owned/operated water supply systems
                                     using ground water, surface water,
                                     or mixed ground and surface water.
Federal Government................  Federally owned/operated community
                                     water supply systems using ground
                                     water, surface water, or mixed
                                     ground water and surface water.
------------------------------------------------------------------------

    The 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 this table could also be regulated. To determine whether 
your facility is regulated by this action, you should carefully examine 
the applicability criteria in Secs. 141.11 and 141.62 of the rule. If 
you have any questions regarding the applicability of this action to a 
particular entity, consult the general information contact listed in 
the section listing contacts for further information.

Abbreviations used in this rule

--less than
--less than or equal to
>--greater than
--greater than or equal to
--plus or minus
Sec. --section
--, Greek letter, in statistics represents standard 
deviation
g--Microgram, one-millionth of a gram (3.5  x  
10-\8\ of an ounce)
g/L--micrograms per liter
AA--Activated alumina
AIC--Akaike Information Criterion
ACWA--Association of California Water Agencies
AMWA--Association of Metropolitan Water Agencies
APHA--American Public Health Association

[[Page 6977]]

ARARs--Applicable or relevant and appropriate requirements
As (III)--Trivalent arsenic. Common inorganic form in water is arsenite
As (V)--Pentavalent arsenic. Common inorganic form in water is arsenate
ASDWA-- Association of State Drinking Water Administrators
AsH3--Arsine
ASTM--American Society for Testing and Materials
ATSDR--Agency for Toxic Substances and Disease Registry, U.S. 
Department of Health & Human Services
AWWA--American Water Works Association
AWWARF--American Water Works Association Research Foundation
BAT--Best available technology
BV--Bed volume
CCR--Consumer Confidence Report
CERCLA--Comprehensive Environmental Response, Compensation, and 
Liability Act administered by EPA for hazardous substances
C/F--Modified coagulation/filtration
CFR--Code of Federal Regulations
CSFII--Continuing Survey of Food Intakes by Individuals
CWA--Clean Water Act administered by EPA for surface waters of the U.S.
CWS--Community water system
CWSS--Community Water System Survey
DMA--Dimethyl arsinic acid, cacodylic acid, 
(CH3)2HAsO2
DNA--Deoxyribonucleic acid
DWSRF--Drinking Water State Revolving Fund
EA--Economic analysis
EDR--Electrodialysis reversal
EEAC--Environmental Economics Advisory Committee
e.g.--exempli gratia, Latin for ``for example''
EPA--U.S. Environmental Protection Agency
et al.--et alia, Latin for ``and others''
FACA--Federal Advisory Committee Act
FR--Federal Register
FRFA--Final Regulatory Flexibility Analysis
FSIS--Federalism Summary Impact Statement
GDP--Gross Domestic Product
GFAA--Graphite furnace atomic absorption
GHAA--Gaseous hydride atomic absorption
GI--Gastrointestinal
GW--Ground water
GWR--Ground Water Rule
HRRCA--Health Risk Reduction and Cost Analysis
ICP-AES--Inductively coupled plasma-atomic emission spectroscopy
ICP-MS--Inductively coupled plasma mass spectroscopy
ICR--Information collection request
i.e.--id est, Latin for ``that is''
IOCs--Inorganic contaminants
ISCV--Intra-system coefficient of variation
IX--Ion exchange
L--Liter, also referred to as lower case ``l'' in older citations
LD50--The dose of a chemical taken by mouth or absorbed by 
the skin which is expected to cause death in 50% of the test animals
LS--Modified lime softening
LT1/FBR--Long Term 1 Enhanced Surface Water Treatment and Filter 
Backwash Recycling Rule
MCL--Maximum contaminant level
MCLG--Maximum contaminant level goal
MDL--Method detection limit
mg--Milligrams, one-thousandth of a gram, 1 milligram=1,000 micrograms
mg/kg--Milligrams arsenic per kilogram body weight or soil weight
mg/L--Milligrams per liter
MHI--Mean household income
MMA--Monomethyl arsenic, arsonic acid, 
CH3H2ASO3
NAOS--National Arsenic Occurrence Survey
NAS--National Academy of Sciences
NAWQA--National Ambient Water Quality Assessment, USGS
NCI--National Cancer Institute
NCWS--Non-community water system
NDWAC--National Drinking Water Advisory Council for EPA
NIRS--National Inorganic and Radionuclide Survey done by EPA
NODA--Notice of Data Availability
NOMS--National Organic Monitoring Survey done by EPA
NPDES--National Pollutant Discharge Elimination System for CWA
NPDWR--National primary drinking water regulation
NR--Not reported
NRC--National Research Council, the operating arm of NAS
NTNCWS--Non-transient non-community water system
NTTAA--National Technology Transfer and Advancement Act
NWIS--National Water Information System of USGS
OGWDW--Office of Ground Water and Drinking Water in EPA
OMB--Office of Management and Budget
PE--Performance evaluation, studies to certify laboratories for EPA 
drinking water testing
pH--Negative log of hydrogen ion concentration
PNR--Public Notification Rule
POE--Point-of-entry treatment devices
POTWs--Publicly owned treatment works, treat wastewater
POU--Point-of-use treatment devices
ppb--Parts per billion
ppm--Parts per million
PQL--Practical quantitation level
PRA--Paperwork Reduction Act
psi--Pounds per square inch
PT--Performance testing
PUC--Public utilities commission
PWS--Public water systems
QALYs--Quality adjusted life years
RCRA--Resource Conservation and Recovery Act
REF--Relative exposure factors
RFA--Regulatory Flexibility Act
RIA--Regulatory Impact Analysis
RO--Reverse osmosis
RUS--Rural Utilities Service
RWS--Rural Water Survey
SAB--Science Advisory Board
SBAR--Small Business Advocacy Review
SBREFA--Small Business Regulatory Enforcement Fairness Act
SD--Standard deviation
SDWA--Safe Drinking Water Act
SDWIS--Safe Drinking Water Information System
SEER--Surveillance, Epidemiology, and End Results
SM--Standard Method for Examination of Water and Wastewater
SMF--Standardized monitoring framework
SMRs--Standardized mortality ratios
SO4--Sulfate
SOCs--Synthetic organic contaminants
STP-GFAA--Stabilized temperature platform graphite furnace atomic 
absorption
SW--Surface water
TBLLs--Technically based local limits
TC--Toxicity Characteristic, RCRA hazardous waste
TCLP--Toxicity Characteristic Leaching Procedure, tests for hazardous 
waste
TDS--Total dissolved solids
TMF--Technical, managerial, financial capacity
TOC--Total organic carbon
UMRA--Unfunded Mandates Reform Act
URTH--Unreasonable risk to health
U.S.--United States
USDA--US Department of Agriculture
USGS--US Geological Survey
UV--Ultraviolet
VOCs--Volatile organic contaminants
VSL--Value of statistical life
VSLY--Value of statistical life year
WHO--World Health Organization
WS--Water supply
WTP--Willingness-to-pay

Table of Contents

I. Background and Summary of the Final Rule

A. What Did EPA Propose?
B. Overview of the Notice of Data Availability (NODA)
C. Does This Regulation Apply to My Water System?

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D. What are the Final Drinking Water Regulatory Standards for 
Arsenic (Maximum Contaminant Level Goals and Maximum Contaminant 
Levels)?
E. Will There be a Health Advisory?
F. What are the Best Available Technologies For Removing Arsenic 
From Drinking Water?
    1. BAT technologies
    2. Preoxidation
    3. Factors affecting listing technologies
    4. Other technologies evaluated, but not designated as BAT
    5. Waste disposal
G. Treatment Trains Considered For Small Systems
    1. Can my water system use point-of-use (POU), point-of-entry 
(POE), or bottled water to comply with this regulation?
    2. What are the affordable treatment technologies for small 
systems?
    3. Can my water system get a small system variance from an MCL 
under today's rule?
H. Can My System Get a General Variance or Exemption from the MCL 
Under Today's Rule?
I. What Analytical Methods are Approved for Compliance Monitoring of 
Arsenic and What are the Performance Testing Criteria for Laboratory 
Certification?
    1. Approved analytical methods
    2. Performance testing criteria for laboratory certification
J. How Will I Know if My System Meets the Arsenic Standard?
    1. Sampling points and grandfathering of monitoring data
    2. Compositing of samples
    3. Calculation of violations
    4. Monitoring and compliance schedule
K. What do I Need To Tell My Customers?
    1. Consumer Confidence Reports
    a. General requirements
    b. Special informational statement
    2. Public Notification
L. What Financial Assistance Is Available for Complying With This 
Rule?
M. What is the Effective Date and Compliance Date for the Rule?
N. How Were Stakeholders Involved in the Development of This Rule?

II. Statutory Authority

III. Rationales for Regulatory Decisions

A. What is the MCLG?
B. What is the Feasible Level?
    1. Analytical measurement feasibility
    2. Treatment
C. How Did EPA Revise Its National Occurrence Estimates?
    1. Summary of occurrence data and methodology
    2. Corrections and additions to the data
    3. Changes to the methodology
    4. Revised occurrence results
D. How Did EPA Revise Its Risk Analysis?
    1. Health risk analysis
    a. Toxic forms of arsenic
    b. Effects of acute toxicity
    c. Non-cancer effects associated with arsenic.
    d. Cancers associated with arsenic
    e. How does arsenic cause cancer?
    f. What is the quantitative relationship between exposure and 
cancer effects that may be projected for exposures in the U.S.?
    g. Is it appropriate to assume linearity for the dose-response 
assessment for arsenic at low doses given that arsenic is not 
directly reactive with DNA?
    2. Risk factors/bases for upper- and lower-bound analyses
    a. Water consumption
    b. Relative Exposure Factors
    c. Arsenic occurrence
    d. Risk distributions
    e. Estimated risk reductions
    f. Lower-bound analyses
    g. Cases avoided
    3. Sensitive subpopulations
    4. Risk window
E. What are the Costs and Benefits at 3, 5, 10, and 20 g/L?
    1. Summary of cost analysis
    a. Total national costs
    b. Household costs
    2. Summary of benefits analysis
    a. Primary analysis
    b. Sensitivity analysis on benefits valuation
    c. SAB recommendations
    d. Analytical approach
    e. Results
    3. Comparison of costs and benefits
    a. Total national costs and benefits
    b. National net benefits and benefit-cost ratios
    c. Incremental costs and benefits
    d. Cost-per-case avoided
    4. Affordability
F. What MCL Is EPA Promulgating and What Is the Rationale for This 
Level?
    1. Final MCL and overview of principal considerations
    2. Consideration of health risks
    3. Comparison of benefits and costs
    4. Rationale for the final MCL
    a. General considerations
    b. Relationship of MCL to the feasible level (3 g/L)
    c. Reanalysis of proposed MCL and comparison to final MCL
    d. Consideration of higher MCL options
    e. Conclusion

IV. Rule Implementation

A. What are the Requirements for Primacy?
B. What are the Special Primacy Requirements?
C. What are the State Recordkeeping Requirements?
D. What are the State Reporting Requirements?
E. When does a State Have to Apply for Primacy?
F. What are Tribes Required To Do Under This Regulation?

V. Responses to Major Comments Received

A. General Comments
    1. Sufficiency of information and adequacy of procedural 
requirements to support a final rule
    2. Suggestions for development of an interim standard
    3. Public involvement and opportunity for comment
    4. Relation of MCL to the feasible level
    5. Relationship of MCL to other regulatory programs
    6. Relation of MCL to WHO standard
    7. Regulation of non-transient non-community water systems 
(NTNCWSs)
    8. Extension of effective date for large systems
B. Health Effects of Arsenic
    1. Epidemiology data
    2. Dose-response relationship
    3. Suggestions that EPA await further health effects research
    4. Sensitive subpopulations
    5. EPA's risk analysis
    6. Setting the MCLG and the MCL
C. Occurrence
    1. Occurrence data
    2. Occurrence methodology
    3. Co-occurrence
D. Analytical Methods
    1. Analytical interferences
    2. Demonstration of PQL (includes acceptance limits)
    3. Acidification of samples
E. Monitoring and Reporting Requirements
    1. Compliance determinations
    2. Monitoring of POU devices
    3. Monitoring and reporting for NTNCWSs
    4. CCR health language and reporting date
    5. Implementation guidance
    6. Rounding analytical results
F. Treatment Technologies
    1. Demonstration of technology performance
    2. Barriers to technology application
    3. Small system technology application
    4. Waste generation and disposal
    a. Anion exchange
    b. Activated alumina
    c. Reverse osmosis
    5. Emerging technologies
G. Costs
    1. Disparity of costs
    a. What is EPA's response to major comments on the decision tree 
for the proposed rule?
    b. What is EPA's response to comments on system level costs?
    c. What is EPA's response to comments that state the report 
``Cost Implications of a Lower Arsenic MCL'' (Frey et al., 2000), be 
used as a basis for reflecting more realistic national costs than 
EPA's estimates?
    2. Affordability
    3. Combined cost of new regulations
    4. Projected effects of the new standard on other regulatory 
programs.
H. Benefits of Arsenic Reduction
    1. Timing of benefits accrual (latency)
    2. Use of the Value of Statistical Life (VSL)
    3. Use of alternative methodologies for benefits estimation
    4. Comments on EPA's consideration of nonquantifiable benefits
    5. Comments on EPA's assumption of benefits accrual prior to 
rule implementation
I. Risk Management Decision
    1. Role of uncertainty in decision making
    2. Agency's interpretation of benefits justify costs provision
    3. Alternative regulatory approaches
    4. Standard for total arsenic vs. species-specific standards
J. Health Risk Reduction and Cost Analysis (HRRCA)
    1. Notice and comment requirement
    2. Conformance with SDWA requirements

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VI. Administrative and Other Requirements

A. Executive Order 12866: Regulatory Planning and Review
B. Regulatory Flexibility Act (RFA), as Amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
C. Unfunded Mandates Reform Act (UMRA) of 1995
    a. Authorizing legislation
    b. Cost-benefit analysis
    c. Financial assistance
    d. Estimates of future compliance costs and disproportionate 
budgetary effects
    e. Macroeconomic effects
    f. Summary of EPA's consultation with State, Tribal, and local 
governments
    g. Nature of State, Tribal, and local government concerns and how 
EPA addressed these concerns
    h. Regulatory alternatives considered
    i. Selection of the regulatory alternative
D. Paperwork Reduction Act (PRA)
E. National Technology Transfer and Advancement Act (NTTAA)
F. Executive Order 12898: Environmental Justice
G. Executive Order 13045: Protection of Children from Environmental 
Health Risks and Safety Risks
H. Executive Order 13132: Federalism
I. Executive Orders 13084 and 13175: Consultation and Coordination with 
Indian Tribal Governments
J. Plain Language
K. Congressional Review Act
L. Consultations with the Science Advisory Board, National Drinking 
Water Advisory Council, and the Secretary of Health and Human Services
M. Likely Effect of Compliance With the Arsenic Rule on the Technical, 
Financial, and Managerial Capacity of Public Water Systems
VI. References

List of Tables

Table I.F-1.--Best Available Technologies and Removal Rates
Table I.G-1.--Treatment Technology Trains
Table I.G-2.--Baseline Values for Small Systems Categories
Table I.G-3.--Available Expenditure Margin for Affordable Technology 
Determinations
Table I.G-4.--Design and Average Daily Flows Used for Affordable 
Technology Determinations
Table I.G-5.--Affordable Compliance Technology Trains for Small 
Systems with population 25-500
Table I.G-6.--Affordable Compliance Technology Trains for Small 
Systems with populations 501-3,300 and 3,301 to 10,000
Table I.I-1.--Approved Analytical Methods (40 CFR 141.23) for 
Arsenic at the MCL of 0.01 mg/L
Table III.C-1.--Summary of Occurrence Databases for the Proposed and 
Final Rules
Table III.C-2.--Alaska PWS Inventories: Baseline Handbook and 
Corrected
Table III.C-3.--National Occurrence Exceedance Probability Estimates
Table III.C-4.--Parameters of Lognormal Distributions Fitted to 
National Occurrence Distributions
Table III.C-5.--Regional Occurrence Exceedance Probability Estimates
Table III.C-6.--Statistical Estimates of Numbers of Systems with 
Average Finished Arsenic Concentrations in Various Ranges
Table III.C-7.--Estimated Intra-System Coefficients of Variation
Table III.C-8.--Comparison of National Arsenic Occurrence Estimates
Table III.D-1.--Life-Long Relative Exposure Factors
Table III.D-2(a).--Cancer Risks for U.S. Populations Exposed At or 
Above MCL Options, after Treatment1,2 (Without Adjustment 
for Arsenic in Food and Cooking Water)
Table III.D-2(b).--Cancer Risks for U.S. Populations Exposed At or 
Above MCL Options, after Treatment1,2 (With Adjustment 
for Arsenic Exposure in Food and Cooking Water)
Table III.D-2(c).--Cancer Risks for U.S. Populations Exposed At or 
Above MCL Options, after Treatment1 (Lower Bound With 
Food and Cooking Water Adjustment, Upper Bound Without Food and 
Cooking Water Adjustment)
Table III.D-3.--Annual Total (Bladder and Lung) Cancer Cases Avoided 
from Reducing Arsenic in CWSs and NTNCWS
Table III.E-1.--Total Annual National System and State Compliance 
Costs
Table III.E-2.--Mean Annual Costs per Household
Table III.E-3.--Estimated Benefits from Reducing Arsenic in Drinking 
Water
Table III.E-4.--Sensitivity of the Primary VSL Estimate to Changes 
in Latency Period Assumptions, Income Growth, and Other Adjustments
Table III.E-5.--Sensitivity of Combined Annual Bladder and Lung 
Cancer Mortality Benefits Estimates to Changes in VSL Adjustment 
Factor Assumptions
Table III.E-6.--Sensitivity of Combined Annual Bladder and Lung 
Cancer Mortality Benefits Estimates to Changes in VSL Adjustment 
Factor Assumptions
Table III.E-7.--Estimated Annual Costs and Benefits from Reducing 
Arsenic in Drinking Water
Table III.E-8 Summary of National Annual Net Benefits and Benefit-
Cost Ratios, Combined Bladder and Lung Cancer Cases
Table III.E-9 Estimates of the Annual Incremental Risk Reduction, 
Costs, and Benefits of Reducing Arsenic in Drinking Water
Table III.E-10. Annual Cost Per Cancer Case Avoided for the Final 
Arsenic Rule--Combined Bladder and Lung Cancer Cases
TABLE V.F-4.1 Treatment Trains in Final Versus Proposed Arsenic Rule 
Decision Tree
Table V.F-4.2 New or Revised Treatment Trains
Table VI.B-1. Profile of the Universe of Small Water Systems 
Regulated Under the Arsenic Rule

I. Background and Summary of the Final Rule

A. What Did EPA Propose?

    On June 22, 2000, the Federal Register published EPA's proposed 
arsenic regulation for community water systems and non-transient non-
community water systems (65 FR 38888; EPA, 2000i). EPA proposed a 
health-based, non-enforceable goal, or Maximum Contaminant Level Goal 
(MCLG), of zero micrograms per liter (g/L) and a Maximum 
Contaminant Level (MCL) of 5 g/L. The Agency also requested 
comment on alternate MCL levels of 3 g/L, 10 g/L, and 
20 g/L. (In the proposed rule EPA expressed arsenic 
concentration in milligrams per liter (mg/L) or parts per million, 
which matches the units of the former and current standard for arsenic. 
Except as noted, the Agency will refer to arsenic concentration in 
micrograms per liter (g/L) in this preamble.)
    EPA based the June 2000 proposal on extensive analysis including a 
careful consideration of the following issues: a nonzero MCLG; 
occurrence of arsenic in public water systems; our approach for 
estimating national occurrence and co-occurrence; acceptance limits 
used to establish the practical quantitation level (PQL); rounding of 
measured values for compliance purposes; extending compliance by two 
years for systems serving under 10,000 people in order to add capital 
improvements; dates for reporting changes in the consumer confidence 
reports and public notification; appropriateness of the national 
affordability criteria; affordable technologies for small systems; 
implementation issues for point-of-use (POU) and point-of-entry (POE) 
treatments; appropriateness of non-hazardous residual costing; our 
overall analysis of costs; adjusting benefits estimates (e.g., for 
factors such as latency); our approach for considering uncertainties 
that affected risk; use of the authority to set an MCL at a level other 
than the feasible MCL; expression of the MCL as total arsenic; 
approaches to regulation of NTNCWSs; State program revisions; selenium 
levels as an attenuation factor in arsenic toxicity; impacts on small 
entities; use of consensus analytical methods; methods to address 
environmental justice concerns; and comments on use of plain

[[Page 6980]]

language. We asked commenters to submit data and comments on these 
issues, as well as any other issues raised in the proposal.
    The proposal reflected several types of technical evaluations, 
including analytical methods performance and laboratory capacity; the 
likelihood of different size water systems choosing treatment 
technologies based on source water characteristics; and the national 
occurrence of arsenic in drinking water supplies. Furthermore, the 
Agency assessed the quantifiable and nonquantifiable costs and health 
risk reduction benefits likely to occur at the treatment levels 
considered, and the effects of arsenic on sensitive subpopulations.
    The proposed MCL was consistent with the Agency's use of the new 
benefit/cost provisions of the Safe Drinking Water Act (SDWA), as 
amended in 1996 (see section II. of this preamble for additional 
information about this provision). EPA proposed 3 g/L as the 
feasible MCL, after considering treatment costs and efficiency under 
field conditions as well as considering the appropriate analytical 
methods. Because EPA determined that the benefits of regulating arsenic 
at the feasible level would not justify the costs, the Agency proposed 
an MCL of 5 g/L, while requesting comment on MCL options of 3 
g/L (the feasible level), 10 g/L, and 20 g/
L.
    We based our estimates of large system compliance costs primarily 
on costs for coagulation/filtration and lime softening, although we 
consider several other technologies to be appropriate as best available 
technology (BAT) technologies. (See Table I.F-1.) For small-system 
(systems serving 10,000 people and less) compliance costs, we 
considered the costs for ion exchange, activated alumina, reverse 
osmosis, and nanofiltration. EPA proposed extending the effective date 
to five years after the final rule issuance for small community water 
systems and maintaining the effective date at three years after 
promulgation for all other community water systems. EPA proposed that 
States applying to adopt the revised arsenic MCL may use their most 
recently approved monitoring and waiver plans or note in their primacy 
application any revisions to those plans. EPA proposed that NTNCWSs 
monitor for arsenic and report exceedances of the MCL.
    The Agency also clarified the procedure used for determining 
compliance after exceedances for inorganic, volatile organic, and 
synthetic organic contaminants in Secs. 141.23(i)(2), 
141.24(f)(15)(ii), and 141.24(h)(11)(ii), respectively. Finally, EPA 
proposed that new systems and systems using a new source of water be 
required to demonstrate compliance with the MCLs using State-specified 
time frames. The clarified new source and new system compliance 
regulations require that States establish initial sampling frequencies 
and compliance periods for inorganic, volatile organic, and synthetic 
organic contaminants in Secs. 141.23(c)(9), 141.24(f)(22), and 
141.24(h)(20), respectively.

B. Overview of the Notice of Data Availability (NODA)

    In the proposed rule, EPA quantified the risk reduction and 
benefits of avoiding bladder cancer and noted that a peer-reviewed 
quantification of lung cancer risk from arsenic exposure would probably 
be available in time to consider for the final rule (65 FR 38888 at 
38899; EPA, 2000i). Relying upon a discussion in the National Research 
Council (NRC) report (NRC, 1999, pg. 8) about the qualitative risks of 
lung cancer (65 FR 38888 at 38944; 2000i), EPA provided a ``What-If'' 
estimate of lung cancer benefits (65 FR 38888 at 38946, 2000i) in the 
proposed rule. On October 20, 2000, the Federal Register published 
EPA's Notice of Data Availability (NODA) containing a revised risk 
analysis for bladder cancer and new risk information concerning lung 
cancer (65 FR 63027; EPA, 2000m), and identified a correction to Table 
4 on October 27, 2000 (65 FR 64479; EPA, 2000n). The NODA also provided 
information concerning the availability of cost curves used to develop 
the costs published in the proposal.
    EPA used new risk information for lung and bladder cancer from a 
peer-reviewed article written by Morales et al. (2000). In the NODA, 
EPA explained that the authors used several alternative statistical 
models to estimate cancer risk. EPA explained its reasons for selecting 
``Model 1'' with no comparison population for further analysis. We used 
daily water consumption (EPA, 2000c) reported by gender, region, age, 
economic status, race, and separately for pregnant women, lactating 
women, and women in childbearing years combined with weight data to 
derive exposure factors for the U.S. We used these exposure factors, 
our occurrence estimate (EPA 2000g) of populations exposed to arsenic 
at different concentrations, and the risk distributions from the 
Morales et al. (2000) paper in Monte Carlo simulations to estimate the 
upper bound of risks faced by the U.S. population. The NODA compared 
the bladder cancer risks derived for the proposal against the bladder 
cancer risks derived from the Morales et al. (2000) study. EPA also 
derived lung cancer risks using the same approach and the risk model 
contained in the Morales et al. (2000) study.
    EPA also used the newly calculated risks to estimate a lower bound 
risk in the U.S. This calculation took into account the amount of 
additional arsenic people in Taiwan were likely to have ingested from 
water used in food preparation. EPA showed the effects on risks for the 
U.S. population at both the mean and 90th percentile levels for various 
arsenic levels in drinking water. Based on the revised risk assessment, 
we updated our assessment of the relative risk of lung cancer as 
compared to bladder cancer. The NODA indicated that instead of being 2 
to 5 times as many fatal lung cancer cases as bladder cancer cases (as 
was cited in NRC's Executive Summary, NRC, 1999, pg. 8 as a qualitative 
estimate), the combined risk of excess lung and bladder cancer were 
thought to be only about twice that of bladder cancer risk. EPA noted 
that, while the new risks were higher than the bladder cancer risk in 
the proposal, the monetized benefits of lung cancer would fall within 
the lung cancer benefits range estimated using the ``What-If'' analysis 
(e.g., $19.6 million--$224 million yearly for an MCL of 10 g/
L) in the proposal (65 FR 38888 at 38959; EPA, 2000m).
    In the NODA, EPA also explained that the docket for the proposed 
rule had the November 1999 version (EPA, 1999o) of ``Technologies and 
Costs for the Removal of Arsenic from Drinking Water'' rather than the 
April 1999 version of the document that was the primary source for the 
treatment technology cost equations used to generate the national cost 
estimate. The national cost estimate was presented in the ``Proposed 
Arsenic in Drinking Water Rule Regulatory Impact Analysis'' (EPA, 
2000h). The NODA therefore announced the availability of the 
``Technologies and Costs for the Removal of Arsenic from Drinking 
Water,'' dated April 1999 (EPA,1999b). The NODA also noted that 
commenters interested in reproducing the waste disposal curves should 
consult the ``Small Water System Byproducts Treatment and Disposal Cost 
Document'' (EPA, 1993a) and ``Water System Byproducts Treatment and 
Disposal Document (EPA, 1993b).'' In addition to placing these 
documents in the docket, the NODA also specified that an electronic 
copy of the treatment technology and waste disposal equations used in 
the development of the RIA could be found in the docket.

[[Page 6981]]

EPA made the April 1999 version of the document, ``Technologies and 
Costs for the Removal of Arsenic from Drinking Water'' (EPA,1999b) 
available on its arsenic webpage.
    The cost methodology and cost estimates were clearly stated and 
explained in the proposal for public review and consideration. Through 
a technical oversight, we incorrectly attributed the source for the 
cost curves to the November version of the document placed in the 
docket (EPA, 1999o). As a result, people could not replicate the 
precise analysis we did, should a commenter desire to do so. More 
specifically, although the inputs, assumptions, and model methodology 
were clearly explained, we incorrectly cited the sources of an 
intermediate step of deriving specific cost curves from those 
assumptions. Based upon the proposal's detailed discussion of inputs, 
assumptions and associated methodology, EPA believes the public was 
fully able to review, understand, and comment on the Agency's estimate 
of potential impacts. EPA discusses the cost curves further in section 
III.E.1 of this preamble.

C. Does This Regulation Apply to My Water System?

    The final regulation on arsenic in drinking water promulgated today 
applies to all CWSs and NTNCWSs. The regulation not only establishes an 
MCLG and MCL for arsenic, but also lists feasible technologies and 
affordable technologies for small systems that can be used to comply 
with the MCL. However, systems are not required to use the listed 
technologies in order to meet the MCL.

D. What are the Final Drinking Water Regulatory Standards for Arsenic 
(Maximum Contaminant Level Goals and Maximum Contaminant Levels)?

    In today's rule, the MCLG is 0 g/L, and the enforceable 
MCL is 0.01 mg/L, which is the same as 10 micrograms per liter 
(g/L) or 10 parts per billion (ppb). EPA based the MCL on 
total arsenic, because drinking water contains almost entirely 
inorganic forms, and the analytical methods for total arsenic are 
readily available and capable of being performed by certified 
laboratories at an affordable cost.

E. Will There be a Health Advisory?

    A health advisory for arsenic is not part of today's rulemaking. 
EPA will be considering whether or not to issue a health advisory after 
evaluating the recommendations of the Science Advisory Board (SAB) 
(EPA, 2000q). The purpose of an advisory would be to provide useful 
information to water providers between issuance and implementation of 
this rule.

F. What are the Best Available Technologies For Removing Arsenic From 
Drinking Water?

    Section 1412(b)(4)(E) of the Safe Drinking Water Act states that 
each National Primary Drinking Water Regulation (NPDWR) which 
establishes an MCL shall list the technology, treatment techniques, and 
other means that the Administrator finds to be feasible for purposes of 
meeting the MCL. Technologies are judged to be a best available 
technology (BAT) when the following criteria are satisfactorily met:
    (1) The capability of a high removal efficiency;
    (2) A history of full-scale operation;
    (3) General geographic applicability;
    (4) Reasonable cost based on large and metropolitan water systems;
    (5) Reasonable service life;
    (6) Compatibility with other water treatment processes; and
    (7) The ability to bring all of the water in a system into 
compliance.
    EPA identified BATs in this section using the listed criteria. 
Their removal efficiencies and a brief discussion of the major issues 
surrounding the usage of each technology are also given in this 
section. More details about the treatment technologies and costs can be 
found in ``Technologies and Costs for the Removal of Arsenic From 
Drinking Water'' (EPA, 2000t).
1. BAT technologies
    EPA reviewed several technologies as BAT candidates for arsenic 
removal, e.g., ion exchange, activated alumina, reverse osmosis, 
nanofiltration, electrodialysis reversal, coagulation assisted 
microfiltration, modified coagulation/filtration, modified lime 
softening, greensand filtration, conventional iron and manganese 
removal, and several emerging technologies. The Agency determined that, 
of the technologies capable of removing arsenic from source water, only 
the technologies in Table I.F-1 fulfill the requirements of SDWA for 
BAT determinations for arsenic. The maximum percent of arsenic removal 
that can be reasonably obtained from these technologies is also shown 
in the table. These removal efficiencies are for arsenic (V) removal.

      Table I.F-1.-- Best Available Technologies and Removal Rates
------------------------------------------------------------------------
                                                               Maximum
                    Treatment Technology                       Percent
                                                             Removal \1\
------------------------------------------------------------------------
Ion Exchange (sulfate  50 mg/L).................           95
Activated Alumina..........................................           95
Reverse Osmosis............................................          >95
Modified Coagulation/Filtration............................           95
Modified Lime Softening (pH > 10.5)........................           90
Electrodialysis Reversal...................................           85
Oxidation/Filtration (20:1 iron:arsenic)...................          80
------------------------------------------------------------------------
\1\ The percent removal figures are for arsenic (V) removal. Pre-
  oxidation may be required.

2. Preoxidation
    In water, the most common valence states of arsenic are As (V), or 
arsenate, and As (III), or arsenite. As (V) is more prevalent in 
aerobic surface waters and As (III) is more likely to occur in 
anaerobic ground waters. In the pH range of 4 to 10, As (V) species 
(H2AsO4\-\ and 
H2AsO42\-\) are negatively charged, 
and the predominant As (III) compound (H3AsO3) is 
neutral in charge. Removal efficiencies for As (V) are much better than 
removal of As (III) by any of the technologies evaluated because the 
arsenate species carry a negative charge and arsenite is neutral under 
these pH conditions. To increase the removal efficiency when As (III) 
is present, pre-oxidation to the As (V) species is necessary.
    As (III) may be converted through pre-oxidation to As (V) using one 
of several oxidants. Data on oxidants indicate that chlorine, potassium 
permanganate, and ozone are effective in oxidizing As (III) to As (V). 
Pre-oxidation with chlorine may create undesirable concentrations of 
disinfection byproducts and membrane fouling of subsequent treatments 
such as reverse osmosis. EPA has completed research on the chemical 
oxidants for As (III) conversion, and is presently investigating 
ultraviolet light disinfection technology (UV) and solid oxidizing 
media. For POU and POE devices, central chlorination may be required 
for oxidation of As (III).
3. Factors affecting listing technologies
    Ion Exchange (IX) can effectively remove arsenic using anion 
exchange resins. It is recommended as a BAT primarily for sites with 
low sulfate because sulfate is preferred over arsenic. Sulfate will 
compete for binding sites resulting in shorter run lengths. Due to much 
shorter run lengths than activated alumina, anion exchange must be

[[Page 6982]]

regenerated because it is not cost effective to dispose of the resin 
after one use. Column bed regeneration frequency is a key factor in the 
cost of the process and affects the volume of waste produced by the 
process. The proposed rule preamble noted that anion exchange may be 
practical up to approximately 120 mg/L of sulfate (Clifford, 1994). The 
upper-bound sulfate concentration for the final rule is 50 mg/L. The 
selection of this upper bound is based on several factors, including 
cost and the ability to dispose of the brine stream.
    The proposed rule listed three mechanisms to dispose of the brine 
stream used for regeneration. The options were: sanitary sewer, 
evaporation pond, and chemical precipitation. Many comments on the 
proposed rule were based on the assumption that the waste streams 
generated would be considered hazardous waste. Waste streams containing 
less than 0.5% solids are evaluated against the toxicity characteristic 
directly to determine if the waste is hazardous. Arsenic in the 
regeneration brine will likely exceed 5 mg/L for most systems with 
arsenic above 10 g/L and sulfate below 50 mg/L. Since the 
brine stream would likely be considered hazardous, EPA eliminated the 
evaporation pond and the chemical precipitation options from the 
decision tree as options for disposal of anion exchange wastes. The 
Agency retained discharge to a sanitary sewer because domestic sewage 
and any mixture of domestic sewage and other wastes that pass through a 
sewer system to a publicly owned treatment works (POTW) for treatment 
is excluded from consideration as solid waste (40 CFR 261.4). Domestic 
sewage means untreated sanitary wastes that pass through a sewage 
system. Discharges meeting the previously stated criteria are excluded 
from regulation as hazardous waste. However, these assumptions were 
reviewed to substantially reduce projections of brine wastes going to 
POTWs from those that were used in support of the proposed rule.
    Discharge to a sanitary sewer can be limited by technically based 
local limits (TBLLs) for arsenic or total dissolved solids. Since anion 
exchange is regenerated more frequently than activated alumina, the 
total dissolved solids increase can be significant. Many comments 
indicated that significant increases in total dissolved solids would be 
unacceptable, especially in the Southwest where water resources are 
scarce. Salt is used for regeneration of anion exchange resins. The 
upper bound of 50 mg/L sulfate for anion exchange is based on projected 
increases of total dissolved solids using the quantity of salt needed 
for regeneration and the frequency of regeneration (based on sulfate). 
The sulfate upper bound for the final rule is significantly lower than 
the upper bound from the proposed rule. Due to the potential for an 
increase in total dissolved solids, anion exchange would be favored in 
areas other than the Southwest where the volume of brine is very small 
relative to the total volume of wastewater being treated at the POTW. 
Systems that need to treat only a few entry points or can blend a 
significant portion of the water to meet the MCL may produce a smaller 
brine stream to allow the brine to be discharged to a POTW. Water 
systems should check with the POTW to ensure that the brine stream will 
be accepted before selecting this option.
    Activated Alumina (AA) is an effective arsenic removal technology; 
however, the capacity of activated alumina to remove arsenic is very pH 
sensitive. High removals can be achieved over a broad range of pH, but 
shorter run lengths will be observed at higher pH. Activated alumina 
can be operated in one of two ways. The activated alumina can either be 
disposed of or regenerated after the media is exhausted. Under the 
regeneration option, strong acids and bases are used to remove arsenic 
from the media so that it can be used again to remove arsenic. Because 
arsenic is strongly adsorbed to the media, only about 50-70% of the 
adsorbed arsenic is removed. The brine stream produced by the 
regeneration process then requires disposal. The proposed rule listed 
discharge to a sanitary sewer as the disposal mechanism for the brines. 
Many comments on the proposed rule noted that TBLLs for arsenic or 
total dissolved solids might restrict discharge of brine streams to the 
sanitary sewer. Since activated alumina run lengths (i.e., number of 
bed volumes (BV) per run) are much longer than anion exchange, the 
arsenic concentrations in the brine stream would likely be much higher. 
Regeneration of activated alumina media is not recommended for larger 
systems because: (1) Disposal of the brine may be difficult, (2) the 
regeneration process is incomplete which reduces subsequent run 
lengths, and (3) for most systems it will be cheaper to replace the 
media rather than regenerate it. The option of replacing the spent 
media with new media is called disposable activated alumina.
    The disposable activated alumina option can be operated both at the 
optimal pH of 6 and at higher natural water pH values. It is expected 
that larger systems would adjust pH to take advantage of the longer run 
lengths. EPA developed several disposable activated alumina options for 
the final rule. Two options were based on operating the process at the 
natural pH of the water (no pH adjustment). These options are intended 
primarily for smaller systems, although larger systems may also be able 
to operate at the natural pH if it is low enough to get sufficiently 
long run lengths. Two options where the pH was adjusted to pH 6 were 
also examined. The longer run length is based on using sulfuric acid to 
lower the pH. However, sulfate can compete for adsorption sites with 
arsenic. It was recommended that hydrochloric acid be used to obtain a 
longer run length (Clifford et al., 1998). When pH is adjusted to pH 6, 
post-treatment corrosion control will be necessary.
    In our analysis, we assumed that spent media could be safely 
disposed of in a non-hazardous landfill. The preamble to the proposed 
rule described results from testing of activated alumina media used to 
remove arsenic in drinking water systems with arsenic above 50 
g/L. The results from the Toxicity Characteristic Leaching 
Procedure (TCLP) on these samples was typically less that 50 
g/L. The current toxicity characteristic (TC) regulatory level 
for designating arsenic as a hazardous waste under the Resource 
Conservation and Recovery Act (RCRA) is 5 mg/L (5000 g/L) and 
is listed in 40 CFR 261.24(a). The TC regulatory level is one hundred 
times higher than the results from the activated alumina samples.
    Reverse Osmosis (RO) can provide removal efficiencies of greater 
than 95% when operating pressure is ideal. Water rejection (on the 
order of 20-25%) may be an issue in water-scarce regions and may prompt 
systems employing RO to seek greater levels of water recovery. Water 
recovery is the volume of drinking water produced by the process 
divided by the influent stream (product water/influent stream). 
Increased water recovery is often more expensive, since it can involve 
recycling of water through treatment units to allow more efficient 
separation of solids from water. This can also produce more 
concentrated solid wastes. However, the waste stream will generally not 
be as concentrated as anion exchange brines, so it should be easier to 
dispose of. Based on the cost of the process, it is unlikely that 
reverse osmosis would be installed solely for arsenic removal. Blending 
a treated portion with an untreated portion and

[[Page 6983]]

still meeting the MCL would make reverse osmosis more cost effective. 
If blending is not an option, post-treatment corrosion control would be 
necessary. Since a large portion of the water is wasted, water quantity 
could be an issue, especially in the Western U.S. It should be noted 
that while reverse osmosis is listed as a BAT, it was not used to 
develop national costs because other options are more cost effective 
and have much smaller waste streams.
    Modified Coagulation/Filtration (C/F) is an effective treatment 
process for removal of As (V) according to laboratory, pilot-plant, and 
full-scale tests. The type of coagulant and dosage used affects the 
efficiency of the process. Below a pH of approximately 7, removals with 
alum or ferric sulfate/chloride are similar. Above a pH of 7, removals 
with alum decrease dramatically (at a pH of 7.8, alum removal 
efficiency is about 40%). Other coagulants are also less effective than 
ferric sulfate/chloride. Systems may need to lower pH or add more 
coagulant to achieve higher removals.
    Modified Lime Softening (LS), operated within the optimum pH range 
of greater than 10.5 is likely to provide a high percentage of As 
removal. Systems operating lime softening at lower pH will need to 
increase the pH to achieve higher removals of arsenic.
    Coagulation/Filtration and Lime Softening are unlikely to be 
installed solely for arsenic removal. Systems considering installation 
of one of these technologies should design the process to operate in 
the optimal pH range if high removal efficiencies are needed for 
compliance.
    Electrodialysis Reversal (EDR) can produce effluent water quality 
comparable to reverse osmosis. EDR systems are fully automated, require 
little operator attention, and do not require chemical addition. EDR 
systems, however, are typically more expensive than nanofiltration and 
reverse osmosis systems. These systems are often used in treating 
brackish water to make it suitable for drinking. This technology has 
also been applied in the industry for wastewater recovery and typically 
operates at a recovery of 70 to 80%. Since a large portion of the water 
is wasted, water quantity could be an issue, especially in the Western 
U.S. It should be noted that while electrodialysis reversal is listed 
as a BAT, it was not used to develop national costs because other 
options are more cost effective and have much smaller waste streams.
    Oxidation/Filtration (including greensand filtration) has an 
advantage in that there is not as much competition with other ions. 
Arsenic is co-precipitated with the iron during iron removal. 
Sufficient iron needs to be present to achieve high arsenic removals. 
One study recommended a 20:1 iron to arsenic ratio (Subramanian et al., 
1997). Removals of approximately 80% were achieved when iron to arsenic 
ratio was 20:1. When the iron to arsenic ratio was lower (7:1), 
removals decreased below 50%. The presence of iron in the source water 
is critical for arsenic removal. If the source water does not contain 
iron, oxidizing and filtering the water will not remove arsenic. When 
the arsenic is present as As(III), sufficient contact time needs to be 
provided to convert the As(III) to As(V) for removal by the oxidation/
filtration process. An additional pre-oxidation step is not required 
for this process as long as there is sufficient contact time. In 
developing national cost estimates, EPA assumed that systems would opt 
for this type of technology only if more than 300 g/L of iron 
was present. The Agency assumed a removal percentage of 50% when 
estimating national costs because the 20:1 ratio could not be verified 
due to limitations in the co-occurrence database. However, EPA assumed 
a removal percentage of 80% as part of a sensitivity analysis. At 
proposal EPA indicated that oxidation filtration was not being listed 
as BAT because it has a low removal efficiency, which might not be 
appropriate for an MCL of 5. However, the Agency also noted that this 
technology may be appropriate for systems that do not require high 
arsenic removal and had high iron in their source water. Because this 
is an inexpensive technology that is particularly effective for high-
iron, low-arsenic waters, EPA is listing oxidation/filtration as a BAT 
with a footnote that the iron-to-arsenic ratio must be at least 20:1. 
Systems with greater than 300 g/L of iron will also see 
benefits in the aesthetic quality of the water as the iron can be 
reduced below the secondary standard. EPA's inclusion of oxidation/
filtration as a BAT in today's final rule is based upon further 
evaluation of all available information and studies as well as on 
public comments.
4. Other technologies evaluated, but not designated as BAT
    Coagulation Assisted Microfiltration. The coagulation process 
described previously can be linked with microfiltration to remove 
arsenic. The microfiltration step essentially takes the place of a 
conventional gravity filter. The University of Houston recently 
completed pilot studies at Albuquerque, New Mexico on iron coagulation 
followed by a direct microfiltration system. The results of this study 
indicated that iron coagulation followed by microfiltration is capable 
of removing arsenic (V) from water to yield concentrations that are 
consistently below 2 g/L. Critical operating parameters are 
iron dose, mixing energy, detention time, and pH (Clifford, 1997). 
Coagulation and microfiltration as separate processes have both been 
installed full scale, but the combined coagulation/microfiltration 
process does not have a full-scale operation history. Since a full-
scale operation history is one of the requirements to list a technology 
as a BAT, it is not presently being listed as one. It could be 
designated as such in the future if the technology meets that 
requirement. EPA used this option in developing the national cost 
estimate because we believe coagulation/microfiltration is an 
appropriate technology that will be used by certain water systems to 
comply with this rule, even though it is not currently listed as BAT 
for the reasons mentioned.
    Granular ferric hydroxide is a technology that may combine very 
long run length without the need to adjust pH. The technology has been 
demonstrated for arsenic removal full scale in England (Simms et al., 
2000). A pilot-scale study for activated alumina was also conducted on 
that water and showed run lengths much longer than observed in pilot-
scale studies in the United States. Due to the lack of published data 
showing performance for a range of water qualities, granular ferric 
hydroxide was not designated a BAT. In addition, there is little 
published information on the cost of the media, so it is difficult to 
evaluate cost. Granular ferric hydroxide is being investigated in 
several ongoing studies and may be an effective technology for removing 
arsenic. Systems may wish to investigate it and other adsorption 
technologies such as modified activated alumina and other iron-based 
media. Many of these other new adsorptive media are also being 
investigated in several ongoing studies.
5. Waste disposal
    Waste disposal will be an important issue for both large and small 
drinking water plants. Costs for waste disposal have been added to the 
costs of the treatment technologies (in addition to any pre-oxidation 
and corrosion control costs), and form part of the treatment trains 
that are listed in Tables I.G-1, I.G-5, and I.G-6.
    The preamble to the proposed rule summarized toxicity 
characteristic leaching procedure (TCLP) data on residuals from 
different arsenic removal

[[Page 6984]]

technologies. The arsenic concentrations in TCLP extracts from alum 
coagulation, activated alumina, lime softening, iron/manganese removal, 
and coagulation-microfiltration residuals were below 0.05 mg/L, which 
is two orders of magnitude lower than the current TC regulatory level. 
The TCLP data for iron coagulation were mixed--the residuals from an 
arsenic removal plant were below 0.05 mg/L, but the residuals from 
another iron coagulation plant were above 1 mg/L. However, this is 
still below the TC regulatory level of 5 mg/L. Based on these data, EPA 
does not believe that drinking water treatment plant residuals would be 
classified as hazardous waste. The TCLP data also indicate that most 
residuals could meet a much lower TC regulatory level. Options where 
the brine stream could be hazardous were eliminated from the final 
decision tree. For the purposes of the national cost estimate, it was 
assumed that solid residuals would be disposed of at nonhazardous 
landfills.

G. Treatment Trains Considered For Small Systems

1. Can my water system use point-of-use (POU), point-of-entry (POE), or 
bottled water to comply with this regulation?
    Section 1412(b)(4)(E)(ii) of SDWA, as amended in 1996, requires EPA 
to issue a list of technologies that achieve compliance with MCLs 
established under the Act that are affordable and applicable to typical 
small drinking water systems. These small public water systems 
categories are: (1) population of more than 25 but less than or equal 
to 500; (2) population of more than 500, but less than or equal to 
3,300; and (3) population of more than 3,300, but less than or equal to 
10,000. Owners and operators may choose any technology or technique 
that best suits their conditions, as long as the MCL is met.
    The technologies examined for BAT determinations were also 
evaluated as small system compliance technologies. Several other 
alternatives that are solely small system options were also evaluated 
as compliance technologies. Central treatment is not the only option 
available to small systems. One of the provisions included in the SDWA 
Amendments of 1996 allows the use of POU and POE devices as compliance 
technologies for small systems. SDWA stipulates that POU/POE treatment 
systems:

shall be owned, controlled and maintained by the public water system 
or by a person under contract with the public water system to ensure 
proper operation and maintenance and compliance with the MCL or 
treatment technique and equipped with mechanical warnings to ensure 
that customers are automatically notified of operational problems 
(Sec. 1412(b)(4)(E)).

    Whole-house, or POE treatment, is necessary when exposure to the 
contaminant by modes other than consumption is a concern; this is not 
the case with arsenic. Single faucet, or POU treatment, is preferred 
when treated water is needed only for drinking and cooking purposes. 
POU devices are especially applicable for systems that have a large 
flow and only a minor part of that flow directed for potable use such 
as at many NTNCWSs. POE/POU options include reverse osmosis, activated 
alumina, and ion exchange processes. POU systems are easily installed 
and can be easily operated and maintained. In addition, these systems 
generally offer lower capital costs and may reduce engineering, legal, 
and other fees associated with centralized treatment options. However, 
there will be higher administrative costs associated with POU and POE 
options. For POU options, the trade-off is lower treatment cost since 
only 1% of the water is treated, but higher administrative and 
monitoring costs occur. Centrally managed POU options, even with the 
higher monitoring and administrative costs, are less expensive than 
central treatment for populations up to 150 to 250 people depending 
upon the technology and number of households.
    Using POU/POE devices introduces some new issues. Adopting a POU/
POE treatment system in a small community requires more record-keeping 
to monitor individual devices than does central treatment. POU/POE 
systems may require special regulations regarding customer 
responsibilities as well as water utility responsibilities. The water 
system or person under contract to the system is responsible for 
maintaining the devices in customers' homes. This responsibility cannot 
be delegated to the customer. Use of POU/POE systems does not reduce 
the need for a well-maintained water distribution system. Increased 
monitoring may be necessary to ensure that the treatment units are 
operating properly. Monitoring POU/POE systems is also more complex 
because compliance samples need to be taken after each POU or POE unit 
rather than at the entry point to the distribution system to be 
reflective of treatment.
    EPA examined three technologies as POU and POE devices for the 
proposed rule. EPA assumed that systems would more likely choose to use 
POU activated alumina (AA) or reverse osmosis (RO), and POE AA in the 
proposed rule. POU and POE ion exchange (IX) and POE RO were 
considered, but not included as compliance technologies in the proposed 
rule. Activated alumina and ion exchange units face a breakthrough 
issue. If the activated alumina is not replaced on time, there is a 
potential for significantly reduced arsenic removal. However, if the 
anion exchange resin is not replaced or regenerated on time, the 
previously removed arsenic can be driven off the resin by sulfate. Tap 
water arsenic concentrations can be higher than the source water. This 
is called chromatographic peaking. Due to the potential for 
chromatographic peaking and run lengths that would typically be less 
than six months, anion exchange was not listed as a compliance 
technology in the proposed rule. POE ion exchange also may present 
problems with total dissolved solids since the resin would need to be 
regenerated. Since all sites within the system would need treatment, 
the total dissolved solids increase from a centrally managed POE ion 
exchange system would be similar to that from a central treatment ion 
exchange system. EPA did not list POE RO units as compliance 
technologies because it could create corrosion control problems. In 
addition, water recovery would be no higher than central treatment, so 
water quantity issues associated with central treatment reverse osmosis 
would be applicable to POE RO.
    The proposed rule included POE AA as a small system compliance 
technology. Arsenic removal by AA is very sensitive to the pH. The 
finished water pH will typically be higher than the optimal pH of 6 to 
meet the corrosion control requirements of the lead and copper rule. A 
finished water pH for many systems would be in the range of pH 7 to pH 
8. Using data on activated alumina run length and pH, it was determined 
that viable run lengths were likely only when the finished water pH was 
at or below pH 7.5 (Kempic, 2000). Even in this pH range, the media may 
need to be replaced more frequently than once a year, which would make 
the option very expensive especially compared to the POU AA option. The 
run length data used for this analysis were from a site with very 
little competing ions (Simms and Azizian, 1997). Studies at other sites 
with higher levels of competing ions have much lower run lengths 
(Clifford et al., 1998). Based on the limited finished water pH range 
where POE AA might be effective and the fact that the POU media needs 
replacing much less frequently due to lower water demand, POE AA has 
not been listed as a compliance technology

[[Page 6985]]

in the final rule. POE devices utilizing media that are less sensitive 
to pH adjustment may be listed as compliance technologies in the future 
once data on their performance are generated.
    The effect of pH was also examined on POU AA. Under the POU AA 
option, the volume of water requiring treatment is much smaller. The 
unit will be installed at the kitchen tap and only the water being used 
for cooking and consumption is being treated for arsenic removal. Since 
the ratio of the daily volume of water being treated to the size of the 
unit is much smaller, POU units can be operated for longer periods of 
time before the media needs to be replaced. The replacement frequency 
assumed for the costs is every six months. Viable run lengths for the 
POU option were greater than one year up to pH 8 (Kempic, 2000). This 
analysis assumed a large daily usage volume of 24 liters per day. The 
average consumption per person per day is just over 1 liter. Even if 
competing ions reduced the run length significantly, systems with tap 
water at or below pH 8 should meet the MCL of 10 g/L using a 
six-month replacement frequency for the media. POU AA is a compliance 
technology when the tap water pH is at or below pH 8.
    POU RO was listed as a compliance technology in the proposed rule 
and it is being listed as a compliance technology in the final rule as 
well. Several comments indicated that water rejection would be an issue 
with POU devices. Since only about 1% of the total water used in the 
household is being treated, POU RO is unlikely to create water quantity 
problems. If the water rejection rate was 10:1, this would only 
increase the total household water demand by about 10 percent. Where 
availability of additional water is limited, systems may want to 
consider other alternatives to meet the MCL.
    In order to be consistent with 1996 SDWA Amendments, EPA issued a 
Federal Register notice on June 11, 1998 (EPA, 1998f) that deleted the 
prohibition on the use of POU devices as compliance technologies. This 
prohibition was in 40 CFR 141.101. This section now states that public 
water systems shall not use bottled water to achieve compliance with an 
MCL. Bottled water may be used on a temporary basis to avoid 
unreasonable risk to health. Therefore, bottled water cannot be used as 
a compliance technology for the arsenic rule.
    Likely treatment trains are shown in Table I.G-1. These trains 
represent a wide variety of solutions, including BATs, that small 
systems may consider when complying with the proposed arsenic MCL. Not 
all solutions may be viable for a given system. For example, only those 
systems with coagulation/filtration in place will be able to modify 
their existing treatment system. The treatment trains include BATs, 
waste disposal, and when necessary, pre-oxidation and corrosion 
control. While systems could install lime softening at pH > 10.5 or 
optimized coagulation/filtration solely for arsenic removal, EPA does 
not view this as a likely option. Reverse osmosis and electrodialysis 
reversal are also not included in this table because other options are 
more cost effective for arsenic removal and do not reject a large 
volume of water like these two technologies. RO and EDR may be cost-
effective options if removal of other contaminants is needed and water 
quantity is not a concern.

  Table I.G-1.-- Treatment Technology Trains for Consideration by Small
           Systems in Complying With Final Rule Including BATs
------------------------------------------------------------------------
                                    Treatment Technology Trains for
           Train #                   Consideration by Small Systems
------------------------------------------------------------------------
1............................  Add pre-oxidation [if not in-place] and
                                modify in-place Lime Softening (pH >
                                10.5) and modify corrosion control.
2............................  Add pre-oxidation [if not in-place] and
                                modify in-place Coagulation/Filtration
                                and modify corrosion control.
3............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level  20
                                mg/L.
4............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level: 20 mg/L
                                sulfate  50 mg/L.
5............................  Add pre-oxidation [if not in-place] and
                                add Coagulation Assisted Microfiltration
                                with corrosion control and add
                                mechanical dewatering/non-hazardous
                                landfill waste disposal.
6............................  Add pre-oxidation [if not in-place] and
                                add Coagulation Assisted Microfiltration
                                with corrosion control and add non-
                                mechanical dewatering/non-hazardous
                                landfill waste disposal.
7............................  Add Oxidation/Filtration (Greensand)
                                (20:1 iron: arsenic) and add POTW for
                                backwash stream.
8............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 7  pH  pH
                                8.
9............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 8  pH  pH 8.3.
10...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 23,100 BV.
11...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 15,400 BV.
12...........................  Add pre-oxidation [if not in-place] and
                                add POU Reverse Osmosis.
13...........................  Add pre-oxidation [if not in-place] and
                                add POU Activated Alumina. (Finished
                                water pH  pH 8.0)
------------------------------------------------------------------------

    Pre-oxidation costs are given as a separate component because they 
will be incurred only by some systems. In estimating national costs, it 
was assumed that only systems without pre-oxidation in place would need 
to add the necessary equipment. It is expected that no surface water 
systems will need to install pre-oxidation for arsenic removal and that 
fewer than 50% of the ground water systems may need to install pre-
oxidation for arsenic removal. Ground water systems without pre-
oxidation should ascertain if pre-oxidation is necessary by determining 
if the arsenic is present as As (III) or As (V). Ground water systems 
with predominantly As (V) will probably not need pre-oxidation to meet 
the MCL.
2. What are the affordable treatment technologies for small systems?
    The 13 treatment trains listed in Table I.G-1 were compared against 
the national-level affordability criteria to determine the affordable 
treatment trains. The Agency's national-level affordability criteria 
were published in the August 6, 1998 Federal Register (EPA, 1998h). In 
this notice, EPA discussed the procedure for affordable

[[Page 6986]]

treatment technology determinations for the contaminants regulated 
before 1996.
    The preamble to the proposed arsenic rule described the derivation 
of the national-level affordability criteria (65 FR 38888 at 38926; 
EPA, 2000i). A very brief summary follows: First an ``affordability 
threshold'' (i.e., the total annual household water bill that would be 
considered affordable) was calculated. The total annual water bill 
includes costs associated with water treatment, water distribution, and 
operation of the water system. In developing the threshold of 2.5% 
median household income, EPA considered the percentage of median 
household income spent by an average household on comparable goods and 
services and on cost comparisons with other risk reduction activities 
for drinking water such as households purchasing bottled water or a 
home treatment device. The complete rationale for EPA's selection of 
2.5% as the affordability threshold is described in ``Variance 
Technology Findings for Contaminants Regulated Before 1996'' (EPA, 
1998l).
    The Variance Technology Findings document also describes the 
derivation of the baselines for median household income, annual water 
bills, and annual household consumption. Data from the Community Water 
System Survey (CWSS) were used to derive the annual water bills and 
annual water consumption values for each of the three small system size 
categories. The Community Water System Survey data on zip codes were 
used with the 1990 Census data on median household income to develop 
the median household income values for each of the three small-system 
size categories. The median household-income values used for the 
affordable technology determinations are not based on the national 
median income. The value for each size category is a national median 
income for communities served by small water systems within that range. 
Table I.G-2 presents the baseline values for each of the three small-
system size categories. Annual water bills and median household income 
are based on 1995 estimates.

                           Table I.G-2.--Baseline Values for Small Systems Categories
----------------------------------------------------------------------------------------------------------------
                                           Annual household
  System size category  (population       consumption  (1000    Annual water bills  ($/  Median household income
               served)                       gallons/yr)                  yr)                       ($)
----------------------------------------------------------------------------------------------------------------
25-500...............................                       72                     $211                  $30,785
501-3,300............................                       74                      184                   27,058
3,300-10,000.........................                       77                      181                   27,641
----------------------------------------------------------------------------------------------------------------

    For each size category, the threshold value was determined by 
multiplying the median household income by 2.5%. The annual household 
water bills were subtracted from this value to obtain the available 
expenditure margin. Projected treatment costs will be compared against 
the available expenditure margin to determine if there are affordable 
compliance technologies for each size category. The available 
expenditure margin for the three size categories is presented in Table 
I.G-3.

  Table I.G-3.--Available Expenditure Margin for Affordable Technology
                             Determinations
------------------------------------------------------------------------
                                                Available expenditure
  System size category  (population served)     margin  ($/household/
                                                        year)
-----------------------------------------------------------------------
25-500.......................................                      559
501-3,300....................................                      492
3,301-10,000.................................                      510
------------------------------------------------------------------------

    The size categories specified in SDWA for affordable technology 
determinations are different than the size categories typically used by 
EPA in the Economic Analysis. A weighted average procedure was used to 
derive design and average flows for the 25-500 category using design 
and average flows from the 25-100 and 101-500 categories. A similar 
approach was used to derive design and average flows from the 501-1000 
and 1001-3300 categories for the 501-3300 category. The Variance 
Technology Findings document (EPA, 1998l) describes this procedure in 
more detail. Table I.G-4 lists the design and average flows for the 
three size categories.

    Table I.G-4.-- Design and Average Daily Flows Used for Affordable
                        Technology Determinations
------------------------------------------------------------------------
 System size category  (population     Design flow        Average flow
              served)                     (mgd)              (mgd)
------------------------------------------------------------------------
25-500............................              0.058              0.015
501-3,300.........................               0.50               0.17
3,301-10,000......................                1.8               0.70
------------------------------------------------------------------------

    Capital and operating and maintenance costs were derived for each 
treatment train using the flows listed previously and the cost 
equations in the Technology and Cost Document. Several conservative 
assumptions were made to derive the costs. The influent arsenic 
concentration was assumed to be 50 g/L, which was the MCL for 
arsenic prior to this rule. The treatment target was 8 g/L, 
which is 80% of the MCL. Thus, little blending could be performed to 
reduce costs. Capital costs were amortized using the 7% interest rate 
preferred by OMB for benefit-cost analyses of government programs and 
regulations rather than a 3% interest rate.
    The annual system treatment cost in dollars per year was converted 
into a rate increase using the average daily flow. The annual water 
consumption values listed in Table I.G-2 were multiplied by 1.15 to 
account for water lost due to leaks. Since the water lost to leaks is 
not billed, the water bills for the actual water used were adjusted to 
cover this lost water by increasing the household consumption. The rate 
increase in dollars per thousand gallons used was multiplied by the 
adjusted annual consumption to determine the annual cost increase for 
the household for each treatment train. Several comments on 
affordability presented household cost increases that were

[[Page 6987]]

derived by dividing the annual system cost by the number of households. 
That is an inappropriate method because residential customers would not 
only be paying for the water that they use, but also all the water used 
by non-residential customers of the system..
    Of the 13 treatment trains in Table I.G-1, the ones identified in 
Table I.G-5 are deemed to be affordable for systems serving 25-500 
people as the annual household cost was below the available expenditure 
margin. The two trains using coagulation-assisted microfiltration are 
not affordable for this size category. All 13 treatment trains are 
deemed to be affordable for systems serving 501-3,300 and 3,301-10,000 
people and are presented in Table I.G-6. Centralized compliance 
treatment technologies include ion exchange, activated alumina, 
modified coagulation/filtration, modified lime softening, and 
oxidation/filtration (e.g. greensand filtration) for source waters high 
in iron. In addition, POU and POE devices are also compliance 
technology options for the smaller systems.

Table I.G-5.-- Affordable Compliance Technology Trains for Small Systems
                         With Population 25-500
------------------------------------------------------------------------
          Train No.                   Treatment Technology Trains
------------------------------------------------------------------------
1............................  Add pre-oxidation [if not in-place] and
                                modify in-place Lime Softening (pH >
                                10.5) and modify corrosion control.
2............................  Add pre-oxidation [if not in-place] and
                                modify in-place Coagulation/Filtration
                                and modify corrosion control.
3............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level  20
                                mg/L.
4............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level: 20 mg/L
                                sulfate  50 mg/l.
7............................  Add Oxidation/Filtration (Greensand)
                                (20:1 iron: arsenic) and add POTW for
                                backwash stream.
8............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 7 pH  pH
                                8.
9............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 8  pH  pH 8.3.
10...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 23,100 BV.
11...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 15,400 BV.
12...........................  Add pre-oxidation [if not in-place] and
                                add POU Reverse Osmosis.
13...........................  Add pre-oxidation [if not in-place] and
                                add POU Activated Alumina. (Finished
                                water pH  pH 8.0)
------------------------------------------------------------------------


Table I.G-6.-- Affordable Compliance Technology Trains for Small Systems
             With Populations 501-3,300 and 3,301 to 10,000
------------------------------------------------------------------------
          Train No.                   Treatment Technology Trains
------------------------------------------------------------------------
1............................  Add pre-oxidation [if not in-place] and
                                modify in-place Lime Softening (pH >
                                10.5) and modify corrosion control.
2............................  Add pre-oxidation [if not in-place] and
                                modify in-place Coagulation/Filtration
                                and modify corrosion control.
3............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level  20
                                mg/L.
4............................  Add pre-oxidation [if not in-place] and
                                add Anion Exchange and add POTW waste
                                disposal. Sulfate level: 20 mg/L
                                sulfate  50 mg/l.
5............................  Add pre-oxidation [if not in-place] and
                                add Coagulation Assisted Microfiltration
                                with corrosion control and add
                                mechanical dewatering/non-hazardous
                                landfill waste disposal.
6............................  Add pre-oxidation [if not in-place] and
                                add Coagulation Assisted Microfiltration
                                with corrosion control and add non-
                                mechanical dewatering/non-hazardous
                                landfill waste disposal.
7............................  Add Oxidation/Filtration (Greensand)
                                (20:1 iron: arsenic) and add POTW for
                                backwash stream.
8............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 7 pH  pH
                                8.
9............................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina and add non-
                                hazardous landfill (for spent media)
                                waste disposal. pH 8  pH  pH 8.3.
10...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 23,100 BV.
11...........................  Add pre-oxidation [if not in-place] and
                                add Activated Alumina with pH adjustment
                                (to pH 6) and corrosion control and add
                                non-hazardous landfill (for spent media)
                                waste disposal. Run length = 15,400 BV.
12...........................  Add pre-oxidation [if not in-place] and
                                add POU Reverse Osmosis.
13...........................  Add pre-oxidation [if not in-place] and
                                add POU Activated Alumina. (Finished
                                water pH  pH 8.0)
------------------------------------------------------------------------

3. Can My Water System Get a Small System Variance From an MCL Under 
Today's Rule?
    Section 1415(e)(1) of SDWA allows States to grant variances to 
small water systems (i.e., systems having 10,000 customers or less) in 
lieu of complying with an MCL if EPA determines that there are no 
nationally affordable compliance technologies for that system size/
water quality combination. The system must then install an EPA-listed 
variance treatment technology (section 1412(b)(15)) that makes progress 
toward the MCL, if not necessarily reaching it. EPA has determined that 
affordable technologies exist for all three system size categories and 
has therefore not identified a variance technology for any system size 
or source water quality combination. Small system variances are not 
available for the final arsenic MCL.

H. Can My System Get a General Variance or Exemption From the MCL Under 
Today's Rule?

    General variances may be granted in accordance with section 
1415(a)(1)(A) of SDWA and EPA's regulations. General variances are 
available to public water systems that have installed or agree to 
install the BAT but, due to source water quality, are or will be unable 
to comply with the national primary drinking water standard. The 
general variance

[[Page 6988]]

provisions of SDWA are narrowly focused on addressing those rare 
circumstances where some unusual characteristic of the source water 
available to a system will result in less effective performance of the 
BAT. Exemptions may be granted in accordance with section 1416(a) of 
SDWA and EPA's regulations. Exemptions are designed to provide a system 
facing compelling circumstances, such as economic hardship, additional 
time to come into compliance.
    Under section 1415(a)(1)(A) of the SDWA, a State that has primary 
enforcement responsibility (primacy), or EPA as the primacy agency, may 
grant variances from MCLs to those public water systems of any size 
that cannot comply with the MCLs because of characteristics of the 
water sources. The primacy agency may grant general variances to a 
system on condition that the system install the best available 
technology, treatment techniques, or other means, and provided that 
alternative sources of water are not reasonably available to the 
system. At the time this type of variance is granted, the State must 
prescribe a schedule for compliance with its terms and may require the 
system to implement additional control measures. Furthermore, before 
EPA or the State may grant a general variance, it must find that the 
variance will not result in an unreasonable risk to health (URTH) to 
the public served by the public water system.
    Under section 1413(a)(4), States that choose to issue general 
variances must do so under conditions, and in a manner, that are no 
less stringent than section 1415. Of course, a State may adopt 
standards that are more stringent than the EPA's standards. EPA 
specifies BATs for general variance purposes. EPA may identify as BAT 
different treatments under section 1415 for variances other than the 
BAT under section 1412 for MCLs. The BAT findings for section 1415 may 
vary depending on a number of factors, including the number of persons 
served by the public water system, physical conditions related to 
engineering feasibility, and the costs of compliance with MCLs. In this 
final rule, EPA is not specifying different BAT for variances under 
section 1415(a).
    Under section 1416(a), EPA or a State may exempt a public water 
system from any requirements related to an MCL or treatment technique 
of an NPDWR if it finds that: (1) Due to compelling factors (which may 
include a variety of ``compelling'' factors, including economic factors 
such as qualification of the PWS as serving a disadvantaged community), 
the PWS is unable to comply with the requirement or implement measure 
to develop an alternative source of water supply; (2) the exemption 
will not result in an URTH; (3) the PWS was in operation on the 
effective date of the NPWDR, or for a system that was not in operation 
by that date, only if no reasonable alternative source of drinking 
water is available to the new system; and (4) management or 
restructuring changes (or both) cannot reasonably result in compliance 
with the Act or improve the quality of drinking water.
    If EPA or the State grants an exemption to a public water system, 
it must at the same time prescribe a schedule for compliance (including 
increments of progress or measures to develop an alternative source of 
water supply) and implementation of appropriate control measures that 
the State requires the system to meet while the exemption is in effect. 
Under section 1416(b)(2)(A), the schedule prescribed shall require 
compliance as expeditiously as practicable (to be determined by the 
State), but no later than 3 years after the compliance date for the 
regulations established pursuant to section 1412(b)(10). For public 
water systems serving 3,300 people or less and needing financial 
assistance for the necessary improvements, EPA or the State may renew 
an exemption for one or more additional two-year periods, but not to 
exceed a total of six years, if the system establishes that it is 
taking all practicable steps to meet certain requirements specified in 
the statute. Thus, the maximum possible duration of a small systems 
exemption is nine years beyond the 5-year compliance schedule specified 
in today's rule.
    A public water system shall not be granted an exemption unless it 
can establish that either: (1) The system cannot meet the standard 
without capital improvements that cannot be completed prior to the date 
established pursuant to section 1412(b)(10); (2) in the case of a 
system that needs financial assistance for the necessary 
implementation, the system has entered into an agreement to obtain 
financial assistance pursuant to section 1452 or any other Federal or 
State program; or (3) the system has entered into an enforceable 
agreement to become part of a regional public water system.
    EPA believes that exemptions will be an important tool to help 
States address the number of systems needing financial assistance to 
achieve compliance with the arsenic rule (and other rules) with the 
available supply of financial assistance. About 2,300 CWSs and about 
1,100 NTNCWSs will need to install treatment to achieve compliance with 
today's final rule. CWSs and not-for-profit NTNCWSs are eligible for 
assistance from the Drinking Water State Revolving Fund (DWSRF). 
Between its inception in Federal Fiscal Year 1997 and June 2000, the 
DWSRF program has provided assistance to about 1,100 systems. Given the 
many competing demands being placed on financial assistance programs, 
the ability to extend the period of time available for a system to 
receive financial assistance will provide important flexibility for 
States and systems. Exemptions provide an opportunity to extend the 
period of time during which a system can achieve compliance, thus 
providing needy systems with additional time to qualify for financial 
assistance. Under today's action, all systems have 5 years to achieve 
compliance. Exemptions for an additional 3 years can be made available 
to qualified systems. For those qualified systems serving 3,300 persons 
or less, up to 3 additional 2-year extensions to the exemption are 
possible, for a total exemption duration of 9 years. When added to the 
5 years provided for compliance by the rule, this allows up to 14 years 
for small systems serving up to 3,300 people to achieve compliance.
    EPA will issue guidance in the near future on considerations 
involved in granting exemptions under the arsenic rule, including 
making findings of no URTH where exemptions are offered.

I. What Analytical Methods are Approved for Compliance Monitoring of 
Arsenic and What are the Performance Testing Criteria for Laboratory 
Certification?

1. Approved Analytical Methods
    Today's rule lists four analytical technologies that are approved 
for compliance determinations of arsenic at the MCL of 0.01 mg/L (see 
Table I.I-1). As noted in the June 22, 2000 proposed rule (65 FR 38888, 
EPA, 2000i), the methods listed in Table I.I-1 are the same analytical 
technologies that were approved for arsenic when the MCL was 0.05 mg/L, 
with the exception of the methods that use Inductively Coupled Plasma 
Atomic Emission Spectroscopy (ICP-AES) measurement technology. EPA is 
withdrawing two ICP-AES methods (EPA Method 200.7 and SM 3120B) because 
their detection limits (0.008 mg/L and 0.050 mg/L respectively) are too 
high to reliably determine compliance with an MCL of 0.01 mg/L. In the 
June 2000 proposed rule, EPA noted that the ICP-AES methods were rarely 
used to obtain laboratory certification when analyzing

[[Page 6989]]

low level challenge samples for arsenic. Therefore, we believe 
withdrawal of the availability of the ICP-AES methods for compliance 
determinations of arsenic in drinking water will not affect laboratory 
capacity. EPA did not receive any adverse comment on the proposal to 
withdraw approval of these two methods, and today's final rule amends 
the CFR to effect this withdrawal.

Table I.I-1.--Approved Analytical Methods (40 CFR 141.23) for Arsenic at
                          the MCL of 0.01 mg/L
------------------------------------------------------------------------
             Methodology                       Reference method
------------------------------------------------------------------------
Inductively Coupled Plasma Mass       200.8 (EPA)
 Spectroscopy (ICP-MS).
Stabilized Temperature Platform       200.9 (EPA)
 Graphite Furnace Atomic Absorption
 (STP-GFAA).
Graphite Furnace Atomic Absorption    3113B (SM) D-2972-93C (ASTM)
 (GFAA).
Gaseous Hydride Atomic Absorption     3114B (SM) D-2972-93B (ASTM)
 (GHAA).
------------------------------------------------------------------------

2. Performance Testing Criteria for Laboratory Certification
    For purposes of drinking water laboratory certification, the Agency 
specifies pass/fail (acceptance) limits for a successful analysis of 
the required annual challenge sample, i.e., a performance evaluation 
(PE) or performance testing (PT) sample. These acceptance limits have 
been historically derived using one of two different approaches:

    (a) Variable acceptance limits uniquely derived for each PE 
study from a regression analysis of the performance of all 
laboratories that participate in that PE-study, or
    (b) Fixed acceptance limits derived from a regression analysis 
of the laboratory PE sample analysis results in several PE studies.

    Variable acceptance limits are analogous to ``grading on a curve'' 
which means that the pass/fail limit can vary from PE study to study 
depending on the quality and experience of the laboratories 
participating in the study. These limits are specified in the CFR as 
plus or minus two sigma (2 ) where sigma is the standard deviation of 
the analytical results reported in the PE study. EPA specifies variable 
acceptance limits when a method or measurement technology is new enough 
that an insufficient number of experienced laboratories have 
participated in the PE studies or when only a few PE studies have been 
conducted.
    EPA prefers the fixed acceptance limits approach because it is the 
better indicator of laboratory performance averaged over time and 
several different concentrations of the target analyte. Fixed limits 
also provide the same pass/fail benchmark in each PE study. As 
discussed in the proposed rule, EPA has a large base of PE-study data 
from which to derive a practical quantitation limit (PQL) and a fixed 
PE-study acceptance limit for arsenic. Thus, as proposed in the June 
2000 rule, today's final rule amends Sec. 141.23(k)(3)(ii) to specify 
an acceptance limit of 30% in PE (now known as PT) samples 
spiked with arsenic at the PQL of 0.003 mg/L or greater. For a brief 
discussion of the derivation of the PQL for arsenic, see section 
III.B.1, What is the feasible level?

J. How Will I Know if My System Meets the Arsenic Standard?

    This section summarizes changes to the arsenic monitoring and 
compliance determination requirements. The Agency is also changing the 
methods used by a system to determine if it is in violation of an MCL 
for all of the regulated inorganic contaminants (IOCs), synthetic 
organic contaminants (SOCs), and volatile organic contaminants (VOCs). 
See section I.J.3. for more information regarding violation 
determinations.
1. Sampling Points and Grandfathering of Monitoring Data
    In today's rule, the Agency is moving the requirements associated 
with arsenic into Sec. 141.23(c) making it consistent with the 
requirements for IOCs regulated under the standardized monitoring 
framework. All CWS and NTNCWSs must monitor for arsenic at each entry 
point to the distribution system. In some cases, Sec. 142.11(1) allows 
States to establish regulations that ``vary from comparable regulations 
set forth in part 141 of this chapter, and demonstrate that any 
different State regulation is at least as stringent as the comparable 
regulation contained in part 141.'' Using this authority, States may 
allow systems to collect samples at an alternative location (e.g., the 
first point of drinking water consumption in the distribution system) 
if the State justifies in its primacy program that the alternative 
location is equally or more protective. States could implement the 
change in sampling location once the primacy package is approved.
    The MCL compliance elements of the rule become effective in 2006. 
Some ground water systems will collect samples to comply with the 
sampling requirements for all regulated IOCs (including arsenic) in 
2005 in accordance with the State monitoring plan. This sampling event 
will satisfy the monitoring requirements for the 2005-2007 compliance 
period, but the revised arsenic MCL will not become effective until 
2006. Ground water systems may use grandfathered data collected after 
January 1, 2005 to satisfy the sampling requirements for the 2005-2007 
compliance period. The grandfathered data must report results from 
analytical methods approved for use by this final rule (e.g., the 
method detection limit must be substantially less than the revised MCL 
of 10 g/L). Data collected using unacceptably high detection 
levels (e.g. using ICP-AES technology) will not be eligible for 
grandfathering. If the grandfathered data are used to comply with the 
2005-2007 compliance period and the analytical result is greater than 
10 g/L, that system will be in violation of the revised MCL on 
the effective date of the rule. If systems do not use grandfathered 
data, then surface water systems must collect a sample by December 31, 
2006 and ground water systems must collect a sample by December 31, 
2007 to demonstrate compliance with the revised MCL.
    2. Compositing of Samples
    Compositing of samples is allowed under the standardized monitoring 
framework. The States that allow compositing of samples use the 
methodology in the Phase II/V regulations as specified in 
Sec. 141.23(a)(4). In today's rule, CWSs and NTNCWSs will still be 
allowed to composite samples; however, if arsenic is detected above 
one-fifth of the revised MCL (2 g/L), then a follow-up sample 
must be taken within 14 days at each sampling point included in the 
composite as described in Sec. 141.23(a)(4). Compliance determinations 
must be based on the follow up sample result. Water systems may 
composite samples (temporally and spatially) until a

[[Page 6990]]

contaminant (arsenic or any other contaminant regulated in the Phase 
II/V regulations) is detected. Once a contaminant has been detected in 
a composited sample at concentrations greater than one-fifth of the 
MCL, the system(s) must discontinue the practice of compositing samples 
for all future monitoring.
3. Calculation of Violations
    In today's rule, the Agency is clarifying the compliance 
determination section for the IOCs (including arsenic), the SOCs, and 
the VOCs in Secs. 141.23(i), 141.24(f)(15), and 141.24(h)(11), 
respectively.
    Systems will determine compliance based on the analytical result(s) 
obtained at each sampling point. If any sampling point is in violation 
of an MCL, the system is in violation. For systems monitoring more than 
once per year, compliance with the MCL is determined by a running 
annual average at each sampling point. Systems monitoring annually or 
less frequently whose sample result exceeds the MCL for any inorganic 
contaminant in Sec. 141.23(c), or whose sample results exceeds the 
trigger level for any organic contaminant listed in Sec. 141.24(f) or 
Sec. 141.24(h), must revert to quarterly sampling for that contaminant 
the next quarter. Systems are only required to conduct quarterly 
monitoring at the entry point to the distribution system at which the 
sample was collected and for the specific contaminant that triggered 
the system into the increased monitoring frequency. Systems triggered 
into increased monitoring will not be considered in violation of the 
MCL until they have completed one year of quarterly sampling. If any 
sample result will cause the running annual average to exceed the MCL 
at any sampling point (i.e., the analytical result is greater than four 
times the MCL), the system is out of compliance with the MCL 
immediately. Systems may not monitor more frequently than specified by 
the State to determine compliance unless they have applied to and 
obtained approval from the State. If a system does not collect all 
required samples when compliance is based on a running annual average 
of quarterly samples, compliance will be based on the running annual 
average of the samples collected. If a sample result is less than the 
method detection limit, zero will be used to calculate the annual 
average. States have the discretion to delete results of obvious 
sampling or analytic errors.
    States still have the flexibility to require confirmation samples 
for positive or negative results. States may require more than one 
confirmation sample to determine the average exposure over a 3-month 
period. Confirmation samples must be averaged with the original 
analytical result to calculate an average over the 3-month period. The 
3-month average must be used as one of the quarterly concentrations for 
determining the running annual average. The running annual average must 
be used for compliance determinations.
    The rule requires that monitoring be conducted at all entry points 
to the distribution system. However, the State has discretion to 
require monitoring and determine compliance based on a case-by-case 
analysis of individual drinking water systems. The Agency cannot 
address all of the possible outcomes that may occur at a particular 
water system; therefore, EPA encourages drinking water systems to 
inform State regulators of their individual circumstances. Some systems 
have implemented elaborate plans including targeted, increased 
monitoring that is more representative of the average annual 
contaminant concentration to which individuals are being exposed (some 
States use a time-weighted or flow-weighted averaging approach to 
determine compliance).
    Some States require that systems collect samples from wells that 
only operate for one month out of the year regardless of whether they 
are operating during scheduled sampling times. The State may determine 
compliance based on several factors including, but not limited to, the 
quantity of water supplied by a source, the duration of service of the 
source, and contaminant concentration.
4. Monitoring and Compliance Schedule
    Systems must begin complying with the clarified monitoring and 
compliance determination provisions of today's rule effective January 
22, 2004 for inorganic, volatile organic, and synthetic organic 
contaminants. These requirements clarify that for Secs. 141.23(i)(2), 
141.24(f)(15)(ii), and 141.24(h)(11)(ii) compliance will be determined 
based on the running annual average of the initial MCL exceedance and 
any subsequent State-required confirmation samples. In addition, the 
clarifications address calculation of compliance when a system fails to 
collect the required number of samples. Compliance (determined by the 
average concentration) will be based on the total number of samples 
collected. Some systems have purposely not collected the required 
number of quarterly samples and only incurred monitoring and reporting 
violations for the uncollected samples. Any systems that avoid required 
sampling will calculate MCL violations by dividing the summed samples 
by the actual number of samples taken. This clarification did not 
change Secs. 141.23(i)(1) and 141.24(h)(11)(i) which allow systems to 
use zero for all non-detects when calculating MCL violations. In 
addition, if any one sample would cause the annual average to be 
exceeded, the system is out of compliance immediately.
    Also in today's rule, the Agency is moving the arsenic monitoring 
and compliance requirements from Secs. 141.23(l) to (q) to the 
standardized monitoring framework in Sec. 141.23 for other IOCs. States 
may grant systems nine-year monitoring waivers using the conditions in 
Sec. 141.23(c) for arsenic. The criteria for developing a State waiver 
program were published in the Phase II/V rules, and as noted in section 
IV.B. of this rule, the Agency is not modifying the waiver criteria in 
today's rulemaking. However, the revised arsenic rule is not effective 
until January 23, 2006 (see section I.M. for a more detailed discussion 
regarding the effective date of the rule.). States and utilities 
supported moving arsenic into the standardized monitoring framework.
    To use compliance data after the effective date of the 10 
g/L MCL, systems must use an approved method with a method 
detection limit substantially less than the revised arsenic MCL of 10 
g/L. This means that after December 31, 2006 and December 31, 
2007 all surface water systems and groundwater systems, respectively, 
may not use analytical methods using the ICP-AES technology, because 
the detection limits for these methods are 8 g/L or higher. 
This restriction means that two ICP-AES methods that were approved when 
the MCL was 50 g/L may not be used for compliance 
determinations at the revised MCL of 10 g/L. The two methods 
are EPA Method 200.7 and SM 3120B. Prior to 2005, systems may have 
compliance samples analyzed with these less sensitive methods. However, 
EPA advises systems to have compliance samples analyzed and reported at 
the laboratory minimum detection limit.
    If sampling demonstrates that arsenic exceeds the MCL, a CWS will 
be triggered into quarterly monitoring for that sampling point ``in the 
next quarter after the violation occurred.'' The State may allow the 
system to return to the routine monitoring frequency when the State 
determines that the system is reliably and consistently below the MCL. 
However, the State cannot make a determination that the system is 
reliably and consistently below the MCL until a

[[Page 6991]]

minimum of two consecutive ground water, or four consecutive surface 
water samples, have been collected (Sec. 141.23(c)(8)).
    The Agency is not promulgating a reduced monitoring approach 
similar to the revised radionuclides final rule published on December 
7, 2000 (65 FR 76708; EPA, 2000p). As noted above, all systems have to 
collect IOC samples once a year or once every three years, depending on 
the source water, unless they have a waiver. The Agency believes that 
very few States issue waivers for IOCs because the analysis is 
relatively inexpensive and most IOCs are naturally occurring elements 
that may be found in concentrations above the method detection limit. 
Therefore, the majority of systems must collect routine samples for the 
regulated IOCs; and most of the methods used for analysis of these 
contaminants will measure arsenic as well as antimony, beryllium, 
cadmium, chromium, copper, and nickel.

K. What do I Need to tell My Customers?

1. Consumer Confidence Reports
    a. General requirements. In 1998, EPA promulgated the Consumer 
Confidence Report Rule (CCR) (codified at 40 CFR part 141, subpart O), 
a final rule requiring community water systems to issue annual water 
quality reports to their customers (63 FR 44512; EPA, 1998i). The 
reports are due each year by July 1, and provide a snapshot of water 
quality over the preceding calendar year. The reports include 
information on levels of detected contaminants and if the system has 
violated an MCL or a treatment technique, must also include information 
on the potential health effects of contaminants from appendix A to 
subpart O. When they have such violations, systems must also include in 
their report an explanation of the violation and remedial measures 
taken to address it. The arsenic health effects language is currently 
required when arsenic levels exceed 25 g/L, one-half the 
existing MCL of 50 g/L, required under Sec. 141.154(b).
    EPA is today retaining the health effects language for arsenic 
issued with the final CCR Rule and updating appendix A to subpart O to 
include the MCL and MCLG as revised in this rule, together with special 
arsenic-specific reporting requirements.
    In addition to the standard reporting of arsenic detects and 
arsenic MCL violations, EPA is today finalizing a requirement (proposed 
at Sec. 141.154(b); finalized at Sec. 141.154(f)) that CWSs that detect 
arsenic between the revised and existing MCL (i.e., above 10 
g/L and up to and including 50 g/L) prior to the 
effective date for compliance with the revised MCL, include the CCR 
Rule health effects language in their reports. This action is required 
even though, technically, the systems are not in violation of the 
regulations. This requirement will be effective for the five years 
after promulgation, when systems are not yet required to comply with 
the revised MCL. Then, beginning January 23, 2006, systems out of 
compliance must report violations of the revised arsenic MCL under 
Sec. 141.153(d)(6) to the public.
    Based on stakeholder and commenter input, the Agency decided in the 
final CCR Rule that it would use authority granted in SDWA section 
1414(c)(4)(B)(vi) to require inclusion of health effects language for 
arsenic exceedances before the compliance date. That section allows the 
Administrator to require inclusion of health effects language for ``not 
more than three regulated contaminants'' other than those found to 
violate an MCL. The Agency used this authority for total 
trihalomethanes in the Stage 1 Disinfectants and Disinfection 
Byproducts Rule (63 FR 69390). The Agency is now using this same 
authority for arsenic, because it believes that it is important to 
provide customers with the most current understanding of the risk 
presented by this contaminant as soon as possible after establishing a 
new standard. This provision provides systems the flexibility to put 
this health effects information into context and to explain to 
customers that the system is complying with existing standards.
    EPA modified the language it proposed on June 22, 2000 to reflect 
the MCL promulgated today and to clarify what language a system must 
include in its report. Systems subject to Sec. 141.154(f) must begin 
including the arsenic health effects language in the report due by July 
1, 2002.
    b. Special informational statement. In addition, in the CCR Rule, 
the Agency decided to require that CCRs include additional information 
about certain contaminants, one of which was arsenic. As explained in 
the preamble to the CCR Rule (63 FR 44512 at 44514; EPA, 1998i), 
because of commenters' concerns about the adequacy of the current MCL, 
EPA decided that systems that detect arsenic between 25 g/L 
and the current MCL must include some information regarding the arsenic 
standard (Sec. 141.154(b)). This informational statement is different 
from the health effects language required for an MCL violation. EPA 
noted in the CCR rule and in the arsenic proposal that the 
informational statement requirement would be deleted upon promulgation 
of a revised MCL.
    In view of the fact that EPA is today finalizing an MCL somewhat 
higher than the technologically feasible MCL, and that some commenters 
expressed concern about the risk that a higher-than-feasible MCL might 
present to certain consumers, EPA is today retaining and revising an 
existing Sec. 141.154(b) requirement that systems which find arsenic 
below the MCL must provide additional information to their customers. 
EPA believes that consumers should be aware of the uncertainties 
surrounding the risks presented even by very low levels of arsenic. 
While EPA addressed many of the sources of uncertainty in its risk 
analysis of arsenic in support of the final rule, several sources of 
uncertainty remain. Chief among these is the mode of action (i.e., the 
shape of the dose-response curve). EPA continues to research the 
effects of arsenic (according to an arsenic research plan required by 
the 1996 SDWA Amendments and submitted to Congress) and should have a 
better understanding of these effects as the relevant research is 
completed. EPA believes that this uncertainty adequately justifies 
retaining the existing requirement to provide consumers with 
information about low levels of arsenic.
    The existing Sec. 141.154(b) requirement is today updated in two 
ways. First, the arsenic level that triggers the additional information 
is reset from 25 g/L (half the existing MCL) to 5 g/L 
(half the revised MCL). In the preamble to the CCR Rule, we explained 
that ``[many] commenters agreed that half the MCL would be an 
appropriate threshold for requiring additional risk-related 
information.'' EPA continues to believe that half the MCL is an 
appropriate trigger for special information about certain contaminants. 
Beginning with the report due by July 1, 2002, CWSs that find arsenic 
above 5 g/L and up to and including 10 g/L must 
include Sec. 141.154(b) special health information about arsenic in 
their consumer confidence reports.
    Second, the suggested text of the special information is updated. 
Rather than stating that ``EPA is reviewing the drinking water standard 
for arsenic . . .,'' the statement announces clearly that the 
consumer's water meets EPA's new standard while also noting the cost-
benefit trade-off involved in setting that standard. The suggested text 
further notes that there are uncertainties (described in section III.F 
of this notice) surrounding the risks of low levels of arsenic. Systems 
retain the flexibility, as defined in the existing requirement, to

[[Page 6992]]

adjust this language in consultation with the Primacy Agency.
2. Public Notification
    On May 4, 2000, EPA issued the final Public Notification Rule (PNR) 
to revise the minimum requirements that public water systems must meet 
for public notification of violations of EPA's drinking water standards 
(65 FR 25982; EPA, 2000e). Water systems must begin to comply with the 
revised PNR regulations on October 31, 2000 (if they are in 
jurisdictions where the program is directly implemented by EPA) or on 
the date a primacy State adopts the new requirements (not to exceed May 
6, 2002). EPA's drinking water regulation on arsenic affects public 
notification requirements and amends the PNR as part of its rulemaking.
    Today's final rule will require CWSs and NTNCWSs to provide a Tier 
2 public notice for arsenic MCL violations and to provide a Tier 3 
public notice for violations of the monitoring and testing procedure 
requirements. The new arsenic MCL will become effective January 23, 
2006. CWSs and NTNCWSs must provide public notification to consumers 
for any violations after the effective date of the revised arsenic MCL. 
The PNR requires owners and operators of public water systems to give 
notice to persons they serve for all violations when they are operating 
under a variance or exemption (or violate conditions of the variance or 
exemption).

L. What Financial Assistance is Available for Complying With This Rule?

    There are two major sources of Federal financial assistance 
available for water systems: the Drinking Water State Revolving Fund 
(DWSRF) and the Water and Waste Disposal Loan and Grant Program of the 
Rural Utilities Service (RUS) of the U. S. Department of Agriculture.
    The 1996 SDWA Amendments authorized (i.e., approved spending) $9.6 
billion for the DWSRF program. To date, Congress has appropriated 
(i.e., provided) $4.2 billion, which includes $825 million for the 
program in Fiscal Year 2001. By the end of September 2000, States had 
been awarded $3.2 billion in capitalization grants and, from that, had 
provided more than $2.8 billion in assistance to eligible drinking 
water systems. The Federal capitalization grant, together with State 
matching funds, is currently making available about $1 billion per 
year. States have considerable discretion in designing their DWSRF 
program, and have the option of offering special assistance to systems 
that the State considers to be disadvantaged. Special assistance may 
include principal forgiveness, a negative interest rate, an interest 
rate lower than that charged to non-disadvantaged systems, and extended 
repayment periods of up to 30 years. Federal law allows DWSRF 
assistance to be provided to water systems of both public ownership and 
private ownership, although some States are unable or choose not to 
provide assistance to privately owned systems.
    EPA recognizes that public water systems and States face a 
significant challenge in implementing new requirements that are needed 
to ensure the continued provision of safe drinking water. While the 
DWSRF program is proving to be a significant source of funding, it 
cannot be viewed as the only source of funding. It will take a 
concerted effort on the part of Federal, State and local governments, 
private business, and utilities to address the significant 
infrastructure needs identified by public water systems. In order to 
ensure that the DWSRF program is used to focus attention on the highest 
priority needs, all States must give priority to those drinking water 
infrastructure improvement projects that will have the greatest public 
health benefit or ensure compliance with SDWA. State DWSRF programs are 
currently making loans available to the highest ranked projects on 
their lists and are also using a portion of the grants to support other 
important drinking water program activities.
    The RUS program is focused on providing a safe, reliable water 
supply and wastewater treatment to residents of rural America. The 
program offers a combination of low interest loans and grants to 
systems serving rural areas and cities and towns of up to 10,000 
persons and which are publicly owned (including Native American 
systems) or operated as not-for-profit corporations. In recent years 
the RUS program has typically offered assistance totaling about $1.3 
billion per year, about 60% of which is directed to drinking water 
projects. Thus, about $780 million per year is available for rural 
drinking water systems from this program. Together with the 
approximately $1 billion per year being made available through the 
DWSRF, this results in a total of about $1.78 billion per year of 
Federal financial assistance available for drinking water.
    Other Federal financial assistance programs exist that may help 
systems with SDWA compliance related expenditures. However, these other 
programs are not generally as large or focused on drinking water as are 
the DWSRF and RUS programs. EPA's Environmental Financial Advisory 
Board has developed a ``Guidebook of Financial Tools'' (EPA, 1999c), 
which offers a comprehensive summary of public and private programs and 
mechanisms for paying for drinking water and other environmental 
systems. The handbook is available through EPA's web site at: http://www.epa.gov/efinpage/guidbk98/index.htm.
    The Federal financial assistance programs described previously 
clearly face numerous, competing demands on their resources. EPA's 1995 
Drinking Water Infrastructure Needs Survey (EPA, 1997a) identified a 
total 20-year need for all systems of $138.4 billion. The single 
largest category of need (accounting for over half of the total need) 
is installation and rehabilitation of transmission and distribution 
systems. Treatment needs constitute the second largest category of 
need, accounting for over \1/4\ of total needs. Storage and source 
rehabilitation and development constitute the remaining major 
categories of needs. Thus, systems seeking financial assistance for 
installation of arsenic treatment are competing for resources with 
systems seeking assistance for compliance with other rules and with 
systems seeking resources for basic infrastructure repair and 
replacement. In seeking to meet these numerous and competing needs, the 
Agency recognizes the importance of priority setting for financial 
assistance programs. Systems having the financial capability to secure 
funding through the capital markets should do so, leaving the Federal 
financial assistance programs to assist the truly needy systems. Since 
the demand for assistance will likely outstrip the supply of 
assistance, States may wish to consider exemptions, which will provide 
additional time for systems to secure financial assistance.

M. What is the Effective Date and Compliance Date for the Rule?

    In the proposed rule, EPA made a finding that all small systems 
(i.e., systems serving 10,000 people or less) would be granted a 2-year 
capital improvement extension which extends the MCL effective date for 
purposes of compliance with the new MCL to January 23, 2006. EPA 
proposed the 2-year capital improvement extension for small systems 
because of the time required for systems to plan, finance, design and 
construct new treatment systems.
    Large systems were not provided this additional time because of the 
greater resources these systems have to perform

[[Page 6993]]

capital improvements in a timely manner. However, upon consideration of 
information submitted by commenters, EPA has determined that large 
systems will also require an additional 2 years to complete the capital 
improvements necessary to comply with the arsenic MCL. While large 
systems (i.e., systems serving more than 10,000 people) do have greater 
resources to implement capital improvements, (e.g., engineering and 
construction management staff to manage the projects), these systems 
generally also have more entry points to the distribution system that 
will require treatment.
    A number of treatment technologies are listed as BAT for the 
proposed rule: ion exchange, activated alumina, reverse osmosis, 
modified coagulation/filtration, modified lime softening and 
electrodialysis reversal. There are also several emerging technologies 
for arsenic removal, such as nanofiltration and granular ferric 
hydroxide. To ensure cost effective compliance with the arsenic MCL, 
systems will need to evaluate their treatment technology options as a 
first step. This planning step may include pilot studies with potential 
treatment systems, or it may be limited to an evaluation of the raw 
water characteristics. Systems choosing to conduct pilot testing may 
take a year or more to contract with vendors and to perform pilot 
testing.
    Once the planning step is completed systems must design and 
construct the treatment systems. Design and permitting of the treatment 
systems can take an additional year, and construction of the treatment 
system can take another year. Because systems will also need time to: 
obtain funding, obtain local government approval of the project, or 
acquire the land necessary to construct these technologies, it is 
likely that most large systems will need additional time beyond the 
three-year effective date for compliance with the new MCL that EPA 
proposed.
    Based upon these considerations, EPA determined, in accordance with 
section 1412(b)(10) of SDWA, that the compliance date for the new 
arsenic MCL, regardless of system size, will be 5 years from the date 
of promulgation of the standard. See section I.H. for more information 
regarding variance and exemptions.

N. How Were Stakeholders Involved in the Development of This Rule?

    EPA met extensively with a broad range of groups during the 
development of the arsenic proposal, both at EPA-sponsored meetings and 
at other organizations' meetings. The Federal Register published 
notices about EPA's arsenic meetings, and we made conference call lines 
available for those who chose not to attend in person. In addition, EPA 
notified people about regulatory actions via the three Federal Register 
notices (proposal, notice of data availability, and correction notice), 
by mail and e-mail. Over 600 people asked to be on the mailing list 
during the regulatory development period.
    EPA held arsenic stakeholders meetings September 11-12, 1997 in 
Washington, DC; February 25, 1998 in San Antonio, Texas; May 5, 1998 in 
Monterey, California; June 2-3, 1999 in Washington, DC; and August 9, 
2000 in Reno, Nevada. For each of these meetings we invited 
representatives of States, tribal groups, associations, utilities and 
environmental groups. The docket for the proposed rule (W-99-16) 
contains the meeting discussion papers, agendas, participants lists, 
presentation materials, and executive meeting summaries. All the 
meeting materials, except the presentations and attendance list, are 
also available on EPA's arsenic in drinking water web page, 
www.epa.gov/safewater/arsenic.html.
    EPA also presented sessions on drinking water regulations 
(including arsenic) at the National Indian Health Board Annual 
Conference in Anchorage, Alaska in September 1998. The Inter-tribal 
Council of Arizona hosted a consultation for EPA with Tribes February 
24-25, 1999 in Las Vegas, NV at which an overview of the proposed 
arsenic regulation was presented. EPA also conducted a series of 
workshops at the Annual Conference of the National Tribal Environmental 
Council May 18-20, 1999 in Eureka, California. The Council distributed 
materials and gathered comments on EPA's drinking water regulations 
from all recognized Tribal governments.
    In addition to the general stakeholder meetings, EPA also had 
targeted meetings with States' representatives. In May 1999, State 
regulatory representatives from California, Nevada, Michigan, Illinois, 
Texas, Indiana, New Mexico, and Louisiana joined EPA in a discussion on 
the development of the cost of compliance decision tree. In August 
1999, State regulatory representatives from Illinois, Indiana, New 
Mexico, and Texas joined EPA workgroup members in a discussion of the 
NRC study use, review of the occurrence work, treatment technology 
update, and regulatory changes. The interaction from these meetings 
with State colleagues improved the regulatory language and the 
preamble.
    In May 2000, EPA presented a summary of the rule to the National 
Governors' Association. In May 2000, EPA held a dialogue in Washington, 
DC with State officials and the associations that represent elected 
officials. Presentations on arsenic and other drinking water rules 
under development were given to representatives of the National 
Association of Towns and Townships, National Governors' Association, 
National Association of Counties, National League of Cities, 
Association of State Drinking Water Administrators, Environmental 
Council of the States, Florida Department of Environmental Protection, 
Drinking Water Section, Association of State and Territorial Health 
Officials, and the International City/County Management. The purpose of 
the dialogue was to consult on the expected compliance and 
implementation costs of these rules for State, county, and local 
governments and gain a better understanding of the views of 
representatives of State, county, and local governments and their 
elected officials. The meeting materials are in the docket for the 
proposed rule.
    In addition to the various special meetings and discussions 
mentioned previously, EPA representatives delivered arsenic regulatory 
development presentations at a variety of meetings held by other 
organizations. These included the American Water Works Association 
(AWWA) Inorganic Contaminants Meetings in February, 1998 in San 
Antonio, TX and in February, 2000 in Albuquerque, NM; meetings of the 
Association of State Drinking Water Administrators (ASDWA) in February 
and October 1998, March and October 1999, and in October 2000; meetings 
of the Association of Metropolitan Water Agencies (AMWA) in January and 
March 1998; and a meeting of the Association of California Water 
Agencies in March 1998. EPA also gave several technical presentations 
and regulatory updates at the AWWA annual meetings as well as at the 
AWWA Water Quality and Technology Conferences in 1998, 1999, and 2000. 
EPA participated in the Society of Toxicology arsenic workshop in 
Philadelphia, PA in March 2000. Finally, EPA co-sponsored and 
participated in the four International Conferences on Arsenic Exposure 
and Health Effects in July 1993, June 1995, July 1998, and June 2000.
    After the proposal was published in the Federal Register, EPA 
notified all persons on its electronic mailing list for the arsenic 
rule of its availability and sent information. The Regulatory Impact 
Analysis went on the arsenic web page a week after the proposal 
publication. Similarly, EPA also notified the individuals and 
organizations on this

[[Page 6994]]

mailing list about the NODA and the correction notice.

II. Statutory Authority

    Section 1401 of SDWA requires a ``primary drinking water 
regulation'' to specify a MCL if it is economically and technically 
feasible to measure the contaminant and to include testing procedures 
to insure compliance with the MCL and proper operation and maintenance. 
An NPDWR that establishes an MCL also lists the technologies that are 
feasible to meet the MCL, but systems are not required to use the 
listed technologies (section 1412(b)(3)(E)(i)). As a result of the 1996 
amendments to SDWA, when issuing a NPDWR, EPA must also list affordable 
technologies that achieve compliance with the MCL or treatment 
technique for three categories of small systems: those serving 10,000 
to 3301 persons, 3300 to 501 persons, and 500 to 25 persons. EPA can 
list modular (packaged) and POE and POU treatment units for the three 
small system sizes, as long as the units are maintained by the public 
water system or its contractors. Home units must contain mechanical 
warnings to notify customers of problems (section 1412(b)(4)(E)(ii)).
    In section 1412(b)(12)(A) of SDWA, as amended August 6, 1996, 
Congress directed EPA to propose a national primary drinking water 
regulation for arsenic by January 1, 2000 and issue the final 
regulation by January 1, 2001. At the same time, Congress directed EPA 
to develop a research plan by February 2, 1997 to reduce the 
uncertainty in assessing health risks from low levels of arsenic and 
conduct the research in consultation with the NAS, other Federal 
agencies, and interested public and private entities. The amendments 
allowed EPA to enter into cooperative agreements for research. On 
October 27, 2000, Public Law 106-377, the bill which included Fiscal 
Year 2001 appropriations for EPA, amended the statutory deadline to 
direct EPA to promulgate a final arsenic standard by no later than June 
22, 2001.
    Section 1412(a)(3) requires EPA to propose an MCLG simultaneously 
with the NPDWR. The MCLG is defined in section 1412(b)(4)(A) as ``the 
level at which no known or anticipated adverse effects on the health of 
persons occur and which allows an adequate margin of safety.'' Section 
1412(b)(4)(B) specifies that each NPDWR will specify an MCL as close to 
the MCLG as is feasible, with two exceptions added in the 1996 
amendments. First, the Administrator may establish an MCL at a level 
other than the feasible level if the treatment to meet the feasible MCL 
would increase the risk from other contaminants or the technology would 
interfere with the treatment of other contaminants (section 
1412(b)(5)). Second, if benefits at the feasible level would not 
justify the costs, EPA may propose and promulgate an MCL ``that 
maximizes health risk reduction benefits at a cost that is justified by 
the benefits'' (section 1412(b)(6)).
    When proposing an MCL, EPA must publish, and seek public comment 
on, the health risk reduction and cost analyses (HRRCA) of each 
alternative maximum contaminant level considered (section 
1412(b)(3)(C)(i)). This includes the quantifiable and nonquantifiable 
benefits from reductions in health risk, including those from removing 
co-occurring contaminants (not counting benefits resulting from 
compliance with other proposed or final regulations), costs of 
compliance (not counting costs resulting from other regulations), any 
increased health risks (including those from co-occurring contaminants) 
that may result from compliance, incremental costs and benefits of each 
alternative MCL considered, and the effects on sensitive subpopulations 
(e.g., infants, children, pregnant women, elderly, seriously ill, or 
other groups at greater risk). EPA must analyze the quality and extent 
of the information, the uncertainties in the analysis, and the degree 
and nature of the risk. As required by the statute, EPA issued a HRRCA 
for arsenic (EPA, 2000i) as section XIII of the June 22, 2000 arsenic 
proposal (65 FR 38888 at 38957).
    The 1996 amendments also require EPA to base its action on the best 
available, peer-reviewed science and supporting studies and to present 
health effects information to the public in an understandable fashion. 
To meet this obligation, EPA must specify, among other things,

peer-reviewed studies known to the Administrator that support, are 
directly relevant to, or fail to support any estimate of public 
health effects and the methodology used to reconcile inconsistencies 
in the scientific data (section1412(b)(3)(B)(v)).

    Section 1413(a)(1) allows EPA to grant States primary enforcement 
responsibility (primacy) for NPDWRs when EPA has determined that the 
State has adopted regulations that are no less stringent than EPA's. 
States must adopt comparable regulations within two years of EPA's 
promulgation of the final rule, unless a two-year extension is granted. 
State primacy also requires, among other things, adequate enforcement 
(including monitoring and inspections) and reporting. EPA must approve 
or deny State applications within 90 days of submission (section 
1413(b)(2)). In some cases, a State submitting revisions to adopt an 
NPDWR has primacy enforcement authority for the new regulation while 
EPA action on the revision is pending (section 1413(c)). Section 
1451(a) allows EPA to grant primacy enforcement responsibility to 
Federally recognized Indian Tribes, providing grant and contract 
assistance, using the procedures applied to States.

III. Rationales for Regulatory Decisions

A. What Is the MCLG?

    The proposed rule suggested that an MCLG of zero be established for 
arsenic in view of the fact that we are currently unable to specify a 
safe threshold level due to uncertainty about the mode of action for 
arsenic. Today's rule establishes a final MCLG for arsenic of zero. 
After full consideration of public comments, EPA continues to believe 
that the most scientifically valid approach, given the lack of critical 
data, is to use the linear approach to assessing the mode of action. 
This approach results in an MCLG of zero. In the proposal and the NODA, 
EPA noted that the available data point to several potential 
carcinogenic modes of action for arsenic (EPA also requested additional 
data on the mode of action). However, which mode(s) of action is 
operative is unknown. For this reason, while the Agency recognizes that 
the dose-response relationship may be sublinear, the data do not 
provide any basis upon which EPA could reasonably construct this 
relationship. Thus, EPA has no basis upon which to depart from its 
assumption of linearity. The NRC report noted that available data that 
could help determine the shape of the dose-response curve are 
inconclusive and do not meet EPA's stated criteria for departure from 
the default assumption of linearity (NRC, 1999). See section III.D.1 
for a thorough discussion of the dose-response assessment.
    Because the postulated mode of action for arsenic cannot 
specifically be described and the key events are unknown, the Agency 
lacks sufficient available, peer-reviewed information to estimate 
quantitatively a non-linear mode of action. The Agency has thus decided 
not to depart from the assumption of linearity in selecting an MCLG of 
zero.

B. What Is the Feasible Level?

1. Analytical Measurement Feasibility
    In the development of a drinking water regulation, EPA derives a 
practical quantitation limit (PQL) to estimate or evaluate the minimum,

[[Page 6995]]

reliable quantitation level (concentration) that most laboratories can 
be expected to meet during day-to-day operations. The PQL accounts for 
the limits of current measurement technologies and the laboratories 
that use the methods written around these analytical technologies. The 
PQL was defined in a November 13, 1985 rule (50 FR 46906, EPA, 1985b) 
as ``the lowest concentration of an analyte that can be reliably 
measured within specified limits of precision and accuracy during 
routine laboratory operating conditions.'' A PQL is determined either 
through use of interlaboratory studies or, in absence of sufficient 
studies, through the use of a multiplier of 5 to 10 times the method 
detection limit (MDL). Interlaboratory data are obtained from water 
supply (WS) studies that are conducted by EPA to certify drinking water 
laboratories. The WS studies require a candidate laboratory to measure 
the concentration of the target analyte within specified limits (e.g., 
30%) of the amount spiked into a PE (now called PT) 
challenge sample. Using graphical or linear regression analysis of the 
WS data, the Agency sets a PQL at a concentration where at least 75% of 
experienced laboratories (generally EPA and State laboratories) could 
perform within this acceptable limit for accuracy, e.g., 
30%.
    As discussed in the June 22, 2000 proposed rule for arsenic, the 
Agency determined that the PQL (i.e., the feasible level of 
measurement) for arsenic in drinking water is 0.003 mg/L with an 
acceptance limit of 30%. The derivation of the PQL for 
arsenic is consistent with the process used to determine PQLs for other 
metal contaminants regulated under SDWA and takes into consideration 
the recommendations from EPA's SAB (EPA, 1995). Using acceptance limits 
of 30% and linear regression analysis of six recent WS 
studies, EPA derived a PQL of 0.00258 mg/L for arsenic, which was 
rounded to 0.003 mg/L at the 30%. While the PQL represents 
a relatively stringent target for laboratory performance, based on the 
WS data used to derive the PQL for arsenic, the Agency believes most 
laboratories (using appropriate quality assurance and quality control 
procedures) can achieve this level on a routine basis.
2. Treatment Feasibility
    EPA has determined that 3 g/L is technologically feasible 
for large systems based on peer-reviewed treatment information. EPA has 
listed seven BATs for arsenic in the final rule. They are: ion exchange 
when sulfate 50 mg/L, activated alumina, reverse osmosis, 
modified coagulation/filtration, modified lime softening at pH >10.5, 
electrodialysis reversal, and oxidation/filtration when the iron to 
arsenic ratio is at least 20:1. Bench, pilot and full-scale data were 
examined to determine the capabilities of the treatment processes. The 
treatment performance data are summarized in ``Technologies and Costs 
for the Removal of Arsenic from Drinking Water'' (EPA, 2000t).

C. How Did EPA Revise its National Occurrence Estimates?

1. Summary of Occurrence Data and Methodology
    Our data and methodology for estimating arsenic occurrence are 
substantially the same as in the proposed rule (65 FR 38888 at 38903; 
EPA, 2000i). The data and methodology are described in detail in (EPA, 
2000r). Following is a summary of our method. All of the elements of 
this summary are the same as in the proposed rule, except where noted.
    Our occurrence database consists of arsenic compliance monitoring 
samples of finished drinking water, submitted voluntarily by drinking 
water agencies in 25 States. The 25 States are distributed throughout 
the U.S., with at least one located in each of the seven geographic 
regions that we used in our analysis (65 FR 38888 at 38906; EPA, 2000i; 
EPA, 2000r). In some States we used data only from a subset of years in 
which detection limits were lowest. For each PWS in our database, we 
estimated the mean arsenic concentration over time in finished water, 
by first ``filling in'' non-detected concentrations, using one of two 
statistical methods (EPA, 2000r), then averaging the detected and 
filled-in observations from that system. Next, we collected the system 
mean estimates into State distributions, then merged the State 
distributions into regional and then national distributions. In 
combining the regional distributions into a national distribution, we 
weighted each region by the total number of systems in the region, not 
just the number of systems in the States in our database. This 
procedure has the same effect as assigning the regional distributions 
to the 25 States for which we have no observations in our database.
    In addition to the distributions of system means, we estimated 
nationwide intra-system coefficients of variation (ISCV). For a given 
water system, the ISCV quantifies the variation of mean arsenic levels 
at the system's entry points to the distribution system (i.e., sampling 
points of individual wells and treatment points) around the overall 
system mean. We estimated a separate ISCV for each ground water (gw) 
CWS, surface water (sw) CWS, and, unlike in the proposed rule, ground 
water NTNCWS. Each of these ISCVs is assumed to be constant throughout 
the U.S.
2. Corrections and Additions to the Data
    Some public commenters asked whether our data might have errors in 
the classification of water samples as treated or untreated. If that 
were the case, then including untreated samples in our database could 
cause us to overestimate occurrence in finished water. In order to 
determine whether and to what extent these problems exist, we solicited 
additional data sets from drinking water agencies in six States 
(Alabama, California, Illinois, New Mexico, North Carolina, and Texas) 
from whom we already had data in our draft data set. All six States 
responded to our request by submitting additional data, including 
additional identifiers of untreated observations, as well as some new 
observations not contained in our draft data base. In California, once 
the newly identified untreated observations were removed from the data 
set, the number of surface water observations decreased from 2,488 in 
the draft data set to 1,280 in the final data set. For ground water, on 
the other hand, the number of samples in California increased from 
5,622 to 9,494. The increase resulted in part from the additional data, 
and in part because we changed our methodology, as we describe below, 
to include samples from both treated and untreated ground water in our 
ground water estimates. Changes in the other five States were of 
smaller size.
    We also updated our data set from Utah. The latest data from Utah 
include more observations and covers the years 1980 to 1999. The total 
number of observations from Utah in our data set increased from 2,447 
to 4,684.
    Table III.C-1 compares the number of observations, systems, and 
States in our database, by system type and source water type, in the 
proposed and final rules. Note that our complete database is larger 
than shown in Table III.C-1, but in some States we excluded data from 
some years in which analytical detection limits were highest. Table 
III.C-1 counts only the data from the years that we used to estimate 
occurrence.

[[Page 6996]]



                                    Table III.C-1.--Summary of Occurrence Databases for the Proposed and Final Rules
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Proposed rule                          Final rule
                                                                             ---------------------------------------------------------------------------
                 System type                           Source water                # of          # of       # of         # of          # of       # of
                                                                               observations    systems     States    observations    systems     States
--------------------------------------------------------------------------------------------------------------------------------------------------------
CWS.........................................  GW............................          44,502     15,640         25          53,307     15,931         25
CWS.........................................  SW............................          15,892      2,360         25          16,212      2,228         25
NTNCWS......................................  GW............................         * 6,420    * 4,662       * 18           7,045      4,382         17
NTNCWS......................................  SW............................           * 420      * 150       * 14           * 409      * 118       * 15
All.........................................  All...........................          67,234     22,812         25          76,973     22,659        25
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Data not used in estimating occurrence.

    We also updated our baseline inventory of the public water systems 
in the U.S. and the populations they serve, by type of system, type of 
source water, and State. We use this inventory to estimate the numbers 
of systems and people affected by different MCL options, by multiplying 
the number of people or systems in a given category by the estimated 
fraction of systems in that category with mean arsenic greater than the 
levels of interest. In the proposed rule, the occurrence and regulatory 
impact analyses used different sets of baseline estimates: occurrence 
took baseline estimates from EPA's 4th quarter 1997 Safe Drinking Water 
Information System (SDWIS) database, while the proposal's regulatory 
impact analysis (RIA) used 4th quarter 1998 SDWIS. The result, as some 
public commenters pointed out, was that the proposed rule contained two 
inconsistent sets of estimates of the numbers of people and systems 
affected by different MCL options (65 FR 38888; EPA, 2000i, Table V-3; 
EPA, 2000h, Exhibit 4-11). The two estimates of total numbers of 
systems affected at various MCLs differed by up to 27%. We corrected 
this inconsistency by adopting, with one modification, the baseline 
inventory in EPA's Drinking Water Baseline Handbook (EPA, 2000b) 
throughout this preamble and all supporting documents for the final 
rule. The inventory in the Baseline Handbook is taken from EPA's 4th 
quarter 1998 SDWIS database, or the same that was used in the proposed 
RIA. The only modification we made to the inventory was in Alaska where 
the Baseline Handbook lists zero NTNCWS and zero population served by 
NTNCWS. Following public comment from the Alaska Department of 
Environmental Conservation, we corrected the inventory of NTNCWS in 
Alaska. The Baseline Handbook and corrected Alaska inventories are 
shown in Table III.C-2.

                     Table III.C-2.--Alaska PWS Inventories: Baseline Handbook and Corrected
----------------------------------------------------------------------------------------------------------------
                                                         Baseline handbook                   Corrected
                                                 ---------------------------------------------------------------
          System type             Source water                      Population                      Population
                                                  No. of systems      served      No. of systems      served
----------------------------------------------------------------------------------------------------------------
CWS...........................  GW..............             508         227,874             344         175,367
CWS...........................  SW..............             160         317,155             121         260,792
NTNCWS........................  GW..............               0               0             161          51,909
NTNCWS........................  SW..............               0               0              35          56,013
All...........................  All.............             668         545,029             661         544,081
----------------------------------------------------------------------------------------------------------------

    The revised estimates of numbers of systems affected at different 
arsenic concentrations are shown in Table III.C-6. Since the proposed 
and final Economic Analysis use the same set of baseline estimates 
(except for the small correction in Alaska), changes in Table III.C-6 
compared to the proposed RIA (EPA, 2000h, Exhibit 4-11) are due to 
changes in the occurrence estimates in Table III.C-3, which follows. 
Changes in Table III.C-6 compared to the proposed occurrence analysis 
(65 FR 38888; EPA, 2000i, Table V-3) are due to changes in occurrence 
estimates and also correction of the baseline.
3. Changes to the Methodology
    In September 1999, EPA sponsored a peer review of our occurrence 
data and methodology by three independent experts in geochemistry and 
statistics. In response to that review and public comments, we have 
made minor revisions to our methodology for estimating occurrence in 
two ways since the proposed rule.
    First, we now estimate the occurrence distribution for ground water 
NTNCWSs separately from CWSs. In the proposed rule, we used the CWSs 
distribution as a surrogate for NTNCWSs, for both ground and surface 
water systems. We now estimate occurrence in ground water NTNCWSs 
separately, using the same method as for CWSs, as described previously. 
For ground water NTNCWSs we have data from 17 States, compared to 25 
States for CWSs, so there are on average fewer States with data in each 
region. Moreover we have no data about NTNCWSs from any States in the 
Southeast region (Alabama, Florida, Georgia, Mississippi, and 
Tennessee). We therefore used the occurrence distribution for ground 
water CWSs as a surrogate for ground water NTNCWSs in the Southeast. 
The revised occurrence estimates for ground water NTNCWSs are shown in 
Table III.C-3.
    We still do not estimate a separate occurrence distribution for 
surface water NTNCWSs. For surface water NTNCWSs, we did not believe 
that the 118 systems for which data were provided for NTNCWSs formed as 
strong a basis for estimating occurrence as the much larger CWS surface 
water data base, especially in the concentration range of interest. In 
addition, there is less reason to believe that surface water NTNCWSs 
will differ from surface water CWSs. We thus believe the surface water 
CWS estimates provide the soundest basis for estimating impacts given 
the types of data available.
    Second, we have improved our method for estimating intra-system

[[Page 6997]]

variability. In the proposed rule, we estimated the ISCV by measuring 
the total amount of variability of arsenic concentrations around the 
system mean within each system. The problem with that approach is that 
it fails to distinguish between-source variability (variability of 
sampling-point means around the system mean) from within-source 
variability (variability of observations at each sampling point around 
the sampling-point mean). Within-source variability includes variations 
in concentrations through time at a source, and analytical variability 
caused by imprecision of the analytical methods used to measure arsenic 
in water samples. The ISCV is intended to describe only between-source 
variability within a system. Following the recommendations of the peer 
review, we corrected our model of intra-system variation to include 
separate terms for between-source and within-source variability. As a 
result, our estimates of the ISCVs decreased, since we separate out the 
within-source variability. The revised ISCV estimates are shown in 
Table III.C-7.
    A third change to our methodology is that, for ground water 
systems, we now include observations on both treated and untreated 
ground water in our analysis. With the exception of iron removal 
technologies, most treatment in ground water systems has little effect 
on arsenic, so one might expect arsenic concentrations to be similar in 
treated and untreated samples. This turns out to be the case in our 
data: estimates that included untreated samples were either slightly 
higher or lower than estimates with only treated samples. We therefore 
decided to include both treated and untreated samples in our ground 
water occurrence estimates. For surface water estimates, we still use 
only samples from treated water.
4. Revised Occurrence Results
    Table III.C-3 shows our revised estimates of the national 
distribution of arsenic occurrence, by system type and source water 
type. The distributions are stated in terms of ``exceedance 
probabilities,'' that is, the fraction of systems with mean arsenic 
equal to or greater than the given concentration, in finished water. 
The ``weighted point estimate'' is the combination of State 
distributions into a national distribution, as described previously. We 
consider the weighted point estimate to be our best estimate. The 
``lognormal fit'' is the result of fitting a lognormal distribution to 
the weighted point estimates. The lognormal fit is an approximation to 
the weighted point estimate, which we use in our cost and benefit 
analyses (sections III.E and III.F). The lognormal approximation 
simplifies the simulation studies that we use to derive costs and 
benefits, by allowing each distribution to be summarized in terms of 
only two parameters. Table III.C-4 lists the parameters of the fitted 
lognormal distributions.

                      Table III.C-3.--National Occurrence Exceedance Probability Estimates
----------------------------------------------------------------------------------------------------------------
                                  Percent of systems with mean finished arsenic exceeding concentrations (g/L) of:
                                 -------------------------------------------------------------------------------
                                         3               5              10              20              50
----------------------------------------------------------------------------------------------------------------
                                                Ground Water CWS
----------------------------------------------------------------------------------------------------------------
Weighted point estimate.........            19.9            12.1             5.3             2.0            0.43
95% confidence interval \1\.....     [19.3,21.9]     [11.7,13.0]       [5.2,5.9]       [1.9,2.3]     [0.38,0.52]
Lognormal fit...................            19.7            12.0             5.3             2.0            0.43
----------------------------------------------------------------------------------------------------------------
                                                Surface Water CWS
----------------------------------------------------------------------------------------------------------------
Weighted point estimate.........             5.6             3.0            0.80            0.32            0.10
95% confidence interval \1\.....      [4.8,20.6]       [1.8,9.7]      [0.52,1.6]     [0.13,0.82]     [0.02,0.59]
Lognormal fit...................             5.6             3.0             1.1            0.37           0.067
----------------------------------------------------------------------------------------------------------------
                                               Ground Water NTNCWS
----------------------------------------------------------------------------------------------------------------
Weighted point estimate.........            24.2            15.6             5.3             2.1            0.47
95% confidence interval \1\.....
Lognormal fit...................            23.4            14.2             6.1             2.2           0.42
----------------------------------------------------------------------------------------------------------------
\1\ Brackets indicate confidence intervals which were computed for the proposed rule and have not been updated.
  No confidence intervals were computed for NTNCWS.


        Table III.C-4.--Parameters of Lognormal Distributions Fitted to National Occurrence Distributions
----------------------------------------------------------------------------------------------------------------
                  System type                             Source water             Log-mean \1\     Log-SD \2\
----------------------------------------------------------------------------------------------------------------
CWS...........................................  GW..............................           -0.25            1.58
CWS...........................................  SW..............................           -1.68            1.74
NTNCWS........................................  GW..............................            0.03           1.47
----------------------------------------------------------------------------------------------------------------
\1\ Log-mean = mean of natural logarithm of arsenic concentrations (g/L).
\2\ Log-SD = standard deviation of natural logarithm of arsenic concentrations (g/L).

    Table III.C-3 lists separate distribution estimates for ground and 
surface water CWS and for ground water NTNCWSs. As we said previously, 
we believe surface water CWSs provide a more sound basis for 
estimation.
    For CWSs, the estimates in Table III.C-3 have changed only slightly 
since the proposed rule. For ground water CWSs, the largest change is 
an increase at 10 g/L from 5.3% exceedance to 5.4%. For 
surface water CWSs, the largest change is a decrease at 3 g/L 
from 6.0% in the proposed rule to 5.6% in Table III.C-3. This decrease 
is as expected, since, as we explained previously, our revised database 
excludes some observations on untreated water that were included in the 
draft database. Our surface water

[[Page 6998]]

occurrence estimates did increase slightly at 5 g/L, however, 
as Table III.C-8 shows.
    For ground water NTNCWSs, our estimated exceedance probabilities 
increased from 19.9% to 24.2% at 3 g/L, and from 12.1% to 
15.6% at 5 g/L. The estimates at higher concentrations changed 
by at most 0.1% point. The estimates changed because we now estimate a 
separate distribution for ground water NTNCWSs, as we described 
previously.
    The confidence intervals listed in Table III.C-3 were computed for 
the proposed rule, using a computationally intensive resampling 
procedure, as described in (EPA, 2000r). Since our data set and point 
estimates have changed only minimally for the final rule, we did not 
recompute the confidence intervals.
    Table III.C-5 shows occurrence distributions in seven geographic 
regions presented in the proposal and developed by Frey and Edwards 
(1997). (The States and names of these geographic regions in Table 
III.C-5 are based directly on the authors' designations.) As in the 
proposed rule, we find concentrations to be generally highest in the 
West, and generally lowest in the Southeast and Mid-Atlantic. In 
regions where analytical reporting limits in our database were mostly 
higher than 3 g/L or 5 g/L, we did not attempt to 
estimate occurrence at the lowest concentrations. These cases are 
indicated by dashes in Table III.C-5. In some regions, we were able to 
estimate occurrence in fewer States at the lowest concentrations, and 
this sometimes led to inconsistencies in our estimates. For example, 
for New England surface water CWSs, we estimated occurrence at 3 
g/L using only Maine, and at 5 g/L using Maine, New 
Hampshire, and New Jersey. The introduction of more States at higher 
concentrations led to inconsistent estimates of 6.2% and 11.7% of New 
England surface water CWSs with arsenic exceeding 3 g/L and 5 
g/L, respectively. We did not try to resolve these 
inconsistencies at the regional level, but note that the national 
occurrence distributions, listed in Table III.C-3, are consistent.

                      Table III.C-5.--Regional Occurrence Exceedance Probability Estimates
----------------------------------------------------------------------------------------------------------------
                                                      Percent of systems with mean finished arsenic exceeding
                                                                 concentrations (g/L) of:
                                                 ---------------------------------------------------------------
                                                         3               5              10              20
----------------------------------------------------------------------------------------------------------------
                                                Ground Water CWS
----------------------------------------------------------------------------------------------------------------
Mid-Atlantic....................................           (\2\)            *0.4             0.7             0.0
Midwest.........................................            21.2            13.8             6.2             2.4
New England.....................................            21.7            20.8             7.0             2.9
North Central...................................            21.3            13.1             6.0             2.4
South Central...................................            18.6             9.7             3.6             1.1
Southeast.......................................             0.9             0.4             0.1             0.0
West............................................            31.5            25.2            12.5             5.0
----------------------------------------------------------------------------------------------------------------
                                                Surface Water CWS
----------------------------------------------------------------------------------------------------------------
Mid-Atlantic....................................           (\2\)             0.1             0.0             0.0
Midwest.........................................             3.0             1.6             0.7             0.3
New England.....................................         \1\ 6.2            11.7             1.0             0.4
North Central...................................             9.1             3.2             0.6             0.1
South Central...................................             3.8             0.9             0.2             0.1
Southeast.......................................             0.2             0.1             0.0             0.0
West............................................            12.7             8.2             3.4             1.4
----------------------------------------------------------------------------------------------------------------
                                               Ground Water NTNCWS
----------------------------------------------------------------------------------------------------------------
Mid-Atlantic....................................           (\2\)           (\2\)             1.4             0.5
Midwest.........................................            26.2            17.1             8.2             3.3
New England.....................................           (\2\)           (\2\)             2.1             0.6
North Central...................................            29.8            22.8            15.0             9.3
South Central...................................            24.0            14.4             5.9             1.9
Southeast.......................................             0.9             0.4             0.1             0.0
West............................................            34.3            21.9            10.5            4.2
----------------------------------------------------------------------------------------------------------------
\1\ Estimate is inconsistent with estimate at the next higher concentration. See text for explanation.
\2\ Means not enough data to form an estimate. See text for explanation.

    Table III.C-6 shows our estimates of the numbers of systems with 
mean finished arsenic concentrations in various ranges, by system type 
and size. As in the proposed rule, we find no evidence of any 
consistent difference in mean arsenic among systems of different sizes. 
We conclude that the occurrence distributions shown in Table III.C-3 
apply to all categories of system size. In Table III.C-6, therefore, 
the estimated numbers of systems are computed by multiplying the 
baseline inventory of all systems of the given size and type, by the 
corresponding probability of falling within the given range, computed 
from Table III.C-3 and shown in the ``% of systems'' rows. The 
estimates for surface water NTNCWSs were computed by applying the 
occurrence distribution for surface water CWSs to the baseline 
inventory of surface water NTNCWSs.

[[Page 6999]]



   Table III.C-6.--Statistical Estimates of Numbers of Systems With Average Finished Arsenic Concentrations in
                                                 Various Ranges
----------------------------------------------------------------------------------------------------------------
                                                  Number of systems with mean arsenic concentration (g/
                                                                        L) in the range of:
         System size (population served)         ---------------------------------------------------------------
                                                      >3 to 5        >5 to 10        >10 to 20          >20
----------------------------------------------------------------------------------------------------------------
                                                Ground Water CWS
----------------------------------------------------------------------------------------------------------------
25 to 500.......................................           2,272           1,980             961             584
501 to 3,300....................................             811             706             343             208
3,301 to 10,000.................................             192             167              81              49
10,001 to 50,000................................              95              83              40              24
>50,000.........................................              15              13               6               4
All.............................................           3,384           2,949           1,432             870
% of systems....................................            7.8%            6.8%            3.3%            2.0%
----------------------------------------------------------------------------------------------------------------
                                                Surface Water CWS
----------------------------------------------------------------------------------------------------------------
25 to 500.......................................              76              68              14              10
501 to 3,300....................................              92              81              17              12
3,301 to 10,000.................................              47              41               9               6
10,001 to 50,000................................              41              36               8               5
>50,000.........................................              15              13               3               2
All.............................................             270             239              51              34
% of systems....................................            2.5%            2.2%            0.5%            0.3%
----------------------------------------------------------------------------------------------------------------
                                               Ground Water NTNCWS
----------------------------------------------------------------------------------------------------------------
25 to 500.......................................           1,440           1,713             545             348
501 to 3,300....................................             230             274              87              56
3,301 to 10,000.................................               5               6               2               1
10,001 to 50,000................................               1               1               0               0
>50,000.........................................               0               0               0               0
All.............................................           1,677           1,995             635             405
% of systems....................................            8.6%           10.3%            3.3%            2.1%
----------------------------------------------------------------------------------------------------------------
                                              Surface Water NTNCWS
----------------------------------------------------------------------------------------------------------------
25 to 500.......................................              14              13               3               2
501 to 3,300....................................               5               4               1               1
3,301 to 10,000.................................               1               1               0               0
10,001 to 50,000................................               0               0               0               0
>50,000.........................................               0               0               0               0
All.............................................              20              17               4               2
% of systems....................................            2.5%            2.2%            0.5%           0.3%
----------------------------------------------------------------------------------------------------------------
Numbers do not add up to totals in some cases due to rounding.

    Our proposed and final estimates of intra-system coefficients of 
variation are shown in Table III.C-7. The revised estimates are lower, 
since, as we described previously, we now better separate out within-
source (time and analytical) variability from the variability of source 
means within a system. The ISCV estimate for ground water NTNCWSs also 
has changed because we now estimate it separately from that of ground 
water CWSs.

                     Table III.C-7.--Estimated Intra-System Coefficients of Variation (ISCV)
----------------------------------------------------------------------------------------------------------------
                                                           Proposed rule                 Final rule
                                                        --------------------------------------------------------
           System type                 Source water                                              95% confidence
                                                           ISCV (percent)     ISCV (percent)        interval
----------------------------------------------------------------------------------------------------------------
CWS..............................  GW..................               62.9               37.1        [33.1,40.8]
CWS..............................  SW..................               68.4               52.6        [31.4,69.6]
NTNCWS...........................  GW..................               62.9               25.2         [9.6,34.7]
----------------------------------------------------------------------------------------------------------------

    Table III.C-8 compares our proposed and final national occurrence 
estimates to estimates from three other studies: the National Arsenic 
Occurrence Survey (NAOS) (Frey and Edwards, 1997), National Inorganics 
and Radionuclides Survey (NIRS) (Wade Miller Associates, 1992), and 
U.S. Geological Survey (USGS) (USGS, 2000). All of the studies in Table 
III.C-8 evaluated drinking water except for USGS, which evaluated 
ambient ground water, some of which came from non-drinking water 
sources. Wade Miller used surface water estimates from the 1978 
Community Water System Survey, which we consider now to be out of date, 
so those estimates are not shown. Note that Frey and Edwards (1997) 
found significantly different occurrence distributions for small and 
large systems, so the NAOS

[[Page 7000]]

estimates are reported separately for small and large systems. The NAOS 
included samples from all 50 States, but it was a much smaller study 
(468 samples, compared to about 77,000 in our database), and it 
analyzed unfinished water samples. Frey and Edwards (1997) applied 
estimated efficiencies for the treatments known to be in place at the 
sampling locations, to predict the concentrations in finished water.

                                           Table III.C-8.--Comparison of National Arsenic Occurrence Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      % of systems with mean arsenic
                                                                                                                   exceeding concentrations (g/
                Study                       Type of water             System types          Population served                     L) of:
                                                                                                                 ---------------------------------------
                                                                                                                     2       3       5      10      20
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Ground Water Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA-proposed.........................  raw + finished.........  CWS....................  all....................    27.2    19.9    12.1     5.4     2.1
EPA-final............................  raw + finished.........  CWS....................  all....................    27.3    19.9    12.1     5.3     2.0
NAOS-small...........................  finished \1\...........  PWS....................   10,000.....    23.5      NR    12.7     5.1      NR
NAOS-large...........................  finished \1\...........  PWS....................  > 10,000...............    28.8      NR    15.4     6.7      NR
NIRS.................................  finished...............  CWS....................  all....................    17.4    11.9     6.9     2.9     1.1
USGS.................................  raw....................  PWS....................  all....................    25.0      NR    13.6     7.6    3.1
                                                                  Surface Water Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
EPA-proposed.........................  finished...............  CWS....................  all....................     9.9     6.0     2.9     0.8     0.3
EPA-final............................  finished...............  CWS....................  all....................     9.8     5.6     3.0     0.8     0.3
NAOS-small...........................  finished \1\...........  PWS....................   10,000.....     6.2      NR     1.8     0.0      NR
NAOS-large...........................  finished \1\...........  PWS....................  > 10,000...............     7.5      NR     1.3     0.6     NR
--------------------------------------------------------------------------------------------------------------------------------------------------------
NR = not reported.
\1\ Predicted from raw water, using estimated efficiency of treatment in place.

    Table III.C-8 shows that our proposed and final occurrence 
estimates are only slightly different, with the possible exception of 
surface water occurrence estimates at 3 g/L, where our 
estimate decreased from 6.0% to 5.6% exceedance for the final rule. The 
difference is explained by the identification and exclusion of samples 
of untreated water from our database for the final rule, as we 
described previously. For ground water, our estimates fall within the 
range reported in the other three studies. For surface water, our 
estimates are somewhat higher than those of the NAOS.

D. How Did EPA Revise its Risk Analysis?

1. Health Risk Analysis
    a. Toxic forms of arsenic. Humans are exposed to many forms of 
arsenic that have different toxicities. For example, the metallic form 
of arsenic (0 valence) is not absorbed from the stomach and intestines 
and does not exert adverse effects. On the other hand, a volatile 
compound such as arsine (AsH3) is toxic, but is not present 
in water or food. Moreover, the primary organic forms (arsenobetaine 
and arsenocholine) found in fish and shellfish seem to have little or 
no toxicity (Sabbioni et al., 1991). Arsenobetaine quickly passes out 
of the body in urine without being metabolized to other compounds 
(Vahter, 1994). Little is known about the various arsenic species in 
vegetables, grains, and oils (NRC, 1999). Arsenite (+3) and arsenate 
(+5) are the most prevalent toxic forms of inorganic arsenic found in 
drinking water. In general, the inorganic forms of arsenic have been 
considered to be more toxic than the organic forms. In toxicity tests, 
the inorganic forms were reported to be more toxic than the organic 
forms (NAS, 1977) and the trivalent form was more toxic than the 
pentavalent one (Szinicz and Forth, 1988).
    In animals and humans, inorganic pentavalent arsenic is converted 
to trivalent arsenic that is methylated (i.e., chemically bonded to a 
methyl group, which is a carbon atom linked to three hydrogen atoms) to 
monomethyl arsenic (MMA) and dimethyl arsinic acid (DMA), which are 
organic arsenicals. The primary route of excretion for these four forms 
of arsenic is in the urine. The organic arsenicals MMA and DMA were 
once thought to be much less toxic than inorganic arsenicals. Many 
studies reported organic arsenicals to be less reactive in tissues, to 
kill less cells, and to be more easily excreted in urine (NRC, 1999). 
However, recent work has shown that the assumption that organic forms 
that arise during the metabolism of inorganic arsenic are less toxic 
than inorganic forms may not be correct (Aposhian et al., 2000; Petrick 
et al., 2000). One reason for this was that earlier toxicity tests were 
conducted using pentavalent MMA and DMA because it was believed that 
trivalent MMA(III) and DMA(III) were too transient to be found in 
urine. Recently, MMA(III) was isolated in human urine (Aposhian et al., 
2000). Tests have demonstrated that MMA(III) is more toxic to 
hepatocytes (i.e., liver cells) that inorganic trivalent arsenic 
(Petrick et al., 2000; Styblo et al., 2000). These reports indicate 
that the metabolism of inorganic arsenic is not necessarily a 
detoxification process. As yet, it is not known which form of arsenic 
participates in the key events within cells that disrupt cell growth 
control and initiate or influence tumor formation. The SAB noted that 
``[i]t is not possible to consider contributions of different forms of 
arsenic to the overall response based on the data that are available 
today'' (EPA, 2000q).
    b. Effects of acute toxicity. Inorganic arsenic can exert toxic 
effects after acute (short-term) or chronic (long-term) exposure. From 
human acute poisoning incidents, the LD50 of arsenic has 
been estimated to range from 1 to 4 mg arsenic per kilogram (kg) of 
body weight (Vallee et al., 1960, Winship, 1984). This dose would 
correspond to a lethal dose range of 70 to 280 mg for 50% of adults 
weighing 70 kg. At nonlethal, but high acute doses, inorganic arsenic 
can cause gastroenterological effects, shock, neuritis (continuous 
pain) and vascular effects in humans (Buchanan, 1962). Such incidents 
usually occur after accidental exposures. However, sometimes high dose 
acute exposures may be self-administered. For example, inorganic 
arsenic is a component of some herbal medicines and adverse effects 
have been reported after use. In one report of 74 cases (Tay and Seah, 
1975), the primary signs were skin lesions (92%), neurological (i.e., 
nerve) involvement (51%), and

[[Page 7001]]

gastroenterological, hematological (i.e., blood) and renal (i.e., 
kidney) effects (19 to 23%). Although acute or short-term exposures to 
high doses of inorganic arsenic can cause adverse effects, such 
exposures do not occur from U.S. public water supplies in compliance 
with the current MCL of 50 g/L. EPA's drinking water 
regulation addresses the long-term, chronic effects of exposure to low 
concentrations of inorganic arsenic in drinking water.
    c. Non-cancer effects associated with arsenic. A large number of 
adverse noncarcinogenic effects has been reported in humans after 
exposure to drinking water highly contaminated with inorganic arsenic. 
The earliest and most prominent changes are in the skin, e.g., 
hyperpigmentation and keratoses (calus-like growths). Other effects 
that have been reported include alterations in gastrointestinal, 
cardiovascular, hematological (e.g., anemia), pulmonary, neurological, 
immunological and reproductive/developmental function (ATSDR, 1998).
    The most common symptoms of inorganic arsenic exposure appear on 
the skin and occur after 5-15 years of exposure equivalent to 700 
g/day for a 70 kg adult, or within 6 months to 3 years at 
exposures equivalent to 2,800 g/day for a 70 kg adult (NRC, 
1999, pg. 131). They include alterations in pigmentation and the 
development of keratoses that are localized primarily on the palms of 
the hands, the soles of the feet, and the torso. The presence of 
hyperpigmentation and keratoses on parts of the body not exposed to the 
sun is characteristic of arsenic exposure (Yeh, 1973; Tseng, 1977). The 
same alterations have been reported in patients treated with Fowler's 
solution (1% potassium arsenite; Cuzick et al., 1982), used for asthma, 
psoriasis, rheumatic fever, leukemia, fever, pain, and as a tonic (WHO, 
1981; NRC, 1999).
    Chronic exposure to inorganic arsenic is often associated with 
alterations in gastrointestinal(GI) function. For example, noncirrhotic 
hypertension is a relatively specific, but not commonly found 
manifestation in inorganic arsenic-exposed individuals and may not 
become a clinical observation until the patient demonstrates GI 
bleeding (Morris et al., 1974; Nevens et al., 1990). Physical 
examination may reveal spleen and liver enlargement, and 
histopathological examination of tissue specimens may demonstrate 
periportal fibrosis (Morris et al., 1974; Nevens et al., 1990; Guha 
Mazumder et al., 1997). There have been a few reports of cirrhosis 
after inorganic arsenic exposure, but the authors of these studies did 
not determine the subjects' alcohol consumption (NRC, 1999).
    Development of peripheral vascular disease (hardening of the 
arteries to the arms and legs, that can cause pain, numbness, tingling, 
infection, gangrene, and clots) after inorganic arsenic exposure has 
also been reported. In Taiwan, blackfoot disease (BFD), a severe 
peripheral vascular insufficiency which may result in gangrene of the 
feet and other extremities) has been the most severe manifestation of 
this effect. Tseng (1977) reported over 1,000 cases of BFD in the 
arsenic study areas of Taiwan. Less severe cases of peripheral vascular 
disease have been described in Chile (Zaldivar et al., 1974) and Mexico 
(Cebrian, 1987). In a Utah study, increased standardized mortality 
ratios (SMRs) for hypertensive heart disease were noted in both males 
and females after exposure to inorganic arsenic-contaminated drinking 
water (Lewis et al., 1999). These reports link exposure to inorganic 
arsenic effects on the cardiovascular system. Although deaths due to 
hypertensive heart disease were roughly twice as high as expected in 
both sexes, increases in death did not relate to increases in dose, 
calculated as the years of exposure times the median arsenic 
concentration. The Utah data indicate that heart disease should be 
considered in the evaluation of potential benefits of U.S. regulation. 
Vascular effects have also been reported as an effect of arsenic 
exposure in another study in the U.S. (Engel et al., 1994), in Taiwan 
(Wu et al., 1989) and in Chile (Borgono et al., 1977). The overall 
evidence indicating an association of various vascular diseases with 
arsenic exposure supports consideration of this endpoint in evaluation 
of potential noncancer health benefits of arsenic exposure reduction.
    Studies in Taiwan (Lai et al., 1994) and Bangladesh (Rahman et al., 
1998) found an increased risk of diabetes among people consuming 
arsenic-contaminated water. Two Swedish studies found an increased risk 
of mortality from diabetes among those occupationally exposed to 
arsenic (Rahman and Axelson, 1995; Rahman et al., 1998).
    Although peripheral neuropathy (numbness, muscle weakness, tremors; 
ATSDR, 1998) may be present after exposure to short-term, high doses of 
inorganic arsenic (Buchanan, 1962; Tay and Seah, 1975), there are no 
studies that definitely document this effect after exposure to levels 
of less than 50 g/L of inorganic arsenic in drinking water. 
Hindmarsh et al. (1977) and Southwick et al. (1983) have reported 
limited evidence of peripheral neuropathy in Canada and the U.S., 
respectively, but it was not reported in studies from Taiwan, Argentina 
or Chile (Hotta, 1989, as cited by NRC 1999).
    There have been a few, scattered reports in the literature that 
inorganic arsenic can affect reproduction and development in humans 
(Borzysonyi et al., 1992; Desi et al., 1992; Tabacova et al., 1994; 
Hopenhayn-Rich et al., 2000). After reviewing the available literature 
on arsenic and reproductive effects, the NRC (1999) wrote that 
``nothing conclusive can be stated from these studies.'' Regarding the 
Hopenhayn-Rich study, the majority of the SAB panel (EPA, 2000q) 
concluded that while:

it is generally reasonable to consider that children are generally 
at greater risk for a toxic response to any agent in water because 
of their greater drinking water consumption (on a unit-body weight 
basis), [the SAB does not] believe that this study demonstrates such 
a heightened sensitivity or susceptibility to arsenic.

The EPA agrees with this conclusion.
    d. Cancers associated with arsenic. Inorganic arsenic is a multi-
site human carcinogen by the drinking water route. Asian, Mexican and 
South American populations with exposures to arsenic in drinking water 
generally at or above hundreds of micrograms per liter are reported to 
have increased risks of skin, bladder, and lung cancer. The current 
evidence also suggests that the risks of liver and kidney cancer may be 
increased following exposures to inorganic forms of arsenic. The weight 
of evidence for ingested arsenic as a causal factor of carcinogenicity 
is much greater now than a decade ago, and the types of cancer 
occurring as a result of ingesting inorganic arsenic have even greater 
health implications for U.S. and other populations than the occurrence 
of skin cancer alone. (Until the late 1980s skin cancer had been the 
cancer classically associated with arsenic in drinking water.) 
Epidemiologic studies (human studies) provide direct data on arsenic 
risks from drinking water at exposure levels much closer to those of 
regulatory concern than environmental risk assessments based on animal 
toxicity studies.
    Skin Cancer. Early reports linking inorganic arsenic contamination 
of drinking water to skin cancer came from Argentina (Neubauer, 1947, 
reviewing studies published as early as 1925) and Poland (Tseng et al., 
1968). However, the first studies that observed dose-dependent effects 
of arsenic associated with skin cancer came from Taiwan (Tseng et al., 
1968; Tseng, 1977). These studies focused EPA's attention on the health 
effects of ingested arsenic.

[[Page 7002]]

Physicians administered physical examinations to the study group of 
over 40,000 residents from 37 villages, as well as to a reference group 
of 7500 residents reported to be exposed to a median level of 0 to 
0.017 mg/L arsenic (reference group). The study population was divided 
into three groups based on exposure to inorganic arsenic (0 to 0.29, 
0.30 to 0.59 and 0.60 mg of inorganic arsenic per liter (mg/
L) measured at the village level. A dose- and age-related increase of 
arsenic-induced skin cancer among the villagers was noted. No skin 
cancers were observed in the low arsenic reference areas. In both the 
EPA 1988 report on skin cancer and the 1999 NRC report, it was noted 
that grouping individuals into broad exposure groups (rather than 
grouping into village exposures) limited the usefulness of these 
studies for quantitative dose-response estimation. However, these Tseng 
reports and other corroborating studies such as those by Albores et al. 
(1979) and Cebrian et al. (1983) on drinking water exposure and 
exposures to inorganic arsenic in medicines (Cuzick et al., 1982) and 
in pesticides (Roth, 1956) led the EPA, using skin cancer as the 
endpoint, to classify inorganic arsenic as a human carcinogen (Group A) 
by the oral route (EPA, 1984).
    Internal cancers. Exposure to inorganic arsenic in drinking water 
has also been associated with the development of internal cancers. Chen 
et al. (1985) used SMRs to evaluate the association between ingested 
arsenic and cancer risk in Taiwan. (SMRs, ratios of observed to 
expected deaths from specific causes, are standardized to adjust for 
differences in the age distributions of the exposed and reference 
populations). The authors found statistically significant increased 
risks of mortality for bladder, kidney, lung, liver and colon cancers. 
A subsequent mortality study in the same area of Taiwan found 
significant dose-response relationships for deaths from bladder, 
kidney, skin, and lung cancers in both sexes and from liver and 
prostrate cancer for males. They also found increases in peripheral and 
cardiovascular diseases but not in cerebrovascular accidents (Wu et 
al., 1989). There are several corroborating reports of the increased 
risk of cancers of internal organs from ingested arsenic including two 
from South American countries. In Argentina, significantly increased 
risks of death from bladder, lung and kidney cancer were reported 
(Hopenhayn-Rich et al., 1996; 1998). In a population of approximately 
400,000 in northern Chile, Smith et al. (1998) found significantly 
increased risks of bladder and lung cancer mortality.
    There have only been a few studies of inorganic arsenic exposure 
via drinking water in the U.S., and most have not considered cancer as 
an endpoint. The best U.S. study currently available is that of Lewis 
et al. (1999) who conducted a mortality study of a population in Utah 
whose drinking water contained relatively low concentrations of 
arsenic. EPA scientists conducted an epidemiological study of 4,058 
Mormons exposed to arsenic in drinking water in seven communities in 
Millard County, Utah (Lewis et al., 1999). The 151 samples from their 
public and private drinking water sources had arsenic concentrations 
ranging from 4 to 620 g/L with seven median (mid-point in 
range) community exposure concentrations of 14 to 166
g/L. Observed causes of death in the study group (numbering 
2,203) were compared to those expected from the same causes based upon 
death rates for the general white male and female population of Utah. 
While the study population males had a significantly higher risk of 
prostate cancer mortality, females had no significant excess risk of 
cancer mortality at any site. Millard County subjects had higher 
mortality from kidney cancer, but this was not statistically 
significant. Both males and females in the study group had less risk of 
bladder, digestive system and lung cancer mortality than the general 
Utah population. The Mormon females had lower death rates from breast 
and female genital cancers than the State rate. These decreased death 
rates were not statistically significant.
    Tsai et al. (1999) estimated SMRs for 23 cancer and non-cancer 
causes of death in women and 27 causes of death in men in an area of 
Taiwan with elevated arsenic exposures. The SMRs in this study are an 
expression of the ratio between deaths that were observed in an area 
with elevated arsenic levels and those that were expected to occur, 
compared to both the mortality of populations in nearby areas without 
elevated arsenic levels and to the national population. Drinking water 
(250-1,140 g/L) and soil (5.3-11.2
mg/kg) in the Tsai et al. (1999) population study had high arsenic 
content. However, the study gives an indication of the types of health 
effects that may be associated with arsenic exposure via drinking 
water. The study reports a high mortality rate (SMR > 3) for both sexes 
from bladder, kidney, skin, lung, and nasal cavity cancers and for 
vascular disease. Females also had high mortalities for laryngeal 
cancer.
    The SMRs calculated by Tsai et al. (1999) used the single cause of 
death noted on the death certificates. Many chronic diseases, including 
some cancers, are not generally fatal. Consequently, the impact 
indicated by the SMR in this study may underestimate the total impact 
of these diseases. The causes of death reported in this study are 
consistent with what is known about the adverse effects of arsenic. 
Tsai et al. (1999) identified ``bronchitis, liver cirrhosis, 
nephropathy, intestinal cancer, rectal cancer, laryngeal cancer, and 
cerebrovascular disease'' as possibly ``related to chronic arsenic 
exposure via drinking water,'' which had not been reported before. In 
addition, people in the study area were observed to have nasal cavity 
and larynx cancers not caused by occupational exposure to inhaled 
arsenic.
    A small cohort study in Japan of persons exposed to arsenic in 
drinking water provides evidence of the association of cancer and 
arsenic among persons exposed for 5 years to 1000
g/L or more and followed for 33 years after cessation of 
exposure. The strongest association was for lung and bladder cancer, 
similar to results in studies in Taiwan and South America (Tsuda et 
al., 1995).
    Kurttio et al. (1999) conducted a case-cohort design study of 61 
bladder and 49 kidney cancer cases and 275 controls to evaluate the 
risk of these diseases with respect to arsenic drinking water 
concentrations. In this study the median exposure was 0.1 g/L, 
the maximum reported was 64 g/L, and 1% of the exposure was 
greater than 10 g/L. The authors reported that very low 
concentrations of arsenic in drinking water were significantly 
associated with bladder cancer when exposure occurred two to nine years 
prior to diagnosis. Arsenic exposure occurring greater than 10 years 
prior to diagnosis was not associated with bladder cancer risk. This 
raises a question about the significance of the finding about exposures 
two to nine years since one would expect earlier exposure to have had 
an effect given the Tsuda et al. (1995) study summarized previously.
    The two internal cancers consistently seen and best characterized 
in epidemiologic studies are those of lung and bladder. EPA considers 
the studies summarized before as confirmation of its long-standing view 
that arsenic is a known human carcinogen. This rule relies on 
assessment of lung and bladder cancers for its quantitative risk 
estimates in support of the MCL. EPA recognizes that other internal 
cancers as well as skin cancer are important.

[[Page 7003]]

Nonetheless, some issues with other cancer endpoints led to their being 
considered qualitatively rather than quantitatively. EPA has considered 
skin and liver cancer qualitatively for the following reasons: (1) The 
skin cancer endpoint is difficult to analyze because, in the U.S., it 
is considered curable; and (2) the liver cancer endpoint is likely to 
have been influenced in Taiwan by the prevalence there of viral 
hepatitis which is a factor in liver cancer.
    How does arsenic cause cancer? EPA sponsored an ``Expert Panel on 
Arsenic Carcinogenicity: Review and Workshop'' in May 1997 (EPA, 
1997e). The panel evaluated existing data to comment on arsenic's 
carcinogenic mode of action and the effect on dose-response 
extrapolations. The panel noted that arsenic compounds have not formed 
deoxyribonucleic acid (DNA) adducts (i.e., bound to DNA) nor caused 
point mutations. Thus, indications are that the mode of action does not 
involve direct reaction with DNA. Trivalent inorganic forms inhibit 
enzymes, but arsenite and arsenate do not affect DNA replication. The 
panel discussed several modes of action, concluding that arsenic 
indirectly affects DNA, inducing chromosomal changes. The panel thought 
that arsenic-induced chromosomal abnormalities could possibly come from 
errors in DNA repair and replication that affect gene expression; that 
arsenic may increase DNA hypermethylation and oxidative stress; that 
arsenic may affect cell proliferation (cell death appears to be 
nonlinear); and that arsenic may act as a co-carcinogen. Arsenite 
causes cell transformation but not mutation of cells in culture. It 
also induces gene amplification (multiple copies of DNA sequences) in a 
way that suggests interference with DNA repair or cell control instead 
of direct DNA damage.
    In terms of implications for the risk assessment, the panel noted 
that risk per unit dose estimates from human studies can be biased 
either way (i.e., reduced animal fats in the diet would underestimate 
risk). For the Taiwanese study, the ``* * * biases associated with the 
use of average doses and with the attribution of all increased risk to 
arsenic would both lead to an overestimation of risk (EPA, 1997e, page 
31).'' While health effects are most likely observed in people getting 
high doses, the effects are assigned to the average dose of the 
exposure group. Thus, risk per unit dose estimated from the average 
doses would lead to an overestimation of risk (EPA, 1997e, page 31). On 
the other hand, basing risk estimates on one or two tumor sites may 
underestimate risk as compared to summing risks for all related health 
endpoints.
    There is much research underway about the mode of action for 
arsenic. In order to understand the shape of the dose-response 
relationship in the range of exposure typical of the U.S., that is 
significantly below the range of observation of epidemiologic studies, 
one needs to identify which one or more of the possible modes of action 
is operative. If this can be elucidated, it will become possible to 
study and quantify the key events within cells that influence cell 
growth control and how they may quantitatively relate to eventual tumor 
incidence. Until then the shape of the dose-response relationship and 
whether there is any threshold cannot be known.
    f. What is the quantitative relationship between exposure and 
cancer effects that may be projected for exposures in the U.S.? The 
Agency chose to make its quantitative estimates of risk based on the 
Chen et al. (1988; 1992) and Wu et al. (1989) Taiwan studies. This 
choice was endorsed by the NRC and EPA's SAB (EPA, 2000q; NRC, 1999). 
The database from Taiwan has the following advantages: mortality data 
were drawn from a cancer registry; arsenic well water concentrations 
were measured for each of the 42 villages; there was a large, 
relatively stable study population that had life-time exposures to 
arsenic; there are limited measured data for the food intake of arsenic 
in this population; age- and dose-dependent responses with respect to 
arsenic in the drinking water were demonstrated; the collection of 
pathology data was unusually thorough; and the populations were quite 
homogeneous in terms of lifestyle.
    EPA recognizes that there are problems with the Taiwan study that 
introduce uncertainties to the risk analysis such as: the use of median 
exposure data at the village level; the low income and relatively poor 
diet of the Taiwanese study population (high levels of carbohydrates, 
low levels of protein, selenium and other essential nutrients); and 
high exposure to arsenic via food and cooking water. These are 
discussed more thoroughly in the following paragraphs. The available 
studies from Taiwan are ecological studies and have exposure 
uncertainties that are recognized. Ecological studies are problematic 
as bases for quantitative risk assessment. Errors in assigning persons 
to exposures are difficult to avoid. Moreover, all confounding factors 
that may have contributed to risk may not be adequately accounted for. 
These uncertainties have to be remembered since they lead to 
uncertainty in the quantitative dose-response relationship estimated in 
the observed range of data and in any extrapolation to estimate the 
potential risk at exposures significantly below the observed range. 
There is not a way to take all confounding factors into account 
quantitatively. (see section III.F.)
    Notwithstanding these concerns, the Taiwan epidemiological studies 
provide the basis for assessing potential risk from lower 
concentrations of inorganic arsenic in drinking water, without having 
to adjust for cross-species toxicity interpretation. Ordinarily, the 
characteristics of human carcinogens can be explored and experimentally 
defined in test animals. Dose-response can be measured, and animal 
studies may identify internal transport, metabolism, elimination, and 
subcellular events that explain the carcinogenic process. Arsenic 
presents unique problems for quantitative risk assessment because there 
is no test animal species in which to study its carcinogenicity. While 
such studies have been undertaken, it appears that test animals do not 
respond to inorganic arsenic exposure in a way that makes them useful 
as a model for human cancer assessment. Their metabolism of inorganic 
arsenic is also quantitatively different than humans.
    There are issues with the extrapolation of the dose-response from 
the observed range of exposure in Taiwan to estimate Taiwan cancer risk 
below the observed data range and application of the same risk estimate 
to U.S. populations. The following issues have been addressed:
     The Taiwan population ingested more arsenic in food and 
via cooking with contaminated water than is typical for the U.S. 
population. This is because the staples of the Taiwan diet were rice 
and sweet potatoes. Rice and sweet potatoes are high in arsenic and 
both staples absorb water upon cooking. EPA did a sensitivity analysis 
of the effect of exposure to arsenic through water used in preparing 
food in Taiwan. EPA also analyzed the effect of exposure to arsenic 
through food.
     The Taiwan data on exposure were uncertain because the 
association of individuals with contaminated wells was made by grouping 
persons in a village and assuming they had a lifetime of exposure to 
the median of the concentration of arsenic measured in the wells 
serving that village. Wells within each village had varying arsenic 
levels so that people using certain wells had much higher exposures 
than others in the same village. Not all wells serving all villages 
were measured. However, all villagers were assigned a single median

[[Page 7004]]

concentration for exposure. In addition, moves made from village to 
village were not accounted for. When villages with only one arsenic 
measurement were removed from the data set (on the theory that the 
exposure data were too uncertain), or when village means instead of 
medians were used for the exposure estimates, there was no 
statistically significant change in the estimated point of departure, 
using Model 1 of Morales et al. (2000).
     The Taiwan population was a rural population that was not 
well nourished, having deficits of selenium, possibly methionine or 
choline (methyl donors), zinc and other essential nutrients. This 
malnourishment is not typical of the U.S. population, although some 
U.S. populations may have one or another of the same deficits. The 
Taiwanese population may also have some genetic differences from the 
general U.S. population. These issues cannot be quantitatively 
accounted for. However, deficits in selenium in the diet, in 
particular, are a known risk factor for cancer and indicate possible 
overestimation of risk when the Taiwan data are applied. EPA has 
qualitatively taken this into account. (See section III.F.)
     The Utah study (Lewis et al., 1999) did not find any 
excess bladder or lung cancer risk after exposure to arsenic at 
concentrations of 14 to 166 g/L. An important feature of the 
study is that it estimated excess risk by comparing cancer rates among 
the study population, in Millard County, Utah to background rates in 
all of Utah. But the cancer rates observed among the study population, 
even those who consumed the highest levels of arsenic, were lower, in 
many cases significantly lower, than in all of Utah. This is evidence 
that there are important differences between the study and comparison 
populations besides their consumption of arsenic. One such difference 
is that Millard County is mostly rural, while Utah as a whole contains 
some large urban populations. Another difference is that the subjects 
of the Utah study were all members of the Church of Jesus Christ of 
Latter Day Saints, who for religious reasons have relatively low rates 
of tobacco and alcohol use. For these reasons, the Agency believes that 
the comparison of the study population to all of Utah is not 
appropriate for estimating excess risks. An alternative method of 
analysis is to compare cancer rates only among people within the study 
population who had high and low exposures. The Agency performed such an 
analysis on the Utah data, using the statistical technique of Cox 
proportional hazard regression (US EPA, 2000x; Cox and Oakes, 1984). 
The results showed no detectable increased risk of lung or bladder 
cancers due to arsenic, even among subjects exposed to more than 100 
g/L on average. On the other hand, the excess risk could also 
not be distinguished statistically from the levels predicted by model 1 
of Morales et al. (2000). What these results show is that the Utah 
study is not powerful enough to estimate excess risks with enough 
precision to be useful for the Agency's arsenic risk analysis. 
Furthermore, the SAB noted that ``(a)lthough the data provided in 
published results of the Lewis, et al., 1999 study imply that there was 
no excess bladder or lung cancer in this population, the data are not 
in a form that allows dose-response to be assessed dependably'' (EPA, 
2000q). The indications of Lewis et al. study have been taken into 
account in the judgments of the impact of scientific uncertainties on 
the final MCL.
    g. Is it appropriate to assume linearity for the dose-response 
assessment for arsenic at low doses given that arsenic is not directly 
reactive with DNA? Independent scientific panels (EPA, 2000q; NRC, 
1999; EPA, 1997e; EPA, 1988) who have considered the Taiwan study have 
raised the caution that using the Taiwan study to estimate U.S. risk at 
lower levels may result in an overly conservative estimation of U.S. 
risk. The independent panels have each said that below the observed 
range of the high level of contamination in Taiwan the shape of the 
dose-response relationship may prove to be sublinear when there is 
adequate data to characterize the mode of action. If so, an assumption 
that the effects seen per dose increment remain the same from high to 
low levels of dose may overstate the U.S. risk. In evaluating the 
benefits of alternative MCLs, EPA weighed both the qualitative and 
quantitative uncertainties about risk magnitude (see section III.F.)
    The use of a linear procedure to extrapolate from a higher, 
observed data range to a lower range beyond observation is a science 
policy approach that has been in use by Federal agencies for four 
decades. Its basis is both science and policy. The policy objectives 
are to avoid underestimating risk in order to protect public health and 
be consistent and clear across risk assessments. The science components 
include its applicability to generally available data sets (animal 
tests and human studies) and its basis in the fact that cancer is a 
consequence of genetic changes coupled with the assumption that direct 
reaction with DNA is a basic mode of action for chemicals causing 
important genetic changes (Cogliano et al., eds., 1999).
    The linear approach is intended to identify a level of risk that is 
an upper limit on what the risk might be. There are two biological 
situations in which the linear approach can be a particularly uncertain 
estimate of risk. One is when the metabolism and toxicokinetics of the 
agent being assessed cause a nonlinear relationship between the dose of 
the active form and the dose of the applied form of the agent. If this 
is not quantitatively dealt with in the dose part of the dose-response 
estimation, the linear extrapolation will have added uncertainties. In 
the case of arsenic, it is known that metabolism and toxicokinetics are 
complex, but the active form(s) is not known. The resulting 
complexities of estimating dose cannot, therefore, be accounted for in 
dose-response modeling.
    The other situation is when the mode of action of the agent is 
indirect; that is, when there is not a one-to-one reaction between the 
active form of the agent and DNA, but, instead, the active form affects 
other cell components or processes that, in turn, causes genetic 
change. In such cases, the rates of these secondary processes are 
limiting, not the dose of the active form. With few exceptions, the 
rates of these secondary processes are thought not to be a linear 
function of applied dose. In the case of arsenic, it is known that 
arsenic does cause genetic changes in short-term tests, but these are 
indirect genetic changes (not one-to-one reactions between arsenic and 
DNA).
    If there are both complex toxicokinetics and secondary effects, the 
upper-limit risk estimate from the linear approach provides may be 
overly conservative. However, there simply are not sufficient data to 
quantify the effect of these two features of arsenic on risk. While 
some commenters assert that the Agency can simply use models that have 
sublinear structures to address the issue of secondary nature of 
effects, the Agency does not agree. There are no data on the effects of 
arsenic that may be precursors to cancer. Without such biological data, 
the exercise of blindly applying models has no anchor, in EPA's 
judgment. Such modeled extrapolations could take numerous shapes and 
there is no way to decide how shallow or steep the curve would be or 
where on the dose gradient the zero risk level might be, given the 
hundreds of possibilities. There are also certain modes of action that 
do not involve DNA reactivity, but are thought to be linear in dose 
response, such as effects on growth-control signals within cells. Since 
we do not know what the mode of action of arsenic is, we cannot in fact 
rule out linearity. Therefore, in

[[Page 7005]]

accordance with the 1986 cancer guidelines, and subsequent guidance 
discussed later, the Agency cannot reasonably use anything other than a 
linear mode of action to estimate the upper bound of risk associated 
with arsenic exposure. Nevertheless, the uncertainties about both of 
these facets (the toxicokinetics and secondary effects) of risk 
estimation have been taken into account qualitatively in the Agency's 
final decision as a perspective on the linear dose-response estimation 
(see section III.F.).
    The Agency considered mode-of-action information as a basis for 
departing from the assumption of linearity and in the process, 
developed a framework for judging the adequacy of mode of action data 
(EPA, 1996a). This framework has been reviewed and supported by the SAB 
(EPA, 1997f; EPA, 1999g). The framework was applied to the assessment 
of chloroform (EPA, 2000d).
    In order to decide whether a particular mode of action is operative 
for an agent, the database on mode of action must be rich and able to 
both describe the sequence of key events in the putative mode of action 
and demonstrate it experimentally. The elements of the framework 
analysis include:
     Summary description of postulated mode of action (the 
postulated sequence of cellular/physiological events leading to cancer 
must be described.)
     Identification of key events (the specific events that are 
key to carcinogenesis must described in order to be experimentally 
examined.)
     Strength, consistency, specificity of association (the 
experimental observation of the key events and their relationship to 
tumor development must be described.)
     Dose-response relationship (the dose-response relationship 
between the key events and tumor incidence must be described and 
evaluated.)
     Temporal relationship (the key events must be shown to 
precede tumor development.)
     Biological plausibility and coherence (the postulated mode 
of action and the data must be in accord with general, accepted 
scientific evidence about the causes of cancer.)
     Other modes of action (alternative modes of action that 
are suggested must be examined and their contribution, if any, 
described.)
     Conclusion (an overall conclusion is made as to whether 
the postulated mode of action is accurate given the results of 
evaluation of the evidence under the previous elements.)
     Human relevance, including subpopulations (if the evidence 
of mode of action of carcinogenicity is from animal studies, its human 
relevance is examined.)
    In the case of chloroform, there was sufficient information to 
describe key events and undertake mode of action analysis. In the case 
of arsenic, the postulated mode of action cannot be specifically 
described, the key events are unknown, and no analysis of the remaining 
elements of the mode of action framework can be made. Several possible 
influences of arsenic on the carcinogenic process have been postulated, 
but there are insufficient experimental data either to show that any 
one of the possible modes is the influence actually at work or to test 
the dimensions of its influence as the framework requires.
    For chloroform there are extensive data on metabolism that identify 
the likely active metabolite. The key events--cell toxicity followed by 
sustained cell proliferation and eventually tumor effects--have been 
extensively studied in many experiments. The key events have been 
empirically demonstrated to precede and consistently be associated with 
tumor effects. In sum, a very large number of studies have satisfied 
the requirements of the framework analysis. By contrast, the arsenic 
database fails to even be able to satisfy the first element of the 
framework; the key events are unknown. While there are a number of 
possible modes of action implied by existing data, none of them has 
been sufficiently studied to be analyzed under the Agency's framework. 
For this reason the comparison of the ``best available, peer reviewed 
data'' for arsenic and chloroform shows quite different results. There 
are not sufficient data on arsenic to describe a mode of action as 
there were for chloroform. This was also the conclusion of the SAB 
review of arsenic (EPA, 2000q).
    Overall, the NRC and SAB reports agreed that the best available 
science provides no alternative to use of a linear dose-response 
process for arsenic because a specific mode (or modes) of action has 
not been identified. Unlike chloroform, the Agency lacks sufficient 
available, peer-reviewed information on arsenic to estimate 
quantitatively a non-linear mode of action. The Agency thus has decided 
not to depart from the assumption of linearity in selecting an MCLG of 
zero.
2. Risk factors/bases for upper- and lower-bound analyses
    EPA calculated upper- and lower-bound risk estimates for the U.S. 
population exposed to arsenic concentrations. The approach for this 
analysis included five components. First, we developed relative 
exposure factor distributions, which incorporate data from the recent 
EPA water consumption study with age, sex, and weight data. Second, the 
Agency calculated the arsenic occurrence distributions for the 
population exposed to arsenic levels above 3 g/L. Third, we 
chose risk distributions for bladder and lung cancer for the analysis 
from Morales et al. (2000). Fourth, EPA developed estimates of the 
projected bladder and lung cancer risks faced by exposed populations 
using Monte-Carlo simulations, bringing together the relative exposure 
factor, occurrence, and risk distributions. These simulations resulted 
in upper bound estimates of the risks faced by U.S. populations exposed 
to arsenic concentrations at or above 3 g/L in their drinking 
water. Finally, EPA made adjustments to the lower-bound risk estimates 
to reflect exposure to arsenic in cooking water and in food in Taiwan. 
A more detailed description of the risk methodology is provided in 
Appendix B of the Economic Analysis (EPA, 2000o).
    a. Water consumption. EPA recently updated its estimates of per 
capita daily average water consumption (EPA, 2000c). The estimates used 
data from the combined 1994, 1995, and 1996 Continuing Survey of Food 
Intakes by Individuals (CSFII), conducted by the U.S. Department of 
Agriculture (USDA). The CSFII is a complex, multi-stage area 
probability sample of the entire U.S. and is conducted to survey the 
food and beverage intake of the U.S. Per capita water consumption 
estimates are reported by source. Sources include community tap water, 
bottled water, and water from other sources, including water from 
household wells and rain cisterns, and household and public springs. 
For each source, the mean and percentiles of the distribution of 
average daily per capita consumption are reported. The estimates are 
based on an average of 2 days of reported consumption by survey 
respondents. The estimated mean daily average per capita consumption of 
``community tap water'' by individuals in the U.S. population is 1 
liter/person/day. For ``total water'', which includes bottled water, 
the estimated mean daily average per capita consumption is 1.2 liters 
per/person/day. These estimates of water consumption are based on a 
sample of 15,303 individuals in the 50 States and the District of 
Columbia. The sample was selected to represent the entire

[[Page 7006]]

population of the U.S. based on 1990 census data.
    The estimated 90th percentile of the empirical distribution of 
daily average per capita consumption of community tap water for the 
U.S. population is 2.1 liters/person/day; the corresponding number for 
the 90th percentile of daily average per capita consumption of total 
water is 2.3 liters/person/day. In other words, current consumption 
data indicate that 90% of the U.S. population consumes approximately 2 
liters/person/day, or less.
    Water consumption estimates for selected subpopulations in the U.S. 
are described in the CSFII, including per capita water consumption by 
source for gender, region, age categories, economic status, race, and 
residential status and separately for pregnant women, lactating women, 
and women in childbearing years. The water consumption estimates by age 
and sex were used in the computation of the relative exposure factors 
discussed later.
    b. Relative Exposure Factors. Lifetime male and female relative 
exposure factors (REFs) for each of the broad age categories used in 
the water consumption study were calculated, where the life-long REFs 
indicate the sensitivity of exposure to an individual relative to the 
sensitivity of exposure of an ``average'' person weighing 70 kilograms 
and consuming 2 liters of water per day, a ``high end'' water 
consumption estimate according to the EPA water consumption study 
referred to previously (EPA, 2000c). In these calculations, EPA 
combined the water consumption data with data on population weight from 
the 1994 Statistical Abstract of the U.S. Distributions for both 
community tap water and total water consumption were used because the 
community tap water estimates may underestimate actual tap water 
consumption. The weight data included a mean and a distribution of 
weight for male and females on a year-to-year basis. The means and 
standard deviations of the life-long REFs derived from this analysis 
are shown in Table III.D-1.

           Table III.D-1.--Life-Long Relative Exposure Factors
------------------------------------------------------------------------
                                 Community water         Total water
                                consumption data      consumption data
------------------------------------------------------------------------
Male........................  Mean = 0.60.........  Mean = 0.73
                              s.d. = 0.61.........  s.d. = 0.62
Female......................  Mean = 0.64.........  Mean = 0.79
                              s.d. = 0.6..........  s.d. = 0.61
------------------------------------------------------------------------

    c. Arsenic occurrence. EPA recently updated its estimates of 
arsenic occurrence, and calculated separate occurrence distributions 
for arsenic found in ground water and surface water systems. These 
occurrence distributions were calculated for systems with arsenic 
concentrations of 3 g/L or above. Arsenic occurrence estimates 
are described in more detail in section III.C.
    d. Risk distributions. In its 1999 report, ``Arsenic in Drinking 
Water,'' the NRC analyzed bladder cancer risks using data from Taiwan. 
In addition, NRC examined evidence from human epidemiological studies 
in Chile and Argentina, and concluded that risks of bladder and lung 
cancer had comparable risks to those ``in Taiwan at comparable levels 
of exposure'' (NRC, 1999). The NRC also examined the implications of 
applying different statistical analyses to the newly available 
Taiwanese data for the purpose of characterizing bladder cancer risk. 
While the NRC's work did not constitute a formal risk analysis, they 
did examine many statistical issues (e.g., measurement errors, age-
specific probabilities, body weight, water consumption rate, comparison 
populations, mortality rates, choice of model) and provided a starting 
point for additional EPA analyses. The report noted that ``poor 
nutrition, low selenium concentrations in Taiwan, genetic and cultural 
characteristics, and arsenic intake from food'' were not accounted for 
in their analysis (NRC, 1999, pg. 295). In the June 22, 2000 proposed 
rule, EPA calculated bladder cancer risks and benefits using the 
bladder cancer risk analysis from the NRC report (NRC, 1999). We also 
estimated lung cancer benefits in a ``What If'' analysis based on the 
statement in the 1999 NRC report that ``some studies have shown that 
excess lung cancer deaths attributed to arsenic are 2-5 fold greater 
than the excess bladder cancer deaths'' (NRC, 1999).
    In July, 2000, a peer reviewed article by Morales et al. (2000) was 
published, which presented additional analyses of bladder cancer risks 
as well as estimates of lung and liver cancer risks for the same 
Taiwanese population analyzed in the NRC report. EPA summarized and 
analyzed the new information from the Morales et al. (2000) article in 
a NODA published on October 20, 2000 (65 FR 63027; EPA, 2000m). 
Although the data used were the same as used by the NRC to analyze 
bladder cancer risk in their 1999 publication, Morales et al. (2000) 
considered more dose-response models and evaluated how well they fit 
the Taiwanese data for both bladder cancer risk and lung cancer risk. 
Ten risk models were presented in Morales et al. (2000) used with and 
without one of two comparison populations. After consultation with the 
primary authors (Morales and Ryan), EPA chose Model 1 with no 
comparison population for further analysis.
    EPA believes that the models in Morales et al. (2000) without a 
comparison population are more reliable than those with a comparison 
population. Models with no comparison population estimate the arsenic 
dose-response curve only from the study population. Models with a 
comparison population include mortality data from a similar population 
(in this case either all of Taiwan or part of southwestern Taiwan) with 
low arsenic exposure. Most of the models with comparison populations 
resulted in dose-response curves that were supralinear (higher than a 
linear dose response) at low doses. The curves were ``forced down'' 
near zero dose because the comparison population consists of a large 
number of people with low risk and low exposure. EPA believes, based on 
discussions with the authors of Morales et al. (2000), that models with 
a comparison population are less reliable, for two reasons. First, 
there is no basis in data on arsenic's carcinogenic mode of action to 
support a supralinear curve as being biologically plausible. To the 
contrary, the conclusion of the NRC panel (NRC, 1999) was that the mode 
of action data led one to expect dose responses that would be either 
linear or less than linear at low dose. However, the NRC indicated that 
available data are inconclusive and `` * * * do not meet EPA's 1996 
stated criteria for departure from the default assumption of 
linearity.'' (NRC, 1999)

[[Page 7007]]

    Second, models that include comparison populations assume that the 
study and comparison populations are the same in all important respects 
except for arsenic exposure. Yet Morales et al. (2000) agree that 
``[t]here is reason to believe that the urban Taiwanese population is 
not a comparable population for the poor rural population used in this 
study.'' Moreover, because of the large amount of data in the 
comparison populations, the model results are sensitive to assumptions 
about this group. Evidence that supports these arguments are that the 
risks in the comparison groups are substantially lower than in 
similarly exposed members of the study group and the shape of the 
estimated dose-response changes sharply as a result. For these reasons, 
EPA believes that the models without comparison populations are more 
reliable than those with them. Of the models that did not include a 
comparison population, EPA believes that Model 1 best fits the data, 
based on the Akaike Information Criterion (AIC), a standard criterion 
of model fit, applied to Poisson models. In Model 1, the relative risk 
of mortality at any time is assumed to increase exponentially with a 
linear function of dose and a quadratic function of age.
    Morales et al. (2000) reported that two other models without 
comparison populations also fit the Taiwan data well: Model 2, another 
Poisson model with a nonparametric instead of quadratic age effect, and 
a multi-stage Weibull (MSW) model. Under Model 2, the points of 
departure for male and female bladder and lung cancer are from 1% to 
11% lower than under Model 1, but within the 95% confidence bounds from 
Model 1. Model 2 therefore implies essentially the same bladder and 
lung cancer risks as Model 1. Under the MSW model, compared to Model 1, 
points of departure are 45% to 60% higher for bladder cancer and for 
female lung cancer, and 38% lower for male lung cancer. EPA did not 
consider the MSW model for further analysis, because this model is more 
sensitive to the omission of individual villages (Morales et al., 2000) 
and to the grouping of responses by village (NRC, 1999), as occurs in 
the Taiwanese data. However, if the MSW model were correct, it would 
imply a 14% lower combined risk of lung and bladder cancers than Model 
1, among males and females combined.
    Considering all of these results, the Agency decided that the more 
exhaustive statistical analysis of the data provided by Morales et al. 
(2000), as analyzed by EPA, would be the basis for the new risk 
calculations for the final rule (with further consideration of 
additional risk analyses) and other pertinent information. The Agency 
views the results of the alternative models described above as an 
additional uncertainty which was considered in the decision concerning 
the selection of the final MCL (see section III.F. of today's 
preamble).
    e. Estimated risk reductions. Estimated risk reductions for bladder 
and lung cancer at various MCL levels were developed using Monte-Carlo 
simulations. Monte-Carlo analysis is a technique for analyzing problems 
where there are a large number of combinations of input values which 
makes it impossible to calculate every possible result. A random number 
generator is used to select input values from pre-defined 
distributions. For each set of random numbers, a single scenario's 
result is calculated. As the simulation runs, the model is recalculated 
for each new scenario that continues until a stopping criteria is 
reached. These simulations combined the distributions of relative 
exposure factors (REFs), occurrence at or above 3 g/L, and 
risks of bladder and lung cancer taken from the Morales et al. (2000) 
article. The simulations resulted in upper-bound estimates of the 
actual risks faced by populations exposed to arsenic concentrations at 
or above 3 g/L in their drinking water.
    f. Lower-bound analyses. Two adjustments were made to the risk 
distributions resulting from the simulations described previously, 
reflecting uncertainty about the actual arsenic exposure in the Taiwan 
study area. First, the Agency made an adjustment to the lower bound 
risk estimates to take into consideration the effect of exposure to 
arsenic through water used in preparing food in Taiwan. The Taiwanese 
staple foods were dried sweet potatoes and rice (Wu et al., 1989). Both 
the 1988 EPA ``Special Report on Ingested Inorganic Arsenic'' report 
(EPA,1988) and the 1999 NRC report assumed that an average Taiwanese 
male weighed 55 kg and drank 3.5 liters of water daily, and that an 
average Taiwanese female weighed 50 kg and drank 2 liters of water 
daily. Using these assumptions, along with an assumption that Taiwanese 
men and women ate one cup of dry rice and two pounds of sweet potatoes 
a day, the Agency re-estimated risks for bladder and lung cancer, using 
one additional liter water consumption for food preparation (i.e., the 
water absorbed by hydration during cooking). This adjustment was 
discussed and used in the October 20, 2000 NODA (65 FR 63027; EPA, 
2000m).
    Second, an adjustment was made to the lower-bound risk estimates to 
take into consideration the relatively high arsenic concentration in 
the food consumed in Taiwan as compared to the U.S. The food consumed 
daily in Taiwan contains about 50 g of arsenic, versus about 
10 g in the U.S. (NRC, 1999, pp. 50-51). Thus the total 
consumption of inorganic arsenic (from food preparation and drinking 
water) is considered, per kilogram of body weight, in the process of 
these adjustments. To carry them out, the relative contribution of 
arsenic in the drinking water that was consumed as drinking water, on a 
g arsenic per kilogram body weight per day (g/kg/day) 
basis, was compared to the total amount of arsenic consumed in drinking 
water, drinking water used for cooking, and in food, on a g/
kg/day basis.
    Other factors contributing to lower bound uncertainty include the 
possibility of a sub-linear dose-response curve below the point of 
departure. The NRC noted ``Of the several modes of action that are 
considered most plausible, a sub-linear dose response curve in the low-
dose range is predicted, although linearity cannot be ruled out.'' 
(NRC, 1999). The recent Utah study (Lewis et al., 1999), described in 
section V.G.1(b), provides some evidence that the shape of the dose-
response curve may well be sub-linear at low doses. Because sufficient 
mode of action data were not available, an adjustment was not made to 
the risk estimates to reflect the possibility of a sub-linear dose-
response curve. Additional factors contributing to uncertainty include 
the use of village well data rather than individual exposure data, 
deficiencies in the Taiwanese diet relative to the U.S. diet (selenium, 
choline, etc.), and the baseline health status in the Taiwanese study 
area relative to U.S. populations. The Agency did not make adjustments 
to the risk estimates to reflect these uncertainties because applicable 
peer-reviewed, quantitative studies on which to base such adjustments 
were not available.
    Estimated risk levels for bladder and lung cancer combined at 
various MCL levels are shown in Tables III.D-2(a-c). The risk estimates 
without adjustments for exposure uncertainty through cooking water and 
food are shown Table III.D-2 (a). These estimates incorporate 
occurrence data, water consumption data, and male and female risk 
estimates. Lower bounds show estimates using community water 
consumption data; upper bounds show estimates using total water 
consumption data. Table III.D-2 (b) shows estimated risk

[[Page 7008]]

levels for bladder and lung cancer combined at various MCL levels with 
adjustments for exposure uncertainty through cooking water and food. 
These estimates incorporate occurrence data, water consumption data, 
and male risk estimates, with lower bounds reflecting community water 
consumption data and upper bounds reflecting total water consumption 
data. There are no adjustments for other factors which contribute to 
uncertainty, such as the use of village well data as opposed to 
individual exposure data. Tablet III.D-2 (c) is a combination of Table 
III.D-2(a) and Table III.D-2 (b), with the lower bounds taken from 
Table III.D-3 (b), and the upper bounds taken from Table III.D-2 (a). 
Thus Table III.D-2(c) reflects the range of estimates before and after 
the exposure uncertainty adjustments for cooking water and for food, 
along with the incorporation of water consumption data, occurrence 
data, and cancer risk estimates. These estimates were used to estimate 
the range of potential cases avoided at the various MCL levels.
    The lower-bound risk estimates in Tables III.D-2(a-c) reflect the 
following:
--The community (tap) water consumption from the EPA water consumption 
study (EPA, 2000c)
--The occurrence distributions of arsenic in U.S. ground and surface 
water systems
--Male risk estimates from Morales et al. (2000)
--Arsenic exposure from cooking water in Taiwan
--Arsenic exposure from food in Taiwan
    The upper-bound risk estimates in Tables III.D-2(a-c) reflect the 
following:
--The total water consumption estimates from the EPA water consumption 
study (EPA, 2000c)
--The occurrence distributions of arsenic in U.S. ground and surface 
water systems
--Male and female risk estimates from Morales et al. (2000)

    Table III.D-2(a).--Cancer Risks for U.S. Populations Exposed At or Above MCL Options, After Treatment 1,2
                           [without adjustment for arsenic in food and cooking water]
----------------------------------------------------------------------------------------------------------------
                                                                      Mean exposed       90th percentile exposed
                      MCL  (g/L)                           population risk           population risk
----------------------------------------------------------------------------------------------------------------
3.............................................................      0.93 -1.25  x  10-4      1.95 -2.42  x  10-4
5.............................................................      1.63 -2.02  x  10-4       3.47 -3.9  x  10-4
10............................................................      2.41 -2.99  x  10-4      5.23 -6.09  x  10-4
20............................................................      3.07 -3.85  x  10-4     6.58 -8.37  x  10-4
----------------------------------------------------------------------------------------------------------------
\1\ Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume
  that the probability of illness from arsenic exposure in the U.S. is equal to the probability of death from
  arsenic exposure among the arsenic study group.
\2\ The estimated risks are male and female risks combined.


   Table III.D-2(b).--Cancer Risks for U.S. Populations Exposed At or Above MCL Options, After Treatment 1, 2
                           [without adjustment for arsenic in food and cooking water]
----------------------------------------------------------------------------------------------------------------
                                                                      Mean exposed       90th percentile exposed
                      MCL  (g/L)                           population risk           population risk
----------------------------------------------------------------------------------------------------------------
3.............................................................      0.11 -0.13  x  10-4      0.22 -0.26  x  10-4
5.............................................................      0.27 -0.32  x  10-4      0.55 -0.62  x  10-4
10............................................................      0.63 -0.76  x  10-4      1.32 -1.54  x  10-4
20............................................................       1.1 -1.35  x  10-4     2.47 -2.89  x  10-4
----------------------------------------------------------------------------------------------------------------
\1\ Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume
  that the probability of illness from arsenic exposure in the U.S. is equal to the probability of death from
  arsenic exposure among the arsenic study group.
\2\ The estimated risks are for males.


    Table III.D-2(c).--Cancer Risks for U.S. Populations Exposed At or Above MCL Options, After Treatment 1,2
  [lower bound with food and cooking water adjustment, upper bound withough food and cooking water adjustment]
----------------------------------------------------------------------------------------------------------------
                                                                      Mean exposed       90th percentile exposed
                      MCL  (g/L)                           population risk           population risk
----------------------------------------------------------------------------------------------------------------
3.............................................................      0.11 -1.25  x  10-4      0.22 -2.42  x  10-4
5.............................................................      0.27 -2.02  x  10-4       0.55 -3.9  x  10-4
10............................................................      0.63 -2.99  x  10-4      1.32 -6.09  x  10-4
20............................................................       1.1 -3.85  x  10-4      2.47 -8.37  x  10-4
----------------------------------------------------------------------------------------------------------------
\1\ Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume
  that the probability of illness from arsenic exposure in the U.S. is equal to the probability of death from
  arsenic exposure among the arsenic study group.

    g. Cases avoided. The lower and upper bound risk estimates from 
Table III.D-2(c) were applied to the exposed population to generate 
cases avoided for CWSs serving less than a million customers. Because 
the actual arsenic occurrence was known for the very large systems 
(those serving over a million customers), their system-specific arsenic 
occurrence distributions could be directly computed. The system-
specific arsenic distributions allowed direct calculation of avoided 
cancer cases. The process, described in detail in the Economic Analysis 
(EPA, 2000o), utilizes the same risk estimates from Morales et al. 
(2000) that were used in deriving the number of cases avoided in 
smaller CWSs. Cases avoided for NTNCWSs were also computed separately, 
utilizing factors developed to

[[Page 7009]]

account for the intermittent nature of the exposure. These factors are 
described in the Economic Analysis.
    An upper-bound adjustment was made to the number of bladder cancer 
cases avoided to reflect a possible lower mortality rate in Taiwan than 
was assumed in the risk assessment process described earlier. We also 
made this adjustment in the June 22, 2000 proposal. In the Taiwan study 
area, information on arsenic-related bladder and lung cancer deaths was 
reported. In order to use these data to determine the probability of 
contracting bladder and lung cancer as a result of exposure to arsenic, 
a probability of mortality, given the onset of arsenic-induced bladder 
and lung cancer among the Taiwanese study population, must be assumed. 
The study area in Taiwan is a section where arsenic concentrations in 
the water are very high by comparison to those in the U.S., and an area 
of low incomes and poor diets, where the availability and quality of 
medical care is not of high quality, by U.S. standards. In its estimate 
of bladder cancer risk, the Agency assumed that within the Taiwanese 
study area, the probability of contracting bladder cancer was 
relatively close to the probability of dying from bladder cancer (i.e., 
that the bladder cancer incidence rate was equal to the bladder cancer 
mortality rate).
    We do not have data on the rates of survival for bladder cancer in 
the Taiwanese villages in the study at the time of data collection. We 
do know that the relative survival rates for bladder cancer in 
developing countries overall ranged from 23.5% to 66.1% in 1982-1992 
(WHO, 1998). We also have some information on annual bladder cancer 
mortality and incidence for the general population of Taiwan in 1996. 
The age-adjusted annual incidence rates of bladder cancer for males and 
females, respectively, were 7.36 and 3.09 per 100,000, with 
corresponding annual mortality rates of 3.21 and 1.44 per 100,000 
(correspondence from Chen to Herman Gibb, January 3, 2000). Assuming 
that the proportion of males and females in the population is equal, 
these numbers imply that the mortality rate for bladder cancer in the 
general population of Taiwan, at present, is 45%. Since survival rates 
have most likely improved over the years since the original Taiwanese 
study, this number represents a lower bound on the survival rate for 
the original area under study (i.e., one would not expect a higher rate 
of survival in that area at that time). This has implications for the 
bladder cancer risk estimates from the Taiwan data. If there were any 
persons with bladder cancer who recovered and died from some other 
cause, then our estimate underestimated risk; that is, there were more 
cancer cases than cancer deaths. Based on the previous discussion, we 
think bladder cancer incidence could be no more than two-fold bladder 
cancer mortality; and that an 80% mortality rate would be plausible. 
Thus, we have adjusted the upper bound of cases avoided, which is used 
in the benefits analysis, to reflect a possible mortality rate for 
bladder cancer of 80 percent. Because lung cancer mortality rates are 
quite high, about 88% in the U.S. (EPA, 1998n), the assumption was made 
that all lung cancers in the Taiwan study area resulted in fatalities.
    The total number of bladder and lung cases avoided at each MCL is 
shown in Table III.D-3. These cases avoided include CWSs and NTNCWSs 
cases. The number of bladder and lung cancer cases avoided ranges from 
57.2 to 138.3 at an MCL of 3 g/L, 51.1 to 100.2 at an MCL of 5 
g/L, 37.4 to 55.7 at an MCL of 10 g/L, and 19.0 to 
19.8 at an MCL of 20 g/L. The cases avoided were divided into 
premature fatality and morbidity (i.e., illness) cases based on U.S. 
mortality rates. In the U.S. approximately one out of four individuals 
who is diagnosed with bladder cancer actually dies from bladder cancer. 
The mortality rate for the U.S. is taken from a cost of illness study 
recently completed by EPA (EPA, 1999j). For those diagnosed with 
bladder cancer at the average age of diagnosis (70 years), the 
probability for dying of that disease during each year post-diagnosis 
was summed over a 
20-year period to obtain the value of 26 percent. Mortality rates for 
U.S. bladder cancer patients have decreased overall by 24% from 1973 to 
1996. For lung cancer, mortality rates are much higher. The comparable 
mortality rate for lung cancer in the U.S. is 88% (EPA, 1998n).

  Table III.D-3.--Annual Total (Bladder and Lung) Cancer Cases Avoided
                From Reducing Arsenic in CWSs and NTNCWS
------------------------------------------------------------------------
                                                                Total
                                     Reduced      Reduced       cancer
   Arsenic level (g/L)     mortality    morbidity      cases
                                     cases\1\     cases\1\     avoided
------------------------------------------------------------------------
3................................    32.6-74.1    24.6-64.2   57.2-138.3
5................................    29.1-53.7    22.0-46.5   51.1-100.2
10...............................    21.3-29.8    16.1-25.9    37.4-55.7
20...............................    10.2-11.3      8.5-8.8   19.0-19.8
------------------------------------------------------------------------
\1\ Based on U.S. mortality rates given in the text.

3. Sensitive Subpopulations
    The 1996 SDWA amendments include specific provisions in section 
1412(b)(3)(C)(i)(V) that require EPA to assess the effects of a 
contaminant not just on the general population but on groups within the 
general population such as infants, children, pregnant women, the 
elderly, individuals with a history of serious illness, or other 
subpopulations are identified as likely to be at greater risk of 
adverse health effects due to exposure to contaminants in drinking 
water than the general population. The NRC subcommittee noted that 
there is a marked variation in susceptibility to arsenic-induced toxic 
effects that may be influenced by factors such as genetic polymorphisms 
(especially in metabolism), life stage at which exposures occur, sex, 
nutritional status, and concurrent exposures to other agents or 
environmental factors. The NRC report concluded that there is 
insufficient scientific information to permit separate cancer risk 
estimates for potential subpopulations such as pregnant women, 
lactating women, and children and that factors that influence 
sensitivity to or expression of arsenic-associated cancer and noncancer 
effects need to be better characterized. EPA agrees with the NRC that 
there is not enough information to make risk conclusions on any 
specific subpopulations.
4. Risk Window
    EPA has historically considered 10-4 to 10-6 
as a target risk range protective of public health in its drinking 
water program. However, the risk-range

[[Page 7010]]

represents a policy goal for EPA, and is not a statutory factor in 
setting an MCL. Note that the procedure EPA uses to estimate such risks 
provides an upper-bound estimate. In the case of arsenic, EPA performed 
a benefit-cost analysis as required by the statute. This analysis is 
discussed in more detail in section III.F.

E. What Are the Costs and Benefits at 3, 5, 10, and 20 g/L?

    In accordance with section 1412 (b)(3)(C) of SDWA, EPA must analyze 
the costs and benefits of a proposed NPDWR. To comply with this 
provision, EPA included the complete analysis in the proposed rule. 
Also, in accordance with Executive Order 12866, Regulatory Planning and 
Review, EPA must estimate the costs and benefits of the arsenic rule in 
an Economic Analysis in conjunction with publishing the final rule. EPA 
has prepared an Economic Analysis to comply with the requirements of 
this Order. This section provides a summary of the information from the 
Arsenic Economic Analysis (EPA, 2000o).
1. Summary of Cost Analysis
    National cost estimates of compliance with the arsenic rule were 
derived from estimates of utility treatment costs, monitoring and 
reporting costs, and start-up costs for both CWS and NTNCWSs. Utility 
treatment costs were derived using occurrence data, treatment train 
unit costs, and decision trees. The occurrence data provide a measure 
of the number of systems that would need to install treatment in each 
size category. The treatment train unit cost estimates provide a 
measure of how much a technology will cost to install. Decision trees 
vary by system size and are used as a prediction of the treatment 
technology trains facilities would likely install to comply with 
options considered for the revised arsenic standard. Detailed 
descriptions of the methodologies used in determining the costs of this 
rule are found in the ``Technologies and Cost for Removal of Arsenic in 
Drinking Water'' document (EPA, 2000t) and also the ``Arsenic Economic 
Analysis'' (EPA, 2000o), both of which are in the docket for this final 
rulemaking.
    a. Total national costs. Under the MCL of 10 g/L, the 
Agency estimates that total national costs to CWSs are $172.3 million 
(1999 dollars) annually at a 3% discount rate. This total national cost 
includes annual treatment costs ($169.6 million), annual monitoring and 
administrative costs ($1.8 million), and annual State costs ($0.9 
million). Assuming a 7% discount rate, total national costs to CWSs are 
estimated at $196.6 million annually.
    Total national costs to NTNCWSs are estimated at $8.1 million 
annually at a 3% discount rate. This includes annual treatment costs 
($7.0 million), annual monitoring and administrative costs ($0.9 
million), and annual State costs ($0.1 million). Total national costs 
to NTNCWSs, assuming a 7% discount rate, are estimated at $9.1 million 
annually.
    Table III.E-1 shows the total national cost breakdown for the 
arsenic MCL and also for three other arsenic levels considered in the 
proposed rule. Expected system costs include treatment costs, 
monitoring costs, and administrative costs of compliance. State costs 
include monitoring and administrative costs of implementation. As 
expected, aggregate arsenic compliance costs increase with decreasing 
arsenic MCL levels as more systems are affected.

                     Table III.E-1.--Total Annual National System and State Compliance Costs
                                               [$ millions, 1999]
----------------------------------------------------------------------------------------------------------------
                                               CWS                     NTNCWS                     Total
           Discount rate           -----------------------------------------------------------------------------
                                     3 percent    7 percent    3 percent    7 percent    3 percent    7 percent
----------------------------------------------------------------------------------------------------------------
                                              MCL = 3 g/L
----------------------------------------------------------------------------------------------------------------
System Costs......................       $668.1       $759.5        $28.2        $31.0       $696.3       $790.4
Treatment.........................        665.9        756.5         27.2         29.6        693.1        786.0
Monitoring/Administrative.........          2.2          3.0          1.0          1.4          3.2          4.4
State Costs.......................          1.4          1.6          0.1          0.2          1.5          1.7
                                   -----------------------------------------------------------------------------
    Total \1\.....................        669.4        761.0         28.3         31.1        697.8        792.1
----------------------------------------------------------------------------------------------------------------
                                              MCL = 5 g/L
----------------------------------------------------------------------------------------------------------------
System Costs......................        396.4        451.1         17.3         18.9        413.5        470.2
Treatment.........................        394.4        448.3         16.3         17.6        410.6        466.1
Monitoring/Administrative.........          2.0          2.8          1.0          1.3          2.9          4.1
State Costs.......................          1.1          1.3          0.1          0.2          1.2          1.4
----------------------------------------------------------------------------------------------------------------
    Total \1\.....................        397.5        452.5         17.3         19.1        414.8        471.7
----------------------------------------------------------------------------------------------------------------
                                           Final MCL = 10 g/L
----------------------------------------------------------------------------------------------------------------
System Costs......................        171.4        195.5          7.9          8.9        179.4        204.4
Treatment.........................        169.6        193.0          7.0          7.6        176.7        200.6
Monitoring/Administrative.........          1.8          2.5          0.9          1.3          2.7          3.8
State Costs.......................          0.9          1.0          0.1          0.2          1.0          1.2
----------------------------------------------------------------------------------------------------------------
    Total \1\.....................        172.3        196.6          8.1          9.1        180.4        205.6
----------------------------------------------------------------------------------------------------------------
                                              MCL = 20 g/L
----------------------------------------------------------------------------------------------------------------
System Costs......................         62.4         71.4          3.5          4.1         65.9         75.5
Treatment.........................         60.7         69.0          2.6          2.8         63.3         71.8
Monitoring/Administrative.........          1.7          2.4          0.9          1.3          2.6          3.7

[[Page 7011]]

 
State Costs.......................          0.7          0.8          0.1          0.2          0.9          1.0
                                   -----------------------------------------------------------------------------
    Total \1\.....................         63.2         72.3          3.6          4.2         66.8        76.5
----------------------------------------------------------------------------------------------------------------
\1\ Total may not match detail due to rounding.

    b. Household costs. Table III.E-2 shows mean annual costs per 
household for those households that are served by systems that may need 
to treat under today's rule. As discussed in Table III.C-6 of today's 
preamble and Table 8-2 of the Economic Analysis, of the approximately 
74,000 systems that are covered by today's rule, EPA estimates that 
only about 3,433 of these systems will require treatment. Table III.E-2 
refers only to the households served by systems expected to need 
treatment. The average household cost increase resulting from today's 
rule is $31.85. However, due to economies of scale, costs per household 
are higher in the smaller size categories, and lower in the larger size 
categories. For today's rule (10 g/L), costs are expected to 
be $326.82 per household for systems serving 100 people, and $162.50 
per household for systems serving 101-500 people. Costs per households 
in systems larger than those are substantially lower: From $70.72 to 
$0.86 per household. As shown in Table III.E-2, the costs per household 
do not vary dramatically across MCL options although Table III.E-1 
shows that total national costs are significantly different. This 
divergence is attributable to the total number of households affected 
by each MCL level and not the cost of treatment. For example, 
approximately eleven million households would be affected by an MCL of 
3 g/L compared to approximately three million affected by the 
today's final rule MCL of 10 g/L. In addition, the household 
costs change relatively little among MCL options because while each 
progressively lower MCL option brings in a larger number of systems 
subject to the rule, the majority of those systems generally need only 
minimal removal of arsenic. This fact offsets, to an extent, the 
increased costs as a result of more systems covered at lower MCL 
options. A more detailed discussion of household costs can be found in 
Chapter 6 of the ``Arsenic Economic Analysis'' document (EPA, 2000o).

                                 Table III.E-2.--Mean Annual Costs Per Household
                                              [in 1999 dollars] \1\
----------------------------------------------------------------------------------------------------------------
                                                               3 g/L        m>g/L        m>g/L        m>g/L
 
----------------------------------------------------------------------------------------------------------------
100.........................................................      $317.00      $318.26      $326.82      $351.15
101-500.....................................................       166.91       164.02       162.50       166.72
501-1,000...................................................        74.81        73.11        70.72        68.24
1,001-3.300.................................................        63.76        61.94        58.24        54.36
3.301-10,000................................................        42.84        40.18        37.71        34.63
10,001-50,000...............................................        38.40        36.07        32.37        29.05
50,001-100,000..............................................        31.63        29.45        24.81        22.63
100,001-1,000,000...........................................        25.29        23.34        20.52        19.26
>1,000,000..................................................         7.41         2.79         0.86         0.15
All categories..............................................        41.34        36.95        31.85       23.95
----------------------------------------------------------------------------------------------------------------
\1\ Only households served by those systems expected to install treatment.

    2. Summary of Benefits Analysis
    Arsenic ingestion has been linked to a multitude of health effects, 
both cancerous and non-cancerous. These health effects include cancer 
of the bladder, lungs, skin, kidney, nasal passages, liver, and 
prostate. Arsenic ingestion has also been attributed to cardiovascular, 
pulmonary, immunological, and neurological, endocrine effects. A 
complete list of the arsenic-related health effects reported in humans 
is discussed in section III. D of this preamble. Current research on 
arsenic exposure has only been able to provide enough information to 
conduct a quantitative assessment of bladder and lung cancers. The 
other health effects and possible non-health benefits remain 
unquantified in this analysis but are discussed qualitatively. It is 
important to note that if the Agency were able to quantify additional 
arsenic-related health effects and non-health effects, the quantified 
benefits estimates may be significantly higher than the estimates 
presented in this analysis. In addition, the SDWA amendments of 1996 
require that EPA fully consider both quantifiable and non-quantifiable 
benefits that result from drinking water regulations and has done this 
for today's arsenic rule.
    a. Primary analysis. Quantifiable benefits. Although arsenic in 
drinking water has been associated with numerous health effects (see 
section III.D), the quantified benefits that result from today's rule 
are associated only with reductions in arsenic-related bladder and lung 
cancers. A complete discussion of risk assessment methodology and 
assumptions can be found in Chapter 5 of the ``Arsenic Economic 
Analysis'' document (EPA, 2000o).
    The quantified benefits for today's rule for both CWSs and NTNCWSs 
range from $140 million to $198 million and consider both lower- and 
upper-bound risk levels. Specifically, the benefits to the CWSs are 
approximately $138.2 million to $193.2 million and $1.4 million to $4.5 
million for NTNCWSs. Table III.E-3 shows the complete range of 
quantified benefits for the other MCL levels considered by the Agency. 
Section III.D.2. of this preamble explains the derivation of the upper- 
and lower-bound estimates

[[Page 7012]]

    In order to monetize the benefit from the bladder and lung cancers 
cases avoided, the Agency used two different values. First, a value of 
statistical life (VSL) estimate was applied to those cancer cases that 
result in a mortality. EPA assumed a 26% mortality rate for bladder 
cancer and an 88% mortality rate for lung cancer (EPA, 1999j; EPA, 
1998n). The current VSL value used by the Agency is $6.1 million, in 
1999 dollars. This value of $6.1 million does not reflect any 
adjustments to account for national real income growth that occurred 
subsequent to the completion of the wage-risk studies on which EPA's 
VSL estimate is derived. Were the Agency to adjust the VSL to account 
for this growth in real income, the VSL would be approximately $6.77 
million (assuming a 1.0 income elasticity).
    Second, a willingness-to-pay value (WTP) is used to monetize the 
cancer cases that do not result in a mortality. The WTP value for 
avoiding a non-fatal cancer is not currently available; therefore, the 
Agency used a WTP estimate to reduce a case of chronic bronchitis as a 
proxy. The use of this value may understate the true benefit if the WTP 
to avoid a nonfatal cancer is greater than the WTP to avoid a case of 
chronic bronchitis. The mean value of this WTP estimate is $607,000 (in 
1999 dollars). A complete discussion of the VSL and WTP values and how 
they are calculated can be found in Chapter 5 for the ``Arsenic 
Economic Analysis'' document (EPA, 2000o).

--Non-quantifiable benefits. There are a number of important non-
quantified benefits that EPA considered in its analysis. Chief among 
these are certain health impacts known to be caused by arsenic, though, 
while they may be substantial, the extent to which these impacts occur 
at levels below 50 g/L is unknown. These additional health 
effects include cancers, other than bladder and lung cancers, as well 
as non-cancer health effects. In addition, EPA has identified non-
health benefits that may result from today's rule, which are discussed 
next.

    EPA was not able to quantify many of the health effects potentially 
associated with arsenic due to data limitations. These health effects 
include other cancers such as skin and prostate cancer and non-cancer 
endpoints such as cardiovascular, pulmonary, and neurological impacts. 
These health effects and the relevant studies linking these health 
effects to arsenic in drinking water are discussed in section III.D. of 
today's rule. For example, a number of epidemiologic studies conducted 
in several countries (e.g., Taiwan, Japan, England, Hungary, Mexico, 
Chile, and Argentina) report an association between arsenic in drinking 
water and skin cancer in exposed populations. Studies conducted in the 
U.S. have not demonstrated an association between inorganic arsenic in 
drinking water and skin cancer. However, these studies may not have 
included enough people in their design to detect these types of 
effects.
    Other potential benefits not quantified or monetized in today's 
rule include reduced uncertainty about becoming ill from consumption of 
arsenic in drinking water and the ability for some treatment 
technologies to eliminate multiple contaminants. The reduced 
uncertainty concept depends on several factors including consumer's 
degree of risk aversion, their perceptions about the drinking water 
quality (degree to which they will be affected by the regulatory 
action), and the expected probability and severity of human heath 
effects associated with arsenic contamination of drinking water. 
Another non-quantified benefit is the effect on those systems that 
install treatment technologies that can address multiple contaminants. 
For example, membrane systems, such as reverse osmosis, can be used for 
arsenic removal but can also remove many other contaminants that EPA is 
in the process of regulating or considering regulating. Therefore, by 
installing a reverse osmosis system, a system may not have to make any 
additional changes to comply with these future regulations.

  Table III.E-3.--Estimated Benefits From Reducing Arsenic in Drinking
                                  Water
                            [$ millions 1999]
------------------------------------------------------------------------
                             Total quantified   Potential non-quantified
Arsenic level (g/   health benefits    health benefits includes
            L)                     \1\               reductions in:
------------------------------------------------------------------------
3.........................      $213.8-$490.9   Skin Cancer.
5.........................      $191.1-$355.6   Kidney Cancer.
10........................      $139.6-$197.7   Cancer of the
                                                Nasal Passages.
20........................        $66.2-$75.3   Liver Cancer.
                                                Prostate Cancer.
                                                Cardiovascular
                                                Effects.
                                                Pulmonary
                                                Effects.
                                                Immunological
                                                Effects.
                                                Neurological
                                                Effects.
                                                Endocrine
                                                Effects.
------------------------------------------------------------------------
\1\ Benefits from reduction in bladder and lung cancer. The range
  represents both a lower and upper bound risk as discussed in section
  III. D. of this preamble.

    b. Sensitivity analysis on benefits valuation. For the final 
rulemaking analysis, some commenters have argued that the Agency should 
consider an assumed time lag or latency period in its benefits 
calculations. The term ``latency'' can be used in different ways, 
depending on the context. For example, health scientists tend to define 
latency as the period beginning with the initial exposure to the 
carcinogen and ending when the cancer is initially manifested (or 
diagnosed), while others consider latency as the period between 
manifestation of the cancer and death. Latency, in this case, refers to 
the difference between the time of initial exposure to environmental 
carcinogens and the actual mortality. Use of such an approach might 
reduce significantly the present value of health risk reduction 
benefits estimates.
    In the proposed arsenic rule, the Agency included qualitative 
language on the latency issue, including descriptions of other 
adjustments which may influence the estimate of economic benefits 
associated with avoided cancer fatalities. The Agency also agreed to 
ask the SAB to conduct a review of the benefits' transfer issues and 
possible adjustment factors associated with economic valuation of 
mortality risks. A summary of the SAB's recommendations is shown in the 
following section.

[[Page 7013]]

    c. SAB recommendations. EPA brought this issue before the 
Environmental Economics Advisory Committee (EEAC) of EPA's SAB in a 
meeting held on February 25, 2000 in Washington, DC. The SAB submitted 
a final report on its findings and recommendations to EPA on July 27, 
2000. The Panel's report made a number of recommendations on the 
adjustment factors and benefit-cost analysis in general. A copy of the 
final SAB report (EPA, 2000j) is in the record for this rulemaking.
    The SAB Panel noted that benefit-cost analysis, as described in the 
Agency's Guidelines for Preparing Economic Analysis (EPA, 2000k), is 
not the only analytical tool nor is efficiency the only appropriate 
criterion for social decision making. The SAB Panel also stated that it 
is important to carry out such analyses in an unbiased manner with as 
much precision as possible. In its report, the SAB recommended that the 
Agency continue to use a wage-risk-based VSL as its primary estimate; 
any appropriate adjustments that are made for timing (e.g., latency) 
and income growth should be part of the Agency's main analysis while 
any other proposed adjustments should be accounted for in sensitivity 
analyses to show how results would change if the VSL were adjusted for 
some of the major differences in the characteristics of the risk and of 
the affected populations. The SAB recommended including only 
adjustments for latency and income growth in the main analysis because 
it did not believe any of the other proposed adjustments were 
adequately supported in the literature at the present time. 
Specifically, the SAB report recommended that (1) Health benefits 
brought about by current policy initiatives (i.e., after a latency 
period) should be discounted to present value using the same rate that 
is used to discount other future benefits and costs in the primary 
analysis; and any other proposed adjustments should be accounted for in 
a sensitivity analysis including adjustments to the VSL for a ``cancer 
premium,'' voluntariness and controllability, altruism, risk aversion, 
and ages of the affected population. No adjustment should be made to 
the VSL to reflect health status of persons whose cancer risks are 
reduced. (2) Estimates of VSLs accruing in future years should be 
adjusted in the primary analysis to reflect anticipated income growth, 
using a range of income elasticities.
    After considering the SAB's recommendations, EPA has developed a 
sensitivity analysis of the latency structure and associated benefits 
for the arsenic rule, as described in the next section and in the 
Economic Analysis for the final rule. This analysis consists of health 
risk reduction benefits that reflect adjustments for discounting, 
incorporation of a range of latency period assumptions, adjustments for 
growth in income, and incorporation of other factors such as 
voluntariness and controllability. Although the SAB recommended 
accounting for latency in a primary benefits analysis, the Agency 
believes that, in the absence of any sound scientific evidence on the 
duration of particular latency periods for arsenic related cancers, 
discounted benefits estimates for arsenic are more appropriately 
accounted for in a sensitivity analysis. Sensitivity analyses are 
generally reserved for examining the effects of accounting for highly 
uncertain factors, such as the estimation of latency periods, on health 
risk reduction benefits estimates.
    Defining a latency period is highly uncertain because the length of 
the latency period is often poorly understood by health scientists. In 
some cases, information on the progression of a cancer is based on 
animal studies, and extrapolation to humans is complex and uncertain. 
Even when human studies are available, the dose considered may differ 
significantly from the dose generally associated with drinking water 
contaminants (e.g., involve a high level of exposure over a short time 
period, rather than a long term, low level of exposure). The magnitude 
of the dose, may in turn, affect the resulting latency period. 
Information on latency may be unavailable in many cases or, if 
available, may be highly uncertain and vary significantly across 
individuals. The Agency recognizes, however, that despite significant 
uncertainty in the latency period associated with arsenic exposure 
through drinking water, it is unlikely that all cancer reduction 
benefits would be realized immediately upon exposure reduction. To the 
extent that there are delays due to latency in the realization of these 
benefits, monetized cancer reduction benefits would be discounted; 
although, as discussed above, this may be offset by other adjustments.
    d. Analytical approach. For the latency sensitivity analysis, the 
health benefits have been broken into separate treatments of morbidity 
and mortality. The mortality component of the total benefits is 
examined in this analysis because a cancer latency period (i.e., the 
time period between initial exposure to environmental carcinogens and 
the actual fatality) impacts arsenic-related fatalities to a greater 
extent than arsenic-related morbidity. For purposes of this analysis, 
the Agency examined the impacts of various latency period assumptions, 
adjustments for income growth, and incorporation of other adjustments 
such as a voluntariness and controllability, on bladder and lung cancer 
fatalities associated with arsenic in drinking water (EPA, 2000k).
    Because the latency period for arsenic related bladder and lung 
cancers is unknown, EPA has assumed a range of latency periods from 5 
to 20 years. While both lung and bladder cancer have relatively long, 
average latencies, the lower end of the latency period is substantially 
less. As can be seen by inspection of the Surveillance, Epidemiology, 
and End Results (SEER) data of the National Cancer Institute, 
significant incidence of both cancers occurs in individuals in the 15-
19 year old age groups (NCI, 2000). This strongly indicates a short 
latency period for whatever the cause of the cancer may have been.
    Moreover, the mode of action for arsenic is suspected to be one 
that operates at a late stage of the cancer process that may advance 
the expression of cancers initiated by other causes (sometimes referred 
to as ``promoting out'' the cancerous effect). Therapeutic treatment 
with the drug cyclophosphamide, which causes cell toxicity, has been 
seen to induce bladder cancer in as little as 7 months to 15 years in 
affected patients. This was of course a high dose treatment, but the 
example serves to illustrate the ability of an agent to advance the 
development of cancer.
    For these reasons, we believe latency periods of 5, 10, and 20 
years serve as reasonable approximations, in the absence of definitive 
data on arsenic-induced cancers, of the latency periods for the 
sensitivity analysis.
    Table III.E-4 shows the sensitivity of the primary analysis VSL 
estimate ($6.1 million, 1999 dollars) to changes in latency period 
assumptions and also with the incorporation of an adjustment to reflect 
changes in WTP based on real income growth and other adjustment 
factors. As is shown in Table III.E-4, the adjusted VSL is greater than 
the primary VSL ($6.77 million versus $6.1 million) at an income 
elasticity of 1.0, with adjustments for income growth only. Assuming a 
3% discount rate, the lowest adjusted VSL value ($3.44 million) is 
yielded over a 20-year latency period that includes discounting and 
income growth only (income elasticity = 0.22). Assuming a 7% discount 
rate, the highest adjusted VSL is also $6.77 million (adjusted for 
income growth only (income elasticity = 1.0)). The lowest adjusted VSL 
is $1.61 million (discounted over 20 years).

[[Page 7014]]



    Table III.E-4.-- Sensitivity of the Primary VSL Estimate to Changes in Latency Period Assumptions, Income
                                          Growth, and Other Adjustments
                                               [$ millions, 1999]
----------------------------------------------------------------------------------------------------------------
                                                                      Latency period (Years)
               Adjustment factor                ----------------------------------------------------------------
                                                           5                    10                    20
----------------------------------------------------------------------------------------------------------------
                                                3% Discount Rate
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)...........  6.1                   6.1                   6.1
Adjusted for Income Growth: \1\
    elasticity = 0.22..........................  6.22                  6.22                  6.22
    elasticity = 1.0...........................  6.77                  6.77                  6.77
Adjusted for Income Growth \1\ and Discounting:
    elasticity = 0.22..........................  5.37                  4.63                  3.44
    elasticity = 1.0...........................  5.84                  5.04                  3.75
Adjusted for Income Growth,\1\ Discounting, and
 7% Increase for Voluntariness and
 Controllability;
    elasticity = 0.22..........................  5.74                  4.95                  3.69
    elasticity = 1.0...........................  6.25                  5.39                  4.01
Break-Even for Other Characteristics (as a
 percentage of the primary VSL estimate);
    elasticity = 0.22..........................  6 percent             19 percent            40 percent
    elasticity = 1.0...........................  -2 percent            12 percent            34 percent
----------------------------------------------------------------------------------------------------------------
                                                7% Discount Rate
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)...........  6.1                   6.1                   6.1
Adjusted for Income Growth:\1\
    elasticity = 0.22..........................  6.22                  6.22                  6.22
    elasticity = 1.0...........................  6.77                  6.77                  6.77
Adjusted for Income Growth \1\ and Discounting:
    elasticity = 0.22..........................  4.44                  3.16                  1.61
    elasticity = 1.0...........................  4.83                  3.44                  1.75
Adjusted for Income Growth, \1\ Discounting,
 and 7% Increase for Voluntariness and
 Controllability:
    elasticity = 0.22..........................  4.75                  3.38                  1.72
    elasticity = 1.0...........................  5.17                  3.68                  1.87
----------------------------------------------------------------------------------------------------------------
Break-Even for Other Characteristics (as a
 percentage of the primary VSL estimate):
    elasticity = 0.22..........................  22 percent            45 percent            72 percent
    elasticity = 1.0...........................  15 percent            40 percent            69 percent
----------------------------------------------------------------------------------------------------------------
\1\ This adjustment reflects the change in WTP based on real income growth from 1990 to 1999.

    The first row of both the 3% and 7% discount rate panels in Table 
III.E-4 shows the VSL used in the primary analysis. Because this value 
has not been adjusted for discounting over an assumed and unknown 
latency period, this value does not deviate from the original $6.1 
million used in the primary benefits analysis. The second and third 
rows of both the 3 and 7 percent panels show the adjustments to the 
primary VSL to account for changes in WTP for fatal risk reductions 
associated with real income growth from 1990 to 1999. As real income 
grows, the WTP to avoid fatal risks is also expected to increase at a 
rate corresponding to the income elasticity of demand, as discussed 
below. This income growth, from the years 1990 to 1999, accounts for 
the differences in incomes of the VSL study population versus the 
population affected by the arsenic rule. This does not include any 
income adjustments over a latency period because of methodological 
issues that have not yet been resolved. However, pending the resolution 
of these issues, EPA may include an adjustment for income growth over a 
latency period in future analyses, as recommended by the SAB.
    The fourth and fifth rows of both the 3% and 7% panels illustrates 
the impacts of adjusting the primary VSL for discounting and WTP 
changes based on real income growth over a range of assumed latency 
periods. As is shown in Table III.E-4, this value decreases from $5.84 
million assuming a five-year latency period to $3.75 million assuming a 
20-year latency period (at a 3% discount rate and income elasticity of 
1.0). At a 7% discount rate, this value decreases from $4.83 million to 
$1.75 million.
    The sixth and seventh rows of the 3% and 7% panels illustrate the 
effects of incorporating a 7% increase for voluntariness and 
controllability. The 7% adjustment is based on a study by Cropper and 
Subramanian (1999) that indicates individuals may place a slightly 
higher Willingness to Pay (WTP) on risks where exposure is neither 
voluntary nor controllable by the individual.
    In adjusting for WTP changes based on real income growth, EPA used 
a range of income elasticities from the economics literature. Income 
elasticity is the % change in demand for a good (in this case, WTP for 
fatal risk reductions) for every 1% change in income. For example, an 
income elasticity of 1.0 implies that a 10 percent higher income level 
results in a 10% higher WTP for fatal risk reductions. In a recent 
study (EPA, 2000l), EPA reviewed the literature related to the income 
elasticity of demand for the prevention of fatal health impacts. Based 
on data from cross-sectional studies of wage premiums, a range of 
elasticity estimates for serious health impacts was developed, ranging 
from a lower-end estimate of 0.22 to an upper-end estimate of 1.0.
    There are several other characteristics that differ between the VSL 
estimates used in the primary analysis and an ideal estimate specific 
to the case of cancer risks from arsenic. These might

[[Page 7015]]

include a cancer premium, differences in risk aversion, altruism, age 
of the individual affected, and a morbidity component of the VSL 
mortality estimate. Very little empirical information is available on 
the impact that these characteristics have on VSL estimates so they are 
not accounted for directly in this sensitivity analysis. A more 
complete discussion of the other characteristics identified by 
economists as having a potential impact on willingness to pay to reduce 
mortality risks can be found in chapter seven of the Agency's 
``Guidelines for Preparing Economic Analyses'' (EPA 2000k), which is 
available in the docket for this final rulemaking.
    However, it is possible to use a different type of analysis to 
address the question: what would the impact on VSL of these additional 
characteristics need to be to produce the $6.1 million VSL used in the 
primary benefits analysis? (See primary benefits analysis in section 
III.E.2.a of today's rule.) The last two rows of the 3% and 7% panels 
of Table III.E-4 attempt to answer this question in percentage terms. 
For example, at a 3% discount rate over a 10-year latency period, 
income elasticity of 1.0, and a 7% adjustment for controllability and 
voluntariness, a factor of 12% (as shown in the bottom row of the 3% 
panel of Table III.E-4) indicates that if accounting for these 
characteristics would increase VSL by more than 12% then the primary 
analysis will tend to understate the value of risk reductions. If 
accounting for these characteristics would not increase VSL by at least 
12%, then the primary analysis may overstate benefits (a negative % 
indicates that the primary analysis understates benefits unless the 
combined impact of these additional characteristics actually reduces 
VSL estimates).
    Some researchers believe that the value of some of these 
characteristics will substantially add to the unadjusted VSL (one study 
suggests that a cancer premium alone may be worth an additional 100% of 
primary VSL value (Revesz, 1999)). Some researchers also believe that 
some of these characteristics have a negative effect on VSL, suggesting 
that some of these factors offset one another. Until we know more about 
these various factors we cannot explicitly make adjustments to existing 
VSL estimates. The SAB noted in its report that these characteristics 
require more empirical research prior to incorporation into the 
Agency's primary benefits analysis, but could be explored as part of a 
sensitivity analysis.
    e. Results. Table III.E-5 illustrates the impacts of changes in VSL 
adjustment factor assumptions on the estimated benefits for the range 
of fatal bladder and lung cancer cases avoided in the final arsenic 
rule, assuming a 3% discount rate. The results of this analysis at a 7% 
discount rate are given in Table III.E-6. These results were calculated 
by applying the adjusted VSL from Table III.E-4 to the lower- and 
upper-bound estimates of fatal bladder and lung cancer cases avoided as 
shown in Table III.E-3 in section III.D.2 of today's rule. For purposes 
of this sensitivity analysis, EPA presented combined bladder and lung 
cancer cases avoided in Tables III.E-5 and III.E-6. Health risk 
reduction benefits attributable to reduced arsenic levels in both CWSs 
and NTNCWSs are presented in these tables as well.
    It is important to note that the monetized benefits estimates shown 
in this section reflect quantifiable benefits only. As shown in section 
III.E.2.a, there may be a number of nonquantifiable benefits associated 
with regulating arsenic in drinking water. Were EPA able to quantify 
some of the currently nonquantifiable health effects and other benefits 
associated with arsenic regulation, monetized benefits estimates would 
be higher than what is shown in the table. A more complete discussion 
of how risks from arsenic in drinking water and the corresponding 
health benefits were calculated is provided in the ``Arsenic Economic 
Analysis'' (EPA, 2000o), which is available in the docket for this 
final rulemaking.

 Table III.E-5.--Sensitivity of Combined Annual Bladder and Lung Cancer Mortality Benefits Estimates to Changes
                                      in VSL Adjustment Factor Assumptions
                                    [$ millions, 1999, 3% discount rate] \1\
----------------------------------------------------------------------------------------------------------------
                Arsenic Level (g/L)                       3            5            10           20
----------------------------------------------------------------------------------------------------------------
                                        5-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      176-328      130-182        62-69
Adjusted for Income Growth \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth\2\ and Discounting:
    E = 0.22................................................      175-398      156-288      114-160        55-61
    E = 1.0.................................................      190-433      170-314      124-174        60-66
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................      187-425      167-308      122-171        59-65
    E = 1.0.................................................      204-463      182-336      133-186        64-71
----------------------------------------------------------------------------------------------------------------
                                        10-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      176-328      130-182        62-69
Adjusted for Income Growth: \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth,\2\ and Discounting:
    E = 0.22................................................      151-343      135-249       99-138        47-52
    E = 1.0.................................................      164-373      147-271      107-150        51-57
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................      161-367      144-266      105-148        50-56
    E = 1.0.................................................      176-399      157-289      115-161       55-61

[[Page 7016]]

 
                                        20-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      176-328      130-182        62-69
Adjusted for Income Growth: \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth \2\ and Discounting:
    E = 0.22................................................      112-255      100-185       73-103        35-39
    E = 1.0.................................................      122-278      109-201       80-112        38-42
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................      120-273      107-198       79-110        38-42
    E = 1.0.................................................      131-297      117-215       85-119       41-45
----------------------------------------------------------------------------------------------------------------
\1\ The lower- and upper-bound benefits estimates correspond to the lower- and upper-bound risk estimates and
  cancer cases avoided as shown in section III.D.2 of this preamble.
\2\ This adjustment reflects the change in WTP based on real income growth from 1990 to 1999. E = income
  elasticity.


 Table III.E-6.--Sensitivity of Combined Annual Bladder and Lung Cancer Mortality Benefits Estimates to Changes
                                      in VSL Adjustment Factor Assumptions
                                    [$ millions, 1999, 7% discount rate] \1\
----------------------------------------------------------------------------------------------------------------
                Arsenic Level (g/L)                       3            5            10           20
----------------------------------------------------------------------------------------------------------------
                                        5-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      178-328      130-182        62-69
Adjusted for Income Growth: \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth,\2\ and Discounting:
    E = 0.22................................................      145-329      129-238       95-132        45-50
    E = 1.0.................................................      157-358      141-259      103-144        50-55
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................      155-352      138-255      102-142        49-54
    E = 1.0.................................................      168-383      150-278      110-154        53-58
----------------------------------------------------------------------------------------------------------------
                                        10-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      178-328      130-182        62-69
Adjusted for Income Growth: \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth  \2\ and Discounting:
    E = 0.22................................................      103-234       92-170        67-94        32-36
    E = 1.0.................................................      112-255      100-185       73-103        35-39
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................      110-251       98-182       72-101        35-38
    E = 1.0.................................................      120-273      107-198       78-110        38-42
----------------------------------------------------------------------------------------------------------------
                                        20-Year Latency Period Assumption
----------------------------------------------------------------------------------------------------------------
Primary Analysis (No VSL Adjustment)........................      199-452      178-328      130-182        62-69
Adjusted for Income Growth: \2\
    E = 0.22................................................      203-461      181-334      133-186        63-70
    E = 1.0.................................................      221-502      197-364      144-202        69-77
Adjusted for Income Growth \2\ and Discounting:
    E = 0.22................................................       53-119        47-86        34-48        16-18
    E = 1.0.................................................       57-130        51-94        37-52        18-20
Adjusted for Income Growth,\2\ Discounting, and 7% Increase
 for Voluntariness and Controllability:
    E = 0.22................................................       56-127        50-92        37-51        18-20
    E = 1.0.................................................       61-139       54-100        40-56       19-21
----------------------------------------------------------------------------------------------------------------
\1\ The lower- and upper-bound benefits estimates correspond to the lower- and upper-bound risk estimates and
  cancer cases avoided as shown in section III.D.2 of this preamble.
\2\ This adjustment reflects the change in WTP based on real income growth from 1990 to 1999. E = income
  elasticity.


[[Page 7017]]

    As shown in Tables III.E-5 and III.E-6, the highest range of 
adjusted benefits estimates at the 10 g/L MCL ($144-$202 
million) are yielded when benefits are adjusted for changes in WTP 
based on real income growth only with an income elasticity of 1.0. The 
lowest adjusted benefits estimates at the 10 g/L MCL ($73-$103 
million at 3%, $34-$48 million at 7%) are yielded under the assumption 
of a 20-year latency period that includes adjustments for discounting 
and WTP changes based on real income growth (income elasticity = 0.22). 
These results indicate the high degree of sensitivity of benefits 
estimates to different assumptions of a latency period, discount rate, 
and income elasticity and also the inclusion of adjustments for income 
growth and voluntariness and controllability.
3. Comparison of Costs and Benefits
    This section presents a comparison of quantifiable total national 
costs and benefits for each of the arsenic regulatory options 
considered. Three separate analyses are considered, including a direct 
comparison of aggregate national costs and benefits, a summary of 
benefit-cost ratios and net benefits, and the results of a cost-
effectiveness analysis of each regulatory option.
    a. Total national costs and benefits. Table III.E-7 shows the 
annual costs and benefits associated with the 10 g/L MCL and 
also with three other arsenic levels considered in the proposed rule. 
Both costs and benefits increase as arsenic levels decrease. Costs 
increase over decreasing arsenic levels because of the increasing 
number of systems that must treat to lower arsenic levels. Benefits 
estimates increase as arsenic levels decrease due to the greater number 
of both fatal and non-fatal cancer cases avoided at lower arsenic 
levels. Additionally, other potential non-quantifiable health benefits 
are summarized in Table III.E-7.

            Table III.E-7 Estimated Annual Costs and Benefits From Reducing Arsenic in Drinking Water
                                               [1999, $ millions]
----------------------------------------------------------------------------------------------------------------
                     Total national   Total bladder    Total lung    Total combined
   Arsenic level      costs to CWSs   cancer health   cancer health   cancer health   Potential nonquantifiable
   (g/L)    and NTNCSs \1\   benefits \2\    benefits \2\    benefits \2\         health benefits
----------------------------------------------------------------------------------------------------------------
3..................     697.8-792.1      58.2-156.4     155.6-334.5     213.8-490.9  Skin Cancer; Kidney Cancer;
                                                                                      Cancer of the Nasal
                                                                                      Passages; Liver Cancer;
                                                                                      Prostate Cancer;
                                                                                      Cardiovascular Effects;
                                                                                      Pulmonary Effects;
                                                                                      Immunological Effects;
                                                                                      Neurological Effects;
                                                                                      Endocrine Effects.
5..................     414.8-471.7      52.0-113.3     139.1-242.3     191.1-355.6  ...........................
10.................     180.4-205.6       38.0-63.0     101.6-134.7     139.6-197.7  ...........................
20.................       66.8-76.5       20.1-21.5       46.1-53.8       66.2-75.3  ...........................
----------------------------------------------------------------------------------------------------------------
\1\ Costs include treatment, monitoring, O&M, and administrative costs to CWSs and NTNCWSs and State costs for
  administration of water programs. The lower number shows costs annualized at a consumption rate of interest of
  3%, EPA's preferred approach. The higher number shows costs annualized at 7%, which represents the standard
  discount rate preferred by OMB for benefit-cost analyses of government programs and regulations.
\2\ The lower- and upper-bound bladder, lung, and combined cancer benefits estimates correspond to the lower-
  and upper-bound risk estimates and cancer cases avoided as shown in section III.D.2 of this preamble; these
  estimates include both mortality and morbidity.

    b. National net benefits and benefit-cost ratios. Table III.E-8 
describes the quantifiable net benefits and the benefit-cost ratios 
under various regulatory levels for both CWSs and NTNCWSs at 3% and 7% 
discount rates. The net benefits and benefit-cost ratios do not include 
any of the potential nonquantifiable health benefits that are listed in 
the previous table. As shown in Table III.E-8, under both the lower-and 
upper-bound estimates of avoided lung and bladder cancer cases, the net 
benefits decrease as the arsenic rule MCL options become increasingly 
more stringent. Similarly, the benefit-cost ratios decrease with each 
more stringent MCL option. Costs outweigh the quantified benefits for 
the lower-bound benefits estimates under all four MCL options. Benefit-
cost ratios are equal to or greater than 1.0 for the upper-bound 
benefits estimates (at both 3% and 7% discount rates) for arsenic 
levels of 10 g/L and 20 g/L.

   Table III.E--8. Summary of National Annual Net Benefits and Benefit-Cost Ratios, Combined Bladder and Lung
                                                  Cancer Cases
                                          [1999, $ millions]\1\ \2\ \3\
----------------------------------------------------------------------------------------------------------------
                                                                       Arsenic level (g/L)
                                                         -------------------------------------------------------
                                                                3             5            10            20
----------------------------------------------------------------------------------------------------------------
                                                3% Discount Rate
----------------------------------------------------------------------------------------------------------------
Lower Bound....................  Net Benefits...........       (484.0)       (223.7)        (40.8)         (0.6)
                                 B/C Ratio..............          0.3           0.5           0.8           1.0
Upper Bound....................  Net Benefits...........       (206.8)        (59.2)         17.3           8.5
                                 B/C Ratio..............          0.7           0.9           1.1           1.1
----------------------------------------------------------------------------------------------------------------
                                                7% Discount Rate
----------------------------------------------------------------------------------------------------------------
Lower Bound....................  Net Benefits...........       (578.3)       (280.6)        (66.0)        (10.3)
                                 B/C Ratio..............          0.3           0.4           0.7           0.9
Upper Bound....................  Net Benefits...........       (301.1)       (116.1)         (7.9)         (1.2)

[[Page 7018]]

 
                                 B/C Ratio..............          0.6           0.8           1.0           1.0
----------------------------------------------------------------------------------------------------------------
\1\ Costs include treatment, monitoring, O&M, and administrative costs to CWSs and NTNCWSs and State costs for
  administration of water programs. The lower number shows costs annualized at a consumption rate of interest of
  3%, EPA's preferred approach. The higher number shows costs annualized at 7%, which represents the standard
  discount rate preferred by OMB for benefit-cost analyses of government programs and regulations.
\2\ The lower- and upper-bound bladder, lung, and combined cancer benefits estimates correspond to the lower-
  and upper-bound risk estimates and cancer cases avoided as shown in section III.D.2 of this preamble;
  unquantified benefits are not included.
\3\ Numbers in parentheses indicate negative numbers.

    c. Incremental costs and benefits. Incremental costs and benefits 
are those that are incurred or realized in reducing arsenic exposures 
from one level to the next more stringent level (e.g., from 20 
g/L to 10 g/L). Estimates of incremental costs are 
useful in developing estimates of the cost-effectiveness of 
successively more stringent requirements.
    Table III.E-9 shows the incremental total national risk reduction, 
arsenic mitigation costs, and monetized health benefits for the various 
arsenic levels valued using discount rates of three and seven percent.

  Table III.E-9--Estimates of the Annual Incremental Risk Reduction, Costs, and Benefits of Reducing Arsenic in
                                                 Drinking Water
                                               [$ millions, 1999]
----------------------------------------------------------------------------------------------------------------
                                                                         Arsenic level (g/L)
                    Benefit-cost element                     ---------------------------------------------------
                                                                   20           10           5            3
----------------------------------------------------------------------------------------------------------------
Incremental Risk Reduction:
    Fatal Cancers Avoided per Year \1\......................    10.2-11.3    11.1-18.5     7.8-23.9     3.5-20.4
Incremental Risk Reduction:
    Non-Fatal Cancers Avoided per Year \1\..................      8.5-8.8     7.6-17.1     5.9-20.6     2.6-17.7
Annual Incremental Monetized Benefits \2\...................  $66.2-$75.3  $73.4-$122.  $51.5-$157.  $22.7-$135.
                                                                                     4            9            4
Annual Incremental Costs (3%) \3\...........................        $66.8       $113.6       $234.4       $283.0
Annual Incremental Costs (7%) \3\...........................        $76.5       $129.1       $266.0      $320.5
----------------------------------------------------------------------------------------------------------------
\1\ Total fatal and non-fatal cancer cases avoided are discussed in section III.D.2 of this preamble.
\2\ The lower- and upper-bound combined cancer benefits estimates correspond to the lower- and upper-bound risk
  estimates and cancer cases avoided as shown in section III.D.2 of this preamble.
\3\ Costs include treatment, monitoring, O&M, and administrative costs to CWSs and NTNCWSs and State costs for
  administration of water programs.

    d. Cost-per-case avoided. Cost-per-case avoided is a commonly used 
measure of the economic efficiency with which regulatory options are 
meeting the intended regulatory objectives. Table III.E-10 shows the 
results of an analysis in which the average national cost of achieving 
each unit of reduction in cases of bladder and lung cancer avoided, was 
calculated. The average annual cost per case avoided was computed at 
each MCL option for both 3% and 7% discount rates.
    As shown in Table III.E-10, the cost per bladder and lung cancer 
case avoided ranges from $4.8 million down to $3.2 million at the 10 
g/L MCL, assuming a 3% discount rate. At a 7% discount rate, 
the cost per bladder and lung cancer case avoided ranges from $5.5 
million down to $3.7 million at the 10 g/L MCL. As expected, 
the cost per bladder and lung cancer case avoided decreases with 
increasing arsenic levels. This is due to lower compliance costs at 
higher levels for the standard.

   Table III.E-10.--Annual Cost Per Cancer Case Avoided for the Final
          Arsenic Rule--Combined Bladder and Lung Cancer Cases
                            $ millions, 1999]
------------------------------------------------------------------------
                                            Lower-bound     Upper-bound
      Arsenic level (g/L)          estimate 1      estimate 1
------------------------------------------------------------------------
                            3 % Discount Rate
------------------------------------------------------------------------
3.......................................            12.2             5.0
5.......................................             8.1             4.1
10......................................             4.8             3.2
20......................................             3.5             3.4
------------------------------------------------------------------------
                            7 % Discount Rate
------------------------------------------------------------------------
3.......................................            13.8             5.7
5.......................................             9.2             4.7
10......................................             5.5             3.7
20......................................             4.0            3.9
------------------------------------------------------------------------
1 The lower- and upper-bound cost per cancer case avoided corresponds to
  the range of combined cancer benefits estimates as shown in Table
  III.E-3.

4. Affordability
    As noted previously, section 1412(b)(4)(E)(ii) of SDWA, as amended, 
requires EPA, when promulgating a national primary drinking water 
regulation which establishes a maximum contaminant level (MCL), to

[[Page 7019]]

list technology (considering source water quality) that achieves 
compliance with the MCL and is affordable for systems in three specific 
population size categories: 25-500, 501-3300, and 3301-10,000. If, for 
any given size category/source water quality combination, an affordable 
compliance technology cannot be identified, section 1412(b)(15)(A) 
requires the Agency to list a variance technology. Variance 
technologies may not achieve full compliance with the MCL but they must 
achieve the maximum contaminant reduction that is affordable 
considering the size of the system and the quality of the source water. 
In order for the technology to be listed, EPA must determine that this 
level of contaminant reduction is protective of public health.
    A determination of national level affordability is concerned with 
identifying, for each of the given size categories, some central 
tendency or typical circumstance relating to their financial abilities. 
The metric EPA selected for this purpose is the median household income 
(MHI) for communities of the specified sizes. The household is thus the 
focus of the national-level affordability analysis. EPA considers 
treatment technology costs affordable to the typical household if they 
represent a percentage of MHI that appears reasonable when compared to 
other household expenditures. This approach is based on the assumption 
that the affordability to the median household served by the CWS can 
serve as an adequate proxy for the affordability of technologies to the 
system itself. The national-level affordability criteria have two major 
components: current annual water bills (baseline) and the affordability 
threshold (total % of MHI directed to drinking water). Current annual 
water bills were derived directly from the 1995 Community Water System 
Survey. Based on 1995 conditions, 0.75-0.78% of MHI is being directed 
to water bills for systems serving fewer than 10,000 persons.
    The fundamental, core question in establishing national-level 
affordability criteria is: what is the threshold beyond which drinking 
water would no longer be affordable for the typical household in each 
system size category? Based upon careful analysis EPA believes this 
threshold to be 2.5% of MHI. In establishing this threshold, the Agency 
considered baseline household expenditures (as documented in the 1995 
Consumer Expenditure Survey, Bureau of Labor Statistics) for piped 
water relative to expenditure benchmarks for other household goods, 
including those perceived as substitutes for piped water treated to 
higher standards, such as bottled water and point-of-use and point-of-
entry devices. Based on these considerations, EPA concluded that 
current household water expenditures are low enough, relative to other 
expenditures, to support the cost of additional risk reductions. The 
detailed rationale for the selection of 2.5% MHI as the affordability 
threshold is provided in the guidance document entitled ``Variance 
Technology Findings for Contaminants Regulated Before 1996.'' The 
difference between the affordability threshold and current water bills 
is the available expenditure margin. This represents the dollar amount 
by which the water bill of the typical (median) household could 
increase before exceeding the affordability threshold of 2.5% of MHI.
    By definition, the MHI is the income value exactly in the middle of 
the income distribution. The median is a measure of central tendency; 
its purpose is to help characterize the nature of a distribution of 
values. In the case of income, which tends not to be evenly 
distributed, the median is a much better indicator of central tendency 
than the mean, or arithmetic average, that could be significantly 
skewed by a few large values. The Agency recognizes that there will be 
half the households in each size category with incomes above the 
median, and half the households with incomes below the median. The 
objective of a national-level affordability analysis is to look across 
all the households in a given size category of systems and determine 
what is affordable to the typical, or ``middle of the road'' household.
    The Agency recognizes that baseline costs change over time as water 
systems comply with new regulations and otherwise update and improve 
their systems. To take account of this upward movement in the baseline, 
the Agency plans to adjust the baseline it employs in its calculation 
in two ways. First, actual changes in the baseline will be measured 
approximately every 5 years by the Community Water System Survey. These 
changes will reflect not only the increased costs resulting from EPA 
drinking water rules, but also any changes resulting from other factors 
that could affect capital or operating and maintenance costs. Second, 
to the extent practical and appropriate during the period between 
Community Water System Surveys, the baseline will be adjusted to 
reflect the cost of rules promulgated during that period.
    MHI also changes from year to year, generally increasing in 
constant dollar terms. For example, since 1995 MHI has increased (in 
1999$) by 9.6%. Thus, to determine the available expenditure margin 
(the difference between the affordability threshold and the baseline) 
for each successive rule, adjustments would need to be made in both the 
baseline and the MHI.
    Given the narrow and specific purpose for which the national-level 
affordability criteria are used, the Agency is not adjusting either the 
baseline or the MHI for its analysis for the final arsenic rule. As 
noted previously, MHI has increased by 9.6%. The rules, which have been 
promulgated since the baseline was developed, are the Interim Enhanced 
Surface Water Treatment Rule, the Stage 1 Disinfectants and 
Disinfection ByProducts Rule, the revised Radionuclides Rule, the 
Consumer Confidence Report Rule and the revised Public Notification 
Rule. The Interim Enhanced Surface Water Treatment Rule applies only to 
systems serving greater than 10,000 persons, so it has essentially no 
impact on the baseline costs for smaller systems. The Stage 1 
Disinfectants and Disinfection ByProducts Rule does apply to small 
systems, and it has an impact on only 12% of the nearly 68,200 ground 
water systems serving 10,000 persons; and on 70% of the nearly 5200 
surface water systems serving 10,000 persons. The revised Radionuclides 
Rule has limited impact since it, for the most part, reaffirmed long-
standing MCLs. The Consumer Confidence Rule and revised Public 
Notification Rule result in no capital expenditures and only very 
modest administrative costs.
    The Agency believes that, for purposes of assessing national-level 
affordability of the arsenic rule, the unadjusted baseline and 
unadjusted MHI are appropriate. Making adjustments to these two factors 
would not materially alter the outcome of the analysis.
    The distinction between national-level affordability criteria and 
affordability assessments for individual systems cannot be over-
emphasized. The national-level affordability criteria serve only to 
guide EPA on the listing of an affordable compliance technology versus 
a variance technology for a given system size/source water combination 
for a given contaminant. In the case of arsenic, EPA has determined 
that nationally affordable technologies exist for all system size 
categories and has therefore not identified a variance technology for 
any system size/source water combination. This means that EPA believes 
that the typical household in each system size category can afford the 
costs associated with the listed compliance technologies. EPA

[[Page 7020]]

recognizes that individual water systems may serve a preponderance of 
households with incomes well below the median or may face unusually 
high treatment costs due to some unusual local circumstance.
    SDWA provides a number of tools that States can use to address 
affordability concerns for these individual water systems. Two of these 
tools are financial assistance under the Drinking Water State Revolving 
Fund (DWSRF) and extended compliance time-frames under an exemption. 
SDWA allows States to provide special assistance to water systems that 
the State determines to be disadvantaged, using State-developed 
affordability criteria. This special assistance may include forgiveness 
of principal, a negative interest rate, an interest rate lower than 
that charged to non-disadvantaged systems, and extended repayment 
periods of up to 30 years. To date, about half of the States have 
implemented disadvantaged community programs as part of their DWSRF. 
Almost one quarter of all loans made under the DWSRF have been made to 
systems classified as disadvantaged by the States.
    In addition to special financial assistance through the DWSRF, as 
discussed previously, systems facing affordability concerns may also be 
eligible for extended time to achieve compliance under the terms of a 
State-issued exemption or may receive assistance under the Rural 
Utilities Service (RUS) program of the United States Department of 
Agriculture (see section I.L). Together with the approximately $1 
billion per year being made available through the DWSRF, this results 
in a total of about $1.78 billion per year of Federal financial 
assistance available for drinking water.
    Decisions that a drinking water system makes about how to allocate 
its costs to users and how to design rates can also have a significant 
effect on affordability for low-income households. A traditional 
declining block rate structure would be regressive and might result in 
the households with the least income subsidizing excessive water use by 
more affluent households. Numerous alternative rate designs are 
possible that are more progressive. Of particular interest in 
addressing affordability concerns is lifeline rates. Lifeline rates are 
a rate structure applicable to qualified residential customers that 
includes a specified block of water use priced below the standard 
charge for the customer class. Such rates are primarily designed to aid 
the poor in obtaining some minimum level of service at an affordable 
price.
    The basic organizational or institutional structure of the drinking 
water system is another very important factor that influences the 
affordability of water service. The key issue here is the extent to 
which a given organizational or institutional structure is capable of 
achieving economic and operational efficiency. An especially important 
element of this efficiency relates to the degree to which a system 
seeks to work together with other systems. Systems that effectively 
work together, perhaps by combining management, will realize lower 
overall costs compared to the same systems working independently.

F. What MCL Is EPA Promulgating and What Is the Rationale for This 
Level?

1. Final MCL and Overview of Principal Considerations
    EPA is today promulgating a final arsenic MCL of 10 g/L. 
EPA's selection of this MCL is based on the SDWA statutory requirements 
for establishing an MCL and reflects the Agency's detailed evaluation 
and careful consideration of thousands of pages of comments. As part of 
this process, we have evaluated new data and analysis on occurrence, 
unit treatment costs, small system impacts, treatment technology 
availability, waste disposal options, and uncertainties regarding 
exposure and health effects data. Based on this new information, the 
Agency has revisited technical analyses, calculations, and judgments 
underlying the proposed MCL of 5 g/L. As discussed in section 
III.E. in this preamble, the Agency has conducted a thorough 
revaluation of costs and has carefully considered substantial new 
analysis on this subject submitted by commenters. In addition, EPA has 
completed a detailed reassessment of the risks of arsenic in drinking 
water, and has made significant adjustments to provide a more 
quantitative evaluation of major sources of uncertainty discussed at 
proposal and emphasized by commenters from a number of different 
perspectives.
    Today's rule, with a final MCL of 10 g/L, reflects the 
application of several provisions under SDWA, the first of which 
generally requires that EPA set the MCL for each contaminant as close 
as feasible to the MCLG, based on available technology and taking costs 
to large systems into account. The 1996 SDWA amendments also require 
that the Administrator determine whether or not the quantifiable and 
nonquantifiable benefits of an MCL justify the quantifiable and 
nonquantifiable costs. This determination is to be based on the Health 
Risk Reduction and Cost Analysis (HRRCA) required under section 
1412(b)(3)(C). The HRRCA must include consideration of seven analyses:
    (1)  The quantifiable and nonquantifiable benefits from treatment 
to the new MCL;
    (2)  The quantifiable and non quantifiable benefits resulting from 
reductions of co-occurring contaminants;
    (3)  The quantifiable and nonquantifiable costs resulting directly 
from the MCL;
    (4)  The incremental costs and benefits at the new MCL and 
alternatives considered;
    (5)  The health risks posed by the contaminant, including risks to 
vulnerable populations;
    (6)  Any increased risk resulting from compliance, including risks 
associated with co-occurring contaminants; and
    (7)  Any other relevant factor, including the uncertainties in the 
analyses and the degree and nature of risk.
    Finally, the 1996 SDWA amendments provide new discretionary 
authority for the Administrator to set an MCL less stringent than the 
feasible level if the benefits of an MCL set at the feasible level 
would not justify the costs (section 1412(b)(6)) based on the HRRCA 
analysis. Today's rule establishing an MCL of 10 g/L for 
arsenic is the second time EPA has invoked this new authority. (The 
first such time was in the final rule for uranium, which was published 
on December 7, 2000; EPA, 2000p.)
    In addition to the feasible MCL of 3 g/L, the Agency 
evaluated MCL options of 5 g/L, 10 g/L, and 20 
g/L and the various comments offered concerning these levels 
in response to the proposed rule. EPA has determined that a final MCL 
of 10 g/L more appropriately meets the relevant statutory 
criteria referred to above, particularly after considering the 
following: Available information relating to the various health effects 
associated with arsenic; new analysis regarding the projected risk to 
the population of adverse health effects that would remain after 
implementation; the revised costs and benefits of the various options; 
the incremental costs and benefits; and the uncertainties in the 
benefit-cost and risk analyses. A summary of the results of the 
Agency's reanalysis of these various factors follows.
2. Consideration of Health Risks
    The fifth and seventh HRRCA analyses focus on the health risks to 
be addressed by a new MCL. Estimates of risk levels to the population 
remaining

[[Page 7021]]

after the regulation is in place provide a perspective on the level of 
public health protection and associated benefits. SDWA clearly places a 
particular focus on public health protection afforded by MCLs. For 
instance, where EPA decides to use its discretionary authority after a 
determination that the benefits of an MCL would not justify the costs, 
section 1412(b)(6) requires EPA to set the MCL at a level that 
``maximizes health risk reduction benefits at a cost that is justified 
by the benefits.'' (EPA does not believe the sixth HRRCA analysis, 
consideration of increased risk likely to result from compliance is a 
significant factor in connection with selection of a final MCL; rather, 
we believe that many of the appropriate technologies for reducing 
arsenic will reduce many other co-occurring inorganic contaminants as 
well thereby decreasing, rather than increasing risk.)
    The Agency based its evaluation of the risk posed by arsenic at the 
MCL options of 3 g/L, 5 g/L, 10 g/L and 20 
g/L on a number of considerations, including the bladder 
cancer risk analysis developed by the National Research Council (NRC) 
of the National Academy of Sciences (NRC, 1999); the NRC's qualitative 
assessment of other possible adverse health effects; the lung cancer 
risk analysis developed by Morales et al. (2000); and findings of other 
relevant national and international studies. This information included, 
but was not limited to, findings from epidemiological studies in South 
America cited in the NRC report (NRC, 1999) and a study of a population 
exposed to high levels of arsenic in Millard County, Utah conducted by 
Lewis, et al. (1999).
    Among the factors EPA considered in choosing the final MCL was 
Congress' intent that EPA ``reduce * * * [scientific] uncertainty'' in 
promulgating the arsenic regulation reflected in section 1412(b)(12) 
arsenic research plan provisions and the legislative history on the 
arsenic provision (S. Rep. 104-169, 104th Cong., 1st Sess. at 39-40). 
The uncertainties in the analyses of costs, benefits and risks are also 
a factor required to be considered in the HRRCA. All assessments of 
risk are characterized by an amount of uncertainty. Some of this 
uncertainty can be reduced by collecting more data or data of a 
different sort. For other types of uncertainty, improved data or 
assessment methods can allow one to define the degree to which an 
estimate is likely to be above or below the ``true'' risk. For the 
arsenic risk assessment, there are several definable sources of 
uncertainty that were taken into account. These include, but are not 
limited to, the following:
     Uncertainty about the exact exposure of individuals in the 
study population to arsenic in drinking water, water used in cooking, 
and food;
     Uncertainties associated with applying data from a 
population in rural Taiwan to the heterogenous population of the U.S. 
(including differences in health status and diet between the Taiwanese 
and the U.S. population); and
     Uncertainties concerning precisely how a chemical causes 
cancer in humans (the mode of action) that affects assessments of the 
extent and severity of health effects at low doses.
    Section III.D. of the preamble to today's final rule provides a 
detailed explanation of how these uncertainties associated with the 
risk analysis were taken into account in developing a revised estimate 
of the risk of arsenic in drinking water. Based on comments and 
available information, the Agency has focused, in particular, on the 
first uncertainty bullet, and made two adjustments to its risk analysis 
to reduce uncertainty and more accurately apply data from the Taiwan 
study to the U.S. population. EPA has revised its quantified estimate 
of the risks of arsenic in drinking water to adjust for exposure to 
arsenic in both cooking water and food in the Taiwanese study and has 
also developed a risk range for the combined effects of bladder and 
lung cancer to reflect the scope of uncertainty underlying these 
estimates. Thus, one of the previously listed uncertainties has 
specifically been taken into account quantitatively, while others 
continue to be considered in a qualitative sense.
    In EPA's judgment, use of a risk range more clearly supports a 
qualitative consideration and recognition of the uncertainties that are 
inherent in any risk analysis that substantially relies upon 
epidemiological information. EPA believes that the health risk analysis 
presented in section III.D. of today's rule comprises a plausible range 
of likely risk associated with various concentrations of arsenic in 
drinking water. As just suggested, we do not believe it is appropriate 
to select a central or ``best estimate'' of the risk, due to the 
uncertainties associated with the underlying health effects studies and 
the various plausible assumptions used in considering these 
uncertainties for our risk analysis. This revised analysis of risks was 
used in recalculating the benefits attributable to reducing arsenic in 
drinking water from its present levels. EPA also recognizes that the 
latter two bulleted sources of uncertainty may operate to reduce the 
risk estimates if it were possible to account for them quantitatively.
3. Comparison of Benefits and Costs
    Under HRRCA analyses one and two, the Agency must consider both 
quantifiable and nonquantifiable health risk reduction benefits. 
Benefits considered in our analysis include those about which 
quantitative information is known and can be monetized as well as those 
which are more qualitative in nature (such as some of the non-cancer 
health effects potentially associated with arsenic) and which cannot 
currently be monetized. Important assumptions inherent in EPA's revised 
analysis of the benefits estimates include the value of a statistical 
life and willingness to pay to avoid illness. These assumptions and 
various adjustment factors considered for our benefits analysis are 
explained in detail in section III.E. of this preamble.
    EPA considered the relationship of the monetized benefits to the 
monetized costs for each the regulatory levels it considered. While 
strict equality of monetized benefits and costs is not a requirement 
under section 1412(b)(6)(A), this relationship is an important 
consideration in the regulatory development process. The monetized 
costs and monetized benefits of this final rule, and the methodologies 
used to calculate them, are discussed in detail in section III. E. of 
this preamble and in the arsenic Economic Analysis.
    EPA believes, however, that reliance on only an arithmetic analysis 
of whether monetized benefits outweigh monetized costs is inconsistent 
with the statute's instruction to consider both quantifiable and 
nonquantifiable costs and benefits. The Agency therefore examined and 
considered qualitative and non-monetized benefits in establishing the 
final MCL, as well as other factors discussed previously. These 
benefits are associated with avoiding certain adverse health impacts 
known to be caused by arsenic at higher concentrations, which may also 
be associated with low level concentrations, and include skin and 
prostate cancer as well as cardiovascular, pulmonary, neurological and 
other non-cancer effects. (These health effects are discussed in 
Section III.D. of this preamble.)
    Other potential benefits not monetized for today's final rule 
include customer peace of mind from knowing drinking water has been 
treated for arsenic and reduced treatment costs for contaminants that 
may be co-treated with arsenic. (For example, increased use of 
coagulation and micro filtration

[[Page 7022]]

by surface water systems will offer benefits with respect to removal of 
microbial contaminants and disinfection byproducts.)
    HRRCA analyses three and four require EPA to consider the costs of 
compliance with the rule and the incremental costs and benefits. EPA 
has also revised the cost of compliance estimates associated with the 
various possible regulatory levels considered for today's final 
rulemaking. The central estimate of costs has risen modestly since the 
proposed rule based on our further analysis of the information and data 
provided by commenters. However, in response to comments, we have also 
performed a sensitivity analysis that addresses a number of variables 
in our analysis and which indicates that the costs of compliance could 
exceed our central estimate by as much as 22%.
    In comparing monetized costs and benefits, we conducted several 
types of analyses, including:
     Comparison of total national costs and benefits (Table 
III.E-7);
     Analysis of incremental costs and benefits (comparing one 
regulatory option to another) (Table III.E-9);
     Estimates of net benefits (Table III.E-8); and
     Examination of benefit-cost ratios (Table III.E-8).

Detailed descriptions of our analyses appear in section III.E. of this 
preamble and in the Economic Analysis supporting today's rule. Our 
consideration of these analyses in support of the rationale for the 
final MCL is discussed below.
4. Rationale for the Final MCL
    The rationale for the final MCL promulgated with today's rule is 
based on the HRRCA analyses outlined previously and the statutory 
criteria for setting an alternative (higher than feasible) MCL under 
section 1412(b)(6). These analyses include:
     A revised risk analysis of arsenic in drinking water;
     A revised analysis of total costs;
     A revised analysis of total benefits;
     A comparison of costs and benefits using various metrics 
at various MCL options (including incremental costs and benefits); and
     Other pertinent factors (including uncertainties and the 
degree and nature of risk).
    In the proposed rule, EPA indicated a preference for a standard at 
5 g/L, but solicited comment on MCL options of 3 g/L, 
10 g/L, and 20 g/L, depending upon how uncertainties 
were addressed in the risk analysis as well in the calculation of costs 
and benefits. However, EPA also noted that, between the time of 
proposal and promulgation of the final rule, it would work to resolve 
as much of this uncertainty as possible. As described earlier, the 
principal revised analyses conducted since the rule was proposed and 
considered in our selection of the final MCL include: A revised 
analysis of the uncertainties of the health effects that has generated 
a revised risk range for the various MCL options considered; a revised 
range of benefits associated with our current estimates of the risks; 
and a revised analysis of costs, including uncertainty and sensitivity 
analyses. These revised analyses allow an updated comparison of the 
costs and benefits for the various regulatory options considered.
    a. General considerations. As explained in section III.E. of 
today's preamble, both our benefits and cost estimates involve ranges, 
rather than point estimates, due to a variety of factors. Thus, our 
consideration of costs and benefits involved an examination and 
comparison of these ranges. As can be seen from Table III.E-7, both 
total costs and benefits increase as one examines progressively lower 
(i.e., more stringent) regulatory options compared to higher options. 
However, the benefits and costs do not increase proportionately across 
the range of regulatory options as shown by a comparison of net 
benefits (defined as costs minus benefits). Progressively more 
stringent regulatory options become considerably more expensive, from a 
cost standpoint, than the corresponding increases in benefits, as 
reflected in decreasing net benefits. (see Table III.E-8.)
    b. Relationship of MCL to the feasible level (3 g/L). The 
MCL must be set as close as feasible to the MCLG, unless EPA invokes 
its discretionary authority under section 1412(b)(6) of SDWA to set an 
alternative MCL, which must then be set at a level that maximizes 
health risk reduction benefits at a cost that is justified by the 
benefits. As explained earlier in this preamble, the MCLG is zero and 
the feasible level is 3 g/L. The Agency believes that there 
are several important considerations in examining the feasible level. 
In comparing the benefits and the costs at this level (see Table III.E-
7), we note that it has the highest projected total national costs 
(relative to the other MCL options considered). In addition, while the 
benefits are highest at this level relative to the other MCL options, 
both the net benefits and the benefit/cost disparity at the feasible 
level are the least favorable of the regulatory options considered. For 
these reasons, we believe benefits of the feasible level do not justify 
the costs. Almost all commenters agreed with this conclusion in the 
proposal.
    c. Reanalysis of proposed MCL and comparison to final MCL. Based on 
substantial public comment, EPA has reexamined the proposed MCL of 5 
g/L. In comparing this level to 10 g/L, we note that 
both the net benefits and the benefit-cost relationships are less 
favorable for 5 g/L as compared to 10 g/L. Total 
national costs at 5 g/L are also approximately twice the costs 
of an MCL of 10 g/L. At 10 g/L, EPA notes that the 
lung and bladder cancer risks to the exposed population after the 
rule's implementation are within the Agency's target risk range for 
drinking water contaminants of 1  x  10 -\6\ to 1  x  10 
-\4\ or below. EPA recognizes that there is uncertainty in 
this quantification of cancer risk (as well as other health endpoints) 
and this risk estimate includes a number of assumptions, as discussed 
previously. EPA did not directly rely on the risk range in selecting 
the final MCL, since it is not part of the section 1412(b)(6) criteria; 
however, it is an important consideration, because it has a direct 
bearing on our estimates of the benefits of the rule.
    d. Consideration of higher MCL options. EPA does not believe an MCL 
less stringent 10 g/L is warranted from the standpoint of 
benefit-cost comparison. While total national costs associated with 20 
g/L are the lowest of the regulatory options considered, 
benefits are also the lowest of these options. Both regulatory options 
of 10 g/L and 20 g/L have relatively favorable 
benefit-cost relationships relative to lower regulatory options but are 
not significantly different from one another based on this comparison 
metric. However, the incremental, upper-bound benefits at 10 
g/L are more than twice those of 20 g/L; and 10 
g/L is clearly the more protective level. Thus, we do not 
believe that an MCL of 20 g/L would ``maximize health risk 
reduction benefits'' as required for an MCL established pursuant to 
section 1412(b)(6).
    e. Conclusion. Strict parity of monetized costs and monetized 
benefits is not required to find that the benefits of a particular MCL 
option are justified under the statutory provisions of section 
1412(b)(6) of SDWA. However, EPA believes that, based on comparisons of 
cost and benefits (using the various benefit-cost comparison tools 
discussed), the monetized benefits of a regulatory level of 10 
g/L best justify the costs. In addition, as discussed in 
section III.D. and elsewhere in today's preamble, our further 
qualitative consideration of the various sources of

[[Page 7023]]

uncertainty in our understanding of arsenic since the proposal (e.g., 
such as that surrounding the mode of action), has led us to conclude 
that our estimate of risk (for the risks we have quantified) is most 
likely an upper bound of risks and that the higher MCL of 10 
g/L is appropriate. Finally, as discussed in section III.E. of 
this preamble EPA believes that there are a number of not yet 
quantified adverse health effects and potentially substantial non-
monetized benefits at 10 g/L that increase the overall 
benefits at this level.
    In summary, based on our reanalysis of costs, benefits, and health 
risk reduction, and factoring in the uncertainties in these analyses 
and the degree and nature of risk, EPA believes the final MCL of 10 
g/L represents the level that best maximizes health risk 
reduction benefits at a cost that is justified by the benefits and that 
the other regulatory options considered in the proposed rule do not 
satisfy the statutory requirements of section 1412(b)(6) of SDWA. We 
are therefore exercising our discretionary authority under the statute 
to establish an MCL at a level higher than the feasible level and 
setting that level at 10 g/L.

IV. Rule Implementation

A. What Are the Requirements for Primacy?

    States must revise their programs to adopt any part of today's rule 
that is more stringent than the approved State program. Primacy 
revisions must be completed in accordance with 40 CFR 142.12, and 
142.16. States must submit their revised primacy application to the 
Administrator for approval. A State's request for final approval must 
be submitted to the Administrator no later than 2 years after 
promulgation of a new standard unless the State requests and is granted 
an additional 2-year extension.
    For revisions of State programs, Sec. 142.12 requires States to 
submit, among other things, ``[a]ny additional materials that are 
listed in Sec. 142.16 of this part for a specific EPA regulation, as 
appropriate.'' Today's rule does not require States to submit 
information in Sec. 142.16(e) for primacy revisions associated with the 
revised arsenic MCL. The final rule notes that Sec. 142.16(e) primacy 
revision information will only be required for new contaminants, not 
revisions of existing regulated contaminants.

B. What Are the Special Primacy Requirements?

    Today's rule adds special primacy requirements in Sec. 142.16(j) 
and Sec. 142.16(k) to the State special primacy requirement section. 
Section 142.16(j) clarifies that for an existing regulated contaminant 
such as arsenic, States may indicate in the primacy application that 
they will use the existing monitoring plans and waiver criteria 
approved for primacy under the National Primary Drinking Water 
Standards (NPDWRs) for organic and inorganic contaminants (the Phase 
II/V rules). Alternatively, the State may inform the Agency in its 
application of any changes to the monitoring plans and waiver 
procedures.
    Section 142.16(k) requires States to establish initial monitoring 
requirements for new systems and new sources. Many States already have 
developed monitoring programs for new systems and for systems that are 
using new sources of water. To meet the requirements of Sec. 142.16(k), 
States that have existing requirements may simply explain to EPA in 
their primacy revision package their monitoring schedule and how the 
State can ensure that all new systems and new sources will comply with 
the existing MCLs and monitoring requirements. Some States may wish to 
explain that monitoring for new systems is established on a case-by-
case basis. States should explain the factors that are considered as 
case-by-case determinations are made.
    When a State develops or modifies an initial monitoring program for 
new systems and new sources, it should ensure that the program reflects 
the contaminant(s) of concern for that State, known contaminant use, 
historical data, and vulnerability. Because of varying contaminant uses 
and sources, some contaminants occur at higher levels in some regions 
of the country than in other regions. Additionally, the concentrations 
of some contaminants are known to show clear seasonal peaks, while 
others remain constant throughout the year. For example, some States 
may be concerned with atrazine and require multiple samples during a 
specified vulnerable period (e.g., May 1-July 31), while another State 
may only require one sample for the entire year. Alternatively, another 
State may be concerned about trichloroethylene and require four 
quarterly samples.

C. What Are the State Recordkeeping Requirements?

    The standard record keeping requirements for States under SDWA 
apply to the arsenic rule (Sec. 142.14). Today's rule does not modify 
or require additional recordkeeping requirements. States with primacy 
must keep all records of current monitoring requirements and the most 
recent monitoring frequency decision pertaining to each contaminant, 
including the monitoring results and other data supporting the 
decision, and the State's findings based on the supporting data and any 
additional bases for such decision. These records must be kept in 
perpetuity or until a more recent monitoring frequency decision has 
been issued.

D. What are the State Reporting Requirements?

    Currently, States with primary enforcement responsibility must 
report to EPA information under Sec. 142.15 regarding violations, 
variances and exemptions, and enforcement actions and general 
operations of State public water supply programs. Today's rule does not 
modify or require additional reporting requirements. The State 
reporting requirements that will apply to the arsenic standard are the 
same as all other regulated inorganic contaminants.

E. When Does a State Have To Apply for Primacy?

    To maintain primacy for the Public Water Supply Supervision (PWSS) 
program and to be eligible for interim primacy enforcement authority 
for future regulations, States must adopt today's final rule. A State 
must submit a request for approval of program revisions that adopt the 
revised MCL and implement regulations within two years of promulgation, 
unless EPA approves an extension per Sec. 142.12(b). Interim primacy 
enforcement authority allows States to implement and enforce drinking 
water regulations once State regulations are effective and the State 
has submitted a complete and final primacy revision application. To 
obtain interim primacy, a State must have primacy with respect to each 
existing NPDWR. Under interim primacy enforcement authority, States are 
effectively considered to have primacy during the period that EPA is 
reviewing their primacy revision application.

F. What Are Tribes Required To Do Under This Regulation?

    Currently, the Navajo Nation is the only Tribe with primacy for all 
the National Primary Drinking Water Regulations, and it will be subject 
to the same requirements as a State. There are no other Federally 
recognized Indian tribes with primacy to enforce any of the drinking 
water regulations. EPA's Regions have responsibility for implementing 
the rules for all Tribes except the Navajo Nation under section 
1451(a)(1) of SDWA. To obtain primacy authority for the revised arsenic 
MCL, Tribes must submit a primacy

[[Page 7024]]

application to regulate inorganic contaminants (i.e., the Phase II/V 
rule).

V. Responses to Major Comments Received

A. General Comments

1. Sufficiency of Information and Adequacy of Procedural Requirements 
To Support a Final Rule
    A number of commenters challenged EPA's basis for promulgating a 
final rule, arguing that (1) there was insufficient technical 
information provided with the proposed rule, (2) various expert 
technical evaluations were not adequately considered, or (3) procedural 
requirements (e.g., Unfunded Mandates Reform Act (UMRA), Small Business 
Regulatory and Enforcement Flexibility Act (SBREFA)) have not been 
fully satisfied. EPA respectfully disagrees, and we believe that the 
record of our actions is sufficient to support a final rulemaking. 
Other portions of the preamble to today's rule explain the technical 
evaluations performed in support of the proposed rule and the revised 
analyses conducted, based on comments and information submitted in 
response to the proposal. EPA recognizes that various questions about 
different aspects of this rulemaking have been the subject of an array 
of analyses and reports by various investigators. This area of 
investigation has also been dynamic, and there will undoubtedly be 
additional analyses after promulgation of the final rule that the 
Agency will need to consider in light of the requirement to 
periodically review (and revise as appropriate) all final drinking 
water regulations as provided by section 1412(b)(9) of SDWA. However, 
we believe that we have fully and appropriately considered all 
available and relevant information for the final rulemaking and do not 
need to repropose as several commenters suggest. We also believe that 
we have fully satisfied the procedural requirements of the pertinent 
statutory and Executive Order requirements. Section VI. of the preamble 
to today's final rule discusses these procedural requirements in more 
detail.
2. Suggestions for Development of an Interim Standard
    Several commenters advocated an interim standard in view of the 
uncertainties associated with the health effects data, the costs of 
compliance with the final rule, and concerns over the interpretation of 
the ``anti-backsliding'' provision of SDWA related to review and 
revision of existing standards (section 1412(b)(9)). While EPA 
appreciates these concerns, we do not believe that they provide a 
sufficient basis for concluding that an interim standard be set. We 
agree with the recommendation of the National Academy of Sciences that 
there is sufficient information available now to develop a new lower 
drinking water standard for arsenic. We further believe that available 
information is sufficient to support a final, rather than an interim, 
standard. Finally, there is simply no authority in SDWA to establish an 
interim standard that does not comply with sections 1412(b)(4) and 
1412(b)(6). However, we are committed to reviewing and revising, if 
appropriate, the final standard every six years (or sooner, if 
pertinent new information becomes available). In so doing, we must 
ensure that the revised standard provides for ``equal or greater 
protection to the health of persons'' as compared to the standard it 
replaces.
3. Public Involvement and Opportunity for Comment
    Some commenters questioned whether the extent of public involvement 
in the development of today's rule was sufficient. Some commenters also 
suggested that the Agency use a negotiated rulemaking process for the 
final rule pursuant to the Federal Advisory Committee Act (FACA). EPA 
believes that public involvement throughout the development of this 
rule, has been extensive and far-reaching. As discussed in section I.N. 
earlier in this preamble, during the period 1996-2000, EPA conducted a 
number of Agency workgroup meetings on arsenic and advertised six 
stakeholder meetings (held in five locations) in the Federal Register. 
Five States also provided written comments on implementation issues 
during the workgroup process. Representatives of eight Federal 
agencies, 19 State offices, 16 associations representing the breadth of 
the public water system community, 13 corporations, 14 consulting 
engineering companies, two environmental organizations, three members 
of the press, 37 public utilities and cities, four universities, and 
one Indian tribe attended the stakeholder meetings on arsenic. EPA 
presented an overview of the arsenic rulemaking to over 900 Tribal 
representatives in 1998 and provided more detailed information in 1999 
to 25 Tribal council members and water utility operators from 12 Indian 
tribes. In addition, EPA provided updates on our rulemaking activities 
at national and regional meetings of various groups and trade 
associations. We also participated in the American Water Works 
Association's (AWWA) technical workgroup meetings. As part of the Small 
Business Regulatory and Enforcement Flexibility Act (SBREFA) process, 
EPA also received valuable input from discussions with small entity 
representatives during SBREFA consultations for the arsenic rule. EPA 
obtained recommendations from the National Drinking Water Advisory 
Council (NDWAC) on the rule as a whole as well as on our approach 
benefits analysis and small systems affordability. We also posted 
discussion papers produced for our stakeholder interactions on the EPA 
Office of Ground Water and Drinking Water (OGWDW) Internet site and 
sent them directly to participants at stakeholder meetings and others 
who expressed interest. EPA also received over 1,100 comments on the 
June 22, 2000 proposed rule. EPA took these comments into consideration 
in developing today's final rule.
    EPA agrees that the FACA-negotiated rulemaking process has been an 
effective one in the past for other complex rulemakings. However, EPA 
does not believe that a negotiated rulemaking at this point is 
consistent with the deadlines set by Congress for this rulemaking. We 
would point out, however, that the Agency has taken a number of active 
steps to ensure broad-based stakeholder involvement, as described 
previously, and has solicited expert points of view outside the Agency. 
Some of these actions included a charge to the National Academy of 
Sciences (NAS) to fully explore the most current health effects issues. 
A charge was also given to EPA's Science Advisory Board (SAB) to review 
key aspects of the proposed rule and EPA's underlying rationale. EPA 
believes that this combination of actions ensured that full and 
complete stakeholder involvement occurred, and that further 
negotiations would be unnecessary.
4. Relation of MCL to the Feasible Level
    Several commenters questioned the feasible level of 3 g/L 
contained in the proposed rule. Commenters believed that EPA has not 
accurately assessed the capabilities of laboratories to achieve the 
practical quantitation level (PQL) or of treatment technologies to 
reliably and consistently treat down to the feasible level. EPA 
disagrees and still believes that 3 g/L is feasible from the 
standpoints of both analytical methods and treatment technologies. EPA 
discusses these issues in more detail in section III.B. of the preamble 
to today's final rule. Many of the comments on the proposed rule were 
concerned by the close proximity of the proposed

[[Page 7025]]

standard (5 g/L) to the proposed feasible level (3 g/
L). However, comments regarding whether or not the proposed standard of 
5 g/L is feasible are not particularly germane to the setting 
of the final standard, which is well above any level identified by most 
commenters as being feasible.
5. Relationship of MCL to Other Regulatory Programs
    Many commenters expressed concerns about the possible impact of a 
new revised drinking water standard for arsenic on other regulatory 
standards for arsenic. In particular, several commenters recommended 
that EPA consider the prospective costs of future Comprehensive 
Environmental Response, Compensation and Liability Act (CERCLA) site 
clean-up actions, RCRA hazardous waste management costs, or national 
permit discharge elimination system (NPDES) permits to the extent that 
a new arsenic in drinking water standard leads to more stringent 
regulatory actions under those respective statutes. EPA disagrees and 
notes that SDWA specifically excludes from consideration under the 
HRRCA such prospective, ancillary costs in developing a drinking water 
standard (see section 1412(b)(3)(C) of SDWA).
6. Relation of MCL to WHO Standard
    Several commenters on the proposed rule expressed a concern that 
the drinking water standard in the U.S. should be no more stringent 
than the standard developed for the World Health Organization (WHO). 
This comment dealt primarily with the proposed level of 5 g/L 
and does not apply to the final MCL of 10 g/L, which is 
identical to the WHO standard. However, while the thrust of the comment 
is now moot, EPA notes that the basis for the final MCL and the WHO 
standard are different. EPA's standard is based on consideration of all 
of the risk management factors required to be evaluated under SDWA 
(e.g., risk, costs, benefits, treatment technology and analytical 
method capabilities, small systems affordability, etc.) while the WHO 
standard is based solely on health effects, without regard to any 
implementation considerations. Further, the health basis for the WHO 
standard is primarily an assessment of arsenic-induced skin cancer, 
whereas there are a number of health endpoints of concern in EPA's 
analysis including lung and bladder cancer. In summary, the two levels 
(the WHO standard and EPA's final MCL) happen to be the same but a 
possible future change in the WHO standard would not necessarily 
require a revision to EPA's MCL, for the reasons just discussed.
7. Regulation of Non-Transient Non-Community Water Systems (NTNCWSs)
    Several commenters objected to the approach outlined in the 
proposed rule for addressing NTNCWSs (monitoring and reporting only) 
and pointed out the need for consistency in coverage of NTNCWSs in 
EPA's rules. These commenters noted that the rules originally 
promulgated in 1976 (arsenic and radionuclides) have not required 
coverage of NTNCWSs, whereas more recently promulgated rules have. In 
addition, EPA's proposed radon rule suggested not covering NTNCWSs and 
the recently promulgated radionuclides rule did not require coverage of 
NTNCWSs, but instead deferred this issue for future resolution. EPA 
agrees that the outcomes of its recent decisions with respect to 
coverage of NTNCWSs have been different. However, we considered the 
merits of each rulemaking on a case-by-case basis using a consistent 
set of criteria, namely the cost/benefit analysis required under 
section 1412(b)(4).
    For the proposed arsenic rule, EPA carefully examined the risks 
posed by NTNCWSs and concluded preliminarily that the risks were such 
that, without coverage, consumers of water from NTNCWSs were projected 
to be within the target risk range. EPA acknowledges, however, that 
there is uncertainty associated with its information about exposure 
patterns for consumers of water from NTNCWSs and the demographics of 
these facilities. Thus, our understanding of the health risks (and 
associated possible benefits of removal) to consumers of water from 
NTNCWSs is uncertain. In the case of arsenic, EPA believes the 
additional uncertainty in the overall risk analysis argues against any 
finding at this point that these systems are substantially different in 
terms of exposure than community water systems. EPA also believes the 
decision to cover these facilities in today's rule is supported by 
consideration of the risks to certain subpopulations within the general 
population, such as children who consume water at day care facilities 
or schools that are served by NTNCWSs.
    Concerns were also expressed about whether commenters were provided 
with sufficient information about the costs of full coverage. These 
commenters noted that EPA could not, without violating the notice and 
comment provisions of the Administrative Procedure Act, move to full 
coverage of these facilities in the final rule. EPA disagrees with this 
comment. The proposal clearly indicated that full coverage of NTNCWSs 
was an option on which comment was being requested and the supporting 
documents provided complete information about the costs of full 
coverage. (EPA, 2000h, see Table 6-9).
8. Extension of Effective Date for Large Systems
    Commenters were generally supportive of EPA's proposed national 
determination (pursuant to section 1412(b)(10) of SDWA) that water 
systems covered by the rule, serving less than 10,000 persons, and 
needing to make capital improvements to comply with the new standard 
would need more than 3 years from the time of rule promulgation to 
accomplish this. Thus, the proposed rule suggested allowing a two-year 
extension for compliance with the new standard, beyond the three years 
provided after the promulgation date. However, several commenters 
suggested that this finding and the additional two years for compliance 
should be applicable to all systems, including those serving more than 
10,000 persons, since extensive planning, design, and new equipment 
will also generally be needed by larger systems in a similar situation 
to comply with the new standard. EPA was persuaded by these comments, 
and has, as part of the implementation requirements for today's final 
rule, elected to apply this two-year extension to all facilities 
covered by today's rule.

B. Health Effects of Arsenic

1. Epidemiology Data
    Many commenters were critical of the Taiwan epidemiologic study as 
a basis for EPA decision making, quantitative dose-response assessment, 
extrapolation of the dose-response from the observed range of exposure, 
and application of the same risk estimate to the U.S. population. No 
commenters challenged the EPA conclusion that this study and the other 
epidemiologic studies together show that arsenic is carcinogenic to 
humans. Some supported the risk analysis in the proposed rule and the 
notice of data availability (NODA) because it is relatively risk 
averse; others had criticisms.
    The following issues were raised about the use of the Taiwan risk 
assessment to represent U.S. risk: Arsenic exposure from food and via 
cooking with contaminated water in Taiwan is higher than is typical for 
the U.S. population; exposure groupings were made at the village level 
and were assigned the median of the

[[Page 7026]]

concentration of arsenic measured in the wells serving that village; 
not all wells serving all villages were measured and well 
concentrations varied seasonally; the Taiwan population was a rural 
population that was not well nourished, having deficits of selenium, 
possibly methionine or choline (methyl donors), zinc and other 
essential nutrients; and the Taiwan population may have unknown 
differences in genetic polymorphisms from the U.S. population. Similar 
concerns were raised about the South American studies.
    Commenters also cited studies in the U.S. (Lewis et al., 1999, Utah 
population) and Europe (Buchet et al., 1999; Kurttio et al., 1999) as 
support for the position that the risks from the Taiwan study 
overestimated the risks in the U.S.
    Many commenters were convinced that the Lewis et al. (1999) study 
of a U.S. population is the best study to use in estimating U.S. risk. 
Since the Utah study did not observe cancer outcomes that one would 
expect if risks were as large as the Taiwan or South American studies 
suggest, these commenters believe that risks estimates from studies of 
populations outside of the U.S. overestimate U.S. risks.
    Scientists generally agree that high doses of arsenic are 
associated with various cancer and noncancer health effects in humans. 
Epidemiology studies in humans demonstrate that arsenic induces skin 
and internal (e.g., bladder and lung) cancers and non-cancer effects 
such as skin keratoses and vascular abnormalities when ingested in 
drinking water at high doses.
    The epidemiologic investigations that have been most thorough in 
investigating the exposure and effects on humans of ingesting ground 
water contaminated with arsenic are those of populations in Taiwan 
(Chen et al., 1985; 1988; 1992; Wu et al., 1989), Argentina (Hopenhayn-
Rich et al., 1996; 1998), Chile (Smith et al., 1998), and the U.S. 
(Lewis et al., 1999). All of these and other, smaller studies have been 
considered in the Agency's deliberations on this rule.
    The studies from Taiwan, Chile, Argentina and the U.S. employed the 
proper endpoints, selected correct study groups and grouped the people 
into discrete exposure groups. They also used acceptable methods and 
accounted for some known confounders. These studies, due to their 
relative sizes, varied in their statistical power to detect 
differences. The Utah study (Lewis et al., 1999) contained 4,000 people 
while the Taiwan study had approximately 40,000 people and the two 
South American studies each had over 200,000 people. All of these 
epidemiology studies were ecological and retrospective studies. The 
Taiwan and South American studies had no individual exposure data. The 
Utah study associated persons with wells that had measured 
concentrations though exposure was calculated based on both level of 
arsenic and length of exposure. The Utah study followed exposed 
individuals to discern causes of later disease through carefully kept 
church records.
    The Agency chose to make its quantitative estimates of risk based 
on the Taiwan study. This choice was endorsed by the EPA Science 
Advisory Board (SAB, 2000q; NRC, 1999). The database from Taiwan has 
the following advantages: Mortality data were drawn from a cancer 
registry; arsenic well water concentrations were measured for each of 
the 42 villages; there was a large, relatively stable study population 
that had life-time exposures to arsenic; there are limited measured 
data for the food intake of arsenic in this population; age-and dose-
dependent responses with respect to arsenic in the drinking water were 
demonstrated; the collection of pathology data was unusually thorough; 
and the populations were quite homogeneous in terms of lifestyle. 
Studies in Argentina and Chile also showed lung and bladder risk of 
similar magnitude at comparable levels of exposure. EPA recognizes that 
there are problems with the Taiwan study that introduce uncertainties 
to the risk analysis such as: the ecological study design; the use of 
median exposure data at the village level; the low income and 
relatively poor diet of the Taiwanese study population (high levels of 
carbohydrates, low levels of protein, selenium and other essential 
nutrients); and high exposure to arsenic via food and cooking water.
    As urged by many commenters, the Agency has considered and made 
adjustments in its dose-response assessment to reflect the quantitative 
effect of the high Taiwanese exposure to arsenic via food and cooking 
water. The Agency made an adjustment to the lower bound risk estimates 
to take into consideration the effect of exposure to arsenic through 
water used in preparing food in Taiwan. In addition, an adjustment was 
made to the lower bound risk estimates to take into consideration the 
relatively high arsenic concentration in the food consumed in Taiwan as 
compared to the U.S. We also considered several additional factors 
qualitatively in our final decision. These included the effect of the 
median well exposure data from the Taiwan study and the effects of 
nutritional factors such as selenium and methyl donors. However, we did 
not feel that there were sufficient data to account for these factors 
quantitatively.
    The U.S. population cannot be considered to be made up entirely of 
well-nourished, genetically uniform persons. People of the Asian and 
Pacific Islander group make up about 4% (approximately 11 million) of 
the more than 270 million people in the U.S. (U.S. Census Bureau, 
2000). In addition, there is a significant portion of the U.S. 
population living in poverty with poor nutrition. Thus, the Agency 
continues to believe that the Taiwan study is appropriate as a basis 
for risk assessment. The fact that the whole of the Taiwanese 
population was nutritionally vulnerable is a factor that the Agency has 
considered qualitatively as an uncertainty in risk assessment that may 
on average lead to overestimation of risk when applied to the U.S.
    The Utah study (Lewis et al., 1999) did not find any excess bladder 
or lung cancer risk after exposure to arsenic at concentrations of 14 
to 166 g/L. An important feature of the study is that it 
estimated excess risk by comparing cancer rates among the study 
population in Millard County, Utah to background rates in all of Utah. 
But the cancer rates observed among the study population, even those 
who consumed the highest levels of arsenic, were significantly lower 
than in all of Utah. This is evidence that there are important 
differences between the study and comparison populations besides their 
consumption of arsenic. One such difference is that Millard County is 
mostly rural, while Utah as a whole contains some large urban 
populations. Another difference is that the subjects of the Utah study 
were all members of the Church of Jesus Christ of Latter Day Saints, 
who for religious reasons have relatively low rates of tobacco and 
alcohol use. For these reasons, the Agency believes that the comparison 
of the study population to all of Utah is not appropriate for 
estimating excess risks. An alternative method of analysis is to 
compare cancer rates only among people within the study population who 
had high and low exposures. The Agency performed such an analysis on 
the Utah data, using the statistical technique of Cox proportional 
hazard regression (U.S. EPA, 2000x; Cox and Oakes, 1984). The results 
showed no detectable increased risk of lung or bladder cancers due to 
arsenic, even among subjects exposed to more than 100 g/L on 
average. On the other hand, the excess risk could also not be 
distinguished statistically from the

[[Page 7027]]

levels predicted by model 1 of Morales et al. (2000). These results 
show that the Utah study is not powerful enough to estimate excess 
risks with enough precision to be useful for the Agency's quantitative 
arsenic risk analysis. Furthermore, the SAB noted that ``(a)lthough the 
data provided in published results of the Lewis, et al., 1999 study 
imply that there was no excess bladder or lung cancer in this 
population, the data are not in a form that allows dose-response to be 
assessed dependably'' (EPA, 2000q). Other studies in the U.S. (Morton 
et al., 1976; Valentine et al., 1992; Wong et al., 1992) and Europe 
(Buchet et al., 1999; Kurttio et al., 1999) were also considered in 
EPA's evaluation of the risk from arsenic. However, these studies were 
not sufficient to develop a dose-response relationship.
2. Dose-Response Relationship
    Numerous comments were received about the quantitative estimation 
of potential cancer risks to U.S. populations from drinking water 
exposure to arsenic. Concerns were raised about the extrapolation of 
the dose (exposure)--response relationship observed in a study of 
cancer incidence in an arseniasis-endemic area of Taiwan with high 
levels of arsenic in water (Chen et al., 1988; Wu et al., 1989; Chen et 
al., 1992) to estimate potential response in the U.S. to arsenic in 
water at lower levels.
    Some commenters asked whether it is appropriate to assume a linear 
dose response for arsenic given that arsenic does not appear to be 
directly reactive with DNA. Other commenters urged strict adherence to 
the linear approach, and recommended choosing an MCL that is below the 
1/10,000 level of estimated risk based on that approach.
    Some commenters also noted that independent scientific panels (EPA, 
2000q; NRC, 1999; EPA, 1997e; EPA, 1988) who have considered the Taiwan 
study have raised the caution that using the Taiwan study to estimate 
U.S. risk at lower levels may result in an overly conservative 
estimation of U.S. risk. The independent panels have each said that 
below the observed range of the high level of contamination in Taiwan 
the shape of the dose-response relationship is likely to be sublinear. 
Thus, an assumption that the effects seen per dose increment remain the 
same from high to low levels of dose may overstate the U.S. risk. Some 
commenters have urged that the Agency model the dose-response 
relationship as a sublinear one, rather than as a linear one as in the 
proposal and NODA for the rule. These commenters consider adherence to 
the linear model as a failure of the Agency to use the best available, 
peer-reviewed science as required by SDWA.
    After consideration of the arguments made by the commenters, the 
Agency continues to believe that the best approach, given the 
uncertainties associated with the available data, is to use the linear 
approach to set the MCLG for arsenic. In the proposal and the NODA, EPA 
discussed the fact that the available data on arsenic's carcinogenic 
mode of action point to several potential modes of action, but which 
one is operative is unknown. For this reason, the data do not support 
use of an alternative to linearity. The Agency recognizes that the 
dose-response relationship may be sublinear. The Agency has considered 
both a linear extrapolation and a nonlinear approach in the selection 
of an MCL in this final rule. (see section III.D.1.g. and the comment 
response document for a thorough discussion of the Agency's position on 
the dose-response assessment for arsenic.)
3. Suggestions That EPA Await Further Health Effects Research
    Several commenters expressed the opinion that EPA should delay 
setting a standard for arsenic until more research studies have been 
completed. These commenters focused on research areas such as health 
effects (especially at low doses), the mode of action, and the dose-
response curve. Other commenters questioned EPA's support of new 
research and tracking of ongoing research.
    Since developing the Arsenic Research Plan as required by the 1996 
SDWA amendments, EPA and stakeholders have established a substantial 
research program. Significant research has been completed, and further 
research is underway. EPA is tracking the progress of ongoing research 
and will make research results available to the public. EPA is 
committed to issuing the arsenic regulation based on best available 
science and believes that the research currently available is 
sufficient to do so.
    EPA believes that the research underway may provide important new 
data for future rulemakings on arsenic. However, EPA does not believe 
that a determination on the arsenic MCL must be delayed until this 
research is complete. Indeed, the U.S. Court of Appeals for the 
District of Columbia Circuit found that EPA:

cannot reject the ``best available'' evidence simply because of the 
possibility of contradiction in the future by evidence unavailable 
at the time of action--a possibility that will always be present'' 
and that ``[a]ll scientific conclusions are subject to some doubt; 
future hypothetical findings always have the potential to resolve 
the doubt. What is significant is Congress's requirement that the 
action be taken on the basis of the best available evidence at the 
time of rulemaking. The word ``available'' would be senseless if 
construed to mean ``expected to be available at some future date'' 
(Chlorine Chemistry Council v. EPA, 206 F.3d 1286, 1290-91 (D.C. 
Cir. 2000)).

In the future, as part of the 6-year review process, the Agency will 
evaluate new data to determine if the MCLG and/or MCL promulgated in 
today's regulation should be revised.
    Research pertaining to arsenic in the drinking water is a priority 
for the EPA. In addition, EPA supports and encourages other 
organizations to sponsor new epidemiology and toxicology studies on 
arsenic. The nature of scientific research is that as each study 
attempts to address or resolve a particular issue, it also raises more 
questions for investigation. EPA recognizes that even when the ongoing 
set of studies are complete, more are likely to follow. Uncertainty is 
inherent in science; at no point will ``all'' research be finished and 
``all'' questions be answered.
4. Sensitive Subpopulations
    Some commenters encouraged EPA to set the arsenic standard as low 
as possible to protect vulnerable populations. These commenters felt 
that EPA should consider human development and reproduction and 
variously defined vulnerable populations as persons with immune, 
cardiovascular, and nervous system disorders, children, low-income 
people, Native Americans, diabetics, and geriatric populations.
    The 1996 SDWA amendments include specific provisions in section 
1412(b)(3)(C)(i)(V) that require EPA to assess the effects of a 
contaminant on the general population and on groups within the general 
population such as infants, children, pregnant women, the elderly, 
individuals with a history of serious illness, or other subpopulations 
that are identified as likely to be at greater risk of adverse health 
effects due to exposure to contaminants in drinking water than the 
general population. The NRC subcommittee (NRC, 1999) noted that there 
is a marked variation in susceptibility to arsenic-induced toxic 
effects which may be influenced by factors such as genetic 
polymorphisms (especially in metabolism), life stage at which exposures 
occur, sex, nutritional status, and concurrent exposures to other 
agents or environmental factors. EPA shares the view of the NRC report

[[Page 7028]]

which concluded that there is insufficient scientific information to 
permit separate cancer risk estimates for potential subpopulations such 
as pregnant women, lactating women, and children and that factors that 
influence sensitivity to or expression of arsenic-associated cancer and 
noncancer effects need to be better characterized. The EPA agrees with 
NRC that there is not enough information to make risk conclusions 
regarding any specific subpopulations. However, EPA believes it is 
appropriate to consider effects on infants due to their greater 
consumption of water per body weight and is considering whether to 
issue a health advisory that will address this issue.
    A study of a population in Chile exposed to about 800 g/L 
in its drinking water for a period of years showed significant 
association with this exposure and fetal and infant mortality that 
declined to background when the water was treated to remove arsenic. 
This study was cited by a commenter as indicating more general 
sensitivity of fetuses and infants. The dose was one that had a range 
of significant arsenic toxicity effects on the adult population. It is 
logical that fetuses of mothers so exposed would be affected and 
infants would have received several times the adult exposure per kg 
body weight and, consequently, more toxicity. This study does not 
indicate disproportionate effects on fetuses or infants at low doses. 
Once the water was treated the effects declined to background 
(Hopenhayn-Rich et al., 2000).
5. EPA's risk analysis
    Several commenters felt that EPA did not follow the NRC 
recommendations that ``the final calculated risk should be supported by 
a range of analyses over a fairly broad feasible range of 
assumptions'', misinterpreted the NRC report, or relied solely on the 
NRC report and thus did not do an appropriate risk assessment for 
arsenic. Others viewed the NRC report as lacking peer review or as 
being politically motivated.
    The SAB (EPA, 2000q, pgs. 2-3) discussed EPA's use of the NRC 
report. In the cover letter to the Administrator they stated:

    * * * The NRC also noted a number of factors that likely differ 
between the Taiwanese study population and the U.S. population and 
which might influence the validity of arsenic cancer risk estimates 
in the United States. Even though the Agency did its own risk 
characterization (i.e., they combined the NRC risk factors with U.S. 
exposure information and arsenic occurrence distributions to obtain 
a range of risks for use in their benefits analysis), they chose not 
to quantitatively take any of these factors into account at this 
time.
    The Panel agrees with conclusions reached by the NRC in its 1999 
report on arsenic, especially their conclusion that ``there is 
sufficient evidence from human epidemiological studies * * * that 
chronic ingestion of inorganic arsenic arsenic [sic] causes bladder 
and lung, as well as skin cancer.'' The NRC also stated that 
currently the Taiwanese data are the best available for quantifying 
risk * * *. We note, however, that this Panel does not believe that 
resolution of all these factors can nor must be accomplished before 
EPA promulgates a final arsenic rule in response to the current 
regulatory deadlines. However, resolution of the critical factors * 
* *. in time for the next evaluation cycle for the arsenic 
regulation should be considered as a goal.

    In closing the cover letter to the Administrator, the SAB stated:

    Specifically, the majority of the Panel members felt that there 
is adequate basis for the Agency to consider use of its 
discretionary authority under the Safe Drinking Water Act of 1996 to 
consider MCLs other than the proposed 5 g/L.
    * * * The ultimate risk number derived from the Taiwanese study 
has proven very sensitive to the decision about the appropriateness 
of the comparison population. This of course, has important 
implications for the use of the data to estimate risk in the U.S. 
Also a study in Utah suggests that some U.S. populations may be less 
susceptible to the development of cancer, than those in Taiwan * * 
*. Also, a recently published study suggests that the incremental 
increases in lung and bladder cancers observed in the Taiwan study 
are of roughly the same magnitude, rather than the NRC's inference 
of a potentially two- to five-fold greater rate of lung cancer 
relative to bladder cancer.
    As noted by the NRC, the mechanisms associated with arsenic-
induced cancer most likely have a sublinear character, which implies 
that linear models, such as those used by the Agency, overestimate 
risk * * *. Nonetheless, the Panel agrees with the NRC that 
available data do not yet meet EPA's new criteria for departing from 
linear extrapolation of cancer risk.

    The NRC Subcommittee on Arsenic in Drinking Water explored a number 
of model approaches using the Taiwan epidemiology data for bladder 
cancer. Although there are indications that the dose-response 
relationship for arsenic may be nonlinear at low doses, a convincing 
biological argument for selecting a nonlinear model is not yet 
available. Thus, according to EPA's draft 1996 guidelines and 
consistent with the 1986 guidelines, EPA determined that a point of 
departure approach was most appropriate to estimate low-dose risks. EPA 
agreed with NRC's choice of the Poisson model. In the NODA, based on 
the Morales et al. study (2000), EPA conducted a re-analysis of the 
bladder and lung cancer data using a Poisson model with no comparison 
population to estimate points of departure for each health endpoint. In 
addition to the re-analysis of bladder and lung cancer risk, EPA did a 
sensitivity analysis of the effect of exposure to arsenic through water 
used in preparing food in Taiwan. In response to comments received on 
the proposed rule and the NODA, EPA has also analyzed the effect of 
exposure to arsenic through food and considered the effect of village 
level exposure data. In summary, EPA's final risk calculation is 
supported by analyses of the effect of various assumptions and 
uncertainties on the risk estimate and reflects the best available 
science.
    EPA believes that it has done a thorough risk analysis on arsenic. 
Arsenic health risks have remained a high priority at EPA for over 20 
years, and EPA scientists have closely followed all scientific 
developments. EPA established four independent scientific panels to 
evaluate arsenic health risks (EPA, 2000q; NRC, 1999; EPA, 1997e; EPA, 
1988) and provided a sense of the views of the broader scientific 
community. EPA participated in conducting one of the major cancer 
mortality studies available on arsenic (Lewis et al., 1999). In the 
proposed rule and NODA, EPA used the 1999 NRC report's analysis of the 
Taiwan data as well as other published scientific papers to 
characterize the potential health hazards of ingested arsenic. The NRC 
report represents a thorough examination of the best available, peer 
reviewed science through the late 1990s. Other studies that were 
important in EPA's analysis were the Utah study (Lewis et al., 1999) 
and the Morales et al. (2000) study. In selecting the proposed MCL, EPA 
considered the uncertainties of the quantitative dose-response 
assessment, particularly the possible nonlinearity of the dose-
response. EPA also considered the unquantifiable risks from arsenic 
such as noncancer effects. In response to commenters, EPA expanded its 
analysis of the Utah study (U.S. EPA, 2000x) and delved further into 
the uncertainties in the Taiwan data. The Agency made an adjustment to 
the lower-bound risk estimates to take into consideration the effect of 
exposure to arsenic through water used in preparing food in Taiwan. In 
addition, an adjustment was made to the lower-bound risk estimates to 
take into consideration the relatively high arsenic concentration in 
the food consumed in Taiwan as compared to the U.S. EPA also 
investigated the effect of the ecological exposure data on its risk 
estimates. When villages with only one arsenic measurement were removed

[[Page 7029]]

from the data set (on the theory that the exposure data was too 
uncertain), or when village means instead of medians were used for the 
exposure estimates, there was no statistically significant change in 
the estimated point of departure, using Model 1 of Morales et al. 
(2000). In summary, EPA believes that it has completed a thorough risk 
analysis on arsenic that used the best available, peer reviewed 
science.
    The NRC subjected their draft report to a very rigorous external 
peer review using its own procedures that are well established and 
generally acknowledged as being independent and objective. The SAB also 
reviewed the NRC report and EPA's risk analysis, which was, in part, 
based on the NRC report. In addition, the public was provided an 
opportunity to comment on the EPA risk analysis as a part of the 
arsenic proposal and NODA.
    EPA disagrees that the NRC report was politically motivated. The 
NRC Subcommittee on Arsenic in Drinking Water was composed of 16 highly 
respected scientific experts. EPA believes that this panel produced an 
impartial analysis of the data available on the toxicity of arsenic.
6. Setting the MCLG and the MCL
    Some commenters were confused about the difference between MCLGs 
and MCLs, how EPA sets MCLGs and MCLs based on legal, scientific, and 
policy principles, and the relationship between the MCLG and costs and 
benefits. Other commenters were concerned about a perceived ``anti-
backsliding'' provision for MCLGs and MCLs in SDWA.
    In accordance with SDWA, standards set for contaminants consist of 
two components, a maximum contaminant level goal (MCLG) and a national 
primary drinking water regulation (NPDWR) (section 1412(b)(1)(A)), 
which specifies either ``a maximum contaminant level (MCL) for such 
contaminant which is generally set as close to the maximum contaminant 
level goal as is feasible'' (section 1412(b)(4)(B)) or a treatment 
technique if ``it is not economically or technologically feasible to 
ascertain the level of the contaminant'' (section 1412(b)(7)(A)).
    SDWA defines an MCLG as ``the level at which no known or 
anticipated adverse effects on the health of persons occur and which 
allows an adequate margin of safety'' (section 1412(b)(4)(A)). MCLGs 
for all carcinogens are set at zero unless adequate scientific data 
support a higher MCLG. In accordance with the SDWA, the MCLG is based 
on the best available peer reviewed science. An MCLG is a goal, not a 
regulatory limit that the Agency expects to be attained by water 
systems.
    The MCLG must be proposed simultaneously with a national primary 
drinking water regulation (section 1412(a)(3)), which specifies a 
maximum contaminant level (MCL) as close to the MCLG as technically 
feasible. The MCL is the enforceable standard. SDWA allows EPA to make 
an exception to setting the MCL as close to the MCLG as is feasible 
where the ``Administrator determines * * * that the benefits of a 
maximum contaminant level * * * would not justify the costs of 
complying with the level.'' In this case, EPA may propose and 
promulgate an MCL ``that maximizes health risk reduction benefits at a 
cost that is justified by the benefits'' (section 1412(b)(6)). This 
exception was used to set the MCL for arsenic. EPA found that at the 
feasible level of 3 g/L, the benefits of compliance did not 
justify the costs. The Agency determined that an MCL of 10 g/L 
maximizes the health risk reduction benefits at a cost that is 
justified by the benefits (see preamble discussion of the risk 
management decision that was made for arsenic in section III.F.)
    Some commenters argued that EPA sets the MCL within a risk-range of 
10-\4\ to 10-\6\ without proper regard to the 
statutory requirements discussed above. This is not the case. As noted 
in the proposal, EPA has historically considered this risk range as 
protective of public health, and accordingly has sought to ensure that 
drinking water standards are within this risk range. However, the risk-
range represents a policy goal for EPA, and is not a statutory factor 
in setting an MCL. In the case of arsenic, EPA did the benefit-cost 
analysis required by the statute. Having found that the benefits of an 
MCL at the feasible level were not justified by the costs, EPA set the 
MCL at 10 g/L. This MCL maximizes health risk reduction 
benefits at a cost that is justified by the benefits.
    EPA is required to review and revise as appropriate, each national 
primary drinking water regulation, at least every 6 years. Revisions to 
current regulations ``shall maintain, or provide for greater protection 
of the health of persons'' (section 1412(b)(9)). When new scientific 
data become available, the Agency may reevaluate the MCLG and MCL.

C. Occurrence

    The principal concerns raised by the commenters and our responses 
are as follows:
1. Occurrence data
    Several commenters expressed concern that EPA estimated occurrence 
using data from only 25 States and that the national estimate was thus 
not as robust as it should have been. Many of these commenters 
suggested that EPA should request data from all States/more systems 
before issuing the final rule.
    It is true that we based our occurrence estimate on data from only 
25 States. However, we believe that we have compiled the most 
comprehensive and accurate occurrence estimate possible with currently 
available data, and that this estimate adequately supports our various 
analyses and final decisions.
    For our occurrence analysis, we relied on data submitted 
voluntarily by State drinking water agencies. In doing so, we collected 
the largest available database on arsenic in drinking water, consisting 
of almost 77,000 observations from more than 26,600 public water 
systems in 25 States. We received but did not use data from six States 
(Florida, Idaho, Iowa, Louisiana, Pennsylvania, and South Dakota), 
because the data either could not be linked to PWSs; did not indicate 
if results were censored; were all zero; did not provide analytical or 
reporting limits; or were rounded to the nearest 10 g/L.
    In response to our request in the proposed rule for additional 
occurrence data, we received additional data from several States. 
However, in each case, the submitted data either corresponded closely 
to observations already in our data set (California, New Mexico, Utah), 
or were of the wrong kind or insufficient quantity to use in our 
estimation (Iowa, Maryland, Nebraska, Oklahoma, Vermont, West 
Virginia).
    Of the States from whom we did not receive usable data, we believe 
that many do not have databases of the kind and quality that we would 
need for our occurrence analysis. We therefore could not have obtained 
such information from other States without requiring, in some 
instances, new monitoring to be undertaken and new data to be compiled.
    In forming our occurrence estimate, we did not ignore States for 
which we have no suitable data. We accounted for these States by 
assigning regional occurrence distributions to them. Our resulting 
national estimates compare relatively closely with those developed by 
the utility industry and by the U.S. Geological Survey (EPA, 2000r).
    Some commenters indicated EPA should not use data from the U.S. 
Geological Survey's National Ambient Water Quality Assessment (NAWQA) 
or EPA's NIRS, SDWIS, or Rural Water

[[Page 7030]]

Survey (RWS) to estimate occurrence. In forming our occurrence 
estimates, we used arsenic concentrations drawn only from our 25-State 
arsenic compliance monitoring database. We did not use observations 
from NAWQA, SDWIS, RWS, NAOS, NIRS, NOMS, Community Water System Survey 
(CWSS) or any other surveys or studies. As the preamble of the proposed 
rule (65 FR 38888 at 38903) states, we used National Organic Monitoring 
Survey (NOMS), RWS, and the 1978 CWSS in previous arsenic occurrence 
analyses, but did not use them for the present analysis because of 
their age and relatively high detection limits. The only information we 
used from SDWIS was the type and size of particular systems, and the 
numbers of systems and population served in different categories of 
systems. We used NAWQA, NAOS and NIRS only for comparison to our 
finished results.
2. Occurrence Methodology
    Some commenters stated their belief that EPA had underestimated 
national occurrence because they believe that EPA did not have enough 
data with which to develop the estimate. Commenters also believed that, 
since the national occurrence is underestimated, noncompliance/co-
occurrence are also underestimated.
    We do not agree that we have underestimated arsenic occurrence. We 
have the largest existing database of arsenic in drinking water, with 
almost 77,000 observations from more than 26,600 public water systems 
in 25 States. We did not ignore States for which we have no data, but 
accounted for them by assigning regional occurrence distributions to 
them. Our data and methodology have been approved by an independent 
expert peer review panel. Our occurrence estimates are close to those 
of the NAOS and USGS.
    Some commenters believe EPA's occurrence methodology is 
inconsistent with the way compliance is determined and that EPA should 
use a running annual average for estimating noncompliance.
    We acknowledged in the proposed rule (65 FR 38888 at 38907) that 
our method of estimating occurrence is different from the method used 
for determining compliance with the MCL. Our method usually gives 
higher estimates, because we substitute non-zero values for non-
detects, while under the regulatory definition of compliance, non-
detects are assumed to equal zero. We believe our method is the best 
one despite the difference, for two reasons. First, our goal is to 
characterize arsenic occurrence as accurately as possible. Given a 
sound characterization of system-mean occurrence and of intra-system 
and intra-source variability, the numbers of systems and points of 
entry expected to fail the regulatory definition of compliance at some 
MCL option can be determined. The reverse calculation, on the other 
hand, is generally not possible. Second, as analytical methods improve 
and detection limits decrease, the difference between the two methods 
will decrease.
    To the extent that our estimates disagree with those used for 
determining compliance, our estimates will be higher and thus will 
cause us to slightly overestimate the costs associated with any MCL 
option. Our estimates of benefits, on the other hand, should not be 
biased one way or the other by our occurrence estimate, since health 
risks are mainly determined by mean exposure over time, which we 
accurately characterize. The same would not be true if we used the 
regulatory definition of non-detects, which underestimates mean 
occurrence.
    Commenters also pointed out that occurrence estimates in different 
parts of the rule and support documents are inconsistent. Although the 
analysis is internally consistent, apparent inconsistencies in the 
numbers arise from three sources: System versus site considerations, 
year of the SDWIS inventory, and use of best point or regressed 
estimates. With respect to the first point, because most large ground 
water systems have multiple entry points, some systems which have 
average concentrations below the MCL will still have impacted entry 
points. As a consequence, the number of impacted systems is much larger 
than the number of systems with mean concentrations above the MCL. In 
the proposal, this difference amounted to several hundred systems.
    In connection with the second point, year of the SDWIS inventory, 
it is not unusual for there to be a change from year to year in the 
inventory of hundreds of water systems. This results from restructuring 
and consolidations, among other factors. In the final rule and 
supporting documents, we have tried to address this issue by 
consistently using a single set of baseline estimates, taken from EPA's 
Drinking Water Baseline Handbook (EPA, 2000b). Regardless, this factor 
is only responsible for a one or two percent variation in the impact 
estimate, and is not of sufficient significance to impact the decision 
making process.
    The third issue relates to the representation of the mean system 
arsenic occurrence. In many tables, mean arsenic concentrations are 
presented which reflect our best point estimates. Nevertheless, the 
best estimate of national cost impacts derives from use of a best fit 
equation which incorporates all of the data. We have used these 
regressed fits in the development of the costs and benefits. The two 
sets of estimates are described in section III.C.4.
3. Co-Occurrence
    Some commenters believe EPA has underestimated the co-occurrence of 
arsenic with radon.We agree that, based on the NWIS data, most systems 
with arsenic greater than 10 g/L will also have radon greater 
than 300 pCi/L. However, only about 8% of all systems exceed both 
standards. Moreover, about 85% of such systems (again based on NWIS) 
have radon in the range of 300 to 1000 pCi/L, where incidental removal 
of radon will be most effective. We expect, for example, that systems 
with 300 to 1000 pCi/L of radon will be more likely to treat for 
arsenic by coagulation and microfiltration, which removes most radon 
incidentally by aeration. Therefore, we believe that the impact of co-
occurrence of radon and arsenic will be small.
    Some commenters believed that EPA did not evaluate the effect of 
different sulfate levels in its decision tree. We did evaluate several 
ranges of concentrations of sulfate and arsenic against each other (see 
65 FR 38888 at 38938). The sulfate concentration ranges included 0 to 
25, 25 to 120, 120 to 250, 250 to 500, and >500 mg/L. The arsenic 
concentration ranges included 0 to 2, 2 to 5, 5 to 10, 10 to 20, and 
>20 g/L. For these ranges, there was no apparent change in co-
occurrence of sulfate and arsenic as the concentrations increased. 
However, the Agency took the co-occurrence of arsenic and sulfate and 
the impact on anion exchange technology into consideration in the 
decision tree at sulfate levels of 20, 20 to 90, 90 to 120, and >120 
mg/L. The revised decision tree for today's final rule only applies 
anion exchange when sulfate levels are less than 50 mg/L.
    Some commenters expressed their belief that NWIS is inadequate to 
estimate national co-occurrence of arsenic and radon and that NWIS data 
should be verified as representative of PWS water use by requesting 
data from States. It is true that NWIS includes samples from non-
drinking water supplies. NWIS is, however, the largest and best data 
base available for studying co-occurrence with over 40,000 ambient 
water samples. To the extent that non-drinking water samples affect our 
estimates, they should cause us to

[[Page 7031]]

overestimate occurrence and therefore also co-occurrence. We realize 
that NWIS may not reflect conditions in any given State or water 
system; we use it only for deriving national estimates.

D. Analytical Methods

1. Analytical Interferences
    Commenters expressed concern about the potential for matrix 
interferences in the analysis of arsenic at low levels. A potential for 
chloride interference when using ICP-MS with samples containing high 
levels of chloride was specifically noted by commenters. A commenter 
also stated that some investigators had reported arsenic results in 
drinking water samples that differed depending on the valence state of 
the arsenic in the sample (i.e., As (III) or (V)) when using methods 
that used GHAA technology. The Agency agrees that interferences may be 
encountered when determining arsenic using the methods proposed in the 
June 2000 rule (including the GHAA technique). However, the Agency 
disagrees that the interferences are unexpected or impede compliance 
with the arsenic MCL of 0.01 mg/L. Four different measurement 
technologies are approved for the analysis of arsenic: AA furnace, AA-
Platform, GHAA and ICP-MS with respective MDLs of 0.001 mg/L, 0.0005 
mg/L, 0.001 mg/L, and 0.0014 mg/L. These technologies have been used 
for compliance determinations of arsenic for many years. The methods 
written around each of these technologies identify potential 
interferences and contain corrective procedures. In particular, the 
ICP-MS method warns of potential interferences from chloride and 
provides instructions to eliminate this problem.
    2. Demonstration of PQL (Includes Acceptance Limits)
    Several commenters agreed with the 30% acceptance limit 
and the 0.003 mg/L PQL derived and proposed for arsenic. Other 
commenters expressed concerns that the PQL was not correctly derived or 
that the acceptance limits were too broad.
    A commenter stated that the Agency should set the PQL at 5 to 10 
times the method detection limits of 0.001mg/L which would result in a 
PQL range of 0.005 to 0.010 mg/L. As previously explained in section 
III.B.1 of this preamble, EPA only uses the MDL multiplier approach to 
derive a PQL when there is insufficient interlaboratory data to 
statistically derive a PQL. For arsenic, the Agency had ample WS data 
to derive a PQL using the interlaboratory approach.
    Several commenters were concerned that the ``PQL study is not 
realistic and does not account for matrix interference in real drinking 
water samples.'' In addition, some commenters stated that the ``PQL 
should be set at a level that is achievable by laboratories on a 
routine basis.'' EPA disagrees that the PQL for arsenic is unrealistic, 
or that it has been set at a level that is unachievable on a routine 
basis. As explained in section III.B.1 of this preamble, EPA used the 
interlaboratory data from six recent WS studies to derive the arsenic 
PQL. The WS studies utilize reagent grade water (i.e., blank water free 
of interferences) for the PE-samples that are analyzed in the WS study. 
Use of reagent water to prepare a test sample conforms with an accepted 
and longstanding practice in which a method developer validates an 
analytical method in blank water before looking for possible 
inaccuracies from matrix effects when the method is applied to a sample 
matrix (e.g., a compliance drinking water sample). Reagent water is 
used as an initial benchmark for method development and testing, 
because it is interference-free and can be readily produced in any 
competent laboratory. A lab subsequently identifies and corrects for 
matrix effects by comparing its performance on reagent water to the 
results on the matrix (contaminated drinking water) or spiked matrix 
(clean drinking water spiked with arsenic) sample.
    All of the methods approved for SDWA and Clean Water Act (CWA) 
compliance monitoring require that laboratories demonstrate acceptable 
performance in reagent grade water before drinking water samples are 
tested. A study conducted by Eaton (Eaton, 1994) found that the type of 
matrix and the analytical method used had no significant effect on the 
derivation of their PQL. This study included drinking waters with high 
total dissolved solids and total organic carbon, and arsenic 
concentrations that ranged from 0.001 to 0.010 mg/L. Thus, EPA 
disagrees with the comment that the PQL would be significantly 
different if derived in various drinking waters instead of in reagent 
water.
    The Agency also believes that the derived PQL of 0.003 mg/L is 
realistic and is achievable on a routine basis. The derivation of the 
PQL for arsenic is consistent with the longstanding process used to 
determine PQLs for other metal contaminants regulated under SDWA. In 
deriving the PQL for arsenic, the Agency took into consideration the 
issue of laboratory capability, laboratory capacity, and the ability of 
laboratories to achieve a quantitation level on a routine basis. The 
PQL for arsenic was derived from data collected in WS studies in which 
PE-samples were prepared with reagent water spiked with low 
concentrations, 0.006 mg/L, of arsenic. These studies were conducted 
from 1992 to 1995. The number of EPA Regional and State laboratories 
that participated in each study ranged from 26 to 45 laboratories. 
Using acceptance limits of 30% a linear regression analysis 
of this data yielded a PQL of 0.00258 mg/L. The Agency rounded up to 
derive the proposed PQL of 0.003 mg/L (3 g/L) with a 
30% acceptance limit. Over 75% of the EPA Regional and 
State laboratories were able to report arsenic concentrations within 
30% of 3 g/L. In addition, 62% of non-EPA 
laboratories that participated in these same WS studies were equally 
successful. The number of non-EPA laboratories in these WS studies 
ranged from 360 to 619 laboratories, which means that the number of 
laboratories that successfully analyzed the low concentration arsenic 
PE-samples ranged from 223 to 384. This data indicate that neither 
laboratory capacity nor capability will be a problem at a PQL of 3 
g/L 30%. EPA, therefore, believes that competent 
laboratories are available, and with the use of the quality control 
instructions in the compliance methods will routinely achieve this 
level of performance.
    Several commenters felt the acceptance limit of 30% is 
too wide. The 30% acceptance limit was based on a 
recommendation from the SAB. The SAB recommendation was to choose an 
acceptance limit similar to that set for other regulated metals (EPA, 
1995). These limits range from 15% for barium, beryllium, 
and chromium to 30% for mercury and thallium 
(Sec. 141.23(k)(3)). EPA chose the upper (i.e., wider) limit on this 
range to ensure that a sufficient number of laboratories could be 
certified for arsenic determinations (the number of laboratories that 
can achieve the accuracy acceptance limit increases as the limit is 
widened). Several commenters agreed with the proposed 30% 
acceptance limit, because they shared EPA concerns about insufficient 
laboratory capacity if this limit was narrowed.
3. Acidification of samples
    A commenter stated that the Agency needed to clarify that a sample 
can be collected in the field without acidification, and that 
acidification of the sample can be done later at the laboratory. The 
commenter believes that delaying acidification does not affect the 
compliance determination and that a

[[Page 7032]]

laboratory is a better place in which to handle acids. The Agency 
agrees with this comment and had previously clarified in a final rule 
(64 FR 67450; December 1, 1999; see page 67452, item 11 and page 67456, 
item 3; EPA, 1999p), that acidification of samples may be conducted in 
the field or laboratory with acidification at the laboratory being the 
better and safer choice. In the 1999 rule, EPA noted that this change 
would be affected by amending footnote one to the table at 
Sec. 141.23(k)(2) to read as follows:

    For cyanide determinations samples must be adjusted with sodium 
hydroxide to pH > 12 at the time off collection. When chilling is 
indicated the sample must be shipped and stored at 4EC or less. 
Acidification of nitrate or metals samples may be with a 
concentrated acid or a dilute (50% by volume) solution of the 
applicable concentrated acid. Acidification of samples for metals 
analysis is encouraged and allowed at the laboratory rather than at 
the time of sampling provided the shipping time and other 
instructions in Section 8.3 of EPA Methods 200.7 or 200.8 or 200.9 
are followed.

Although the June 2000 proposal inadvertently omitted this footnote, 
today's final rule contains the correct footnote.
    Another commenter believed that because the proposed sample 
preservation requirement for arsenic was new and supposedly untested, 
data collected under the previous requirements might not be comparable 
to data resulting from the new sample preservation requirement. These 
are not new analytical requirements. The commenter may have been misled 
by the statement in the preamble to the June 2000 arsenic proposal that 
EPA proposed to add a ``new'' requirement to the preservation and 
holding time table at Sec. 141.23(k)(2). It is only new in the sense 
that EPA has codified the requirements in today's rule. Arsenic 
compliance data collected in the past and the arsenic data discussed in 
the June 2000 proposal were collected using these preservation and 
holding time conditions.

E. Monitoring and Reporting Requirements

1. Compliance Determinations
    Most of the comments regarding compliance determinations requested 
the Agency to provide further clarification on this issue. Many 
commenters specifically asked EPA to specify whether samples collected 
quarterly as a result of an MCL violation are defined as compliance 
samples or confirmation samples. In today's final rule, the Agency has 
provided further clarification in the regulatory language to eliminate 
any misinterpretation.
    The Agency defines quarterly samples as compliance samples that 
must be used to determine compliance. Confirmation samples are any 
samples that the State requires that go beyond the minimum Federally 
required samples defined in the following paragraph.
    Systems will determine compliance based on the compliance samples 
obtained at each sampling point. If any sampling point is in violation 
of an MCL, the system has a MCL violation. For systems monitoring more 
than once per year, compliance with the MCL is determined by a running 
annual average at each sampling point. Systems monitoring annually or 
less frequently whose sample result exceeds the MCL for inorganic 
contaminants in Sec. 141.23(c), or whose sample result exceeds the 
trigger level for organic contaminants listed in Secs. 141.24(f) or 
141.24(h) must revert to quarterly sampling in the next quarter. The 
system will not be considered in violation of the MCL until it has 
completed one year of quarterly compliance sampling. If any sample 
result will cause the running annual average to exceed the MCL at any 
sample point (i.e., the analytical result is greater than four times 
the MCL), the system is out of compliance with the MCL immediately. 
Systems may not monitor more frequently than specified by the State to 
determine compliance unless it has applied to and obtained approval 
from the State. If a system does not collect all required samples when 
compliance is based on a running annual average of quarterly samples, 
compliance will be based on the running annual average of the samples 
collected. If a sample result is less than the detection limit, zero 
will be used to calculate the annual average. States have the 
discretion to delete results of obvious sampling or analytic errors.
    States still have the flexibility to require confirmation samples 
for positive or negative results. States may require more than one 
confirmation sample to determine the average exposure over a 3-month 
period. Confirmation samples must be averaged with the original 
analytical result to calculate an average over the 3-month period. The 
3-month average must be used as one of the quarterly concentrations for 
determining the running annual average. The running annual average must 
be used for compliance determinations.
    Some commenters requested rule language that clearly specifies how 
to determine compliance and others requested approval of scientific 
methodologies that more accurately reflect the average annual 
contaminant exposure. Today's rule requires that monitoring be 
conducted at all entry points to the distribution system. However, the 
State has discretion to require monitoring and determine compliance 
based on a case-by-case analysis of individual drinking water systems.
    The Agency cannot in this rule address all of the possible outcomes 
that may occur at a particular water system; therefore, EPA encourages 
drinking water systems to inform State regulators of their individual 
circumstances. Some systems have implemented elaborate plans including 
targeted, increased monitoring that is much more representative of the 
average annual mean contaminant concentration to which individuals are 
being exposed. (Some States determine compliance based on a time or 
flow weighted average.) In many cases, the State can demonstrate that 
compliance is being calculated based on scientific methods that are 
more representative of the true contaminant concentration that 
individuals are being exposed to over a year, but it substantially 
increases the sampling and analytical costs.
    Some States require that systems collect samples from wells that 
only operate for 1 month out of the year regardless of whether they are 
operating during scheduled sampling times. The State may determine 
compliance based on several factors including, but not limited to, the 
quantity of water supplied by a source, the duration of service of the 
source, and contaminant concentration.
2. Monitoring of POU Devices
    Several commenters indicated that there will be many implementation 
problems with POU devices. EPA agrees that some issues such as 
scheduling and access for routine maintenance of POU devices, 
liability, and monitoring may be difficult but believes they can be 
alleviated with sufficient planning. The Agency will be providing POU 
operation and maintenance guidance for small systems after publication 
of the final rule. In general, EPA believes that POU systems can be 
easily installed, maintained, and monitored for removal efficacy.
    EPA believes that it is feasible for public water systems to own, 
control, and maintain POE/POU devices for arsenic MCL compliance either 
directly or through a contract with a qualified party. This approach, 
however, requires more recordkeeping to monitor individual devices than 
does centralized

[[Page 7033]]

treatment. Both POU AA and RO can be obtained with mechanical warnings 
to ensure that customers are notified of operational problems. In the 
case of activated alumina, such warnings include shut-off valves that 
are triggered prior to the adsorptive capacity of the media being 
exhausted, based on the volume of water treated. Reverse osmosis POU 
devices come with total dissolved solids detectors that activate 
warning lights when membrane integrity is compromised.
    Systems having high arsenic concentrations in the finished water 
that choose to achieve compliance using POU treatment would shift from 
monitoring at a central location to monitoring at the POU devices. As 
is the case with any system that installs treatment to lower 
contaminant concentrations to levels below the MCL, the monitoring 
frequency is part of the compliance agreement between the Primacy 
Agency and the system. The compliance agreement must require monitoring 
that is as protective as monitoring for systems using centralized 
treatment and may not be less frequent than the routine monitoring 
required in today's rule (i.e., annual samples for surface water 
systems and one sample every three years for ground water systems). The 
Primacy Agency will be responsible for negotiating the monitoring 
schedule with the system for POU devices and may amend the compliance 
agreement with the system to increase or reduce the monitoring 
frequency to an alternate schedule depending upon maintenance, public 
responses, the implementation of the service agreement, and the initial 
monitoring results. For purposes of forecasting national compliance 
costs, EPA assumed that all POU devices would be monitored for arsenic 
with one sample taken the first year following installation, samples 
taken annually in subsequent years, and replacement of the filter 
cartridge at each POU site every 6 months.
3. Monitoring and Reporting for NTNCWSs
    Most commenters disagreed with EPA's approach of requiring NTNCWSs 
to monitor and provide public notification. Instead, the majority of 
commenters indicated that EPA should either require full coverage or 
not regulate NTNCWSs. In today's rule making, EPA is requiring NTNCWSs 
to comply with the arsenic regulation, including the monitoring and 
reporting requirements associated with arsenic in Sec. 141.23, the MCL 
listed in Sec. 141.62, and the public notification requirements 
(NTNCWSs are subject to the same requirements as those of CWSs). EPA 
acknowledges that there is uncertainty associated with its information 
about exposure patterns for consumers of water from NTNCWSs and the 
demographics of these facilities. Thus, our understanding of the health 
risks to consumers of water from NTNCWSs is uncertain. In the case of 
arsenic, however, EPA believes the additional uncertainty in the 
overall risk analysis supports the decision to treat these facilities 
the same as CWSs. EPA also believes the decision to cover these 
facilities is underscored by consideration of the risks to children who 
consume water at day care facilities or schools that are served by 
NTNCWSs.
4. CCR Health Language and Reporting Date
    Comments received on EPA's proposed consumer confidence reporting 
(CCR) requirements were equally split. Some commenters supported EPA's 
proposal to include health effects language in CCRs if a system detects 
arsenic above the revised MCL prior to the effective date. Others 
disagreed with the proposal because they believed providing this 
information prior to the effective date would be confusing to consumers 
and would not allow sufficient time to inform consumers about the risks 
associated with arsenic. These dissenting commenters generally felt 
that it would be more useful for systems to provide notice to consumers 
that the MCL has been revised and systems will be required to comply by 
the effective date of the revision.
    The Agency believes that it is important to provide customers with 
the most current understanding of the risk presented by arsenic as soon 
as possible after establishing the new standard. In today's rule, 
community water systems that detect arsenic between the revised and 
existing MCL must include health effects language in their consumer 
confidence reports prior to the effective date of the revised MCL. The 
Agency does not believe that inclusion of this information will be 
unnecessarily confusing to consumers because, under the CCR rule 
systems have the flexibility to place this information in context. EPA 
expects that affected systems will include not only the health effects 
language but also an explanation that the current MCL has been revised 
and the system is not in violation because the new standard has not yet 
taken effect.
    EPA is finalizing an MCL somewhat higher than the technologically 
feasible MCL. Since some commenters expressed concern about the risk 
that a higher-than-feasible MCL might present to certain consumers, EPA 
is requiring systems that detect arsenic at concentrations greater than 
5 g/L and up to and including 10 g/L to provide 
additional information to their customers. EPA believes that consumers 
should be aware of the uncertainties surrounding the risks presented by 
very low levels of arsenic. While EPA addressed many of the sources of 
uncertainty in its risk analysis of arsenic in support of the final 
rule, several sources of uncertainty remain and will be considered in 
the future in the context of the periodic review and revision, if 
appropriate, of drinking water regulations as required by section 
1412(b)(9) of SDWA.
5. Implementation Guidance
    EPA appreciates the fact that the final rule will place a new 
implementation burden on many water systems, particularly small 
systems. This is particularly true of small ground water systems that 
heretofore have not been obliged to install, operate, and maintain a 
treatment facility. EPA also understands that new or more sophisticated 
treatment technologies will have obvious implications in terms of 
operator capacity. EPA has addressed this issue in several ways, and 
does not believe that it is an impediment to promulgating this new MCL. 
In brief, some of the ways these implementation concerns have been 
addressed are as follows. EPA has identified a number of affordable 
small system treatment technologies that are based on consideration of 
the capabilities of small system operators. Systems will have the 
latitude to choose the type of treatment technology that is most cost 
effective and appropriate (from an operation and maintenance 
standpoint) for their particular situation. EPA also plans to publish 
implementation guidance for small systems within 60 days of publication 
of the final rule that will provide helpful information to aid small 
systems in both selecting and operating small treatment technologies. 
EPA has exercised its statutory authority under section 1412(b)(10) of 
SDWA to provide an additional 2 years for small systems to comply with 
this rule (for a total of 5 years). Individual small systems may apply 
for exemptions with extensions that can provide for a total of an 
additional 9 years to comply with the requirements of this rule. 
Finally, EPA notes that the final rule provides more ``buffer'' between 
the feasible level (3 g/L) and the MCL of 10 g/L as 
compared to the proposed level of 5 g/L. Thus, treatment 
facilities that experience operation difficulties would

[[Page 7034]]

have more latitude in terms of the timing and type of corrective 
measures that would need to be taken than would be the case with a more 
stringent final MCL. For all of the above reasons, EPA does not believe 
that there are any insurmountable implementation problems associated 
with the final MCL for arsenic.
6. Rounding Analytical Results
    Today's rule requires that data be reported to the nearest 0.001 
mg/L (3 significant figures). Some commenters felt that the rounding 
approach described in the proposed rule would significantly impact 
State programs. The proposed rule solicited comment on an approach 
requiring all values greater than or equal to 6 to be rounded up and 
all values less than or equal to 4 to be rounded down (i.e. a value of 
0.0056 mg/L would be rounded to 0.006 mg/L). Results ending in 5 would 
round the third significant digit to the closest ``even'' number. 
Therefore, a result of 0.0155 mg/L would be rounded to 0.016 mg/L, and 
0.0145 mg/L would be rounded to 0.014 mg/L. Some commenters supported 
EPA's rounding approach. Other commenters indicated that implementing 
this revision would affect State data management operations and would 
require staff training.
    The Agency recognizes that implementing a revision to the existing 
rounding guidance may impact State database and computer programs. In 
today's final rule, the Agency is encouraging States to continue using 
the rounding scheme that EPA recommended in the ``Water Supply Guidance 
#72'', dated April 6, 1981. EPA stated in this guidance that:

All MCLs contained in the National Interim Primary Drinking Water 
Regulations are expressed in the number of significant digits 
permitted by the precision and accuracy of the specified analytical 
procedures. Data reported to the State or EPA should be in a form 
containing the same number of significant digits as the MCL. In 
calculating data for compliance purposes, it is necessary to round-
off by dropping the digits that are not significant. The last 
significant digit should be increased by one unit if the digit 
dropped is 5, 6, 7, 8, or 9. If the digit is 0, 1, 2, 3, or 4 do not 
alter the preceding number.

For example, analytical results for arsenic of 0.0105 mg/L would round 
off to 0.011 mg/L while a result of 0.0104 mg/L would round off to 
0.010 mg/L.

F. Treatment Technologies

1. Demonstration of Technology Performance
    Many comments on the proposed arsenic rule (EPA, 2000i) expressed 
the concern that the treatment options that EPA designated as BAT for 
compliance with the arsenic MCL have not been adequately demonstrated 
in full-scale operation for arsenic removal. Commenters noted that 
there are relatively few arsenic treatment facilities in the U.S., and 
these facilities are generally small and were designed for an arsenic 
MCL of 50 g/L. Although many of the treatment options 
designated as BAT are widely used for other water treatment objectives, 
commenters stated that the limited application of these technologies to 
arsenic removal, especially in large plants, creates uncertainty as to 
their efficacy and feasibility for this purpose. Commenters alleged 
that this situation makes it difficult for water systems to determine 
appropriate compliance technology choices and raises questions 
regarding the validity of EPA's estimates of costs for compliance with 
the arsenic MCL.

    EPA notes that SDWA section 1412(b)(4)(E) states: [E]ach 
national primary drinking water regulation which establishes a 
maximum contaminant level shall list the technology, treatment 
technique, and other means which the Administrator finds to be 
feasible for purposes of meeting such maximum contaminant level.

    SDWA defines feasible in section 1412(b)(4)(D) as follows:

    For the purposes of this subsection, the term ``feasible'' means 
feasible with the use of the best technology, treatment techniques, 
and other means which the Administrator finds, after examination for 
efficacy under field conditions and not solely under laboratory 
conditions, are available (taking cost into consideration).

Thus, SDWA requires EPA to list feasible compliance treatment options 
based on demonstration of efficacy under field conditions and taking 
cost into consideration.
    For compliance with the arsenic MCL, EPA judged technologies to be 
a best available technology when the following criteria were 
satisfactorily met:
     The capability of a high removal efficiency;
     A history of full scale operation;
     General geographic applicability;
     Reasonable cost;
     Reasonable service life;
     Compatible with other water treatment processes; and
     The ability to bring all of the water in a system into 
compliance.
    After reviewing a number of technologies, EPA identified the 
following as BAT for arsenic removal: ion exchange, activated alumina, 
reverse osmosis, modified coagulation/filtration, modified lime 
softening, electrodialysis reversal, and oxidation/filtration. EPA 
believes that all of these treatment options meet the SDWA criteria of 
demonstrated efficacy under field conditions and, further, meet the 
additional criteria listed above which EPA has historically used to 
identify BAT. Studies which support this assessment are described in 
``Technologies and Costs for Removal of Arsenic from Drinking Water'' 
(EPA, 2000t). Consequently, identification of these technologies as BAT 
is appropriate.
    EPA recognizes that application of the arsenic BAT treatment 
options to full-scale plants where they are optimized specifically for 
arsenic removal is limited. This is especially true in regard to large 
plants. Nevertheless, as stated previously, it is appropriate for EPA 
to identify these technologies as BAT because they have been 
demonstrated to be effective for arsenic removal under field 
conditions. Moreover, all of the technologies listed as BAT have an 
established history of successful application at full scale in water 
treatment plants for related treatment objectives, specifically 
including the removal of inorganic contaminants (EPA, 2000t). Ion 
exchange is applied in both municipal and POE/POU treatment for 
softening (i.e., removal of calcium and magnesium), as well as for 
removal of nitrate, arsenic, chromium, radium, uranium, and selenium. 
Activated alumina is used in water treatment plants to remove 
contaminants such as fluoride, arsenic, selenium, silica, and natural 
organic matter. Reverse osmosis has traditionally been employed to 
desalinate brackish water and sea water. Electrodialysis reversal 
systems are often used in treating brackish water to make it suitable 
for drinking, and have also been applied for wastewater recovery. 
Oxidation followed by filtration is utilized extensively in public 
water systems for removal of iron and manganese. Lime softening is 
widely applied for reducing calcium, magnesium, and other metals in 
large water treatment systems. Most surface water systems use 
coagulation/filtration processes for particulate removal, and a growing 
number of systems have modified these processes to increase removal of 
dissolved constituents, primarily TOC and certain metals.
    EPA believes that the successful application of the arsenic BAT 
treatment options for the removal of contaminants other than arsenic is 
relevant to their ability to remove arsenic in full-scale plants. The 
physical and chemical mechanisms operative in these technologies for 
the removal of hardness, sodium, fluoride, TOC and other dissolved 
species are analogous to

[[Page 7035]]

the mechanisms by which these technologies remove arsenic. In addition, 
none of these technologies have characteristics that would make them 
ineffective or infeasible at large scale or under long-term operation. 
The specific conditions under which optimized performance is achieved 
may differ somewhat between removal of arsenic and removal of other 
contaminants, just as they may differ from plant to plant based on 
water matrix and other treatment processes in use. However, because it 
has been shown that these technologies can remove arsenic under field 
conditions, and because these technologies have an established history 
of use for the removal of inorganic contaminants in full-scale systems, 
EPA believes it is appropriate and technically justified to conclude 
that they can be successfully used for arsenic removal in full-scale 
plants.
2. Barriers to Technology Application
    EPA received many comments on the proposed arsenic rule (EPA, 
2000i) that described challenges that systems would face in applying 
the technologies identified by EPA for compliance with the arsenic MCL. 
Among such challenges asserted by comments were the following: the cost 
and availability of adequately trained, certified operators, especially 
in small systems; hazards associated with the shipping, handling, and 
storage of chemicals, especially in regard to wells located in 
residential areas; and the infeasibility of water loss from treatment 
processes in arid regions. Note that comments dealing with residuals 
handling and disposal are addressed subsequently in section V.F.4 of 
this preamble.
    In regard to water treatment plant operators, EPA believes that 
operator competency is critical for the protection of public health and 
the maintenance of safe, optimal, and reliable performance of water 
treatment and distribution facilities. Pursuant to SDWA section 
1419(a), EPA has developed guidelines for the certification and 
recertification of the operators of community and nontransient 
noncommunity public water systems. These guidelines require that all 
operating personnel who make process control/system integrity decisions 
about water quality or quantity that affect public health must be 
properly certified by the State. EPA recognizes and has considered that 
the treatment technologies, which systems will install to comply with 
the arsenic MCL, may add complexity to existing treatment works or may 
be applied to previously untreated ground water. These situations will 
necessitate additional operator training to ensure that treatment 
processes are properly operated, and systems will incur additional 
costs associated with operator labor.
    EPA believes there will be sufficient numbers of adequately trained 
and certified operators available to public water systems. Operator 
training programs are available throughout the U.S. through home study 
courses, classroom settings, and in-plant training. Current and new 
water treatment operators can obtain the training necessary to operate 
any of the treatment technologies considered for compliance with the 
arsenic MCL. EPA is developing a grants program pursuant to SDWA 
section 1419(d) to reimburse training and certification costs for 
operators employed by community water systems and nontransient, 
noncommunity water systems serving 3,300 or fewer people. This funding 
will reduce the compliance burden on these small systems, thereby 
increasing the likelihood that the systems will be able to reliably 
operate and maintain new treatment. Today's rule offers five years 
between promulgation and the time systems must be in compliance. An 
exemption can provide three additional years to achieve compliance, and 
this exemption may be renewed for up to six years for small systems. 
The Agency believes this amount of time will offer ample opportunity 
for States' operator training and certification programs to prepare 
operators.
    EPA's Operator Certification Guidelines require that a certified 
operator be responsible, in charge, and available to all community and 
nontransient, noncommunity water systems. However, this does not mean a 
certified operator must be on site at every treatment facility 24 hours 
a day, 7 days a week. The treatment technologies do not necessarily 
require constant supervision of operators. Depending upon State 
requirements, regional certified operators could travel from facility 
to facility on a regular basis to oversee the efforts of the non-
certified operators provided the certified operator was also available 
to the system on an on-call basis. Systems must consider their 
operational constraints in selecting treatment technologies and in 
establishing appropriate operational controls.
    EPA has accounted for additional labor costs associated with the 
operation of treatment technologies for compliance with the arsenic 
MCL. The Agency's analyses of additional costs are described in 
``Technologies and Costs for Removal of Arsenic from Drinking Water'' 
(EPA, 2000t). The labor rates used to develop operation and maintenance 
costs are conservative estimates based on loaded rates for certified 
operators in large and small systems.
    Concerns expressed by commenters on the storage, handling, and 
application of chemicals used in arsenic treatment centered on hazards 
to the public health and safety if an accidental release occurred. 
These comments hinged on the fact that ground water systems may have 
wells located in residential and high population-density areas. Several 
commenters asserted that the risks from chemical application in these 
areas may outweigh the hazards associated with potentially elevated 
arsenic concentrations. Among the chemicals of concern are chlorine for 
pre-oxidation, and acids and bases for pH adjustment.
    While EPA understands the nature of this concern, EPA does not 
believe that chemical usage for compliance with the arsenic MCL poses a 
significant risk. Systems using chemicals should employ established 
safety and emergency response procedures, along with effective operator 
training and certification. Measures that can be taken to alleviate 
potential problems with chemical handling and storage include: review 
chemical documentation to check quantity and quality; visually inspect 
chemicals and conduct appropriate verification tests; label and secure 
unloading points; verify adequate receiving tank capacity; inspect 
chemical containers for any damage or evidence of leaks; specify 
delivery at scheduled times; specify equipment necessary for safe 
handling and transfer of chemicals; and supervise unloading with 
trained personnel (Casale and LeChevallier, 2000).
    Many community water systems currently disinfect with chlorine. 
This includes many small systems and ground water systems with wells in 
residential areas. Small systems and ground water systems typically 
apply chlorine as hypochlorite that carries relatively little risk. 
Liquified chlorine gas is generally cheaper and is used by many large 
systems. The use of chlorine gas involves certain risks associated with 
accidental leakage. However, these risks are well understood and are 
managed through high standards of equipment specification, operation 
and management procedures, and training of personnel (Porter et al., 
2000).
    Systems using activated alumina may lower the pH of the feedwater 
in order to increase process efficiency, and subsequently raise the pH 
to stabilize the water. EPA believes that most large systems have a 
sufficient level of

[[Page 7036]]

technical expertise to modify pH without difficulty. However, EPA 
recognizes that very small systems may lack the operator capacity to 
successfully rely on pH modification as a component of a treatment 
process. In estimating costs for compliance with the arsenic MCL, EPA 
assumed that most very small systems using activated alumina would not 
adjust the raw water pH. These plants would run under less-than-optimal 
conditions but would still meet the arsenic MCL. Furthermore, for small 
systems and for other systems that may lack the technical expertise to 
adjust pH, other treatment options are available. Because of the number 
and flexibility of treatment options available to systems, along with 
the training and certification of operators, EPA believes that hazards 
to the public as a result of arsenic treatment will be minimal.
    In regard to concerns with water scarcity, EPA notes that of the 
technologies listed in the proposed rule as BAT, only reverse osmosis 
(RO) and electrodialysis reversal (EDR) produce reject water in a 
quantity likely to make them undesirable in arid regions. While EDR and 
RO were listed as BAT in the proposed rule, they were not used in the 
final national cost estimate because other options are more cost 
effective and do not reject a large volume of water like these two 
technologies. Thus, we did not assume that any systems would chose EDR 
and assumed that RO would only be used by a small fraction of small 
systems and only in POU devices. POU devices treat only a small 
fraction of the household water, so that any water loss is minimized. 
Consequently, EPA does not believe that commenters' concerns about 
water scarcity alter EPA's projections of systems' ability to comply 
with the arsenic MCL. Moreover, in today's rule EPA has established the 
MCL for arsenic at 10 ppb. At this level, it would be possible for many 
systems to use RO or EDR in a split-stream mode, treating a portion of 
the water, and blending treated and untreated water to achieve 
compliance. This option would enable systems to significantly reduce 
the amount of reject water produced were they to select these 
technologies.
    In cases where the available water resources are limited, systems 
may select technologies like activated alumina, anion exchange, and 
coagulation assisted microfiltration where water loss is limited to a 
few percent or less. As discussed in ``Technologies and Costs for 
Removal of Arsenic from Drinking Water'' (EPA, 2000t), the principal 
water losses associated with anion exchange and activated alumina 
result from the rinsing of the beds after regeneration and, in some 
limited cases, backwashing for removal of solids. In normal operating 
conditions, EPA expects this waste water to amount to a small 
percentage of the total water produced.
3. Small System Technology Application
    A number of commenters raised concerns over the small system 
compliance technologies described in the proposal. Many of these 
comments questioned the ability of small systems to apply these 
technologies. EPA has carefully considered these comments and responses 
to the significant issues are provided below (see section I.G. for a 
discussion of the affordable small system compliance technologies under 
today's final rule).
    The most significant issues raised by comments addressed the 
application of Point-of-Use/Point-of-Entry (POU/POE) treatment in small 
systems. Comments cited requirements for preoxidation for activated 
alumina (AA) units as reasons why the POU/POE devices would not be 
desirable. EPA notes that many small systems have disinfection 
treatment systems in place that could act as preoxidation for POE/POU 
units. Comments also raised concerns regarding the brine or concentrate 
stream generated by reverse osmosis (RO) POU/POE units. Commenters 
questioned whether the systems would waste precious water in arid 
areas. EPA believes systems in arid areas are more likely to select 
activated alumina (AA) or another centralized treatment technology. 
Commenters also raised concern over the disposal of the concentrate 
from these units into sewer or septic systems. In response, EPA 
believes it would be highly unlikely for the concentrate stream to pose 
problems because only about 1% of the household water is treated, 
thereby minimally influencing the quality of the sewage discharged from 
the household. Finally, commenters questioned the ability of small 
systems to maintain POE/POU devices which are installed in private 
homes. EPA believes it is feasible for public water systems to own, 
control, and maintain POE/POU devices for arsenic MCL compliance either 
directly or through a contract with a qualified party. While EPA 
recognizes that access to homes for maintenance may be an issue for 
some systems, we believe that such access would be permitted in others, 
especially if significant cost savings could be achieved.
4. Waste Generation and Disposal
    Many comments stated that EPA did not adequately consider problems 
with waste generation and disposal when evaluating which technologies 
would be most appropriately used for achieving compliance. Commenters 
expressed particular concern with anion exchange, activated alumina, 
and reverse osmosis because wastes generated from these processes, 
depending upon their operating and site specific conditions, could be 
hazardous or difficult to dispose of. Comments indicated that many 
utilities would have difficulty in achieving compliance with the 
proposed rule while also maintaining compliance with other 
environmental laws and regulations (e.g., RCRA and CWA). Commenters 
questioned EPA's analysis for the proposed rule that indicated that no 
RCRA hazardous wastes would need to be disposed in the decision tree.
    Arsenic treatment technologies produce three different types of 
wastes: Brines, sludges and spent media. Depending upon arsenic 
concentration and the characteristics of the waste, each of these 
wastes can pose disposal challenges and has the potential for being 
classified as hazardous.
    Arsenic wastes are defined as hazardous if their toxicity 
characteristic (TC) exceeds 5 mg/l of arsenic. The Toxicity 
Characteristic Leaching Procedure (TCLP) is a method by which waste is 
evaluated to determine if it exceeds the TC. If waste is  0.5% dry-
weight solids, then the liquid is defined as the TCLP extract and 
concentrations in it are compared against the TC level to determine if 
it is hazardous. If the waste is  0.5 % dry-weight solids, 
then a TCLP that conservatively simulates leaching from a landfill is 
used to determine if the TC level would be exceeded. EPA considered TC 
and TCLP results from residuals produced by the treatment technologies 
under consideration and selected only those technologies that would not 
produce a hazardous waste.
    Upon the review of public comments and further analysis, EPA agrees 
with comments that some of the treatment train technologies in the 
decision tree of the proposed rule could have created hazardous wastes 
under certain operational circumstances. Thus, EPA has narrowed its 
selection of available technologies in the decision tree for the final 
rule as indicated in Table V.F-4.1. EPA believes that the treatment 
options included in Table V.F-4.1 can address all treatment challenges 
without creating hazardous wastes, while being able to achieve 
compliance with the final rule. EPA has revised its national costs 
upward to reflect the changes in the decision tree. These costs are 
described in more detail in this

[[Page 7037]]

preamble and in support documents for this rule (EPA, 2000o and EPA, 
2000t).
    More specific rationale for the changes in the treatment train 
technologies considered in the decision tree are discussed in the 
following paragraphs and in the ``Technology and Cost Document'' (EPA, 
2000t).
    a. Anion exchange. When anion exchange resins are cleaned, they 
create a regeneration brine. Influent sulfate and arsenic 
concentrations, regeneration level, and rinse volume influence the 
resultant brine concentration levels of arsenic. EPA conducted modeling 
to determine the feasible operating conditions and source water arsenic 
and sulfate concentrations under which anion exchange could effectively 
remove arsenic without creating an arsenic brine that exceeded an 
arsenic concentration of 5 mg/L. Based on this analysis (EPA, 2000t), 
EPA determined brine arsenic concentrations could exceed 5 mg/L when: 
(a) Arsenic influent levels exceed 15 g/L and sulfate 
concentrations exceed 25 mg/L, and (b) when arsenic influent levels 
exceed 25 g/L and sulfate concentrations ranged between 25 and 
90 mg/L. Based on this analysis, EPA eliminated landfills and 
evaporation ponds from the final decision tree for the conditions 
indicated in Table V.F-4.1.
    As part of its proposed and final decision tree evaluation, EPA 
assumed that brine streams with  0.5% solids could potentially be 
disposed of through domestic sewage or mixtures of domestic sewage to 
POTWs regardless of the TC, since this is excluded from regulation 
under RCRA. Piping the brine directly to the POTW without passing 
through the sewer system does not meet the exclusion, nor does trucking 
the brine to the POTW. Even though brine disposal via sewage to POTWs 
is not restricted by RCRA, EPA recognizes that brine disposal can be 
restricted by the POTW's pretreatment programs. POTWs may establish 
Technically Based Local Limits (TBLLs) for arsenic to control: arsenic 
concentrations in POTW biosolids, arsenic concentration in the POTW 
discharge, or total dissolved solids (TDS) in the POTW discharge.
    Many comments indicated that significant increases in total 
dissolved solids would make brine disposal to a POTW unacceptable, 
especially in the Southwest where water resources are scarce. Even 
under the lowest regeneration level of 5.1 lb/ft3 assumed in 
EPA's analysis, TDS increases would likely be prohibited by POTWs when 
influent sulfate concentrations exceed 90 mg/L, and limited to POTWs 
where brine volume is very small compared to total volume for sulfate 
concentrations between 25 and 90 mg/L. Therefore, as described in 
section I.F., EPA modified the compliance decision tree to assume 
systems with sulfate concentrations greater than 50 mg/L would not 
select anion exchange as a treatment technology. In its final decision 
tree, EPA assumed that drinking water plants with sulfate 
concentrations of less than 20 mg/l and with a regeneration frequency 
of 1500 bed volumes, or with sulfate concentrations between 20 and 50 
mg/l and a regeneration frequency of 700 bed volumes, might use anion 
exchange with waste disposal via sewage to POTWs and be able to comply 
with local TBLLs. In the final decision tree less than 10% of the 
systems are assumed to use anion exchange versus over 50% of the 
systems being assumed to use this technology under the proposal.
    b. Activated alumina. The proposed rule considered activated 
alumina with regeneration and listed discharge to a sanitary sewer as 
the disposal mechanism for the brines. Many comments on the proposed 
rule noted that TBLLs for arsenic or total dissolved solids might 
restrict discharge of brine streams to the sanitary sewer. Under 
today's final rule (see section I.F.), regeneration of activated 
alumina media is not recommended for a number of reasons, including the 
difficulty of disposing of the brines. In the final decision tree, EPA 
assumes disposal of spent AA media (either from central treatment or 
POU) to landfills as the waste disposal method for AA. EPA believes 
that spent AA media will be nonhazardous because the TCLP test is 
conducted using weak acid at a pH of 5 which is near the optimal pH for 
adsorption of arsenic onto AA (Kempic, 2000). Wang et al. (2000) 
evaluated AA spent media from two small systems having treating 
influent arsenic concentrations of > 50 g/l and found TCLP 
with arsenic concentrations of 0.07 mg/L or less, well below the TCLP 
limit of 5 mg/L. Some public comments indicated concern that the TCLP 
test conditions at the pH of 5 may not reflect conditions at landfills 
which may have higher pHs. In response, EPA notes that the TCLP is the 
defining test specified in 40 CFR 261.24 for determining whether a 
waste is TC hazardous, and it applies regardless of the actual 
management of the waste unless some exemption applies.
    In the final decision tree, EPA has revised the treatment train 
assumptions for AA to be operated in series (i.e., two treatment units 
in sequence rather than as singular units as was considered under the 
proposal) under various pH conditions (see Table V.F-4.2). Operation in 
series will allow longer-run times and more cost-efficient disposal of 
spent media. The range of pH conditions is assumed in consideration of 
public comments that some utilities will prefer to operate without pH 
adjustment, thereby minimizing oversight and the ``footprint'' of land 
needed for the treatment facilities (since no additional chemical feed 
or storage facilities are needed). While pH adjustment to low levels 
will optimize AA removal of arsenic, this may not be an option for 
certain facilities depending upon land availability. Therefore, EPA 
considers a wide range of pH conditions of AA in the series mode.
    c. Reverse osmosis. Except for POU treatment, EPA did not use 
reverse osmosis in the decision tree of either the proposed or final 
rule (EPA, 2000h); EPA, 2000o). The concentrate stream from POU devices 
can be disposed of through discharge into domestic wastewater and 
thereby be exempt from RCRA regulation. It would also be highly 
unlikely for the concentrate stream to pose problems with TBLLs because 
only about 1% of the household water is treated, thereby minimally 
influencing the quality of the sewage reaching the POTW. Therefore, the 
decision tree to the final rule includes POU reverse osmosis.

              Table V.F-4.1.--Treatment Trains in Final Versus Proposed Arsenic Rule Decision Tree
----------------------------------------------------------------------------------------------------------------
                                        National cost estimate assumes will be selected
     Treatment train: treatment &                        by systems in
   residuals management combination   --------------------------------------------------    Reason for change
                                            Proposed rule              Final rule
----------------------------------------------------------------------------------------------------------------
Regionalization......................  NO.....................  NO.....................  N/A
Alternate Source.....................  NO.....................  NO.....................  N/A
Modify Lime Softening................  YES....................  YES....................  N/A

[[Page 7038]]

 
Modify Coagulation/Filtration........  YES....................  YES....................  N/A
Anion Exchange (25 mg/L sulfate) &     YES....................  YES....................  Treatment name revised--
 POTW discharge.                                                                          Anion Exchange (20 mg/
                                                                                          L sulfate).
Anion Exchange (150 mg/L sulfate) &    NO.....................  NO.....................  N/A
 POTW discharge.
Anion Exchange (25 mg/L sulfate) &     YES....................  NO.....................  Brine stream may be
 Evaporation Pond, Landfill.                                                              hazardous waste.
                                                                                          Commenter issue--EPA
                                                                                          evaluation.
Anion Exchange (150 mg/L sulfate) &    NO.....................  NO.....................  N/A
 Evaporation Pond, Landfill.
Activated Alumina (16500 Bed Volumes)  YES....................  REVISED................  Revised approach uses
 & Landfill.                                                                              multiple columns in
                                                                                          series operation.
Activated Alumina (3000 Bed Volumes)   NO.....................  NO.....................  N/A
 & Landfill.
Reverse Osmosis & direct discharge...  NO.....................  NO.....................  N/A
Reverse Osmosis & POTW discharge.....  NO.....................  NO.....................  N/A
Reverse Osmosis & Chemical             NO.....................  NO.....................  N/A
 Precipitation, Landfill.
Coagulation Microfiltration & Mech.    YES....................  YES....................  N/A
 Dewatering, Landfill.
Coagulation Microfiltration & Non-     YES....................  YES....................  N/A
 Mech. Dewatering, Landfill.
Oxidation Filtration & POTW discharge  YES....................  YES....................  N/A
Anion Exchange (25 mg/L sulfate) &     YES....................  NO.....................  Brine stream may be
 Chem Precipitation, Landfill.                                                            hazardous waste.
                                                                                          Commenter issue--EPA
                                                                                          evaluation.
Anion Exchange (150 mg/L sulfate) &    YES....................  NO.....................  Brine stream may be
 Chem Precipitation, Landfill.                                                            hazardous waste.
                                                                                          Commenter issue--EPA
                                                                                          evaluation.
Activated Alumina (16500 BV) & POTW..  NO.....................  NO.....................  N/A
Activated Alumina (3000 BV) & POTW...  NO.....................  NO.....................  N/A
Anion Exchange (90 mg/L sulfate) &     YES....................  REVISED................  Lower sulfate
 POTW.                                                                                    concentration selected
                                                                                          to minimize total
                                                                                          dissolved solids
                                                                                          increase. Commenter
                                                                                          issue--EPA evaluation.
Anion Exchange (90 mg/L sulfate) &     YES....................  NO.....................  Brine stream may be
 Evaporation Pond, Landfill.                                                              hazardous waste.
                                                                                          Commenter issue--EPA
                                                                                          evaluation.
Point-of-Entry Activated Alumina.....  YES....................  NO.....................  Run length only exceeds
                                                                                          six months when
                                                                                          finished water pH 7.5
Point-of-Use Reverse Osmosis.........  YES....................  YES....................  N/A
Point-of-Use Activated Alumina.......  YES....................  YES....................  N/A
----------------------------------------------------------------------------------------------------------------


             Table V.F-4.2.--New or Revised Treatment Trains
------------------------------------------------------------------------
              Treatment Train                         Revision
------------------------------------------------------------------------
Activated Alumina (pH7-pH8) & Landfill....  Series Operation.
Activated Alumina (pH8-8.3) & Landfill....  Series Operation.
Activated Alumina (pH adjusted to pH6--     Series Operation.
 23,100 Bed Volumes) & Landfill.
Activated Alumina (pH adjusted to pH6--     Series Operation.
 15,400 Bed Volumes) & Landfill.
Anion Exchange (20-50 mg/L sulfate) & POTW  Use 700 Bed Volumes as Run
                                             Length.
------------------------------------------------------------------------

    5. Emerging Technologies
    A number of comments state that several of the emerging 
technologies discussed in the proposal (e.g., granular ferric 
hydroxide, see section I.F) are likely to be the most cost effective 
treatment option for systems, particularly small systems. These 
comments state that systems may not select these emerging technologies 
because they have not been listed as BAT. In response, EPA must clarify 
that systems are not required to use BAT to achieve compliance with the 
MCL. A system may use any technology that is accepted by the State 
primacy agency provided the technology achieves compliance with the 
MCL. However, if a system is unable to meet the MCL with its chosen 
technology, the system will not be eligible for a variance unless the 
installed technology is listed as BAT. Other comments indicated that 
there will not be sufficient time for further testing of these emerging 
technologies prior to the effective date of the MCL. EPA notes that 
because of the capital improvements required for compliance with the 
MCL, the effective date of today's rule is 5 years from the date of 
promulgation for all system sizes. This should provide systems with 
adequate time for testing of the emerging technologies. Moreover, 
States may, as described in section I.H, provide small systems with up 
to an additional nine years to comply through exemptions.

G. Costs

1. Disparity of Costs
    Many public comments stated that EPA substantially underestimated 
costs for implementing the proposed rule. Comments pertained to 
national cost or regional cost estimates and system level cost 
estimates. Commenters stated that EPA's national cost estimates were 
low because: (a) The decision tree led to an over selection of 
technologies with low associated costs, and (b) the system

[[Page 7039]]

level costs associated with the selected technologies were low. 
Elaboration of public comment concerns and EPA's response in each of 
these categories follows. Also, since many public comments referred to 
the report ``Cost Implications of a Lower Arsenic MCL'' (Frey et al., 
2000) as a basis for their comments, EPA analyzed the report in detail. 
As noted below, the Agency disagrees with the approach Frey et al. 
(2000) used to produce the cost estimates in this report.
    a. What is EPA's response to major comments on the decision tree 
for the proposed rule? Commenters indicated that EPA's decision tree 
did not adequately recognize constraints in technology selection 
including feasibility of waste disposal, concerns with compliance with 
other EPA regulations (e.g., RCRA and CWA), land availability, 
complexity of operation and availability of skill level (particularly 
for small systems), and excess use of water in water scarce areas. 
Particular concern was raised by the extent to which EPA predicted that 
anion exchange would be used given concerns with sulfate and total 
dissolved solids, chromatographic peaking (possible rapid breakthrough 
of arsenic at above influent concentration levels due to competition 
from other ions), and handling of regeneration process streams and 
disposal of wastes (some of which may be hazardous). Commenters also 
suggested that EPA over predicted the use of greensand filtration since 
it only removes a limited amount of arsenic at low iron concentrations. 
Comments suggested that EPA should consider much greater use of 
activated alumina in the spent media replacement mode with disposal to 
landfills because of facility of operation and low costs. Comments also 
suggested use of reverse osmosis and nano-filtration in areas unlikely 
to have a water scarcity problem. Although central treatment with 
reverse osmosis was listed as one of the possible compliance 
technologies under the proposed rule, it was not used in the EPA's 
decision tree.
    In preparing the cost estimate for the proposed rule, EPA predicted 
compliance outcomes by considering: (1) Technologies already in place, 
(2) feasibility of application of the technology, and (3) least cost of 
technology. Given all available information at the time of proposal, 
EPA developed its decision tree. EPA received many informative comments 
pertaining to the feasibility of various treatment technologies 
considered. EPA agrees with public comments that some of the waste 
disposal options considered with anion exchange under the proposed rule 
could create hazardous wastes (see V.F.4. of this preamble). To address 
this concern EPA has eliminated the following treatment trains from its 
final decision tree: Anion exchange with chemical precipitation and 
disposal of waste to landfills, and anion exchange with discharge to 
evaporation ponds and disposal of waste to landfills.
    EPA agrees with public comments that activated alumina is likely to 
be used by many more systems than EPA predicted in the proposal. In 
response to comments, EPA revised the treatment train assumptions for 
AA to be operated in series under various pH conditions. Operation in 
series will allow longer run times and more cost-efficient disposal of 
spent media. The range of pH conditions is assumed in consideration of 
public comments that some utilities will prefer to operate without pH 
adjustment, thereby minimizing oversight and the ``footprint'' needed 
for the treatment facilities. While pH adjustment to pH 6.0 will 
optimize AA removal of arsenic, this may not be an option for certain 
facilities depending upon available land and expertise. Thus, EPA 
recognizes higher operational costs for AA for a substantial number of 
systems operating at less than optimal pH.
    Research (Subramanian et al., 1997) indicates that oxidation 
filtration (greensand filtration) achieved about 80% removal of arsenic 
when the iron to arsenic ratio was 20:1 but less than 50% removal when 
the iron to arsenic ratio was 7:1. In developing national cost 
estimates, EPA assumed that systems would opt for this type of 
technology only if more than 300 g/L of iron was present in 
the source water and no more than 50% arsenic removal was needed to 
achieve the MCL. EPA believes that its applicability assumptions for 
greensand filtration are conservative and therefore continues to 
support its usage in the decision tree for the final rule. Greensand 
filtration is a relatively inexpensive technology that may be 
appropriate for those systems that do not require much arsenic removal 
and have high iron in their source water. However, in the decision tree 
for the final rule, EPA lowered the expected use of greensand 
filtration to systems serving less than 3,300 (versus in systems 
serving less than 10,000 under the proposed rule) and reduced its usage 
by about \1/3\ (EPA, 2000h; EPA, 2000h). This drop is mainly attributed 
to the change in the MCL and fewer systems having arsenic at levels 
between 5 g/L and 10 g/L than between 10 and 20 
g/L. The ranges 5-10 g/L and 10-20 g/L 
reflect the arsenic concentration ranges that systems would have to 
fall within to be able to consider greensand, if only 50% removal 
efficiency is assumed.
    EPA continues to believe that reverse osmosis, while a very 
effective technology for removing arsenic, is not likely to be used as 
a centralized treatment option (even in areas of ample water supply) 
because of higher costs relative to other treatment options. EPA did 
not consider nanofiltration a likely compliance technology because of 
high costs relative to other technologies and decreased removal 
efficiency when operated to constrain production of waste streams.
    b. What is EPA's response to comments on system level costs? Under 
the proposed rule EPA only included activated alumina (AA) costs for 
small systems. A number of comments indicated that EPA should revise 
its decision tree to include AA and associated costs for all system 
sizes because AA is more economical than anion exchange. After 
considering the information provided by these comments, EPA expanded 
estimates of the use of AA in the decision tree for the final rule. EPA 
also revised its decision tree and developed costs for four different 
types of AA treatment for all system sizes--two for unadjusted pH and 
two where the pH has been adjusted to the optimal pH of 6. (The effects 
of these changes in the decision tree analysis are described in section 
V.G.1). The main change between the design used for the proposed rule 
versus the final rule is that smaller columns containing the activated 
alumina are operated in series rather than as a single column. This 
will provide greater utilization of the media before disposal and is 
more consistent with the designs used by commenters in evaluating 
disposable activated alumina. EPA's new AA costs specify different unit 
cost equations and flow boundary conditions for small versus large 
systems. Also, EPA has included new operating and maintenance (O&M) 
costs for waste disposal of spent AA media. The effect of all these 
changes is, in general, to decrease capital costs but to increase O&M 
costs and to increase overall AA system level costs within a particular 
size category. Despite these increases in costs for AA, AA is by far 
the most used technology among ground water systems in the final 
decision tree. The ``Arsenic Technologies and Costs'' (T&C) document 
(EPA, 2000t) for the final rule describes in detail the basis for the 
unit costs used for each of the new types of AA treatment.

[[Page 7040]]

    Several comments indicated that EPA's cost estimates were 
calculated for flow rates outside of their boundary conditions and thus 
the accuracy of many of the unit costs are in error. EPA analyzed the 
data provided by these comments and revised the cost equations used to 
estimate unit costs for the final rule. We modified cost equations and 
flow boundary conditions for AA, modified coagulation filtration, 
modified lime softening, anion exchange, coagulation microfiltration, 
and POU treatment. Most of the unit costs increased relative to those 
used for the proposed rule. The T&C document (EPA, 2000t) describes the 
basis for the unit costs used for the final rule.
    A number of comments stated that EPA's cost estimates should 
include pre-oxidation costs with AA in ground waters since many systems 
may not already be disinfecting. EPA must clarify that the cost 
estimates included prechlorination costs for any system that did not 
have existing disinfection treatment. For ground water systems, 13% to 
54% (depending upon system size) of systems predicted to use AA were 
assumed to add pre-oxidation.
    Several comments indicated that EPA's cost estimates for the 
proposal did not include corrosion control costs. However, the 
corrosion control costs were included as a component of the unit costs 
for the following technologies: modified lime softening, modified 
coagulation filtration, coagulation assisted microfiltration, and 
activated alumina options operating at the optimal pH. EPA believes 
that through appropriate use of corrosion control, systems will be able 
to comply with the lead and copper rule and meet the arsenic MCL.
    c. What is EPA's response to comments that state the report ``Cost 
Implications of a Lower Arsenic MCL'' (Frey et al., 2000), be used as a 
basis for reflecting more realistic national costs than EPA's 
estimates? A number of comments noted that the report ``Cost 
Implications of a Lower Arsenic MCL'' (Frey et al., 2000), ``the Cost 
Implications Report,'' or ``the report,'' provides best-case national 
estimated annualized costs of $1,460 million at the 5 g/L 
arsenic MCL option and $605 million at the 10 g/L MCL option. 
Many comments stated that EPA's national cost estimates were 
unrealistically low based upon the Cost Implications Report.
    EPA appreciates the substantial level of information available from 
the Cost Implication Report in regard to evaluation of technological 
feasibility for arsenic removal. This report was one of several sources 
that influenced EPA to predict much less use of anion exchange and much 
greater use of activated alumina in the decision tree for the final 
rule. However, EPA believes that some parts of the report's analysis 
contributed to overestimating national cost estimates. These issues 
include differences in flow rate assumptions, unit costs, and national 
estimates for arsenic occurrence, summarized below. A more detailed 
analysis is available in EPA's Response to Comment Document for the 
final rule.
    Flow rate assumptions. Flow rate assumptions are used with 
engineering cost models to estimate system level treatment costs for 
various technologies considered appropriate for achieving compliance. 
If flow rates are overestimated, system level treatment and national 
costs will be overestimated. EPA uses design flow rates to estimate 
capital costs and average flow rates to estimate operational and 
maintenance costs.
    The Cost Implications Report (Frey et al., 2000) uses significantly 
higher flow rates than EPA (EPA, 2000h; EPA, 2000o) for conducting 
national cost impact analysis for alternative arsenic MCLs. For most 
population categories of systems ranging between 3301 and 1 million 
people, AWWARF used flow rates that were 2-4 times higher than EPA's 
assumptions. Based on EPA's analysis of the Cost Implication Report it 
appears that the report used more system size categories than EPA and 
transferred flow rates for larger-system size categories into smaller-
system size categories. EPA believes that differences in the flow rate 
assumptions would produce an estimate of at least $400 million per year 
higher than an estimate using EPA's flow rates for the proposed arsenic 
MCL option of 5 g/L.
    Since the release of the Cost Implications Report, the authors 
revised their analysis to include different flow rates (Frey et al., 
October 2000), ``the Updated Cost Implications Report.'' The updated 
report based its new flow rates on the equations provided in the 
Proposed Arsenic in Drinking Water Rule Regulatory Impact Analysis 
(EPA, 2000h). The flow rates for ground water systems were based on the 
population/flow equations for publicly owned ground water systems and 
the authors selected the midpoint in each population category (e.g., 
using a flow of systems serving 550,000 persons to estimate costs for 
systems serving between 100,000 and 1 million people). In the Updated 
Cost Implications Report the authors state that:

    [T]he cost response to the difference in flow rates is mixed due 
to the large flow increases in the two largest population categories 
(100,0000 to 1 million and > 1 million) versus the decreases in the 
other flow categories (5,000 to 100,000).

    EPA believes that the revised analysis with the new flow rates in 
the Updated Cost Implications Report still overestimates costs. First, 
the revised design and average flows are only larger for ground water 
systems with populations greater than 1 million people. Second, 
estimating flow rates for systems within a category using the 
population midpoint assumptions in the revised analysis continues to 
cause cost overestimates because many more systems in each population 
size category occur in the lower part of the range than the upper part 
of the range. For example, EPA's data indicate that, in the flow 
category of ground water systems serving 100,000 to 1 million people, 
one-half of the systems have populations under 173,000 people (EPA, 
December 1997 Freeze of Safe Drinking Water Information System) and 
that the mean population among systems is 248,000 people (EPA, 2000a). 
In its cost estimates, EPA considers the distribution of flow rates 
within each size category for estimating system level cost 
contributions to the national impact (EPA, 2000h; EPA, 2000o). Third, 
Table 4.6 of the Cost Implication Report (Frey et al., 2000) provides a 
distribution of ground water systems nationally by system size and 
arsenic concentration, and indicates there are no ground water systems 
serving more than 1,000,000 projected to have arsenic concentrations 
that exceed 5 g/L. Since no ground water systems serving more 
than 1,000,000 people need to treat for MCL options of 5 g/L 
or higher, the national costs given in the revised report due to the 
revised flow rate assumptions in all categories should be lower for MCL 
options at or above 5 g/L.
    On a related issue, EPA believes that the operation and maintenance 
cost equations for anion exchange, activated alumina, coagulation/
microfiltration, and nanofiltration in the Cost Implication Report 
(Frey et al., 2000) were based on design flow rather than average flow. 
Using the operational and maintenance cost equations based on design 
flow rather than average flow significantly increases cost estimates, 
particularly for smaller systems (EPA's analysis indicates that for 
systems with a design flow of 1 M.D., the total annualized costs would 
increase by about 25% and for systems with a design flow of 10 M.D., 
the total annualized costs would increase by about 5%).
    Unit Cost assumptions: The Cost Implication Report (Frey et al., 
2000)

[[Page 7041]]

develops unit cost equations for a technology type based on a wide 
range of operating conditions, some of which may not be very cost 
effective (e.g., anion exchange with sulfate concentrations ranging 
from 25 to 150 mg/l). Because of their recognized lack of cost 
effectiveness for particular situations, the technologies have limited 
application in the national compliance forecast, even in situations 
with sulfate concentrations less than 25 mg/L. This costing approach 
tends to overestimate costs for systems with favorable site specific 
conditions. On the other hand, EPA developed cost equations for 
technology types within an operating range for which the technology can 
most cost effectively operate (e.g., anion exchange with sulfate 
concentrations of less than 25 mg/L) and used these equations for the 
limited number of systems that would meet the constraints. Utilities 
would not likely choose technologies unless they were favorable to use 
and thus only those conditions at which the technology is used should 
be costed, in our view.
    EPA believes that the Cost Implication Report case study costs for 
activated alumina were significantly overestimated due to the vessel 
costs. The vendor quote used for vessel costs is for a complete 
activated alumina system, including the costs for vessels, media, pipes 
and valves, chemical feed and storage, start-up, shipping and 
contingencies. The vendor quote presents budget prices for three design 
flows and different size vessels are used for each design flow. The 
vessel sizes are listed with the budget price, along with many 
additional costs, which may have been a source of confusion. Since 
activated alumina is the most used technology in the compliance 
forecast in the Cost Implications Report, double counting full system 
costs for activated alumina will significantly affect national cost 
estimates, particularly for smaller systems.
    Arsenic occurrence assumptions. The occurrence distributions based 
on the Frey and Edwards (1997) National Arsenic Occurrence Survey 
(NAOS) change throughout Chapter 4 of the Cost Implication Report. The 
national compliance costs are based on the occurrence distribution with 
the highest number of systems above the MCL options, but no basis is 
given for this selection. EPA believes that the arsenic occurrence 
distribution used in the report for the compliance forecast analysis 
significantly overestimates the distribution of arsenic occurrence 
above 20 g/L and this significantly biases costs upward.
2. Affordability
    Many commenters expressed concern that their system, or many 
households served by their system, would be unable to afford to comply 
with the proposed arsenic standard and that the DWSRF would be 
incapable of providing significant assistance. Concerns relating to 
costs and burden contributed to the Agency's decision to promulgate a 
standard of 10 g/L rather than the proposed standard of 5 
g/L. The Agency's decision to promulgate a standard of 10 
g/L significantly reduces the impacts on small systems. At the 
proposed standard of 5 g/L, about 6,500 community water 
systems would have needed to install treatment. At the promulgated 
standard of 10 g/L, about 2,800 small community water systems 
(and 1100 NTNCWS) will need to install treatment. Total capital costs 
for the promulgated standard are 57% lower (for both community water 
systems and NTNCWS) than they would have been for the proposed 
standard. Although the number of systems needing to treat at the 
promulgated standard is well under one half of the number that would 
have needed to treat at the proposed standard, the household level 
impact for those systems needing to treat is about the same.
    The Agency believes that affordability of drinking water at the 
household level is a function of two key variables: price of the water 
and the ability of the household to pay. Each of these two key 
variables is, in turn, a function of a number of other variables. A 
comprehensive and meaningful analysis of affordability for an 
individual system must include a complete assessment of all of the 
variables that influence both price and ability to pay. These variables 
are highly site specific. That is why the framework for addressing 
affordability concerns in SDWA consists of two distinct parts: (1) A 
national level affordability analysis focused on assessing what would 
be affordable (from a national perspective) for typical systems in a 
size class, and (2) State-level analysis, using State-developed 
criteria, to assess affordability for any specific system.
    The price of drinking water (the actual charge imposed on the 
household for its water service) reflects the complex interplay of many 
variables. These variables include the water system's full cost of 
doing business, subsidies or other forms of financial assistance that 
offset some of the system's costs, and the allocation of costs by the 
water system to its users and the rate design employed by the water 
system. The system's cost of providing service is influenced by many 
different factors, e.g., the quality of the source water available to 
the system, the type of treatment employed and the skill of its 
operation, and the basic organizational or institutional structure of 
the water system. Systems that effectively work together, perhaps by 
combining management, will realize lower overall costs compared to the 
same systems working independently. Section I.L discusses Federal 
financial assistance which is available to help systems comply with 
arsenic and other drinking water standards. Section III.E.4 further 
discusses issues considered by EPA in assessing the affordability of 
the arsenic rule.
    One commenter submitted a study which concludes that establishing a 
new arsenic MCL at a level of 5 g/L (or lower) will raise 
serious concerns about the affordability of water service for a 
majority of affected ground water systems. The Agency reviewed the 
study and notes a number of significant deficiencies in its assumptions 
and general methodology. The Agency disagrees with the commenter's 
selection of $50 per household per year as affordable on the basis of 
expenditures on lottery tickets and with the commenter's selection of 
$100 per household/year as posing ``serious affordability concerns'' on 
the basis of it representing some percentage of expenditures on health 
care or telephone service. The Agency notes that the Consumer 
Expenditure Survey, compiled by the Bureau of Labor Statistics, offers 
a broad overview of expenditure patterns across households of various 
incomes. The Consumer Expenditure Survey's data do not necessarily 
support the contention that an increase in water bills would force a 
low-income household to trade off health care or some other 
``essential'' expenditure to pay the water bill. Clearly, however, 
individual household circumstances vary greatly and certain individual 
households may face difficult choices. Another important consideration 
is that assessing expenditure trade offs by low-income households must 
fully account for all the assistance such households can receive, 
including subsidized housing, medical care through Medicaid, food 
stamps, and so on. Simply looking at a low-income household on the 
basis of its cash income can overlook important assistance available. 
The commenter also assumes that if a regulation increases the cost of 
water by 0.5% of median household income in a community, it might raise 
an affordability concern. The commentor

[[Page 7042]]

justifies this value by asserting that such an increase would be more 
than a 50% increase in the water bill for a typical household. The 
Agency finds this argument unconvincing. For a household with the 
median income, the water bill would represent about 0.9% of income. It 
is widely acknowledged that water has been historically underpriced. 
Thus, saying that no more than a 50% increase would be affordable is to 
accept the historic underpricing as appropriate. The commenter also 
assumes the cost estimates that EPA believes are significantly 
overestimated are correct. Thus, the commenter's conclusion that 
establishing a low arsenic standard will raise serious concerns about 
the affordability of water service for a majority of affected ground 
water systems is unsupported. The subsequent conclusion that existing 
variance and grant programs would not be adequate to alleviate 
affordability concerns is likewise unsupported. (See section I.H. of 
today's preamble for a discussion of variances and exemptions and 
section I.L. for a discussion of financial assistance available for 
complying with this rule.)
    A number of commenters indicated that they did not agree with EPA's 
approach for assessing national level affordability. Affordability is a 
complex concept. Numerous different approaches have been developed for 
assessing affordability of drinking water and/or wastewater service. 
Many of these approaches are summarized in the Agency's publication 
``Information for States on Developing Affordability Criteria for 
Drinking Water'' (EPA, 1998a). It is essential that the specific 
purpose for which any affordability criterion is developed be clearly 
understood. EPA's national affordability criteria are developed and 
applied for a very narrow and specific purpose.
    Section 1412(b)(4)(E)(ii) of SDWA , as amended, requires EPA to 
list technology (considering source water quality) that achieves 
compliance with the MCL and is affordable for systems in three specific 
population size categories: 25-500, 501-3300, and 3301-10,000 when 
promulgating a national primary drinking water regulation which 
establishes an MCL. If, for any given size category/source water 
quality combination, an affordable compliance technology cannot be 
identified, section 1412(b)(15)(A) requires the Agency to list a 
variance technology. Variance technologies may not achieve full 
compliance with the MCL but they must achieve the maximum contaminant 
reduction that is affordable considering the size of the system and the 
quality of the source water. In order for the technology to be listed, 
EPA must determine that this level of contaminant reduction is 
protective of public health.
    Thus, EPA developed national affordability criteria for the narrow 
and specific purpose of determining whether or not an affordable 
compliance technology exists, from a national perspective, for the 
specified size categories of systems, considering the quality of source 
waters available to them. The key point at issue here is what EPA 
should consider ``affordable'' from a national perspective. EPA does 
not define national level affordability in terms of what would be 
affordable to the least affluent water systems. Likewise, EPA does not 
define national level affordability in terms of what would be 
affordable to the most affluent water systems. Rather, a determination 
of national level affordability is concerned with identifying, for each 
of the given size categories, some central tendency or typical 
circumstance relating to their financial wherewithal.
    The metric EPA selected for this purpose is the median household 
income for communities of the specified sizes. Some commenters 
expressed concern that EPA was using the national median household 
income (across all sizes of systems) in making judgments on national-
level affordability. The Agency wishes to clarify that this was not the 
case. We used median household income for communities of the specified 
size categories, as documented in EPA's August 6, 1998 Federal Register 
notice (EPA, 1998h). The household is thus the focus of the national-
level affordability analysis. EPA considers treatment technology costs 
affordable to the typical household if they represent a percentage of 
MHI that appears reasonable when compared to other household 
expenditures. This approach is based on the assumption that the 
affordability to the median household served by the CWS can serve as an 
adequate proxy for the affordability of technologies to the system 
itself. The national-level affordability criteria have two major 
components: current annual water bills (baseline) and the affordability 
threshold (total % of MHI directed to drinking water). Current annual 
water bills were derived directly from the 1995 Community Water System 
Survey. Based on 1995 conditions, 0.75-0.78% of MHI is being directed 
to water bills for systems serving fewer than 10,000 persons.
    The fundamental, core question in establishing national-level 
affordability criteria is: what is the threshold beyond which drinking 
water would no longer be affordable for the typical household in each 
system size category? Based upon careful analysis, EPA believes this 
threshold to be 2.5% of MHI. In establishing this threshold, the Agency 
considered baseline household expenditures (as documented in the 1995 
Consumer Expenditure Survey, Bureau of Labor Statistics) for piped 
water relative to expenditure benchmarks for other household goods, 
including those perceived as substitutes for higher quality piped water 
such as bottled water and POU/POE devices. Based on these 
considerations, EPA concluded that current household water expenditures 
are low enough, relative to other expenditures, to support the cost of 
additional risk reductions. The detailed rationale for the selection of 
2.5% MHI as the affordability threshold is provided in the guidance 
document entitled ``Variance Technology Findings for Contaminants 
Regulated Before 1996'' (EPA, 1998l). The difference between the 
affordability threshold and current water bills is the available 
expenditure margin. This represents the dollar amount by which the 
water bill of the typical (median) household could increase before 
exceeding the affordability threshold of 2.5% of MHI.
    The Agency recognizes that baseline costs change over time as water 
systems comply with new regulations and otherwise update and improve 
their systems. MHI also changes from year to year, generally increasing 
in constant dollar terms. For example, since 1995 MHI has increased (in 
1999$) by 9.6%. Thus, to determine the available expenditure margin 
(the difference between the affordability threshold and the baseline) 
for each successive rule, adjustments would need to be made in both the 
baseline and the MHI. The Agency believes that, for purposes of 
assessing national-level affordability of the arsenic rule, the 
unadjusted baseline and unadjusted MHI are appropriate. Making 
adjustments to these two factors would not materially alter the outcome 
of the analysis, since both the baseline and the MHI would increase, 
and not by dramatically differing percentages. Thus the difference 
between the two would not significantly change.
    By definition, the MHI is the income value exactly in the middle of 
the income distribution. The median is a measure of central tendency; 
its purpose is to help characterize the nature of a distribution of 
values. The Agency recognizes that there will be half the households in 
each size category with incomes above the median, and half the 
households with incomes below the median. The objective of a national-
level affordability analysis is not to

[[Page 7043]]

determine what is affordable to the poorest household in the U.S. Nor 
is it to determine what the richest household in the U.S. could afford. 
Rather, it is to look across all the households in a given size 
category of systems and determine what is affordable to the typical, or 
``middle of the road'' household.
    The distinction between national-level affordability criteria and 
affordability assessments for individual systems cannot be over-
emphasized. The national-level affordability criteria serve only to 
guide EPA on the listing of an affordable compliance technology versus 
a variance technology for a given system size/source water combination 
for a given contaminant. In the case of arsenic, EPA determined that 
nationally affordable technologies exist for all system size categories 
and has therefore not identified a variance technology for any system 
size/source water combination. This means that EPA believes that the 
typical household in each system size category can afford the costs 
associated with the listed compliance technologies. EPA recognizes that 
individual water systems may serve a preponderance of households with 
incomes well below the median, or may face unusually high treatment 
costs due to some unusual local circumstance. As discussed more fully 
in sections I.H, I.L, and III.F.4, there are a number of tools 
available to address affordability concerns for these individual water 
systems. The major tools are financial assistance (low-interest loans 
and grants); extended compliance time-frames under a State-issued 
exemption; life-line and other types of rate structures that systems 
may use; and, restructuring of system management and operations through 
partnerships among systems.
3. Combined Cost of New Regulations
    A number of commenters expressed concern about the cumulative cost 
to water systems of new drinking water regulations. The Agency 
recognizes this concern and acknowledges that there is a small 
percentage of systems faced with co-occurrence and for whom there will 
be multiple treatment requirements. However, for such systems, the 
Agency notes that installation of treatment for one contaminant (such 
as arsenic, in this case) may often reduce the amount of treatment 
needed to remove many types of subsequently regulated contaminants, 
since the initial treatment will likely remove at least some of the 
subsequently regulated contaminant; particularly, certain types of 
inorganic contaminants.
    The most common cumulative impact will be that associated with 
initial monitoring. Most systems will need to conduct at least some 
limited initial monitoring for most regulated contaminants. However, 
for the vast majority of systems that will not detect the contaminant 
at levels of concern, subsequent monitoring will be limited and 
infrequent, with monitoring variances available for up to once every 
nine years.
4. Projected Effects of the New Standard on Other Regulatory Programs
    Several commenters felt that EPA has underestimated the costs of 
the proposed rule by failing to fully consider the possible costs of a 
new, lower drinking water standard on other regulatory programs, 
particularly hazardous waste. EPA disagrees and does not believe that 
certain ancillary costs identified by commenters should be considered 
in the cost of compliance analysis nor should they be a factor 
considered in establishing the MCL. For instance, the prospective costs 
of future CERCLA site clean-up actions are not among the factors that 
SDWA requires EPA to consider in establishing an MCL. Moreover, there 
are a host of site-specific factors taken in account in any CERCLA site 
clean-up situation beyond the clean-up standard itself (which may be an 
MCL under the CERCLA requirement to consider ``applicable or relevant 
and appropriate requirements'' (ARARs)). In the case of RCRA, EPA notes 
that the arsenic in drinking water final rulemaking does not 
necessarily trigger a revision of the Toxicity Characteristic standard 
under RCRA. Thus, there are not necessarily any new costs to entities 
affected by RCRA requirements as a result of this rulemaking. In any 
case, SDWA section 1412(b)(3)(C)(i)(III) specifically excludes 
consideration of such costs from other regulatory programs in the 
development of drinking water standards.

H. Benefits of Arsenic Reduction

    Significant comments on the benefits analysis for the proposed 
arsenic rule addressed the topics of the timing of health benefits 
accrual (latency); the use of the Value of Statistical Life (VSL) as a 
measure of health benefits; the use of alternative methodologies for 
benefits estimation; the Agency's consideration of non-quantifiable 
benefits in its regulatory decision-making process; the Agency's 
analysis of incremental costs and benefits of the proposed arsenic 
rule; and, the Agency's assumption that health risk reduction benefits 
will begin to accrue at the same time costs begin to accrue.
1. Timing of Benefits Accrual (Latency)
    Some commenters argued that EPA should have discounted its health 
benefits for the arsenic rule over a cancer latency period. As noted in 
the proposed rule, EPA committed to taking this issue before the 
Science Advisory Board (SAB) for its advice and recommendations.
    EPA brought this issue before the SAB in a meeting held on February 
25, 2000 in Washington, DC (65 FR 5638, February 4, 2000; EPA, 2000a). 
The SAB submitted a final report on their findings and recommendations 
to us on July 27, 2000 (EPA, 2000j). This final report was made 
available on the EPA website at www.epa.gov/sab/eeacf013.pdf.
    The SAB Panel noted that benefit-cost analysis, as described in the 
Agency's Guidelines [for economic analysis], is not the only analytical 
tool nor is efficiency the only appropriate criterion for social 
decision making, but notes that it is important to carry out such 
analyses in an unbiased manner with as much precision as possible. In 
its report, the SAB recommended that the Agency continue to use a wage-
risk based VSL as its primary estimate; any appropriate adjustments 
that are made for timing and income growth should be part of the 
Agency's main analysis while any other proposed adjustments should be 
accounted for in sensitivity analyses to show how results would change 
if the VSL were adjusted for some of the major differences in the 
characteristics of the risk and of the affected populations.
    Specifically, the SAB report recommended that: (1) Health benefits 
brought about by current policy initiatives (i.e., after a latency 
period) should be discounted to present value using the same rate that 
is used to discount other future benefits and costs in the primary 
analysis; (2) adjustments to the VSL for a ``cancer premium'' should be 
made as part of a sensitivity analysis; (3) adjustments to the VSL for 
voluntariness and controllability should be made as part of a 
sensitivity analysis; (4) altruism should be addressed in a sensitivity 
analysis and separately from estimation of the value of a statistical 
cancer fatality and the circumstances under which altruism can be 
included in a benefit-cost analysis are restrictive; (5) estimates of 
VSLs accruing in future years should be adjusted in the primary 
analysis to reflect anticipated income growth, using a range of income 
elasticities; (6) adjustments to the VSL for risk aversion should be 
made in a sensitivity analysis; (7) it is theoretically appropriate to 
calculate WTP for individuals whose ages correspond to

[[Page 7044]]

those of the affected population, but that more research should be 
conducted in this area; and (8) no adjustment should be made to the VSL 
to reflect health status of persons whose cancer risks are reduced.
    Consistent with the recommendations of the SAB, EPA developed a 
sensitivity analysis of the latency structure and associated benefits 
for arsenic, a summary of which is shown in Section III.E of the final 
preamble. This analysis consists of health-risk reduction benefits 
which reflect adjustments for discounting, incorporation of a range of 
latency period assumptions, adjustments for growth in income, and 
incorporation of other factors such as a voluntariness and 
controllability. Although the SAB recommended accounting for latency in 
a primary benefits analysis, the Agency believes that, in the absence 
of any sound scientific evidence of latency periods for arsenic related 
cancers, discounted benefits estimates for arsenic are more 
appropriately accounted for in a sensitivity analysis. Sensitivity 
analyses are generally reserved for examining the effects of accounting 
for highly uncertain factors, such as latency periods, on health risk 
reduction benefits estimates.
2. Use of the Value of Statistical Life (VSL)
    Some commenters felt that the Value of Statistical Life (VSL) used 
by EPA in its analysis of benefits for the arsenic rule was incorrect. 
EPA disagrees with these commenters for several reasons. First, the VSL 
used by the Agency in its benefits analysis is based on the most 
current data available. The VSL, as recommended by Agency guidance and 
EPA's SAB, is derived from a statistical distribution of the values 
found in 26 wage-risk studies, which were chosen as the best such 
studies available from a larger body of studies. This examination of 
studies was undertaken by EPA's Office on Air and Radiation in the 
course of its Clean Air Act retrospective analysis. EPA believes the 
VSL estimate ($6.1 million, 1999 dollars) to be the best estimate at 
this time and is recommending that this value be used by the various 
program offices within the Agency. This estimate may, however, be 
updated in the future as additional information becomes available to 
assist the Agency in refining its VSL estimate. The VSL estimate is 
consistent with current Agency economic analysis guidance, which was 
reviewed by EPA's SAB.
    Also, the use of the VSL for benefits valuation is consistent with 
recommendations from EPA's SAB, which discussed this issue in their 
meeting on February 25, 2000 in Washington, DC. The SAB's report on 
their findings and recommendations from the February meeting stated 
that:

despite limitations of the VSL estimates, these seem to offer the 
best available basis at present for considering the value of fatal 
cancer risk reduction. We therefore recommend that the Agency 
continue to use a wage-risk-based VSL as its primary estimate, 
including appropriate sensitivity analyses to reflect the 
uncertainty of these estimates (EPA, 2000j).

    In addition, some commenters disagreed with EPA's valuation of a 
human life. EPA disagrees with these commenters because the VSL does 
not represent the value of an actual human life. Rather, the VSL 
represents the value of people's willingness to pay for small changes 
in the risk of a fatality.
3. Use of Alternative Methodologies for Benefits Estimation
    Several commenters suggested that the Agency use a Quality Adjusted 
Life Years (QALYs) or a Life Years approach in its valuation of health 
benefits for the arsenic rule. EPA disagrees with these commenters 
because the current economic literature does not support these 
methodologies and EPA believes these approaches are not sufficient for 
use in economic analyses.
    The use of alternative methodologies, such as Quality Adjusted Life 
Years (QALYs) and a Life-Years approach, has been extensively discussed 
both within EPA and also before the Environmental Economics Advisory 
Committee (EEAC) of EPA's SAB. The QALY method allows information on 
life expectancy and quality of life to be combined into a single number 
for benefits valuation purposes. QALYs involve rating each year of life 
on a scale from zero to one, where one represents perfect health and 
zero represents the worst possible health state. Because patients 
themselves, or sometimes citizens of the community, are responsible for 
``rating'' each year, these quality-of-life tradeoffs are highly 
subjective and may not be very meaningful. Regarding the use of QALYs, 
the SAB committee stated that ``there are no published studies that 
show that persons with physical limitations or chronic illnesses are 
willing to pay less to increase their longevity than persons without 
these limitations. People with physical limitations appear to adjust to 
their conditions, and their WTP to reduce fatal risks is therefore not 
affected. The EEAC suggests that no adjustments be made to the VSL to 
reflect the health status of persons whose cancer risks are reduced, 
unless additional research documents such effects'' (EPA, 2000j).
    A Life-Years approach involves use of a Value of Statistical Life 
Year (VSLY) measure. The VSLY measure values life-years that would be 
lost if an individual were to die prematurely. The relationship between 
the value of risk reductions and expected life years remaining is 
complex; current research does not provide a definitive way of 
developing estimates of VSLY that are sensitive to such factors as 
current age, latency of effect, life years remaining, and social 
valuation of risk reduction. While age adjustments may be desirable 
from a theoretical standpoint, in the absence of such information, the 
mainstream economics literature does not support developing VSLY 
estimates.
    The SAB's Environmental Economics Advisory Committee (EEAC), in its 
report, confirmed this finding. The use of VSLY for valuing life-years 
lost was found by the EEAC to not have a sufficient theoretical and 
empirical basis for making any adjustments at this time. While the EEAC 
agreed that the theoretically appropriate method is to calculate WTP 
for individuals whose ages correspond to those of the affected 
population, the Committee recommended that more research be conducted 
on this topic before the Agency makes any adjustments for age in its 
estimates of health risk reduction benefits.
    Therefore, because of the limitations enumerated above, EPA 
disagrees with the use of the VSLY as a measure of benefits. This 
position has also been incorporated in the Agency's Guidelines for 
Preparing Economic Analyses (EPA, 2000n). The Agency's economic 
analysis guidelines were reviewed and approved by the Regulatory Policy 
Council and are considered when the Agency makes economic policy 
determinations.
    At this time, current Agency policy is to use VSL estimates for the 
monetization of health risk reduction benefits. As noted already, this 
policy is also consistent with recommendations from the EPA's SAB, 
which discussed this issue in a meeting held on February 25, 2000 in 
Washington, DC.
4. Comments on EPA's Consideration of Nonquantifiable Benefits
    Some commenters felt that EPA did not fully consider 
nonquantifiable benefits in their decision-making process. EPA 
respectfully disagrees with these commenters. SDWA requires that the 
Agency take into consideration any potential quantifiable and 
nonquantifiable benefits associated with regulating arsenic in drinking 
water. To this end, the Agency displayed

[[Page 7045]]

quantifiable costs and benefits and nonquantifiable benefits in the 
same table in the proposal (see Table XI-1 of the proposed rule), so 
that quantifiable and nonquantifiable benefits were given equal 
consideration in the determination of a regulatory level. In selecting 
a proposed MCL of 5 g/L, the Agency based its risk management 
decision on both the quantifiable bladder and lung cancer benefits and 
also on the significant amount of nonquantifiable benefits associated 
with regulating arsenic in drinking water. In addition, EPA has 
provided analysis and considered the nonquantified benefits in the same 
manner for the final rule.
    By definition, nonquantifiable benefits cannot be measured and were 
not measured in the benefit-cost analysis for the arsenic rule. EPA 
attempted to consider these potential benefits in both the proposed and 
final rule since the Agency believes they might occur. Such 
nonquantifiable benefits may include skin cancer, kidney cancer, cancer 
of the nasal passages, liver cancer, prostate cancer, cardiovascular 
effects, pulmonary effects, immunological effects, neurological 
effects, endocrine effects, and customer peace-of-mind benefits from 
knowing their drinking water has been treated for arsenic.
    As stated in section 1412(b)(4)(C) of the SDWA, ``* * * the 
Administrator shall publish a determination as to whether the benefits 
of the maximum contaminant level justify, or do not justify, the costs 
based on the analysis conducted under paragraph (3)(C).'' Paragraph 
(3)(C) contains the description of the seven Health Risk Reduction and 
Cost Analysis elements that the Agency must consider. These seven 
elements include quantifiable and nonquantifiable heath risk reduction 
benefits, quantifiable and nonquantifiable health risk reduction 
benefits from reducing co-occurring contaminants, quantifiable and 
nonquantifiable costs, incremental costs and benefits, effects of the 
contaminant on the general population as well as on any sensitive sub-
populations, possible increased health risks, and uncertainties in the 
analysis of any of these elements.
5. Comments on EPA's Assumption of Benefits Accrual Prior to Rule 
Implementation
    As noted by some commenters, EPA does not make a benefits 
adjustment for the period prior to rule compliance. EPA does not make 
this adjustment for two reasons. First, EPA assumes that costs accrue 
during the same period and does not adjust these costs to account for a 
phasing in of the rule. Therefore, the analysis treats benefits and 
costs in exactly the same manner. Second, the Agency anticipates that 
many systems will begin installing treatment prior to the compliance 
date. This will ensure they are in compliance on the date that the rule 
takes effect. As treatment is installed to meet the compliance date, 
benefits will begin to accrue to those served by these systems.

I. Risk Management Decision

1. Role of Uncertainty in Decision Making
    Several commenters questioned the proposed MCL on the basis of the 
uncertainties associated with aspects of the technical analyses 
supporting this rulemaking. Most of these comments dealt with the 
Agency's analysis of the health effects of arsenic. Section V.B. of 
today's preamble responds to these comments in more detail, and thus, 
only a relatively brief response to these comments, as they affect the 
risk management decision, is offered here. The uncertainties pointed 
out by commenters, together with the considerable costs of compliance 
with a new, lower standard, led several commenters to suggest that the 
Agency promulgate a significantly higher MCL than was proposed.
    In response, EPA believes that several considerations are 
important. First, we note that humans are more sensitive to arsenic 
than laboratory animals. Thus, assessments of the health effects of 
arsenic necessarily rely, in part, on studies in which human 
populations have been exposed to relatively high levels (where 
demonstrable effects can be clearly seen and distinguished) and in 
which extrapolations to safe levels can be performed, and very low 
probabilities of adverse effects are projected. Uncertainties are 
inherent in any such analysis and would attach to similar kinds of 
contaminants (for which humans are more sensitive than animals and 
where no animal model exists). Second, EPA has more fully considered 
the various uncertainties to which many commenters refer and has 
striven to account for them either qualitatively and quantitatively. 
Third, the Agency requested and has carefully considered the advice of 
the National Research Council of the National Academy of Sciences and 
the Drinking Water Committee of the Science Advisory Board on these 
issues as a part of our deliberations leading to a final MCL. In 
summary, we believe that our analysis of the health risks of arsenic in 
drinking water is fully supportive of the final MCL and is based upon 
the best available science. While we acknowledge that uncertainties in 
our understanding of the health effects of arsenic remain, we believe 
there is sufficient information to support today's promulgated 
standard.
2. Agency's Interpretation of Benefits Justify Costs Provision
    Many commenters offered a variety of points of view on EPA's cost-
benefit analysis and on its interpretation of the provision of SDWA 
allowing the Administrator to set a level higher than the feasible 
level if the benefits of a standard do not justify the costs (section 
1412(b)(6) of SDWA). EPA appreciates the many comments on its cost-
benefit analysis, but respectfully disagrees with those comments that 
suggest its analysis is fundamentally flawed and does not support the 
proposed or final rule. Assessment of cost and benefits in cases where 
not all information can be precisely known, as is the case here, is a 
challenging exercise. Sections V.G. and V.H. of this preamble to the 
final rule provide a more detailed response to the various cost and 
benefit estimation comments received. In summary, we believe these 
costs and benefits have been correctly calculated, within the limits of 
available data and information, and that they adequately support both 
the proposed and final rule. Consistent with our statutory 
requirements, we have carefully considered costs and benefits analysis 
in proposing and promulgating a final rule that includes an MCL higher 
than the feasible level. Based on our further analysis of a variety of 
factors, including the costs and benefits, and after consideration of 
the various comments, we have decided to establish the final MCL at a 
higher level than proposed. As discussed in detail in section III.F. of 
this preamble, the Agency believes that, at an MCL of 10 g/L, 
the benefits justify the costs. In our deliberations, we examined total 
national costs and benefits, incremental costs and benefits across 
various optional regulatory levels, and household costs for various 
system size categories. However, it is important to recognize that the 
Agency is also required to comply with the statutory requirement to 
``maximize health risk reduction.'' Thus, while evaluation of costs and 
benefits is a key consideration in the exercise of the discretionary 
authorities under section 1412(b)(6) of the SDWA, the decision criteria 
used in developing a final MCL also has an important risk reduction 
component.
    Some commenters also stated their belief that the benefits must 
exceed the costs in order for a particular standard to be ``justified'' 
in accordance with

[[Page 7046]]

section 1412(b)(6) of SDWA. EPA disagrees and believes, for several 
reasons, that the benefits of the final standard do justify the costs. 
First, in connection with this rulemaking, EPA notes that there are a 
number of non-monetizable benefits that limit the value of a strict 
numeric comparison of costs and benefits. Second, EPA has calculated a 
range of monetizable benefits and believes that a portion of the range 
of benefits do, in fact, ``overlap'' the costs. Finally, EPA notes that 
Congressional report language clarifies the intent of section 
1412(b)(6) and indicates that benefits do not need to strictly equal or 
exceed costs in order for a particular regulatory standard associated 
with those costs to be justified. (see S. Rep. 104-169, 104th Cong., 
1st Sess. at 33.)
3. Alternative Regulatory Approaches
    A number of commenters suggested that EPA tailor the arsenic 
drinking water standard in light of local or regional considerations. 
Market-based and seasonal standards were suggested in this regard. EPA 
understands these comments and the desire of these commenters to 
exercise flexibility in local or Regional decision-making in order to 
reflect information about local arsenic occurrence patterns, local 
public health priorities, available resources, or other pertinent 
factors. EPA notes that SDWA does provide for local and Regional 
flexibility in the implementation of new standard in a variety of ways. 
State decisions on use of State Revolving Loan Funds and Public Water 
System Supervision grant funds should be based upon local needs, local 
priorities, and available local funds. In addition, States may provide 
variances to qualifying systems under section 1415(a) of SDWA. States 
may also grant exemptions to qualifying water systems to provide 
additional time to comply with a new standard (with an opportunity for 
extensions) to help address the kinds of situations that many 
commenters are concerned about. However, SDWA does not provide a basis 
for establishing regional, local, or further-tailored drinking water 
standards as these commenters suggest. Rather, SDWA is designed to 
ensure uniform levels of public health protection across the country 
(except as specifically provided for in variances from the standard). 
In addition, certain Executive Orders such as Executive Order Number 
12898 (Environmental Justice) reinforce this SDWA requirement and are 
specifically designed to ensure that disadvantaged communities are not 
protected at levels that are less than those afforded nationally. Thus, 
EPA disagrees with the suggestion that the level of the final standard 
be altered to address local or regional considerations, or otherwise 
tailored, except as specifically provided for by SDWA.
4. Standard for Total Arsenic vs. Species-Specific Standards
    Several commenters expressed concern that an arsenic in drinking 
water standard based on total arsenic may unfairly penalize many 
drinking water systems, since these commenters felt that only inorganic 
forms of arsenic are considered to be toxic. Thus, the argument goes: 
the portion of a compliance sample that is comprised of organic arsenic 
would unfairly ``count against'' the utility when determining whether 
or not the concentration of arsenic in the sample exceeds the MCL. EPA 
believes, based on our understanding of occurrence patterns of arsenic, 
that source waters overwhelmingly contain inorganic arsenic. However, 
EPA also believes that there is a recent body of scientific evidence 
that indicates organic arsenic may also be toxic. Thus, it is important 
to know the total amount of arsenic present--both inorganic and 
organic.
    Allowing for only the relative concentration of inorganic arsenic 
to be measured in compliance samples would impose an additional expense 
and would only account for a portion of the potentially toxic arsenic 
present. EPA does not believe such an approach is appropriate for the 
reasons discussed and instead believes the final MCL should be 
expressed as total arsenic.

J. Health Risk Reduction and Cost Analysis (HRRCA)

1. Notice and Comment Requirement
    Several commenters stated that EPA was required to publish the 
HRRCA for public comment prior to proposing the arsenic regulation. EPA 
respectfully disagrees with these commenters. SDWA section 
1412(b)(3)(C) states that ``when proposing any national primary 
drinking water regulation that includes a maximum contaminant level, 
the Administrator shall, with respect to a maximum contaminant level 
that is being considered in accordance with paragraph (4) and each 
alternative maximum contaminant level that is being considered pursuant 
to paragraph (5) or (6)(A), publish, and seek comment on, and use for 
purposes of paragraphs (4), (5), and (6) an analysis of * * *'' the 
quantifiable and nonquantifiable health risk reduction benefits, the 
quantifiable and nonquantifiable health risk reduction benefits from 
reducing co-occurring contaminants, the quantifiable and 
nonquantifiable costs, the incremental costs and benefits, the effects 
of the contaminant on the general population as well as on any 
sensitive subpopulations, any possible increased health risks, and 
uncertainties in the analysis of any of the above factors.
    The above section of the statute provides for the publication of 
the HRRCA for any contaminant, except radon in drinking water, 
concurrently with the proposed regulation. Had Congress intended for 
the arsenic HRRCA to be published in advance of the proposal, the 
statute would have specifically provided for that, as it did in the 
case of radon. Section 1412(b)(13)(C) refers to the specific 
requirements for radon in drinking water. In this section of the 
statute, Congress required the Agency to publish the HRRCA for radon in 
drinking water six months in advance of the proposal.
    In the proposed arsenic rule, the Agency provided an analysis of 
the costs, benefits, and other HRRCA requirements, which was shown in 
Section XIII of the preamble to the proposed rule. The public was 
provided a 90-day comment period in which to submit comments on all 
aspects of the proposed rule, including costs, benefits, and HRRCA 
requirements.
2. Conformance With SDWA Requirements
    Some commenters felt that EPA did not meet the statutory 
requirements for conducting a HRRCA in section 1412(b)(3)(C)(i) and did 
not analyze the incremental costs and benefits associated with each 
alternative maximum contaminant level considered in conformance with 
SDWA requirements. EPA has met these requirements by conducting a HRRCA 
and an incremental analysis which are described in section XIII.D. of 
the preamble for the proposed rule. The HRRCA requirements, incremental 
costs, and incremental benefits are also discussed in the Economic 
Analysis of the proposed rule.
    Some commenters also noted that EPA's incremental cost-benefit 
analysis lacked significant detail. The Agency addressed these concerns 
by adding more text to the incremental analysis section in the preamble 
for the final rule.
    Several other commenters stated that the proper interpretation of 
SDWA is to use only an incremental analysis to determine if the 
benefits justify the costs. EPA respectfully disagrees with this 
interpretation because section 1412(b)(4)(C) of SDWA states ``* * * the 
Administrator shall publish a

[[Page 7047]]

determination as to whether the benefits of the maximum contaminant 
level justify, or do not justify, the costs based on the analysis 
conducted under paragraph (3)(C).'' Paragraph (3)(C) contains the 
description of the seven Health Risk Reduction and Cost Analysis 
elements that the Agency must consider. These seven elements include 
quantifiable and nonquantifiable health risk reduction benefits, 
quantifiable and nonquantifiable health risk reduction benefits from 
reducing co-occurring contaminants, quantifiable and nonquantifiable 
costs, incremental costs and benefits, effects of the contaminant on 
the general population as well as on any sensitive subpopulations, 
possible increased health risks, and uncertainties in the analysis of 
any of these elements. The Agency must consider all seven elements, not 
just incremental benefits and costs, when making a determination as to 
whether the benefits of the proposed rule justify the costs.

VI. Administrative and Other Requirements

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735, October 4, 1993) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to 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:
     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;
     Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
     Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof, or;
     Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action'' 
because it will have annual costs of more than $100 million. As such, 
this action was reviewed by OMB. Changes made in response to OMB 
suggestions or recommendations are documented in the public record. EPA 
prepared an Economic Analysis (EA) pursuant to Executive Order 12866 
and a revised version of the EA is in the docket for this rule (EPA, 
2000o).

B. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions.
    The RFA provides default definitions for each type of small entity. 
It also authorizes an agency to use alternative definitions for each 
category of small entity, ``which are appropriate to the activities of 
the agency'' after proposing the alternative definition(s) in the 
Federal Register and taking comment (5 U.S.C. 601(3)-(5).) In addition 
to the above, to establish an alternative small business definition, 
agencies must consult with the Small Business Administration's (SBA) 
Chief Counsel for Advocacy.
    For purposes of assessing the impacts of today's rule on small 
entities, EPA considered small entities to be PWSs serving fewer than 
10,000 persons. In accordance with the RFA requirements, EPA proposed 
using this alternative definition in the Federal Register (63 FR 7620, 
February 13, 1998), requested comment, consulted with the SBA, and 
finalized the alternative definition in the Consumer Confidence Reports 
regulation (63 FR 44511, August 19, 1998). As stated in that final 
rule, the alternative definition would be applied to this regulation as 
well.
    In accordance with section 603 of the RFA, EPA prepared an initial 
regulatory flexibility analysis (IRFA) for the proposed rule and 
convened a Small Business Advocacy Review Panel to obtain advice and 
recommendations of representatives of the regulated small entities in 
accordance with section 609(b) of the RFA. A detailed discussion of the 
Panel's advice and recommendations is found in the Panel Report (EPA 
1999e). A summary of the Panel's recommendations is presented at (65 FR 
38963, June 22, 2000). All Panel's recommendations directly applicable 
to this rulemaking are included in this final rule.
    As required by section 604 of the RFA, EPA also prepared a final 
regulatory flexibility analysis (FRFA) for today's final rule. The FRFA 
in combination with today's preamble, addresses the issues raised by 
public comments on the IRFA, which was part of the proposal of this 
rule. The FRFA is available for review in the docket, (EPA 2000w) and 
is summarized below.
    The RFA requires EPA to address the following when completing an 
FRFA:
    (1) A succinct statement of the need for, and objectives of, the 
rule;
    (2) A summary of the significant issues raised by the public 
comments on the IRFA, a summary of the assessment of those issues, and 
a statement of any changes made to the proposed rule as a result of 
those comments;
    (3) A description of the reporting, recordkeeping, and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to the rule and the 
type of professional skills needed to prepare the report or record;
    (4) A description of the types and number of small entities to 
which the rule will apply, or an explanation why no estimate is 
available; and
    (5) a description of the steps taken to minimize the significant 
impact on small entities consistent with the stated objectives of the 
applicable statutes, including a statement of the factual, policy, and 
legal reasons why EPA selected the alternative the final rule and why 
the other significant alternatives to the rule that were considered 
which affect the impact on small entities were rejected.
    The following is a summary of the FRFA. The first requirement is 
discussed in section II. and III.D.1 of this preamble. The second, 
third, fourth and fifth requirements are summarized as follows.
    a. Comments on the IRFA. Commenters on the IRFA raised a number of 
issues, largely concerned with the potential cost of the rule. In the 
proposed arsenic rule and the RIA supporting the proposal (EPA 2000h), 
EPA estimated the costs for small systems for the four arsenic MCL 
regulatory options and requested comment on the IRFA. Some commenters 
felt that EPA had underestimated the costs for small systems to comply 
with the arsenic proposal. In response to the comments, the Agency re-
evaluated the economic effects on small entities after publication of 
the proposal (as discussed in greater detail in Section III.). EPA 
updated its assessment for the FRFA based on comments and the final 
regulatory decisions, i.e., the final MCL level, full coverage of 
NTNCWS, and updated costs of compliance, including waste disposal 
costs.

[[Page 7048]]

    b. Reporting, Recordkeeping and Other Requirements for Small 
Systems. The arsenic rule continues to require small systems to 
maintain records and to report arsenic concentration levels at the 
point-of-entry to the water system's distribution system. NTNCWSs are 
added to the systems that must meet the MCL for arsenic by this 
rulemaking. Small systems are also required to provide arsenic 
information in the Consumer Confidence Report or other public 
notification if the system exceeds specific arsenic finished water 
concentrations including the MCL. Arsenic monitoring and reporting will 
be required annually for surface water (and mixed surface and ground 
water systems) or once every three years for ground water systems, 
unless the small system obtains a monitoring waiver from the State, 
demonstrating compliance with the proposed MCL. Other existing 
information and reporting requirements, such as Consumer Confidence 
Reports and public notification requirements, will be revised to 
include the lower arsenic MCL and a reporting requirement when one half 
of the MCL is exceeded (see section V.E.). As is the case for other 
contaminants, required information on system arsenic levels must be 
provided by affected systems and is not considered to be confidential. 
The professional skills necessary for preparing the reports are the 
same skill level required by small systems for current reporting and 
monitoring requirements for other drinking water standards.
    The classes of small entities that are subject to the proposed 
arsenic rule include public water systems serving less than 10,000 
people.
    c. Number of Small Entities Affected. The number of small entities 
subject to today's rule is shown in Table VI.B-1 below.

         Table VI.B-1.--Profile of the Universe of Small Water Systems Regulated Under the Arsenic Rule
----------------------------------------------------------------------------------------------------------------
                                                               System size category
        Water system type        -------------------------------------------------------------------------------
                                        100           101-500        501-1,000      1,001-3,300    3,301-10,000
----------------------------------------------------------------------------------------------------------------
Publicly-Owned:
    CWS.........................           1,729           5,795           3,785           6,179           3,649
    NCWS........................           1,783           3,171           1,182             361              29
Privately-Owned:
    CWS.........................          13,640          11,266           2,124           1,955             654
    NCWS........................           8,178           4,162             902             411              56
Total Systems:
    CWS.........................          15,369          17,061           5,909           8,134           4,303
    NCWS........................           9,961           7,333           2,084             772              85
                                 -------------------------------------------------------------------------------
        Total...................          25,330          24,394           7,993           8,906          4,388
----------------------------------------------------------------------------------------------------------------
Source: Safe Drinking Water Information System (SDWIS), December 1998 freeze.

    EPA's FRFA estimates that the economic impact of the final rule 
will not be significant for the vast majority of small systems. Of the 
71,011 small entities potentially affected by the Arsenic Rule, 94% are 
expected to incur average annualized costs of less than $40. This 
average reflects total costs for systems that will not need to modify 
or install treatment to meet the MCL and mostly reflects monitoring 
costs. This equates to approximately 0.001% of average annual revenue. 
The remaining 6%, 3,907 systems, estimated to need additional or 
modified treatment to meet the MCL are expected to incur average 
annualized costs of approximately $20,816, or 0.70% of average annual 
revenue. Although EPA has worked with small communities to minimize the 
burden of compliance with this rule, the Agency anticipates that 
several hundred systems may nevertheless experience costs in excess of 
3% of annual revenues. As noted below, financial assistance and 
exemptions (providing additional time) are available for small systems 
for compliance.
    d. Minimizing small system impact and the final MCL. As discussed 
in more detail in section I.L. of this preamble, EPA notes that $1.7 
billion is available each year through the SRF and RUS program to 
support necessary capital improvements to ensure compliance. SDWA also 
provides small systems additional time to comply through a provision 
for exemptions. Systems serving fewer than 3,300 persons can apply for 
an exemption from the State (SDWA section 1416(b)(3)) that can provide 
up to an additional nine years to comply (for a total of 14 years from 
the effective date of the rule). EPA discusses in section III.F. of 
this preamble the decisions to select the final MCL. EPA is preparing a 
small entity compliance guide to help small entities comply with this 
rule as required by Section 212 of SBREFA. This guide will be available 
for small systems within a few months of the promulgation date of this 
rule. Small systems may obtain a copy of the guide from EPA's web site, 
www.epa.gov/safewater.

C. Unfunded Mandates Reform Act (UMRA) of 1995

    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, Tribal, and local 
governments and the private sector. Under UMRA section 202, EPA 
generally must prepare a written statement, including a benefit-cost 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures by State, Tribal, and local 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

[[Page 7049]]

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.
    EPA has determined that this rule contains a Federal mandate that 
may result in expenditures of $100 million or more for State, Tribal, 
and local governments, in the aggregate, or the private sector in any 
one year. A detailed description of this analysis is presented in EPA's 
Economic Analysis of the arsenic rule (EPA, 2000o) which is included in 
the Office of Water docket for this rule. Accordingly, EPA has prepared 
under section 202 of the UMRA a written statement which is summarized 
below.
    a. Authorizing legislation. Today's rule is issued pursuant to 
section 1412(b)(13) of the 1996 amendments to SDWA that requires EPA to 
propose and promulgate a national primary drinking water regulation for 
arsenic, establishes a statutory deadline of January 1, 2000, to 
propose this rule, and establishes a statutory deadline of January 1, 
2001, (and subsequently amended to June 22, 2001) to promulgate this 
rule.
    b. Cost-benefit analysis. Section III. of this preamble, describing 
the Economic Analysis (EA) (EPA, 2000o), health risk analysis and the 
cost and benefit analysis for arsenic, contains a detailed analysis in 
support of the arsenic rule. Today's final rule is expected to have a 
total annualized cost of approximately $181 million (Exhibit 6-9, EPA, 
2000o). This total annualized cost includes the total annual 
administrative costs of State, Tribal, and local governments, in 
aggregate, less than 1% of the cost, and total annual treatment, 
monitoring, reporting, and record keeping impacts on public water 
systems, in aggregate, of approximately $1.3 million. EPA estimates the 
total annual costs of administrative activities for compliance with the 
MCL to be approximately $2.7 million.
    The EA includes both qualitative and monetized benefits for 
improvements in health and safety. EPA estimates the final arsenic rule 
will have total annual monetized benefits for bladder and lung cancer 
of approximately $140 to 198 million for the MCL of 10 g/L. 
The monetized health benefits of reducing arsenic exposures in drinking 
water are attributable to the reduced incidence of fatal and non-fatal 
bladder and lung cancers. At an arsenic level of 10 g/L, an 
estimated 21 to 30 fatal bladder and lung cancers and 12 to 26 non-
fatal bladder and lung cancers per year are prevented.
    In addition to quantifiable benefits, EPA has identified several 
potential non-quantifiable benefits associated with reducing arsenic 
exposures in drinking water. These potential benefits include health 
effects that are difficult to quantify because of the uncertainty 
surrounding their estimation. Non-quantifiable benefits may also 
include any peace-of-mind benefits specific to reduction of arsenic 
risks that may not be adequately captured in the Value of Statistical 
Life (VSL) estimate.
    c. Financial Assistance. Section III of this preamble describes the 
various Federal programs available to provide financial assistance to 
State, Tribal, and local governments to administer and comply with this 
and other drinking water rules. The Federal government provides funding 
to States that have a primary enforcement responsibility for their 
drinking water programs through the Public Water Systems Supervision 
(PWSS) Grant program. Additional funding is available from other 
programs administered either by EPA or other Federal agencies. These 
include the Drinking Water State Revolving Fund (DWSRF) and Housing and 
Urban Development's Community Development Block Grant Program. Also, 
the Rural Utilities Service (RUS) of the United States Department of 
Agriculture (USDA) operates a Water and Waste Disposal Loan and Grant 
Program. This program provides low-interest loans and grants to public 
entities and not-for-profit corporations serving populations of 10,000 
or fewer persons.
    d. Estimates of future compliance costs and disproportionate 
budgetary effects. To meet the requirement in section 202 of the UMRA, 
EPA analyzed future compliance costs and possible disproportionate 
budgetary effects of an arsenic MCL of 10 g/L to the extent 
reasonably feasible. The Agency believes that the cost estimates, 
indicated previously and discussed in more detail in section III of 
today's rule, accurately characterize future compliance costs of the 
rule.
    With regard to the disproportionate impacts, EPA considered 
available data sources in analyzing the disproportionate impacts upon 
geographic or social segments of the nation or industry. While the 
percentage of systems impacted varies from region to region, no area 
has impacts substantial enough to create a disproportionate burden. For 
the proposal, EPA did identify (Table V-2, p. 38908) that there are a 
larger percentage of systems in the Western and New England regions, 
whose drinking water quality currently would exceed the MCL for 
arsenic. For such regions, total compliance, therefore, may be 
incrementally costlier than for systems in regions where a smaller 
percentage currently exceed the arsenic MCL. However, even this 
difference is not considered by EPA to represent a disproportionate 
impact.
    To estimate the potential disproportionate impacts on social 
segments of this rule, this analysis also developed three other 
measures:
    (1) Reviewing the impacts on small versus large CWSs;
    (2) Reviewing the costs to public versus private CWSs; and
    (3) reviewing the household costs for the rule.

Table 6-11 of the EA (EPA, 2000o) shows that the total treatment costs 
for small CWSs (serving fewer than 10,000 persons) is less than the 
total treatment for large CWSs; therefore, there is no disproportionate 
impact on small systems versus large systems. Table 8-29 of the EA 
shows that there is not a disproportionate impact when comparing costs 
for public CWSs to costs for private CWSs of the same size. Public 
systems have slightly higher costs than public CWSs. Table 8-30 of the 
EA show household costs by system size. Cost per household increases as 
system size decreases. Cost per household is higher for households 
served by smaller systems than larger systems. These values are 
expected for two reasons. First, smaller systems serve far fewer 
households than larger systems and, consequently, each household must 
bear a greater percentage share of the system's costs. Second, smaller 
systems tend to have higher influent arsenic concentrations that, on a 
per-capita or per-household basis, require more expensive treatment 
methods to achieve the target arsenic level.
    Moreover, even if there were a disproportionate impact associated 
with the final MCL, EPA does not have any authority to tailor the 
regulation to provide regional or ownership relief. Finally, as 
previously noted, EPA adopted a 10 g/L arsenic MCL rather than 
the proposed (5 /L) or feasible level (3 g/L) of 
arsenic MCL in part because of the benefit cost issues raised by 
commenters. This should serve to mitigate the costs of the rule to some 
degree. EPA also provided delayed compliance deadlines for all systems

[[Page 7050]]

which should also reduce the economic effect on systems with higher 
ground water arsenic levels.
    EPA will prepare a small entity compliance guide, a monitoring/
analytical manual, and a small systems technology manual that will 
assist the public and private sector.
    e. Macroeconomic effects. As required under UMRA Sec. 202, EPA is 
required to estimate the potential macro-economic effects of the 
regulation. These types of effects include those on productivity, 
economic growth, full employment, creation of productive jobs, and 
international competitiveness. Macro-economic effects tend to be 
measurable in nationwide econometric models only if the economic impact 
of the regulation reaches 0.25% to 0.5% of Gross Domestic Product 
(GDP). In 1998, real GDP was $7,552 billion so a rule would have to 
cost at least $18 billion annually to have a measurable effect. A 
regulation with a smaller aggregate effect is unlikely to have any 
measurable impact unless it is highly focused on a particular 
geographic region or economic sector. The macro-economic effects on the 
national economy from the arsenic rule should be negligible based on 
the fact that, assuming 100% compliance, the total annual costs are 
approximately $181 million, and the costs are not expected to be highly 
focused on a particular geographic region or industry sector.
    f. Summary of EPA's consultation with State, Tribal, and local 
governments. In developing the proposed rule, EPA consulted with small 
governments pursuant to its plan established under section 203 of the 
UMRA to address impacts of regulatory requirements in the rule that 
might significantly or uniquely affect small governments. Consistent 
with the intergovernmental consultation provisions of section 204 of 
UMRA, EPA held, prior to proposal, consultations with the governmental 
entities affected by this rule. EPA held four public meetings for 
stakeholders prior to proposal and an additional meeting after 
proposal. The Agency convened a Small Business Advocacy Review (SBAR) 
Panel in accordance with the Regulatory Flexibility Act (RFA) as 
amended by the Small Business Regulatory Enforcement Fairness Act 
(SBREFA) to address small entity concerns, including small local 
governments. EPA consulted with small entity representatives prior to 
convening the Panel to get their input on the arsenic rule. Two of the 
small entities represented small governments. A detailed description of 
the SBREFA process can be found in the docket of this rulemaking (EPA, 
1999e). EPA also made presentations at Tribal meetings in Nevada, 
Alaska, and California. In addition, EPA made presentations at meetings 
of the American Water Works Association (AWWA), the Association of 
State Drinking Water Administrators (ASDWA), the Association of 
California Water Agencies (ACWA), and the Association of Metropolitan 
Water Agencies (AMWA). Participants in EPA's stakeholder meetings also 
included representatives from the National Rural Water Association, 
AMWA, ASDWA, AWWA, ACWA, Rural Community Assistance Program, State 
departments of environmental protection, State health departments, 
State drinking water programs, and a Tribe.
    g. Nature of State, Tribal, and local government concerns and how 
EPA addressed these concerns. In general, comments on the proposed UMRA 
discussion continued to cite costs and funding for compliance as 
concerns. EPA has further revised the costs for this final rule based 
on comments and continues to believe that there are affordable 
technologies (see section III.E.). Cost was one of the issues EPA 
considered in deciding to exercise its discretionary authority under 
section 1412(b)(6) of SDWA to propose that the MCL be set a level 
higher than the feasible level in the proposed rule of 5 g/L 
and to set the final level of 10 g/L. Commenters asked that 
funding be increased to the Drinking Water State Revolving Fund (DWSRF) 
or somehow fully fund compliance with the proposed requirements. While 
the DWSRF program is proving to be a significant source of funding, it 
cannot be viewed as the only source of funding. There are strategies 
other than Federal funding (such as system bundling) for meeting the 
arsenic rule. Federal, State and local governments, private business 
and utilities will need to work in partnership to help address the 
significant infrastructure needs for complying with today's rule.
    h. Regulatory alternatives considered. As required under section 
205 of the UMRA, EPA considered several regulatory alternatives in 
developing an MCL for arsenic in drinking water. In preparation for 
this consideration, the Regulatory Impact Analysis (EPA, 2000h) and 
Health Risk Reduction and Cost Analysis (HRRCA) for the proposed 
arsenic rule (EPA, 2000i, see section XIII.) evaluated arsenic levels 
of 3 g/L, 5 g/L, 10 g/L, and 20 g/
L. (see section III. of the proposed rule for more discussion of the 
regulatory alternatives considered.)
    i. Selection of the regulatory alternative. As explained in section 
III.F. of today's preamble, the Agency selected an MCL of 10 
g/L which is the most cost-effective alternative since it 
maximizes benefits.

D. Paperwork Reduction Act (PRA)

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, and 
has assigned OMB control number 2040-0231.
    Under this rule, respondents to the monitoring, reporting, and 
recordkeeping requirements include the owners and operators of 
community water systems and State officials that must report data to 
the Agency. Monitoring for arsenic is required at each entry point to 
the distribution system. States will have discretion in grandfathering 
existing data for determining initial monitoring baselines for the 
currently regulated contaminants.
    EPA has estimated the burden associated with the specific 
information collection, record keeping and reporting requirements of 
the proposed rule in the accompanying Information Collection Request 
(ICR). The ICR for today's final rule compares the current requirements 
to the revised requirements for information collection, reporting and 
record-keeping. The States and the PWSs must perform start-up 
activities in preparing to comply with the arsenic rule. Start-up 
activities include reading the final rule to become familiar with the 
requirements and training staff to perform the required activities.
    For PWSs, the number of hours required to perform each activity may 
vary by system size. This rule applies to community water systems and 
non-transient non-community water systems. There are approximately 
74,607 PWSs and 56 States and territories considered in this ICR. 
During the first three years after promulgation of this rule, the 
average burden hours per respondent per year is estimated to be 8 hours 
for PWSs and 915 hours for States. During this period, the total burden 
hour per year for the approximately 74,663 respondents covered by this 
rule is estimated to be 667,179 hours to prepare to comply with this 
final arsenic rule. The average number of responses per year by PWSs is 
49,738. The average number of responses for the States is expected to 
be 75 per year during the first three-year period. The average burden 
hours per response for PWSs is 4. The average burden hours per response 
for States is 229. Total annual labor costs during this first 3-year 
period are expected to be

[[Page 7051]]

about $9.9 million per year for PWSs. The information collected is not 
confidential.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to collect information; search data sources; complete 
and review the collection of information; and transmit or otherwise 
disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. EPA is 
amending the table in Chapter 9 of currently approved ICR control 
numbers issued by OMB for various regulations to list the information 
requirements contained in this final rule.

E. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), (Pub. L. No. 104-113, section12(d), 15 U.S.C. 272 
note), directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., material specifications, test methods, 
sampling procedures, business practices) that are developed or adopted 
by voluntary consensus standard bodies. The NTTAA directs EPA to 
provide to Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    Today's rule does not establish any technical standards; thus, 
NTTAA does not apply to this rule. However, it should be noted that 
systems complying with this rule need to use previously approved 
technical standards already included in Sec. 141.23. As discussed in 
the proposed rule for arsenic (65 FR 38888) and in today's final rule 
(section I.F.1.), one consensus method (SM 3120B) and one EPA method 
(EPA 200.7), are withdrawn by this rule because the method detection 
limits for these methods are inadequate to reliably determine the 
presence of arsenic at the MCL of 10 g/L. After the removal of 
these methods, the four remaining analytical methods currently approved 
for compliance monitoring of arsenic in drinking water are published by 
consensus organizations. The four methods published by these consensus 
organizations include SM 3113B, SM 3114B, ASTM 2972-93B and ASTM 2972-
93C. These methods are described in the ``Annual Book of ASTM 
Standards'' (American Society for Testing and Materials, 1994 and 1996) 
and in ``Standards for the Examination of Water and Wastewater'' (APHA, 
1992 and 1995).

F. Executive Order 12898: Environmental Justice

    Executive Order 12898 establishes a Federal policy for 
incorporating environmental justice into Federal agencies' missions by 
directing agencies to identify and address disproportionately high and 
adverse human health or environmental effects of its programs, 
policies, and activities on minority and low-income populations. The 
Agency has considered environmental justice related issues concerning 
the potential impacts of this action and consulted with minority and 
low-income stakeholders.
    On March 12, 1998, the Agency held a stakeholder meeting to address 
various components of pending drinking water regulations and how they 
may impact sensitive sub-populations, minority populations, and low-
income populations. Topics discussed included treatment techniques, 
costs and benefits, data quality, health effects, and the regulatory 
process. Participants included national, State, Tribal, municipal, and 
individual stakeholders. EPA conducted the meetings by video conference 
call between 11 cities. This meeting was a continuation of stakeholder 
meetings that started in 1995 to obtain input on the Agency's drinking 
water programs. The major objectives for the March 12, 1998 meeting 
were:
     Solicit ideas from stakeholders on known issues concerning 
current drinking water regulatory efforts;
     Identify key issues of concern to stakeholders, and;
     Receive suggestions from stakeholders concerning ways to 
increase representation of communities in EPA regulatory efforts.
    In addition, EPA developed a plain-English guide specifically for 
this meeting to assist stakeholders in understanding the multiple and 
sometimes complex issues surrounding drinking water regulation.

G. Executive Order 13045: Protection of Children from Environmental 
Health Risks and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks,'' (62 FR 19885 April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This final rule is not subject to the Executive Order because the 
Agency does not have reason to believe the environmental health risks 
or safety risks addressed by this action present a disproportionate 
risk to children.

H. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    Under section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, imposes substantial direct 
compliance costs, and is not required by statute (unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or EPA consults with 
State and local officials early in the process of developing the 
proposed regulation). EPA also may not issue a regulation that has 
federalism implications and preempts State law, unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    If EPA complies by consulting, Executive Order 13132 requires EPA 
to provide to the Office of Management

[[Page 7052]]

and Budget (OMB), in a separately identified section of the preamble to 
the rule, a federalism summary impact statement (FSIS). The FSIS must 
include a description of the extent of EPA's prior consultation with 
State and local officials, a summary of the nature of their concerns 
and the agency's position supporting the need to issue the regulation, 
and a statement of the extent to which the concerns of State and local 
officials have been met. Also, when EPA transmits a draft final rule 
with federalism implications to OMB for review pursuant to Executive 
Order 12866, EPA must include a certification from the agency's 
Federalism Official stating that EPA has met the requirements of 
Executive Order 13132 in a meaningful and timely manner.
    EPA has concluded that this rule will have federalism implications. 
This rule will impose substantial direct compliance costs on State and 
local governments, and the Federal government will not provide the 
funds necessary to pay those costs. Accordingly, EPA provides the 
following FSIS as required by section 6(b) of Executive Order 13132.
    EPA consulted with State and local officials early in the process 
of developing the proposed regulation to permit them to have meaningful 
and timely input into its development. Summaries of the meetings have 
been included in the docket for this proposed rulemaking. EPA consulted 
extensively with State, Tribal, and local governments. For example, EPA 
held four public stakeholder meetings in Washington, D.C. (two 
meetings); San Antonio, Texas; and Monterey, California. An additional 
public stakeholder meeting was held after the proposal was published in 
Reno, Nevada. A summary of this meeting is included in the docket of 
this rulemaking. Invitations to stakeholder meetings were extended to 
the National Association of Counties, The National Governors' 
Association, the National Association of Towns and Townships, the 
National League of Cities, and the National Conference of State 
Legislators. In addition, several elected officials were part of the 
Small Business Advocacy Review Panel convened by EPA (as required by 
section 609(b) of the Regulatory Flexibility Act). EPA officials 
presented a summary of the rule to the National Governor's Association 
in a meeting on May 24, 2000. In addition, EPA scheduled a one-day 
stakeholders' meeting for the trade associations that represent elected 
officials on May 30, 2000 to discuss and solicit comment on this and 
other upcoming contaminant rules.
    Several issues were raised by stakeholders (including elected 
officials) regarding the arsenic rule provisions, most of which were 
related to reducing burden and maintaining flexibility. The Office of 
Water was able to reduce burden and increase flexibility for the 
proposal in a number of areas in response to these comments (see 
section XIV.G. of the proposed rule).
    Commenters on the proposed rule continued to request a reduction of 
burden and increased flexibility as well as to question the need for 
the rule. Section V. of this preamble and the Comment Response Document 
(EPA, 2000u) discuss the comments and EPA's response in detail. The 
Agency exercised its discretionary authority under section 1412(b)(6) 
of SDWA to propose that the MCL be set at a level higher than the 
feasible level in the proposed rule and, in the final rule, to move 
from the proposed level of 5 g/L to 10 g/L.

I. Executive Orders 13084 and 13175: Consultation and Coordination With 
Indian Tribal Governments

    On November 6, 2000, the President issued Executive Order 13175 (65 
FR 67249) entitled, ``Consultation and Coordination with Indian Tribal 
Governments.'' Executive Order 13175 took effect on January 6, 2001, 
and revokes Executive Order 13084 (Tribal Consultation) as of that 
date. EPA developed this final rule, however, during the period when 
Executive Order 13084 was in effect; thus, EPA addressed tribal 
considerations under Executive Order 13984.
    Under Executive Order 13084, ``Consultation and Coordination with 
Indian Tribal Governments,'' 63 FR 27655 (May 19, 1998), EPA may not 
issue a regulation that: is not required by statute, significantly or 
uniquely affects the communities of Indian Tribal governments, and 
imposes substantial direct compliance costs on those communities, 
unless the Federal government provides the funds necessary to pay the 
direct compliance costs incurred by the Tribal governments, or EPA 
consults with those governments. If EPA complies by consulting, 
Executive Order 13084 requires EPA to provide the Office of Management 
and Budget, in a separately identified section of the preamble to the 
rule, a description of the extent of EPA's prior consultation with 
representatives of affected Tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian Tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    EPA has concluded that this rule may significantly or uniquely 
affect communities of Indian tribal governments. It may also impose 
substantial direct compliance costs on such communities, and the 
Federal government will not provide the funds necessary to pay the 
direct costs incurred by the Tribal governments in complying with this 
rule. In developing the rule, EPA consulted with Tribal governments to 
permit them to have meaningful and timely input into its development.
    In order to inform and involve Tribal governments prior to 
proposing the arsenic rule, EPA staff attended the 16th Annual Consumer 
Conference of the National Indian Health Board on October 6-8, 1998, 
convened a Tribal consultation meeting on February 24-25, 1999, and 
conducted a series of workshops at the Annual Conference of the 
National Tribal Environmental Council on May 18-20, 1999. Tribal 
representatives were generally supportive of an arsenic standard that 
ensures a high level of water quality, but raised concerns over funding 
for regulations. With regard to the proposed arsenic rule, many Tribal 
representatives saw the health benefits as highly desirable, but felt 
that unless additional funds were made available, implementing the 
regulation would be difficult for many Tribes. Comments submitted on 
the proposed arsenic rule repeated the concern that Tribes might not be 
able to afford to meet the arsenic requirements.
    The Agency believes that the requirements of this final rulemaking 
are affordable nationally, including Tribal PWSs. As discussed in 
section I.G. of this preamble, EPA has developed and applied a national 
affordability criterion to the projected costs of compliance of this 
rule for small systems (those serving less than 10,000 persons). Using 
this approach, EPA has identified affordable compliance technologies 
that small systems (including Tribal PWSs) may use to comply with 
today's final rule.

J. Plain Language

    Executive Order 12866 and the President's memorandum of June 1, 
1998 require each agency to write its rules in plain language. Readable 
regulations help the public find requirements quickly and understand

[[Page 7053]]

them easily. They increase compliance, strengthen enforcement, and 
decrease mistakes, frustration, phone calls, appeals, and distrust of 
government. Of the several techniques typically utilized for writing 
readably, using a question and answer format, and using the word, 
``you'' for whoever must comply, do the most to improve the look and 
sound of a regulation. The preamble for today's final rule uses the 
first principle and was developed using a plain language question and 
answer format. Today's final rule language does not use these 
principles since the rule only modifies or adds to existing regulatory 
language that is in the previous regulatory language format. EPA 
received comments on the use of plain language. Commenters suggested 
that the Agency had not clearly explained certain terms for example, 
``dose-response'' and ``parts per billion.'' The comments were centered 
around technical and scientific issues and terms that are often 
difficult to discuss in a plain language format. EPA considered these 
comments in writing the section of this final rule to which those 
comment apply. EPA made every effort to write this preamble to the 
final rule in as clear, concise, and unambiguous manner as possible.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective March 23, 2001.

L. Consultations With the Science Advisory Board, National Drinking 
Water Advisory Council, and the Secretary of Health and Human Services

    In accordance with section 1412 (d) and (e) of SDWA, the Agency 
discussed or submitted possible arsenic rule requirements to the 
Science Advisory Board (SAB), National Drinking Water Advisory Council 
(NDWAC), and to the Secretary of Health and Human Services and 
requested comment from the Science Advisory Board (SAB) on the arsenic 
rule.
    On March 13th and 14th, 2000 in Washington DC, the Agency met with 
the Science Advisory Board during meetings open to the public where 
several of the Agency's Drinking Water Rules were discussed. A copy of 
the SAB's comments may be found in the docket. SAB provided substantive 
comments on the proposed arsenic rule which are discussed in sections 
V.B. and V.F. of this preamble.
    In addition, the National Drinking Water Advisory Council was 
consulted on this rulemaking on several occasions throughout the rule's 
development (e.g., November 1999 in Baltimore, Maryland; April 2000 in 
San Francisco, CA; November 2000 in Arlington, VA). The summary of the 
deliberations and recommendations of the Council may be found in the 
docket for this rule.
    The Agency coordinated with the Department of Health and Human 
Services in several ways. Representatives of the Centers for Disease 
Control and Prevention (CDC), the Agency for Toxic Substances and 
Disease Registry (ATSDR), and the Food and Drug Administration (FDA) 
were invited to the Agency's stakeholder meetings on the arsenic 
rulemaking and on the mailing list for updates. We provided FDA staff 
with summaries of the meetings, meeting materials, and a briefing 
paper. In addition, the Agency maintained contact with CDC 
representatives on the status of CDC-funded research on skin adsorption 
that could have a bearing on the Agency's deliberations. EPA commented 
on and monitored the progress of the updated ``Toxicological Profile 
for Arsenic'' issued by ATSDR. Finally, we provided ongoing progress 
reports on the Agency's arsenic in drinking water rulemaking activities 
to representatives of FDA relative to the timing of bottled water 
regulations that need to follow the promulgation of the Agency's final 
rule.

M. Likely Effect of Compliance With the Arsenic Rule on the Technical, 
Financial, and Managerial Capacity of Public Water Systems

    Section 1420(d)(3) of SDWA as amended requires that, in 
promulgating a NPDWR, the Administrator shall include an analysis of 
the likely effect of compliance with the regulation on the technical, 
financial, and managerial capacity of public water systems. The 
following summarizes the analysis performed to fulfill this statutory 
obligation. (EPA, 2000v)
    Overall water system capacity is defined in guidance (EPA, 1998g) 
as the ability to plan for, achieve, and maintain compliance with 
applicable drinking water standards. Capacity has three components: 
technical, managerial, and financial. Technical capacity is the 
physical and operational ability of a water system to meet SDWA 
requirements. Technical capacity refers to the physical infrastructure 
of the water system, including the adequacy of source water and the 
adequacy of treatment, storage, and distribution infrastructure. It 
also refers to the ability of system personnel to adequately operate 
and maintain the system and to otherwise implement requisite technical 
knowledge. Managerial capacity is the ability of a water system to 
conduct its affairs in a manner enabling the system to achieve and 
maintain compliance with SDWA requirements. Managerial capacity refers 
to the system's institutional and administrative capabilities. 
Financial capacity is a water system's ability to acquire and manage 
sufficient financial resources to allow the system to achieve and 
maintain compliance with SDWA requirements.
    The arsenic rule establishes five requirements that may impact the 
TMF capacity of PWSs:
    (1) Compliance with MCL revised to 10 g/L from 50 
g/L (40 CFR 141.62);
    (2) Revised arsenic monitoring schedule [(modified to join the 
standard monitoring framework (SMF) used for other inorganic 
contaminants (IOCs)] (Sec. 141.23(c))--includes requirement for public 
notification of MCL exceedance, but not Consumer Confidence Report 
(CCR) requirements (Sec. 141.154);
    (3) New source monitoring (Sec. 141.24);
    (4) Removal of EPA Method 200.7 and SM 3120 from list of approved 
analytical methods to demonstrate compliance (Sec. 141.23); and
    (5) Inclusion of arsenic health effects language in CCRs 
(Sec. 141.154).
    The arsenic rule applies to all CWSs (54,370 systems) and NTNCWSs 
(20,255 systems)--74,625 systems in all (EPA, 2000b). However, many 
systems will not be affected by the new arsenic requirements. Table 
VI.M-1 provides a complete listing of the requirements and a 
description of the type and number of systems affected by each 
requirement.

[[Page 7054]]



                  Table VI.M-1.--Requirements of the Arsenic Rule and Number of Systems Affected
----------------------------------------------------------------------------------------------------------------
                                                                    Affected systems \1\
                                           ---------------------------------------------------------------------
                Requirement                                                                Number
                                                     Description          --------------------------------------
                                                                               CWSs       NTNCWSs       Total
----------------------------------------------------------------------------------------------------------------
Compliance with revised MCL (10 g/ Systems with As           3,024        1,080        4,104
 L).                                         10 g/L.
Revised monitoring schedule...............  CWSs with As between 3 g/L (PQL) and 50 g/L and all NTNCWSs.
New source monitoring.....................  Systems that develop a new              ~0          ~ 0          100
                                             source to meet the revised
                                             MCL.
Removal of specified analytical methods...  All CWSs that currently use            100          N/A          100
                                             banned methods.
Inclusion of health effects language in     CWSs with As 5-25        ~4,000          N/A      ~4,000
 CCR.                                        g/L.
----------------------------------------------------------------------------------------------------------------
\1\ Estimates derive from actual system impacts projected in cost benefit analysis. Will differ from system-
  level figures discussed earlier in preamble. Reflect all systems having impacts, including those partially
  impacted.

    Those systems whose current source(s) will not meet the revised MCL 
must either develop a new source, install new treatment processes, or 
enhance their existing treatment processes. (The impact of developing a 
new source are included in the analysis of the new source requirement.) 
The installation, operation, and maintenance of new treatment 
technologies will require a substantial enhancement of these systems' 
technical capacity. Specifically, source water adequacy will be reduced 
(marginal sources may no longer be viable), the system will be required 
to greatly enhance its infrastructure (particularly its treatment 
processes) to meet the technical challenge posed by the revised MCL, 
and system operators will require correspondingly greater technical 
expertise to successfully operate new and more advanced treatment 
processes.
    The impacts to the managerial capacity of systems affected by the 
revised arsenic MCL are not anticipated to be as great as the technical 
and financial challenges. Nonetheless, many system managers will need 
to review the implications of the revised MCL and may need to hire a 
more highly certified operator or provide additional training for the 
existing operator.
    In addition, systems will need to rely upon and improve their 
interactions with the service community and technical/financial 
assistance providers. System management will need to explain the 
following issues: (1) The reason why the arsenic standard was revised, 
(2) the safety of the water that the system provides, and (3) the 
reason for new or higher fees. These activities are in addition to the 
inclusion of the health effects language in the CCR and therefore will 
impact the managerial capacity of a system.
    The impacts of the arsenic rule requirements to the technical 
capacity of systems are closely tied to financial impacts. Systems that 
must install additional treatment processes or upgrade their current 
treatment processes may face significant costs. These costs may be 
especially difficult for many of the affected systems to absorb since 
many of them are relatively small (i.e., serving less than 3,300 
customers), and therefore typically have a smaller revenue base and 
fewer households over which they may distribute the additional costs. 
The rule specifically allows the use of centrally managed POU-treatment 
devices to achieve compliance with the revised arsenic MCL. However, 
the installation, operation, maintenance, and management of these 
devices still represents a substantial expense for small systems.
    To obtain funding from either public or private sources, systems 
will need to demonstrate sound financial accounting and budgeting 
practices, and the ability to repay their debts. As a result, many of 
the smallest systems that do not currently charge explicitly for water 
service (e.g., mobile home parks, camp grounds, etc.) may need to begin 
to bill their customers. Those systems that already charge for water 
service will likely need to increase their rates (sometimes requiring 
approval of the local public utilities commission (PUC)), and improve 
their recordkeeping procedures.
    EPA anticipates that the revised monitoring and reporting framework 
will have a relatively limited impact on system capacity even though 
some CWSs will no longer be eligible for reduced monitoring and others 
will no longer be able to composite. NTNCWSs will be required to 
monitor for arsenic for the first time. To comply with this requirement 
system management will need to ensure that staff understand the new 
requirements, that monitoring records are properly maintained, and that 
the appropriate reports are provided to the State primacy agency and 
EPA. In addition, systems will face a slight increase in monitoring 
costs that may require systems to adjust their budgeting practices and 
fee structures. Nonetheless, since most systems are already familiar 
with the SMF for IOCs, the impact to capacity is minimal.
    There will be a substantial impact on capacity for those systems 
that must develop a new source to meet the revised MCL. In addition to 
the monitoring requirements specified in the arsenic proposal, these 
systems will expend substantial effort and money to ensure that their 
new source(s) will consistently provide reliable production of high 
quality water.
    Removing two currently approved analytical methods should not have 
a large impact on system capacity. Since similarly priced alternative 
methods are available, it was estimated that there would be little to 
no impact to the managerial and financial capacity of systems that 
currently rely on this method (or whose laboratory relies on this 
method). A system may need to ensure that the systems' laboratory uses 
an approved method and may need to ensure that the operator is aware of 
the change in approved analytical methods.
    The requirement for affected systems (those with arsenic levels 
above half the revised MCL) to immediately begin incorporating health 
affects language into their CCRs will principally impact the managerial 
capacity of systems. Specifically, systems will need to: (1) 
incorporate information about arsenic into their CCRs; (2) explain to 
the service community the reason why they are including such 
information; (3)

[[Page 7055]]

explain the health implications of current arsenic levels; and 
potentially, (4) explain how the system anticipates meeting the revised 
MCL. Moreover, affected systems will also need to prepare to respond to 
customer queries regarding the new arsenic information and the system's 
compliance status.
    The arsenic rule will have a substantial impact on the capacity of 
the 4,100 CWSs and NTNCWSs that must reduce arsenic levels or develop 
new sources to meet the revised MCL. However, while the impact to these 
systems is significant, only five percent of all systems regulated 
under the Arsenic Rule (4,104 of 74,625) will be affected by this 
requirement. The new monitoring and reporting requirements, removal of 
approved analytical methods, and inclusion of health effects language 
in the CCR are expected to impact the capacity of approximately an 
additional 26,000 systems to a small degree. About 31,000 systems 
(i.e., 40% of regulated systems) are expected to experience minimal 
impact on their capacity as a result of the arsenic rule.

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Ad Hoc Work Group, Drinking Water Subcommittee, Environmental Health 
Advisory Committee, Science Advisory Board Report: A Critical 
Examination of the Evidence for a Threshold For Cancer Risk in Humans 
from Inorganic Arsenic. Washington, DC. June 1989 report.
    US EPA. 1989b. Cover letter dated September 28, 1989 from SAB to 
EPA. Science Advisory Board's Review of the Arsenic Issues Relating to 
the Phase II Proposed Regulations From the Office of Drinking Water. 
Science Advisory Board Committee: Drinking Water Subcommittee of the 
Environmental Health Committee.
    US EPA. 1991a. National Primary Drinking Water Regulations--
Synthetic Organic Chemicals and Inorganic Chemicals; Monitoring for 
Unregulated Contaminants; National Primary Drinking Water Regulations 
Implementation; National Secondary Drinking Water Regulations. Federal 
Register. Vol. 56, No. 20, p. 3526. January 30, 1991.
    US EPA. 1991b. Arsenic IRIS File; Arsenic, Inorganic. February 
1991. Used for 1992 National Toxics Rule, December 22, 1992, 57 FR 
60848.
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April 12, 1991 from John R. Fowle III, Chair of the Arsenic Research 
Recommendation Workgroup, Health Effects Research Laboratory.
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Synthetic Organic Chemicals and Inorganic Chemicals; Final Rule. 
Federal Register. Vol. 57, No. 138, p. 31776. July 17, 1992.
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Criteria for Priority Toxic Pollutants; States' Compliance; Final Rule. 
Federal Register. Vol. 57, No. 246, p. 60848. December 22, 1992.

[[Page 7058]]

    US EPA, 1992d. Bartley, C.B., P.M. Colucci, and T. Stevens. The 
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April 1993.
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Federal Register. Vol. 58, No. 234, p. 64579. December 8, 1993.
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Elements in Water By Ultrasonic Nebulization Inductively Coupled 
Plasma-Atomic Emission Spectrometry. Methods for the Determination of 
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160, p. 44512. August 19, 1998.
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Proposed Rule. Federal Register. Vol. 63, No. 171, p. 47097. September 
3, 1998.

[[Page 7059]]

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1999.
    US EPA 1999c. A Guidebook of Financial Tools: Paying for 
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25964. May 13, 1999.
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on EPA's Planned Proposal of the National Primary Drinking Water 
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June 4, 1999.
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Washington, DC. Office of Ground Water and Drinking Water. July 1999.
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Revised Sections of the Proposed Guidelines for Carcinogen Risk 
Assessment. EPA-SAB-EC-99-015. July 29, 1999.
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the 25 Largest Public Water Systems (With Treatment Plant 
Configurations) Prepared for U.S. EPA by Science Applications 
International Corporation. August 10, 1999.
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Systems. Draft prepared by Science Applications International 
Corporation under contract with EPA OGWDW. August 15, 1999.
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Prevention and Toxics. Chapter 1 II.8. Cost of Bladder Cancer. 
September, 1999.
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Prevention and Toxics. Chapter V Cost of Lung Cancer. September, 1998.
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Prepared by Science Applications International Corporation under 
contract 68-C6-0059 for EPA OGWDW. EPA 815-R-00-025. September 30, 
1999.
    US EPA. 1999m. National Primary Drinking Water Regulations: Radon-
222, Proposed Rule. Federal Register. Vol. 64, No. 211, p. 59246. EPA 
815-z-99-006. November 2, 1999.
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Arsenic Rule. Washington, DC. Office of Ground Water and Drinking 
Water. November, 1999. EPA-815-R-00-011.
    US EPA. 1999o. Technologies and Costs for the Removal of Arsenic 
from Drinking Water. Washington, DC. Office of Ground Water and 
Drinking Water. November, 1999. EPA-815-R-00-012.
    US EPA. 1999p. National Primary Drinking Water Regulations: 
Analytical Methods for Chemical and Microbiological Contaminants and 
Revisions to Laboratory Certification Requirements; Final Rule. Federal 
Register. Vol. 64, No. 230, p. 67450. December 1, 1999.
    US EPA. 1999q. Analytical Methods Support Document for Arsenic in 
Drinking Water. Prepared by Science Applications International 
Corporation under contract with EPA OGWDW, Standards and Risk 
Management Division. December, 1999. EPA-815-R-00-010.
    US EPA. 1999r. Arsenic Risk Characterization, Part 1. Prepared by 
ISSI Consulting Group, Inc. for EPA Office of Water, Office of 
Standards and Technology. December 22, 1999.
    US EPA 2000a. Meeting Notice of the Environmental Economics 
Advisory Committee (EEAC) of the Science Advisory Board (SAB) on 
February 25, 2000. Federal Register. Volume 65, Number 24. February 4, 
2000. Page 5638.
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4th quarter 1998 SDWIS freeze. Prepared by International Consultants, 
Inc. under contract with EPA OGWDW, Standards and Risk Management 
Division. March 17, 2000.
    US EPA. 2000c. Estimated Per Capita Water Ingestion in the United 
States: Based on Data Collected by the United States Department of 
Agriculture's (USDA) 1994-1996 Continuing Survey of Food Intakes by 
Individuals. Office of Water, Office of Standards and Technology. EPA-
822-00-008. April 2000.
    US EPA 2000d. Review of the EPA's Draft Chloroform Risk Assessment 
by the Science Advisory Board Chloroform Risk Assessment Review 
Subcommittee. EPA-SAB-EC-00-009. April 28, 2000.
    US EPA. 2000e. National Primary Drinking Water Regulations: Public 
Notification Rule; Final Rule. Federal Register. Vol. 65, No. 87, p. 
25982. May 4, 2000.
    US EPA. 2000f. National Primary Drinking Water Regulations: Ground 
Water Rule; Proposed Rule. Federal Register. Vol. 65, No. 91, p. 30193. 
May 10, 2000.
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Supplies. Public Comment Draft. Office of Water, Washington, D.C. EPA 
815-D-00-001. May 2000.
    US EPA. 2000h. Regulatory Impact Analysis (RIA) of the Arsenic 
Rule. May 2000. EPA 815-R-00-013. Available online www.epa.gov/ogwdw.
    US EPA. 2000i. National Primary Drinking Water Regulations; Arsenic 
and Clarifications to Compliance and New Source Contaminants 
Monitoring; Proposed Rule. Federal Register. Vol. 65, No. 121, p. 
38888. June 22, 2000.
    US EPA 2000j. SAB Report from the Environmental Economics Advisory 
Committee (EEAC) on EPA's White Paper ``Valuing the Benefits of Fatal 
Cancer Risk Reduction. EPA-SAB-EEAC-00-013. July 27, 2000.
    US EPA 2000k. Guidelines for Preparing Economic Analyses. EPA 240-
R-00-003, September 2000.
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Industrial Economics, Inc. to EPA. Update to Recommended Approach to 
Adjusting WTP Estimates to Reflect Changes in Real Income.
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and Clarifications to Compliance and New Source Contaminants 
Monitoring; Notice of Data Availability. Federal Register. Volume 65, 
Number 204. October 20, 2000. Page 63027-63035.
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and Clarifications to Compliance and New Source Contaminants 
Monitoring. Correction. Federal Register. Volume 65, Number 209. 
October 27, 2000.
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EPA 815-R-00-026 December 2000.
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Radionuclides; Final Rule. Federal Register. Volume 65, Number 236. 
December 7, 2000.
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Advisory Board Review of Certain

[[Page 7060]]

Elements of the Proposal. EPA-SAB-DWC-1-001. December 12, 2000. 
www.epa.gov/sab.
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Prepared by ISSI for Office of Ground Water and Drinking Water. EPA 
815-R-00-023. December 2000.
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Managerial, and Financial Capacity of Public Water Systems. December 
29, 2000.
    US EPA 2000t. Arsenic Technologies and Costs for the Removal of 
Arsenic from Drinking Water. December 2000.
    US EPA 2000u. Arsenic Response to Comments Document. December 2000.
    US EPA. 2000v. Radon and Arsenic Regulatory Compliance Costs for 
the 25 Largest Public Water Systems (With Treatment Plant 
Configurations) Prepared for U.S. EPA by Science Applications 
International Corporation. December 2000.
    US EPA. 2000w. Final Regulatory Flexibility Analysis (FRFA) for the 
Final Arsenic Rule. December 29, 2000.
    US EPA. 2000x. A Re-Analysis of Arsenic-Related Bladder and Lung 
Cancer Mortality in Millard County, Utah. Office of Ground Water and 
Drinking Water, Washington, DC. EPA 815-R-00-027. December 2000.
    US EPA. 2000y. Geometries and Characteristics of Public Water 
Systems. Final Report. Prepared by Science Applications International 
Corporation under contract with EPA OGWDW. EPA 815-R-00-024. December 
2000.
    US GS. 1998. Reese, R.G., Jr., Arsenic. In United States Geological 
Survey Minerals Yearbook, Fairfax, VA, US Geological Survey.
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Summaries. Fairfax, VA, pgs. 26-27. US Geological Survey. January 1999.
    US GS. 2000. Focazio, M., A. Welch, S. Watkins, D. Helsel & M. 
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January 15, 1943.
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List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 141

    Environmental protection, Chemicals, Indian lands, Incorporation by 
reference, Intergovernmental relations, Radiation protection, Reporting 
and recordkeeping requirements, Water supply.

40 CFR Part 142

    Environmental protection, Administrative practice and procedure, 
Chemicals, Indian lands, Intergovernmental relations, Radiation 
protection, Reporting and recordkeeping requirements, Water supply.

    Dated: January 16, 2001.
Carol M. Browner,
Administrator.

    For reasons stated in the preamble, the Environmental Protection 
Agency amends 40 CFR parts 9, 141 and 142 as follows:

PART 9--OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

    1. The authority citation for part 9 continues to read as follows:

    Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326-1330, 1324, 
1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-
1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-
1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 
300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-
9657, 11023, 11048.


[[Page 7061]]



    2. Amend the table in Sec. 9.1 by removing the entry for 141.23-
141.24 and adding new entries for 141.23(a)-(b), 141.23 (c), and 
141.23(d)-141.24 to read as follows:


Sec. 9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                                                             OMB control
                      40 CFR citation                            No.
------------------------------------------------------------------------
                  *        *        *        *        *
 
               National Prmary Drinking Water Regulations
                  *        *        *        *        *
141.23A(a)-(b).............................................    2040-0090
141.23(c)..................................................    2040-0231
141.23(d)-141.24...........................................    2040-0090
                  *        *        *        *        *
------------------------------------------------------------------------

PART 141--NATIONAL PRIMARY DRINKING WATER REGULATIONS

    1. The authority citation for part 141 continues to read as 
follows:

    Authority: 42 U.S.C. 300f, 300g-1, 300g-2, 300g-3, 300g-4, 300g-
5, 300g-6, 300j-4, 300j-9, and 300j-11.

Subpart A--[Amended]


Sec. 141.2  [Amended]

    2. In 40 CFR 141.2 revise the definition heading for ``Point-of-
entry treatment device'' to read ``Point-of-entry treatment device 
(POE)'', and revise the definition heading for ``Point-of-use treatment 
device'' to read ``Point-of-use treatment device (POU)''.

    3. Amend Sec. 141.6 by revising paragraphs (a) and (c), and adding 
paragraphs (j) and (k) to read as follows:


Sec. 141.6  Effective dates.

    (a) Except as provided in paragraphs (b) through (k) of this 
section, and in Sec. 141.80(a)(2), the regulations set forth in this 
part shall take effect on June 24, 1977.
* * * * *
    (c) The regulations set forth in Secs. 141.11(d); 141.21(a), (c) 
and (i); 141.22(a) and (e); 141.23(a)(3) and (a)(4); 141.23(f); 
141.24(e) and (f); 141.25(e); 141.27(a); 141.28(a) and (b); 141.31(a), 
(d) and (e); 141.32(b)(3); and 141.32(d) shall take effect immediately 
upon promulgation.
* * * * *
    (j) The arsenic maximum contaminant levels (MCL) listed in 
Sec. 141.62 is effective for the purpose of compliance on January 23, 
2006.
    Requirements relating to arsenic set forth in Secs. 141.23(i)(4), 
141.23(k)(3) introductory text, 141.23(k)(3)(ii), 141.51(b), 141.62(b), 
141.62(b)(16), 141.62(c), 141.62(d), and 142.62(b) revisions in 
Appendix A of subpart O for the consumer confidence rule, and 
Appendices A and B of subpart Q for the public notification rule are 
effective for the purpose of compliance on January 23, 2006. However, 
the consumer confidence rule reporting requirements relating to arsenic 
listed in Sec. 141.154(b) and (f) are effective for the purpose of 
compliance on March 23, 2001.
    (k) Regulations set forth in Secs. 141.23(i)(1), 141.23(i)(2), 
141.24(f)(15), 141.24(f)(22), 141.24(h)(11), 141.24(h)(20), 142.16(e), 
142.16(j), and 142.16(k) are effective for the purpose of compliance on 
January 22, 2004.

Subpart B--[Amended]

    4. Amend Sec. 141.11 by revising the second sentence of paragraph 
(a) and revising paragraph (b) to read as follows:


Sec. 141.11  Maximum contaminant levels for inorganic chemicals.

    (a) * * * The analyses and determination of compliance with the 
0.05 milligrams per liter maximum contaminant level for arsenic use the 
requirements of Sec. 141.23.
    (b) The maximum contaminant level for arsenic is 0.05 milligrams 
per liter for community water systems until January 23, 2006.
* * * * *

Subpart C--[Amended]

    5. Amend Sec. 141.23 by:
    a. Adding a new entry for ``Arsenic'' in alphabetical order to the 
table in paragraph (a)(4)(i) and adding endnotes 6, 7 and 8,
    b. Revising paragraphs (a)(5) and (c) introductory text,
    c. Adding paragraph (c)(9),
    d. Revising paragraphs (f)(1), (i)(1), and (i)(2),
    e.-h. Adding paragraph (i)(4),
    i. Revising the entries for arsenic in the table in paragraph 
(k)(1),
    j. Revising paragraph (k)(2) introductory text,
    k. Adding a new entry for ``Arsenic'' in alphabetical order to the 
table to paragraph (k)(2) and revising footnote 1,
    l. Revising the last sentence in paragraph (k)(3) introductory 
text, and
    m. Adding a new entry for ``Arsenic'' in alphabetical order to the 
table in paragraph (k)(3)(ii).
    The revisions and additions read as follows:


Sec. 141.23  Inorganic chemical sampling and analytical requirements.

    (a) * * *
    (4) * * *
    (i) * * *

                                  Detection Limits for Inforganic Contaminants
----------------------------------------------------------------------------------------------------------------
                                                                                                     Detection
                Contaminant                   MCL (mg/l)                Methodology                Limit (mg/l)
----------------------------------------------------------------------------------------------------------------
*                  *                  *                  *                  *                  *
                                                        *
Arsenic....................................     \6\ 0.01  Atomic Absorption; Furnace............           0.001
                                                          Atomic Absorption; Platform--               \7\ 0.0005
                                                           Stabilized Temperature.
                                                          Atomic Absorption; Gaseous Hydride....           0.001
                                                          ICP-Mass Spectrometry.................      \8\ 0.0014
*                  *                  *                  *                  *                  *
                                                        *
----------------------------------------------------------------------------------------------------------------
*  *  *  *  *
\6\ The value for arsenic is effective January 23, 2006. Unit then, the MCL is 0.05 mg/L.
\7\ The MDL reported for EPA method 200.9 (Atomic Absorption; Platform--Stablized Temperature) was determined
  using a 2x concentration step during sample digestion. The MDL determined for samples analyzed using direct
  analyses (i.e., no sample digestion) will be higher. Using multiple depositions, EPA 200.9 is capable of
  obtaining MDL of 0.0001 mg/L.
\8\ Using selective ion monitoring, EPA Method 200.8 (ICP-MS) is capable of obtaining a MDL of 0.0001 mg/L.

* * * * *
    (5) The frequency of monitoring for asbestos shall be in accordance 
with paragraph (b) of this section: the frequency of monitoring for 
antimony, arsenic, barium, beryllium, cadmium, chromium, cyanide, 
fluoride, mercury, nickel, selenium and thallium shall be in accordance 
with paragraph (c) of this section; the frequency of monitoring for 
nitrate shall be in accordance with paragraph (d) of this section; and 
the

[[Page 7062]]

frequency of monitoring for nitrite shall be in accordance with 
paragraph (e) of this section.
* * * * *
    (c) The frequency of monitoring conducted to determine compliance 
with the maximum contaminant levels in Sec. 141.62 for antimony, 
arsenic, barium, beryllium, cadmium, chromium, cyanide, fluoride, 
mercury, nickel, selenium and thallium shall be as follows:
* * * * *
    (9) All new systems or systems that use a new source of water that 
begin operation after January 22, 2004 must demonstrate compliance with 
the MCL within a period of time specified by the State. The system must 
also comply with the initial sampling frequencies specified by the 
State to ensure a system can demonstrate compliance with the MCL. 
Routine and increased monitoring frequencies shall be conducted in 
accordance with the requirements in this section.
* * * * *
    (f) * * *
    (1) Where the results of sampling for antimony, arsenic, asbestos, 
barium, beryllium, cadmium, chromium, cyanide, fluoride, mercury, 
nickel, selenium or thallium indicate an exceedance of the maximum 
contaminant level, the State may require that one additional sample be 
collected as soon as possible after the initial sample was taken (but 
not to exceed two weeks) at the same sampling point.
* * * * *
    (i) * * *
    (1) For systems which are conducting monitoring at a frequency 
greater than annual, compliance with the maximum contaminant levels for 
antimony, arsenic, asbestos, barium, beryllium, cadmium, chromium, 
cyanide, fluoride, mercury, nickel, selenium or thallium is determined 
by a running annual average at any sampling point. If the average at 
any sampling point is greater than the MCL, then the system is out of 
compliance. If any one sample would cause the annual average to be 
exceeded, then the system is out of compliance immediately. Any sample 
below the method detection limit shall be calculated at zero for the 
purpose of determining the annual average. If a system fails to collect 
the required number of samples, compliance (average concentration) will 
be based on the total number of samples collected.
    (2) For systems which are monitoring annually, or less frequently, 
the system is out of compliance with the maximum contaminant levels for 
antimony, arsenic, asbestos, barium, beryllium, cadmium, chromium, 
cyanide, fluoride, mercury, nickel, selenium or thallium if the level 
of a contaminant is greater than the MCL. If confirmation samples are 
required by the State, the determination of compliance will be based on 
the annual average of the initial MCL exceedance and any State-required 
confirmation samples. If a system fails to collect the required number 
of samples, compliance (average concentration) will be based on the 
total number of samples collected.
* * * * *
    (4) Arsenic sampling results will be reported to the nearest 0.001 
mg/L.
* * * * *
    (k) * * *
    (1) * * *

----------------------------------------------------------------------------------------------------------------
      Contaminant and methodology \13\          EPA        ASTM \3\       SM \4\               Other
----------------------------------------------------------------------------------------------------------------
*                  *                  *                  *                  *                  *
                                                        *
Arsenic \14\:
    Inductively Coupled Plasma \15\........  \2\ 200.7  ..............  \15\ 3120  .............................
                                                                                B
    ICP-Mass Spectrometry..................  \2\ 200.8  ..............  .........  .............................
    Atomic Absorption; Platform............  \2\ 200.9  ..............  .........  .............................
    Atomic Absorption; Furnace.............  .........      D-2972-93C      3113B  .............................
    Hydride Atomic Absorption..............  .........      D-2972-93B      3114B  .............................
*                  *                  *                  *                  *                  *
                                                        *
----------------------------------------------------------------------------------------------------------------
*        *        *        *      *
\2\ ``Methods for the Determination of Metals in Environmental Samples-Supplement I'', EPA-600/R-94-111, May
  1994. Available at NTIS, PB 95-125472.
\3\ Annual Book of ASTM Standards, 1994 and 1996, Vols. 11.01 and 11.02, American Society for Testing and
  Materials. The previous versions of D1688-95A, D1688-95C (copper), D3559-95D (lead), D1293-95 (pH), D1125-91A
  (conductivity) and D859-94 (silica) are also approved. These previous versions D1688-90A, C; D3559-90D, D1293-
  84, D1125-91A and D859-88, respectively are located in the Annual Book of ASTM Standards, 1994, Vols. 11.01.
  Copies may be obtained from the American Society for Testing and Materials, 100 Barr Harbor Drive, West
  Conshohocken, PA 19428.
\4\ 18th and 19th editions of Standard Methods for the Examination of Water and Wastewater, 1992 and 1995,
  respectively, American Public Health Association; either edition may be used. Copies may be obtained from the
  American Public Health Association, 1015 Fifteenth Street NW., Washington, DC 20005.
*        *        *        *      *
\13\ Because MDLs reported in EPA Methods 200.7 and 200.9 were determined using a 2X preconcentration step
  during sample digestion, MDLs determined when samples are analyzed by direct analysis (i.e., no sample
  digestion) will be higher. For direct analysis of cadmium and arsenic by Method 200.7, and arsenic by Method
  3120 B sample preconcentration using pneumatic nebulization may be required to achieve lower detection limits.
  Preconcentration may also be required for direct analysis of antimony, lead, and thallium by Method 200.9;
  antimony and lead by Method 3113 B; and lead by Method D3559-90D unless multiple in-furnace depositions are
  made.
\14\ If ultrasonic nebulization is used in the determination of arsenic by Methods 200.7, 200.8, or SM 3120 B,
  the arsenic must be in the pentavalent state to provide uniform signal response. For methods 200.7 and 3120 B,
  both samples and standards must be diluted in the same mixed acid matrix concentration of nitric and
  hydrochloric acid with the addition of 100 L of 30% hydrogen peroxide per 100ml of solution. For
  direct analysis of arsenic with method 200.8 using ultrasonic nebulization, samples and standards must contain
  one mg/L of sodium hypochlorite.
\15\ After January 23, 2006 analytical methods using the ICP-AES technology, may not be used because the
  detection limits for these methods are 0.008 mg/L or higher. This restriction means that the two ICP-AES
  methods (EPA Method 200.7 and SM 3120 B) approved for use for the MCL of 0.05 mg/L may not be used for
  compliance determinations for the revised MCL of 0.01 mg/L. However, prior to 2005 systems may have compliance
  samples analyzed with these less sensitive methods.


[[Page 7063]]

* * * * *
    (2) Sample collection for antimony, arsenic, asbestos, barium, 
beryllium, cadmium, chromium, cyanide, fluoride, mercury, nickel, 
nitrate, nitrite, selenium, and thallium under this section shall be 
conducted using the sample preservation, container, and maximum holding 
time procedures specified in the table below:

----------------------------------------------------------------------------------------------------------------
             Contaminant                   Preservative \1\          Container \2\               Time \3\
----------------------------------------------------------------------------------------------------------------
                                      *        *        *        *        *
Arsenic..............................  Conc HNO3 to pH 2......  P or G                   6 months
                                     *        *        *        *        *
----------------------------------------------------------------------------------------------------------------
\1\ For cyanide determinations samples must be adjusted with sodium hydroxide to pH 12 at the time off
  collection. When chilling is indicated the sample must be shipped and stored at 4 deg.C or less. Acidification
  of nitrate or metals samples may be with a concentrated acid or a dilute (50% by volume) solution of the
  applicable concentrated acid. Acidification of samples for metals analysis is encouraged and allowed at the
  laboratory rather than at the time of sampling provided the shipping time and other instructions in Section
  8.3 of EPA Methods 200.7 or 200.8 or 200.9 are followed.
\2\ P = plastic, hard or soft; G = glass, hard or soft.
\3\ In all cases samples should be analyzed as soon after collection as possible. Follow additional (if any)
  information on preservation, containers or holding times that is specified in method.

* * * * *
    (3) * * * To receive certification to conduct analyses for 
antimony, arsenic, asbestos, barium, beryllium, cadmium, chromium, 
cyanide, fluoride, mercury, nickel, nitrate, nitrite and selenium and 
thallium, the laboratory must:
* * * * *
    (ii) * * *

------------------------------------------------------------------------
               Contaminant                       Acceptance limit
------------------------------------------------------------------------
                  *        *        *        *        *
Arsenic.................................  30 at 0.003 mg/L
                  *        *        *        *        *
------------------------------------------------------------------------

* * * * *

    6. Amend Sec. 141.24 by:
    a. Adding a new sentence to the end of paragraph (f)(15) 
introductory text,
    b. Revising paragraphs (f)(15)(i) and (f)(15)(ii) and adding new 
paragraphs (f)(15)(iii) through (f)(15)(v),
    c. Adding paragraph (f)(22),
    d. Adding a new sentence to the end of paragraph (h)(11) 
introductory text,
    e. Revising paragraphs (h)(11)(i) and (h)(11)(ii) and adding new 
paragraphs (h)(11)(iii) through (h)(11)(v), and
    f. Adding paragraph (h)(20).
    The revisions and additions read as follows:


Sec. 141.24  Organic chemicals other than total trihalomethanes, 
sampling and analytical methods.

    (f) * * *
    (15) * * * If one sampling point is in violation of an MCL, the 
system is in violation of the MCL.
    (i) For systems monitoring more than once per year, compliance with 
the MCL is determined by a running annual average at each sampling 
point.
    (ii) Systems monitoring annually or less frequently whose sample 
result exceeds the MCL must begin quarterly sampling. The system will 
not be considered in violation of the MCL until it has completed one 
year of quarterly sampling.
    (iii) If any sample result will cause the running annual average to 
exceed the MCL at any sampling point, the system is out of compliance 
with the MCL immediately.
    (iv) If a system fails to collect the required number of samples, 
compliance will be based on the total number of samples collected.
    (v) If a sample result is less than the detection limit, zero will 
be used to calculate the annual average.
* * * * *
    (22) All new systems or systems that use a new source of water that 
begin operation after January 22, 2004 must demonstrate compliance with 
the MCL within a period of time specified by the State. The system must 
also comply with the initial sampling frequencies specified by the 
State to ensure a system can demonstrate compliance with the MCL. 
Routine and increased monitoring frequencies shall be conducted in 
accordance with the requirements in this section.
* * * * *
    (h) * * *
    (11)* * * If one sampling point is in violation of an MCL, the 
system is in violation of the MCL.
    (i) For systems monitoring more than once per year, compliance with 
the MCL is determined by a running annual average at each sampling 
point.
    (ii) Systems monitoring annually or less frequently whose sample 
result exceeds the regulatory detection level as defined by paragraph 
(h)(18) of this section must begin quarterly sampling. The system will 
not be considered in violation of the MCL until it has completed one 
year of quarterly sampling.
    (iii) If any sample result will cause the running annual average to 
exceed the MCL at any sampling point, the system is out of compliance 
with the MCL immediately.
    (iv) If a system fails to collect the required number of samples, 
compliance will be based on the total number of samples collected.
    (v) If a sample result is less than the detection limit, zero will 
be used to calculate the annual average.
* * * * *
    (20) All new systems or systems that use a new source of water that 
begin operation after January 22, 2004 must demonstrate compliance with 
the MCL within a period of time specified by the State. The system must 
also comply with the initial sampling frequencies specified by the 
State to ensure a system can demonstrate compliance with the MCL. 
Routine and increased monitoring frequencies shall be conducted in 
accordance with the requirements in this section.

Subpart F--[Amended]

    7. Amend the table in Sec. 141.51(b) by adding a new entry for 
``Arsenic'' in alphabetical order and adding a new endnote to read as 
follows:


Sec. 141.51  Maximum contaminant level goals for inorganic 
contaminants.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                Contaminant                          MCLG (mg/L)
------------------------------------------------------------------------
                  *        *        *        *        *
Arsenic...................................  zero \1\
                   *        *        *        *    *
------------------------------------------------------------------------
\1\ This value for arsenic is effective January 23, 2006. Until then,
  there is no MCLG.

Subpart G--[Amended]

    8. Amend Sec. 141.60 by adding paragraph (b)(4) to read as follows:


Sec. 141.60  Effective dates.

* * * * *
    (b) * * *
    (4) The effective date for Sec. 141.62(b)(16) is January 23, 2006.

    9. Amend Sec. 141.62 by:
    a. Revising the first sentence of paragraph (b) introductory text,
    b. Adding a new entry ``(16)'' for arsenic to the table in 
paragraph (b),
    c. Adding a new entry for ``Arsenic'' in alphabetical order, adding 
new endnotes 4 and 5, adding a new item 12 and revising items 2 and 6 
to list of ``Key to BATs in Table'' and revising the heading to the 
table in paragraph (c),
    d. Adding paragraph (d).
    The revisions and additions read as follows:


Sec. 141.62  Maximum Contaminant Levels for inorganic contaminants.

* * * * *
    (b) The maximum contaminant levels for inorganic contaminants 
specified in

[[Page 7064]]

paragraphs (b) (2)-(6), (b)(10), and (b) (11)-(16) of this section 
apply to community water systems and non-transient, non-community water 
systems. * * *
* * * * *

------------------------------------------------------------------------
                Contaminant                          MCL (mg/L)
------------------------------------------------------------------------
                  *        *        *        *        *
(16) Arsenic..............................  0.01
------------------------------------------------------------------------

    (c) * * *

          BAT FOR INORGANIC COMPOUNDS LISTED IN SECTION 141.62(b)
------------------------------------------------------------------------
               Chemical Name                           BAT(s)
------------------------------------------------------------------------
                  *        *        *        *        *
Arsenic \4\...............................  1, 2, 5, 6, 7, 9, 12 \5\
                 *        *        *        *        *
------------------------------------------------------------------------
*        *        *        *        *
\4\ BATs for Arsenic V. Pre-oxidation may be required to convert Arsenic
  III to Arsenic V.
\5\ To obtain high removals, iron to arsenic ratio must be at least
  20:1.

Key to BATs in Table

1 = Activated Alumina
2 = Coagulation/Filtration (not BAT for systems  500 service 
connections)
* * * * *
5 = Ion Exchange
6 = Lime Softening (not BAT for systems  500 service connections)
7 = Reverse Osmosis
* * * * *
9 = Electrodialysis
* * * * *
12 = Oxidation/Filtration
* * * * *
    (d) The Administrator, pursuant to section 1412 of the Act, hereby 
identifies in the following table the affordable technology, treatment 
technique, or other means available to systems serving 10,000 persons 
or fewer for achieving compliance with the maximum contaminant level 
for arsenic:

                        Small System Compliance Technologies (SSCTs) \1\ for Arsenic \2\
----------------------------------------------------------------------------------------------------------------
           Small system compliance technology               Affordable for listed small system categories \3\
----------------------------------------------------------------------------------------------------------------
Activated Alumina (centralized)........................  All size categories.
Activated Alumina (Point-of-Use) \4\...................  All size categories.
Coagulation/Filtration \5\.............................  501-3,300, 3,301-10,000.
Coagulation-assisted Microfiltration...................  501-3,300, 3,301-10,000.
Electrodialysis reversal \6\...........................  501-3,300, 3,301-10,000.
Enhanced coagulation/filtration........................  All size categories
Enhanced lime softening (pH> 10.5).....................  All size categories.
Ion Exchange...........................................  All size categories.
Lime Softening \5\.....................................  501-3,300, 3,301-10,000.
Oxidation/Filtration \7\...............................  All size categories.
Reverse Osmosis (centralized) \6\......................  501-3,300, 3,301-10,000.
Reverse Osmosis (Point-of-Use) \4\.....................  All size categories.
----------------------------------------------------------------------------------------------------------------
\1\ Section 1412(b)(4)(E)(ii) of SDWA specifies that SSCTs must be affordable and technically feasible for small
  systems.
\2\ SSCTs for Arsenic V. Pre-oxidation may be required to convert Arsenic III to Arsenic V.
\3\ The Act (ibid.) specifies three categories of small systems: (i) those serving 25 or more, but fewer than
  501, (ii) those serving more than 500, but fewer than 3,301, and (iii) those serving more than 3,300, but
  fewer than 10,001.
\4\ When POU or POE devices are used for compliance, programs to ensure proper long-term operation, maintenance,
  and monitoring must be provided by the water system to ensure adequate performance.
\5\ Unlikely to be installed solely for arsenic removal. May require pH adjustment to optimal range if high
  removals are needed.
\6\ Technologies reject a large volume of water--may not be appropriate for areas where water quantity may be an
  issue.
\7\ To obtain high removals, iron to arsenic ratio must be at least 20:1.

Subpart O--[Amended]

    10. Amend Sec. 141.154 by revising paragraph (b) and adding 
paragraph (f) to read as follows:


Sec. 141.154  Required additional health information.

* * * * *
    (b) Ending in the report due by July 1, 2001, a system which 
detects arsenic at levels above 0.025 mg/L, but below the 0.05 mg/L, 
and beginning in the report due by July 1, 2002, a system that detects 
arsenic above 0.005 mg/L and up to and including 0.01 mg/L:
    (1) Must include in its report a short informational statement 
about arsenic, using language such as: While your drinking water meets 
EPA's standard for arsenic, it does contain low levels of arsenic. 
EPA's standard balances the current understanding of arsenic's possible 
health effects against the costs of removing arsenic from drinking 
water. EPA continues to research the health effects of low levels of 
arsenic, which is a mineral known to cause cancer in humans at high 
concentrations and is linked to other health effects such as skin 
damage and circulatory problems.
    (2) May write its own educational statement, but only in 
consultation with the Primacy Agency.
* * * * *
    (f) Beginning in the report due by July 1, 2002 and ending January 
22, 2006, a community water system that detects arsenic above 0.01 mg/L 
and up to and including 0.05 mg/L must include the arsenic health 
effects language prescribed by Appendix A to Subpart O.

    11. Amend Appendix A to Subpart O by revising the entry for arsenic 
under ``Inorganic contaminants:'' and adding an endnote to read as 
follows:

Appendix A to Subpart O--Regulated Contaminants

[[Page 7065]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         To convert
           Contaminant (units)             Traditional    for CCR,    MCL in CCR      MCLG       Major Sources in drinking     Health effects language
                                           MCL in mg/L  multiply by     units                              water
--------------------------------------------------------------------------------------------------------------------------------------------------------
          *                  *                  *                  *                  *                  *                  *
Inorganic contaminants:
          *                  *                  *                  *                  *                  *                  *
    Arsenic (ppb)........................     \1\ 0.01         1000       \1\ 10        \1\ 0  Erosion of natural deposits;  Some people who drink water
                                                                                                Runoff from orchards;         containing arsenic in
                                                                                                Runoff from glass and         excess of the MCL over
                                                                                                electronics production        many years could
                                                                                                wastes.                       experience skin damage or
                                                                                                                              problems with their
                                                                                                                              circulatory system, and
                                                                                                                              may have an increased risk
                                                                                                                              of getting cancer.
          *                  *                  *                  *                  *                  *                  *
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
    1. These arsenic values are effective January 23, 2006. Until 
then, the MCL is 0.05 mg/L and there is no MCLG.

Subpart Q--[Amended]

    12. Amend Appendix A to Subpart Q by:
    a. Revising the entry for ``2. Arsenic'' under ``B. Inorganic 
Chemicals (IOCs)'',
    b. Redesignating endnotes 8 through 17 as endnotes 10 through 19 in 
the table and at the end of the table, and
    c. Adding endnotes 8 and 9.
    The revisions and additions read as follows:

Appendix A to Subpart Q--NPDWR Violations and Other Situations 
Requiring Public Notice \1\

----------------------------------------------------------------------------------------------------------------
                                                    MCL/MRDL/TT violations \2\    Monitoring & testing procedure
                                                 --------------------------------           violations
                                                                                 -------------------------------
                   Contaminant                    Tier of public                  Tier of public
                                                      notice         Citation         notice         Citation
                                                     required                        required
----------------------------------------------------------------------------------------------------------------
*                  *                  *                  *                  *                  *
                                               *
B. Inorganic Chemicals (IOCs)...................
*                  *                  *                  *                  *                  *
                                               *
2. Arsenic......................................               2   \8\ 141.62(b)               3  \9\ 141.23(a),
                                                                                                             (c)
*                  *                  *                  *                  *                  *
                                               *
----------------------------------------------------------------------------------------------------------------

Appendix A--Endnotes

    1. Violations and other situations not listed in this table 
(e.g., reporting violations and failure to prepare Consumer 
Confidence Reports), do not require notice, unless otherwise 
determined by the primacy agency. Primacy agencies may, at their 
option, also require a more stringent public notice tier (e.g., Tier 
1 instead of Tier 2 or Tier 2 instead of Tier 3) for specific 
violations and situations listed in this Appendix, as authorized 
under Sec. 141.202(a) and Sec. 141.203(a).
    2. MCL-Maximum contaminant level, MRDL-Maximum residual 
disinfectant level, TT-Treatment technique.
* * * * *
    8. The arsenic MCL citations are effective January 23, 2006. 
Until then, the citations are Sec. 141.11(b) and Sec. 141.23(n).
    9. The arsenic Tier 3 violation MCL citations are effective 
January 23, 2006. Until then, the citations are Sec. 141.23(a), (l).
* * * * *

    13. Amend Appendix B to Subpart Q by:
    a. Revising entry ``9. Arsenic'' under ``C. Inorganic chemicals 
(IOCs)'',
    b. Redesignating endnotes 11 through 21 as endnotes 12 through 22 
in the table and at the end of the table, and
    c. Adding endnote 11.
    The revisions and additions read as follows:

Appendix B to Subpart Q--Standard Health Effects Language for Public 
Notification

----------------------------------------------------------------------------------------------------------------
                                                                    Standard health effects language for public
           Contaminant              MCLG \1\ mg/L   MCL \2\ mg/L                    notification
----------------------------------------------------------------------------------------------------------------
*                  *                  *                  *                  *                  *
                                               *
9. Arsenic \11\..................               0            0.01  Some people who drink water containing
                                                                    arsenic in excess of the MCL over many years
                                                                    could experience skin damage or problems
                                                                    with their circulatory system, and may have
                                                                    an increased risk of getting cancer.

[[Page 7066]]

 
*                  *                  *                  *                  *                  *
                                               *
----------------------------------------------------------------------------------------------------------------

Appendix B--Endnotes

    1. MCLG-Maximum contaminant level goal.
    2. MCL-Maximum contaminant level.
* * * * *
    11. These arsenic values are effective January 23, 2006. Until 
then, the MCL is 0.05 mg/L and there is no MCLG.
* * * * *

PART 142--NATIONAL PRIMARY DRINKING WATER REGULATIONS 
IMPLEMENTATION

    1. The authority citation for part 142 continues to read as 
follows:

    Authority: 42 U.S.C. 300f, 300g-1, 300g-2, 300g-3, 300g-4, 300g-
5, 300g-6, 300j-4, 300j-9, and 300j-11.

Subpart B--[Amended]

    2. Amend Sec. 142.16 by revising paragraph (e) introductory text, 
reserving paragraph (i), and adding paragraphs (j) and (k) to read as 
follows:


Sec. 142.16  Special primacy requirements.

* * * * *
    (e) An application for approval of a State program revision which 
adopts the requirements specified in Secs. 141.11, 141.23, 141.24, 
141.32, 141.40, 141.61 and 141.62 for a newly regulated contaminant 
must contain the following (in addition to the general primacy 
requirements enumerated elsewhere in this part, including the 
requirement that State regulations be at least as stringent as the 
federal requirements):
* * * * *
    (i) [reserved]
    (j) An application for approval of a State program revision which 
adopts the requirements specified in Secs. 141.11, 141.23, 141.24, 
141.32, 141.40, 141.61 and 141.62 for an existing regulated contaminant 
must contain the following (in addition to the general primacy 
requirements enumerated elsewhere in this part, including the 
requirement that State regulations be at least as stringent as the 
federal requirements):
    (1) If a State chooses to issue waivers from the monitoring 
requirements in Secs. 141.23, 141.24, and 141.40, the State shall 
describe the procedures and criteria which it will use to review waiver 
applications and issue wavier determinations. The State shall provide 
the same information required in paragraph (e)(1)(i) and (ii) of this 
section. States may update their existing waiver criteria or use the 
requirements submitted under the National Primary Drinking Water 
Regulations for the inorganic and organic contaminants (i.e., Phase II/
V rule) in 16(e) of this section. States may simply note in their 
application any revisions to existing waiver criteria or note that the 
same procedures to issue waivers will be used.
    (2) A monitoring plan by which the State will ensure all systems 
complete the required monitoring by the regulatory deadlines. States 
may update their existing monitoring plan or use the same monitoring 
plan submitted under the National Primary Drinking Water Regulations 
for the inorganic and organic contaminants (i.e. Phase II/V rule) in 
16(e) of this section. States may simply note in their application any 
revisions to an existing monitoring plan or note that the same 
monitoring plan will be used. The State must demonstrate that the 
monitoring plan is enforceable under State law.
    (k) States establish the initial monitoring requirements for new 
systems and new sources. States must explain their initial monitoring 
schedules and how these monitoring schedules ensure that public water 
systems and sources comply with MCL's and monitoring requirements. 
States must also specify the time frame in which new systems will 
demonstrate compliance with the MCLs.

    3. Amend the table in Sec. 142.62(b) by adding a new entry for 
``Arsenic'' in alphabetical order, adding new endnotes 4 and 5, adding 
a new item 12 to list of ``Keys to BATs in Table'' and revising the 
heading to the table in paragraph (b) to read as follows:


Sec. 142.62  Variances and exemptions from the maximum contaminant 
levels for organic and inorganic chemicals.

* * * * *
    (b) * * *

          BAT for Inorganic Compounds Listed in Sec.  141.62(b)
------------------------------------------------------------------------
                Chemical name                            BAT(s)
------------------------------------------------------------------------
              *        *        *        *        *
Arsenic \4\..................................   \5\ 1, 2, 5, 6, 7, 9, 12
             *        *        *        *        *
------------------------------------------------------------------------
*        *        *        *        *
\4\ BATs for Arsenic V. Pre-oxidation may be required to convert Arsenic
  III to Arsenic V.
\5\ To obtain high removals, iron to arsenic ratio must be at least
  20:1.

* * * * *

Key to BATs in Table

1 = Activated Alumina
2 = Coagulation/Filtration (not BAT for systems  500 service 
connections)
* * * * *
5 = Ion Exchange
6 = Lime Softening (not BAT for systems  500 service connections)
7 = Reverse Osmosis
* * * * *
9 = Electrodialysis
* * * * *
12 = Oxidation/Filtration
* * * * *
[FR Doc. 01-1668 Filed 1-19-01; 8:45 am]
BILLING CODE 6560-50-P