[Federal Register Volume 66, Number 139 (Thursday, July 19, 2001)]
[Proposed Rules]
[Pages 37617-37631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18093]



[[Page 37617]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 141 and 142

[WH-FRL-7015-4]
RIN 2040-AB75


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Today's action proposes and requests comment on a range of MCL 
options for the drinking water standard for arsenic. In particular, EPA 
is requesting comment on whether the data and technical analyses 
associated with the arsenic rule published in the January 22, 2001, 
Federal Register (66 FR 6976) as well as any new information that may 
be available would support setting the enforceable arsenic standard, or 
Maximum Contaminant Level (MCL), at 3 micrograms per liter (g/
L) (the feasible level), 5 g/L (the level proposed in June 
2000), 10 g/L (the level published in the January 2001 rule), 
or 20 g/L.
    To assist commenters, today's document provides a brief summary of 
the principal data and technical analyses that accompanied the January 
2001 arsenic rule and solicits comment on key issues associated with 
this information and analyses. In providing comment on these issues, 
commenters should focus on the preamble, technical support documents, 
and record associated with the January 2001 rule (not the June 2000 
proposal (65 FR 38888)) because EPA made many changes to the analyses 
supporting the January decisions in response to public comment on the 
June 2000 proposal. In developing comments, commenters may also wish to 
consider information EPA plans to have in a notice in the fall of 2001, 
which will request comment on the results of the additional analyses of 
key scientific, technical and economic elements of the rule. The 
comment period for today's notice ends October 31, 2001, because the 
Agency expects this comment period to overlap with the fall 2001 
notice's comment period on the scientific, cost, and benefits reviews.
    On May 22, 2001, EPA published in the Federal Register (66 FR 6976) 
a final rule delaying the effective date of the arsenic rule until 
February 22, 2002, in order to conduct reviews of the science and 
costing analyses. Additional information about these reviews as well as 
a review of the benefits analysis for the January 22, 2001, rule are 
provided in today's document. EPA expects the results of these reviews 
to be available within the comment period for today's proposal.
    This proposal does not affect the clarifications to compliance and 
new source contaminants monitoring regulations also issued on January 
22, 2001, (66 FR 6976), for inorganic, volatile organic, and synthetic 
organic contaminants. Those regulations go into effect on January 22, 
2004, as provided in the January 22, 2001, final rule.

DATES: Your comments on a range of arsenic MCLs from 3 g/L to 
20 g/L must be in writing and either postmarked or received by 
EPA's Water Docket by October 31, 2001.

ADDRESSES: You may mail your written comments to the W-99-16-VI Arsenic 
Comments Clerk, Water Docket (MC-4101); U.S. EPA; 1200 Pennsylvania 
Avenue, NW.; Washington, DC 20460. Comments may be hand delivered 
(e.g., courier or overnight delivery service) to EPA's Water Docket, 
located at 401 M Street, SW.; East Tower Basement Room 57; in 
Washington, DC; between 9 a.m. and 3:30 p.m. Eastern Time, Monday 
through Friday. Comments may be submitted electronically to [email protected]. See SUPPLEMENTARY INFORMATION for file formats and 
other information about electronic filing and docket review.

FOR FURTHER INFORMATION CONTACT: The Safe Drinking Water Hotline, 
phone: (800) 426-4791 or (703) 285-1093, e-mail: [email protected] 
for general information, meeting information, and copies of arsenic 
regulations and support documents. For inquiries about the on-going 
cost of compliance review, contact: Mr. Amit Kapadia, (202) 260-1688, 
e-mail: [email protected]. For all other questions about this 
document, contact Irene Dooley, (202) 260-9531, e-mail: 
[email protected].

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 CWSs and approximately 20,000 NTNCWSs nationwide. 
Entities potentially regulated by this action are CWSs and NTNCWSs. The 
following table provides examples of the regulated entities under this 
rule.

                       Table of Regulated Entities
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                                             Examples of potentially
                Category                        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, State, Tribal, and Local          State, Tribal, or local
 Government.                              government-owned/operated
                                          water supply systems using
                                          ground water, surface water,
                                          or mixed ground water 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 as revised by the 
January 22, 2001 (66 FR 6976) arsenic rule.

Additional Information for Commenters

    No facsimiles (faxes), compressed or zipped files will be accepted, 
and comments must be submitted in writing. In providing comment on 
these issues, commenters should focus on the preamble, technical 
support documents, and record associated with the January 2001 arsenic 
in drinking water regulation (not the June 2000 proposal (65 FR 
38888)). EPA addressed comments prepared for the June 2000 proposed 
rule in the response-to-comments document in the docket for W-99-16-III 
and summarized responses

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to the major comments in the preamble of the January 2001 regulation. 
Please submit an original and three copies of your comments and 
enclosures (including references) and identify your submission by the 
docket number W-99-16-VI. To ensure that EPA can read, understand, and 
therefore properly respond to comments, the Agency would prefer that 
comments cite, where possible, the question(s) or sections and page 
numbers in the document or supporting documents to which each comment 
refers. Commenters should use a separate paragraph for each issue 
discussed. Commenters who want EPA to acknowledge receipt of their 
comments should include a self-addressed, stamped envelope.
    EPA uses WordPerfect as its standard software, so electronic 
submissions (including 3.5 inch floppy disks) must be submitted in 
WordPerfect 8 (or older version) or ASCII file format (unless four hard 
copies are also submitted). Comments submitted in other electronic 
formats (e.g., Word, pdf, Excel, and compressed or zipped files) must 
also be submitted as hard copies. For purposes of dating dual hard 
copy/electronic copy submissions, the date of the electronic copy will 
be recorded as the date submitted. Please indicate that you are sending 
hard copies so the Docket can link your two submissions rather than log 
in two sets of your comments. Electronic comments on this document may 
be filed online at many Federal Depository Libraries.
    The Agency's response-to-comments document for W-99-16-VI will 
address the comments received for this proposal, and this document will 
be made available in the docket. Since the comment period ends October 
31, 2001, the response-to-comment document will not be completed until 
sometime later in the fall of 2001. To facilitate development of a 
response-to-comments document, EPA appreciates receiving an electronic 
version in addition to the original and three copies for large 
submissions (e.g., over 10 pages). The Agency does not send out 
individual replies to respond to those who submit comments.

Availability of Docket

    For an appointment to review the docket for this rulemaking, call 
(202) 260-3027 between 9 a.m. and 3:30 p.m. Eastern Time, Monday 
through Friday and refer to Docket W-99-16-VI. Every user is entitled 
to 100 free pages, and after that the Docket charges 15 cents a page. 
Users are invoiced after they copy $25, which is 267 photocopied pages. 
The Safe Drinking Water Hotline can provide some hard copies of some of 
the supporting documentation and some electronically, phone: (800) 426-
4791 or (703) 285-1093, e-mail: [email protected]. EPA's arsenic-in-
drinking-water web page contains links to the arsenic Federal Register 
notices and other supporting material at www.epa.gov/safewater/arsenic.html.

Abbreviations Used in This Proposed Rule

>--greater than
--less than
Sec. --section
g--micrograms, one millionth of a gram (3.5  x  
10-8 ounce, 0.000000035 oz.)
g/L--micrograms per liter, same as parts per billion (ppb)
AES--Atomic emission spectroscopy
ARBRP--Arsenic Rule Benefits Review Panel of SAB
AWWARF--American Water Works Association Research Foundation
BAT--Best available technology
CCR--Consumer Confidence Report
CFR--Code of Federal Regulations
CWS--Community water system
DWSRF--Drinking Water State Revolving Fund
EA--Economic analysis
EO--Executive Order
EPA--U.S. Environmental Protection Agency
ERDDAA--Environmental Research, Development, and Demonstration 
Authorization Act, SAB
FACA--Federal Advisory Committee Act
FR--Federal Register
FRFA--Final regulatory flexibility analysis
FSIS--Federalism summary impact statement
GW--Ground water
ICP--Inductively coupled plasma
ICR--Information Collection Request
ISCV--Intra-system coefficient of variation
IRFA--Initial regulatory flexibility analysis
ISCV--Intra-system coefficients of variation
L--Liter, also referred to as lower case ``l'' in older citations
MCL--Maximum contaminant level
MCLG--Maximum contaminant level goal
mg--milligrams, one thousandth of a gram, 1 mg = 1,000 g
mg/L--milligrams per liter
NAS--National Academy of Sciences
NCWS--Non-community water system
NDWAC--National Drinking Water Advisory Council, EPA FACA group
NODA--Notice of Data Availability
NPDWR--National primary drinking water regulation
NRC--National Research Council, the operating arm of NAS
NTNCWS--Non-transient non-community water system
NTTAA--National Technology Transfer and Advancement Act
OMB--Office of Management and Budget
P.L.--Public Law
PNR--Public Notification Rule
POTW--Publicly owned treatment works, wastewater treatment
POU--Point-of-use treatment devices
PRA--Paperwork Reduction Act
PWS--Public water systems
REF--Relative exposure factors
RFA--Regulatory Flexibility Act
RUS--Rural Utilities Service
SAB--Science Advisory Board
SBA--Small Business Administration
SBAR--Small Business Advocacy Review
SBREFA--Small Business Regulatory Enforcement Fairness Act
SDWA--Safe Drinking Water Act
SW--Surface water
UMRA--Unfunded Mandates Reform Act
U.S.--United States
USGS--U.S. Geological Survey
VSL--Value of statistical life
WTP--Willingness to pay

Table of Contents

I. Background and History Preceding This Document
    A. What is in the arsenic rule published on January 22, 2001?
    1. Summary of arsenic regulation
    2. Changes to the Consumer Confidence Report (CCR) for arsenic
    3. Changes to public notification for arsenic
    4. Arsenic rule's effect on State/Tribal primacy programs
    B. What did EPA's Administrator announce on March 20, 2001?
    C. How has the effective date of the arsenic rule changed?
    1. March 23, 2001 Federal Register 60-day delay notice
    2. April 23, 2001 Federal Register 9-month extension proposal
    3. May 22, 2001 Federal Register February 22, 2002 effective 
date
    4. Effect on CCR for calendar year 2001
    D. With what regulatory standard for arsenic must systems comply 
now?
II. EPA's Plans to Review Parts of the Arsenic Rule
    A. What is the purpose of today's action and what happens now?
    B. What approach will EPA use to review the science, costs, and 
benefits of the rule?
    1. Overview
    2. Approach to review of health science
    3. Approach to review of cost of compliance estimates
    4. Approach to review of benefits estimates
    C. How did EPA assess the occurrence of arsenic?
    1. Summary of arsenic occurrence analysis
    2. Request for occurrence comments
    D. How did EPA evaluate the health risks of arsenic in drinking 
water?
    1. Summary of health risk elements
    2. Request for comment on health issues
    E. How did EPA calculate the national costs of compliance with 
the arsenic in drinking water rule?
    1. Summary of cost elements of January 22, 2001 rule and record
    2. List of cost issues and request for comments
    F. How did EPA calculate the benefits of the arsenic rule?
    1. Summary of the January 22, 2001, benefits assessment
    2. List of key benefit analysis issues
    a. Discounting benefits over a cancer latency period
    b. Consideration of non-quantifiable benefits in the regulatory 
decision-making process
    3. Request for comments on benefits

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    G. What process is EPA planning for review of financial, 
technical, and planning tools for small systems?
    1. Small system review process
    2. List of small system issues
    a. Affordability, availability of financial assistance, and 
treatment technology
    b. SDWA Capacity Development Framework
    3. Request for small systems comment
III. Process to be Employed after Technical Reviews and Public 
Comment
    A. How will EPA notify the public of results of the technical 
reviews and the nature of the public comments?
    B. What process will EPA use to make final decisions on the 
rule?
IV. Administrative 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
    D. Paperwork Reduction Act (PRA)
    E. National Technology Transfer and Advancement Act
    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 Order 13175, Consultation and Coordination with 
Indian Tribal Governments
    J. Consultations with the Science Advisory Board, National 
Drinking Water Advisory Council, and the Secretary of Health and 
Human Services
    K. Likely Effect of Compliance With the Arsenic Rule on the 
Technical, Financial, and Managerial Capacity of Public Water 
Systems
    L. Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
V. References

I. Background and History Preceding This Document

A. What Is in the Arsenic Rule Published on January 22, 2001?

1. Summary of Arsenic Regulation
    In the Monday, January 22, 2001, Federal Register (EPA 2001a), EPA 
issued regulations revising the arsenic drinking water standard and 
clarifying compliance and new-source contaminants monitoring provisions 
(66 FR 6976). The Agency established a health-based, non-enforceable 
Maximum Contaminant Level Goal (MCLG) for arsenic of zero milligrams 
per liter (mg/L) in Sec. 141.15(b) and an enforceable Maximum 
Contaminant Level (MCL) for arsenic of 0.01 mg/L (i.e., 10 micrograms 
per liter (g/L)) for both community water systems (CWSs) and 
non-transient non-community water systems (NTNCWSs) in 
Sec. 141.62(b)(16). (Although EPA lists drinking water standards in 
Title 40 of the Code of Federal Regulations (40 CFR) in units of mg/L, 
except where noted, the Agency will refer to arsenic concentrations in 
g/L in this preamble.) As part of the arsenic regulation, EPA 
also listed the approved analytical methods to measure compliance 
(Sec. 141.23(k)(1)), as well as the best available technologies (BAT) 
(Sec. 141.62(b)), small system technologies that could achieve 
compliance with the MCL (Sec. 141.62(d)), consumer confidence report 
requirements for CWSs, and public notification requirements for PWSs 
for the new MCL. Because the Agency identified affordable technologies 
for small systems, the rule did not list any small system variance 
technologies under Sec. 1412(b)(15)(A) of the Safe Drinking Water Act 
(SDWA).
    All but one of the five existing arsenic analytical technologies 
can be used for compliance determinations. As noted in the June 2000 
proposal (65 FR 38888 at 38913) and January 2001 rule (66 FR 6976 at 
6988), inductively coupled plasma (ICP)--atomic emission spectroscopy 
(AES) methods in EPA Method 200.7 and Standard Methods 3120 B have 
unacceptably high detection limits (see footnote 15 to table in 
Sec. 141.23(k)(1); 66 FR 6976 at 7062).
    EPA established an effective date of March 23, 2001, and a 
compliance date (Sec. 141.6(j)) for the arsenic regulation of January 
23, 2006, five years after issuance for all systems. However, the 
consumer confidence reporting requirements for arsenic listed in 
Sec. 141.6(j) had a March 23, 2001 compliance date.
    EPA intended to issue a small entity implementation or compliance 
guide shortly after issuing the rule (66 FR 6976 at 7033). However, 
because of the on-going reviews, the Agency believes that it is 
premature to distribute small entity guidance at this time.
2. Changes to the Consumer Confidence Report (CCR) for Arsenic
    On August 19, 1998, EPA issued part 141 subpart O, the final rule 
requiring community water systems to provide annual water quality 
report to their customers (63 FR 44512; EPA, 1998a). Reports are now 
due by July 1 for the preceding calendar year (Sec. 141.152(a)). Any 
time arsenic is detected, the report must list the MCL (50 g/
L), the MCLG (none), and the highest level used to determine compliance 
and the range of detected levels, according to Secs. 141.153(d)(4)(i), 
(ii), and (iv), respectively. Section 141.153(d)(6) requires the CCR to 
identify MCL violations, steps taken to address violations, and 
potential health effects using the language in appendix A of subpart O. 
In addition, using the authority of section 1414(c)(4)(B)(vi) of SDWA 
(63 FR 44512 at 44514), systems that detect arsenic between 25 
g/L and 50 g/L are also required to provide an 
informational statement (Sec. 141.154(b)).
    As published, the arsenic rule would make two reporting changes for 
systems detecting arsenic below 50 g/L that would affect the 
CCR due by July 1, 2002, for calendar year 2001 (66 FR 6976 at 6991). 
First, CWSs would be required to include a revised informational 
statement (Sec. 141.154(b)) about arsenic when detected from 5 
g/L to 10 g/L. In the arsenic rule, the Agency 
retained Sec. 141.154(b) reporting requirements because the MCL is 
higher than the technologically feasible MCL (66 FR 6976 at 6991). 
Second, as proposed in Sec. 141.154(b) and finalized in 
Sec. 141.154(f), systems detecting from 10 g/L to 50 
g/L would also provide the arsenic health language in appendix 
A to subpart O (Sec. 141.154(f)), even though systems are in compliance 
with the 50 g/L MCL through January 22, 2006. (January 23, 
2006, is the effective date for the MCL of 10 g/L 
(Sec. 141.60(b)(4)).) As explained in section I.C.4, the current 9-
month extension of the effective date until February 22, 2002, affects 
the CCR requirements of the January 2001 rule for calendar year 2001 
reports.
3. Changes to Public Notification for Arsenic
    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, 2000b). 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, such as 
Wyoming and many Tribes), or on the date that a primacy State/Tribe 
adopts the new requirements (no later than May 6, 2002).
    The January 2001 arsenic rule would require CWSs and NTNCWSs to 
provide a Tier 2 public notice for arsenic MCL violations (> 10 
g/L) and to provide a Tier 3 public notice for violations of 
the monitoring and testing procedure requirements. In addition, public 
water systems must give notice for all violations when operating under 
a variance or exemption and for violating conditions of the variance or 
exemption. The arsenic regulation (66 FR 6976) amended the PNR, subpart 
Q of part

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141, for purposes of compliance starting January 23, 2006 
(Sec. 141.6(j); 66 FR 6976 at 7061).
4. Arsenic Rule's Effect on State/Tribal Primacy Programs
    States must submit applications for revised primacy no later than 2 
years after promulgation of a new standard unless the State requests 
and is granted an additional 2-year extension. Interim primacy 
enforcement authority (Sec. 142.12(e)) 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.
    In the arsenic rule, EPA reduced requirements for submitting 
revisions for existing regulated contaminants (Secs. 142.16(e) and 
(j)), so that information required in Sec. 142.16(e) is not required 
for States revising the MCL for arsenic. In addition, revisions to 
Sec. 142.16(j) clarified that States may inform the Agency in their 
applications of any changes to their existing monitoring plans and 
waiver procedures. These regulations are effective for purpose of 
compliance on January 22, 2004 (Sec. 141.6(k); 66 FR 6976 at 7061).
    Currently, the Navajo Nation is the only federally recognized 
Indian Tribe with primacy to enforce drinking water regulations. EPA 
Regions implement the rules for all other Tribes under section 
1451(a)(1) of SDWA. Tribes must submit a primacy application 
(Sec. 142.76) to have oversight for the inorganic contaminants (i.e., 
the Phase II/V rule) to obtain the authority for the revised arsenic 
MCL. Tribes with primacy for drinking water programs are eligible for 
grants and contract assistance (section1451(a)(3) of SDWA). Tribes are 
also eligible for grants under the Drinking Water State Revolving Fund 
Tribal set-aside grant program authorized by section 1452(i) of SDWA 
for public water system expenditures.
    EPA is aware of the practical implications of the ongoing reviews 
and delayed effective date on States and Tribes in terms of primacy and 
other requirements. EPA will consult with States and interested Tribes 
before addressing the effects on State primacy in future Federal 
Register notices.

B. What Did EPA's Administrator Announce on March 20, 2001?

    On March 20, 2001, the Administrator announced in a press release 
that EPA would delay the effective date for the arsenic rule 60 days. 
That extension was in accordance with the White House (WH) memorandum 
of January 20, 2001, entitled ``Regulatory Review Plan,'' which was 
published in the Federal Register (WH 2001) on January 24, 2001 (66 FR 
7702). The January 20, 2001, memorandum from Andrew Card, Assistant to 
the President and Chief of Staff, communicated the President's plan to 
ensure that his appointees had the opportunity to review new 
regulations ``at the outset of his Administration'' in order to avoid 
``costly, burdensome, or unnecessary regulation * * *.'' For 
regulations that had been published in the Federal Register, but were 
not yet in effect, the memorandum requested departments and agencies to 
postpone their effective dates for 60 days. In order to provide safe 
and affordable drinking water, the Administrator announced plans to 
seek independent reviews of the science behind the arsenic standard and 
the cost estimates used to develop the rule.

C. How Has the Effective Date of the Arsenic Rule Changed?

1. March 23, 2001 Federal Register 60-Day Delay Notice
    On March 23, 2001 (EPA 2001b), the Federal Register published EPA's 
60-day delay of the effective date for the arsenic regulation (66 FR 
16134), in accordance with the White House memorandum, ``Regulatory 
Review Plan'' (66 FR 7702). The delay changed the effective date for 
the arsenic regulation from March 23, 2001, to May 22, 2001, including 
the dates for compliance with the consumer confidence reporting 
requirements for Sec. 141.154(b) and (f) that were specifically linked 
to the new arsenic regulation.
2. April 23, 2001 Federal Register 9-Month Extension Proposal
    On April 23, 2001 (EPA 2001c), EPA proposed (66 FR 20580) to extend 
the effective date for the arsenic rule from May 22, 2001, to February 
22, 2002, in order to obtain independent reviews of the science, cost, 
and benefit analyses used to support the arsenic in drinking water 
regulation. The notice outlined the process for the science and cost 
reviews.
3. May 22, 2001 Federal Register February 22, 2002 Effective Date
    After reviewing the comments received on the 9-month proposed delay 
of the effective date, the Agency issued a final rule (EPA 2001f) on 
May 22, 2001 (66 FR 28342), delaying the final effective date until 
February 22, 2001, so the Agency could proceed as planned with the 
proposed reviews and opportunities for additional public comment. EPA 
identified mechanisms for reviewing the science and cost estimates in 
the notice and provided responses to comments in the preamble (66 FR 
28342 at 28345) that are in the response-to-comment document for docket 
W-99-16-IV (EPA 2001).
4. Effect on CCR for Calendar Year 2001
    The final rule for the 9-month delay (66 FR 28342 at 28350) also 
changed the Sec. 141.6(j) compliance date to February 22, 2002, for the 
new arsenic consumer confidence reporting requirements in 
Secs. 141.165(b) and (f). The delay will affect some systems that send 
out calendar year 2001 reports. CWSs that send out calendar year 2001 
reports prior to February 22, 2002 must comply with the old arsenic CCR 
requirements (those in effect prior to the January 2001 rule). CWSs 
that send their reports after February 22, 2002, will have to comply 
with the new arsenic CCR requirements. In light of the current analyses 
being conducted on aspects of the arsenic rule, the Agency plans to 
address CCR reporting issues and options in the fall 2001 notice.

D. With What Regulatory Standard for Arsenic Must Systems Comply Now?

    In the process of extending the effective date for the arsenic 
rule, EPA has not changed the compliance date for the MCL issued in the 
January 2001 rule. Until January 23, 2006, the MCL for arsenic is 50 
g/L, which only applies to CWSs (Secs. 141.11(a) and (b)), and 
there is no MCLG for arsenic (Sec. 141.51(b)).

II. EPA's Plans to Review Parts of the Arsenic Rule

A. What Is the Purpose of Today's Action and What Happens Now?

    The January 22, 2001, rule established an MCLG of 0 g/L 
and an MCL of 10 g/L for arsenic and explained in detail the 
rationale for this decision. However, because of concerns raised by 
some stakeholders concerning the arsenic in drinking water regulation, 
especially small community systems that may bear a high cost burden to 
comply with the new standard, EPA has decided to request further 
comment on the arsenic standard set in the January 22, 2001, drinking 
water rule.
    As a result, today EPA proposes and requests stakeholder input on a 
range of MCL options for arsenic from 3 g/L to 20 g/
L. In developing comments, commenters should refer to the information 
provided in the January 22, 2001, arsenic rule, the background 
documents supporting that rule, the notice and request for comment on 
the scientific, technical, and benefits

[[Page 37621]]

reviews that EPA plans to publish in the fall of 2001, and any new 
(post-January 2001) information commenters wish to provide. EPA is 
accepting comments until October 31, 2001, on today's notice to 
facilitate commenters' ability to examine the most current information. 
The Agency also anticipates that the comment period for the notice 
summarizing the fall 2001 reviews will overlap with today's comment 
period, thereby allowing commenters to provide a single set of comments 
covering both today's notice and the expected fall 2001 notice, if they 
wish.
    EPA is also undertaking additional analyses on science, cost, and 
benefits issues, as explained in section II.B., and expects these 
analyses to be completed in August 2001. Once the analyses are 
completed, EPA will consider this new information and provide for an 
additional opportunity for public comment on the new analyses along 
with EPA's preliminary conclusion about whether the January 2001 
arsenic rule should be revised, and if so, what the revised standard 
should be. EPA will consider the public comments, as well as the record 
for the arsenic rule for this reconsideration, and issue a final 
decision on whether to revise the January 2001 rule. In particular, EPA 
is considering whether to retain the revised MCL of 10 g/L or 
replace it with another standard--specifically, 3 g/L (the 
feasible level), 5 g/L (the level proposed in June 2000) or 20 
g/L (another alternative considered in the June 2000 
proposal). If EPA does decide to revise the January 2001 rule, EPA will 
issue a new revised rule.

B. What Approach Will EPA Use To Review the Science, Costs, and 
Benefits of the Rule?

1. Overview
    EPA understands and appreciates that the question of setting a 
final arsenic in drinking water standard is a controversial one for 
several reasons. From an economic standpoint, the new regulation can be 
expected to have significant impacts on a number of drinking water 
utilities, especially those serving less than 10,000 people in areas of 
high naturally occurring arsenic. Stakeholders have an understandable 
desire to ensure that any new regulation be based on accurate and 
reliable compliance cost estimates. Stakeholders also want to be 
confident that the health risks associated with a new standard have 
been appropriately evaluated and are based on the best available 
science.
    The Agency is committed to safe and affordable drinking water for 
all Americans. At the same time, we want to be sure that the 
conclusions about arsenic in the rule are supported by the best 
available science and policy decisions based on thorough cost-benefit 
considerations. The Agency is therefore moving rapidly to review 
arsenic research and national cost and benefit estimates related to the 
arsenic standard so that communities that need to reduce arsenic in 
drinking water can proceed with confidence that the new standard is 
based on sound science and accurate cost-benefit estimates. Independent 
review of the science, cost, and benefits analysis behind the arsenic 
in drinking water standard will help resolve questions that have arisen 
about the health basis and costs and benefits of reducing arsenic in 
drinking water.
    EPA's criteria for conducting the reviews will be to ensure that 
reviewers are recognized experts in their fields and are as impartial 
and objective as possible; that the reviews can be completed in August 
2001; and that the results of the reviews are made available for public 
comment. EPA plans to utilize the mechanisms for the reviews described 
in the following section.
    EPA does not plan to seek outside, expert review of its approaches 
for estimating occurrence or determining the availability of analytical 
methods and their capabilities but is requesting further public comment 
on these aspects of the January 2001 rule.
2. Approach to Review of Health Science
    Under a cooperative agreement with EPA, on May 21 the National 
Academy of Sciences (NAS) convened a subcommittee of the National 
Research Council's (NRC) Committee on Toxicology to prepare a report 
updating the scientific analyses, uncertainties, findings and 
recommendations of the report ``Arsenic in Drinking Water (NRC 1999).'' 
NAS posts information about the arsenic study, including project scope, 
the subcommittee membership and biographies, meetings, and meeting 
summaries of the closed sessions (NRC 2001a and NRC 2001b) in the 
website www.nationalacademies.org under Current Projects (the short cut 
to the direct NRC arsenic project address, www4.nas.edu/cp.nsf/ 
af89ea56d4264b948525639b0043e7c7/ 7ae42f9d0397214b85256a3100711f15? 
OpenDocument, is available from www.epa.gov/safewater/ arsenic.html). 
Information on NRC's committee process is also available on the NAS 
website under Frequently Asked Questions at www.nationalacademies.org/ 
about/faq4.html. Specifically, the subcommittee is reviewing relevant 
toxicological and health-effects studies published and data developed 
since the 1999 NRC report, including the toxicological risk-related 
analyses performed by EPA in support of its regulatory decision-making 
for arsenic in drinking water and the health effects discussion in 
EPA's SAB December 2000 report entitled, ``Arsenic Proposed Drinking 
Water Regulation: A Science Advisory Board Review of Certain Elements 
of the Proposal (EPA 2000f).'' The subcommittee is addressing only 
scientific topics relevant to toxicological risk and health effects of 
arsenic.
    The subcommittee will meet approximately three times to discuss and 
evaluate issues and will produce a consensus report in August 2001. On 
May 21, the NRC subcommittee heard presentations from EPA, the Small 
Business Administration, a consultant for Albuquerque, researchers, 
industry, environmental and other interested or affected parties. At 
the open session meeting on June 20, the committee heard from EPA's 
Administrator. The draft consensus report will undergo the established 
NRC peer review process before NRC issues the final report that is 
available to the public. In addition, EPA will make the NRC's report 
available to the general public and request comment on its 
recommendations as part of a notice this fall.
3. Approach To Review of Cost of Compliance Estimates
    The National Drinking Water Advisory Council (NDWAC) is chartered 
under the Federal Advisory Committee Act (FACA) to advise, consult 
with, and make recommendations to EPA. The Agency asked the NDWAC, and 
the Council agreed to convene a panel of nationally recognized 
technical experts to review the cost of compliance estimates associated 
with the regulatory options that were considered in the proposed rule 
and discussed in the January 2001 rule. On May 4, 2001 (EPA 2001d), EPA 
requested nominations for the working group (66 FR 22551). In 
particular, the working group is reviewing the costing methodologies, 
assumptions, and information underlying the system-size as well as the 
aggregated national estimate of system costs underlying the January 
2001 arsenic in drinking water rule. As a part of this review, the 
group is evaluating significant alternative costing approaches or 
critiques where there is adequate information upon which to evaluate 
the basis for such alternate estimates or approaches.
    The working group first met May 29-30, 2001, as announced in the 
May 22,

[[Page 37622]]

2001, Federal Register (EPA 2001f). Working group members have been 
asked to attend a series of meetings (June 28-29 in Denver, Colorado; 
July 9-10 in Phoenix, Arizona; and July 19-20 in Washington, DC) over 
the summer of 2001 (June 15, 2001 Federal Register, EPA 2001h), 
participate in discussion of key issues and assumptions at these 
meetings, and review work products of the working group. The working 
group will make a recommendation to the full NDWAC based on its review 
of the national cost estimates. The NDWAC, will in turn, make a 
recommendation to EPA. All NDWAC working group meetings and full NDWAC 
meetings are open to the public, and meeting information is posted on 
the calendar accessible from www.epa.gov/safewater. EPA posts the 
working group member list and meeting summaries at http://www.epa.gov/safewater/ndwac/council.html. The report of the working group and the 
final recommendations of the NDWAC will be made available for public 
review and comment.
4. Approach To Review of Benefits Estimates
    The EPA Science Advisory Board (SAB), which also is chartered under 
the FACA, was established in 1978 by the Environmental Research, 
Development, and Demonstration Authorization Act (ERDDAA) (42 U.S.C. 
4365), to provide such scientific advice as may be requested by the 
Administrator. At the request of the Agency the SAB has convened a 
panel, the Arsenic Rule Benefits Review Panel (ARBRP), to review the 
Agency's analysis of quantified and unquantified benefits associated 
with the arsenic drinking water rule. The Agency has asked this panel 
of nationally recognized technical experts to review the Agency's 
analysis of quantified and unquantified arsenic benefits analysis as 
required by SDWA, and evaluate whether the components, methodology, 
criteria and estimates reflected in EPA's benefits analysis are 
reasonable and appropriate in light of: (1) The SAB's benefits transfer 
report (EPA 2000d; available on the SAB Website at www.epa.gov/sab/eeacf013.pdf); (2) EPA's Guidelines for Preparing Economic Analyses 
(EPA 20001; www.epa.gov/economics); (3) relevant requirements of the 
Safe Drinking Water Act (SDWA; www.epa.gov/safewater/sdwa/sdwa.html); 
(4) NDWAC recommendations to EPA on benefits (unpublished October 29, 
1998, Benefits Working Group Report to the National Drinking Water 
Advisory Council; EPA 1998b); and (5) recent literature.
    Panel members have been asked to attend one or more meetings over 
the summer of 2001, participate in discussion of key issues and 
assumptions at these meetings, and review the previously described 
documents and literature. The first meeting of the ARBRP will be on 
July 19-20, in Washington, D.C. (EPA 2001i). To ensure that the SAB's 
recommendations are fully considered in decision making, the Agency has 
asked for a report to be made available to the Administrator in August 
2001 to coincide with the findings and recommendations from independent 
reviews of the health effects by NRC and costs by NDWAC. All ARBRP 
meetings are open to the public and time will be allotted for 
presentations by the public. Meeting information is posted on the 
calendar accessible from www.epa.gov/safewater. The report of the ARBRP 
and the final recommendations of the SAB will be made available for 
public review and comment.

C. How Did EPA Assess the Occurrence of Arsenic?

1. Summary of Arsenic Occurrence Analysis
    EPA's occurrence estimates were a fundamental building block in 
cost of compliance estimates as well as its benefits estimates. To 
develop this occurrence estimate, EPA used arsenic compliance 
monitoring data consisting of almost 77,000 observations from 25 States 
to estimate the distribution of arsenic in finished drinking water in 
public water systems (PWS) in the U.S. These States voluntarily 
submitted the data from public water systems. Figure V-1 in the June 
2000 proposed rule (65 FR 38888 at 38906) is a map of the 25 States 
from which EPA used data to estimate occurrence. These States are 
distributed throughout the U.S., with at least one located in each of 
the seven geographic regions that the Agency used in its analysis (EPA 
2000h). Ten other States (Florida, Idaho, Iowa, Louisiana, 
Pennsylvania, South Dakota, Maryland, Nebraska, Vermont, and West 
Virginia) submitted compliance monitoring data, but those data were not 
complete enough to estimate State occurrence (66 FR 6976 at 7029). EPA 
lists the database parameters used to derive its national occurrence 
estimate in Appendix D-2 of the occurrence document (EPA 2000h).
    In order to estimate a national occurrence distribution of arsenic, 
EPA began with individual water systems and built up estimates for 
States, regions, and the nation. For each PWS in its database, the 
Agency estimated the mean arsenic concentration over time in finished 
water. (Although MCL compliance is determined by computing a running 
annual average of quarterly samples, EPA elected to characterize 
arsenic occurrence in each system in terms of the mean arsenic 
concentration over time, rather than by a set of running averages; for 
the benefits estimates, the long-term mean is preferable, because 
health risks are determined by mean exposure to arsenic over time; for 
the cost estimates, the approach used may not accurately predict costs 
in all cases, since some systems with a long-term average below the 
standard might still exceed it during some compliance cycles.) Next, 
the Agency collected the system mean estimates into State 
distributions, then merged the State distributions into regional and 
finally, national distributions. The regions used in the analysis are 
shown in Figure V-1 in the June 2000 proposed rule (65 FR 38888 at 
38906). In combining the regional distributions into a national 
distribution, the Agency weighted each region by the total number of 
systems in the region, not just the number of systems in the States in 
its database. This procedure has the same effect as assigning the 
regional distributions to the 25 States for which there are no 
observations in the database.
    EPA estimated separate arsenic occurrence distributions for 
community water systems (CWS) and non-transient, non-community water 
systems (NTNCWS), and for systems with ground water (GW) and surface 
water (SW) sources. Systems identified as having ground water under the 
influence of surface water were treated as surface water systems. Table 
III.C-1 (66 FR 6976 at 6996) shows the Agency had data from 17 States 
for ground water NTNCWS, compared to 25 States for CWS, so there are, 
on average, fewer States with NTNCWS data in each region. Moreover 
there is no data about NTNCWS from any States in the Southeast region 
(Alabama, Florida, Georgia, Mississippi, and Tennessee). EPA therefore 
used the occurrence distribution for ground water CWS as a surrogate 
for ground water NTNCWS in the Southeast. For surface water NTNCWS, EPA 
used the occurrence estimates from surface water CWS, because the 
characteristics of source water for NTNCWS are expected to be similar 
to source water for CWS, and there is a larger CWS data set to draw 
from.
    Table III.C-5 of the January 2001 rule (66 FR 6976 at 6998) shows 
EPA's estimated arsenic occurrence distributions for the U.S. The 
results are comparable to those of two other arsenic

[[Page 37623]]

occurrence studies: the National Arsenic Occurrence Survey (Frey and 
Edwards, 1997) and USGS (2000).
    In addition to the distributions of system means, EPA 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. EPA estimated separate ISCVs for ground water CWS, surface 
water CWS, and ground water NTNCWS. Each of these ISCVs was assumed to 
be constant throughout the U.S. EPA used the estimated ISCVs as part of 
its cost simulation model summarized today in section II.E.
    Since the completion of its occurrence analysis for the arsenic 
rule (EPA 2000h), EPA has received additional occurrence data from one 
State, North Carolina. More occurrence data from other States may 
become available in the future.
2. Request for Occurrence Comments
    Some stakeholders expressed concern that EPA estimated nationwide 
occurrence using data from only 25 States, and that the national 
occurrence estimate was therefore not as reliable as it should have 
been. Many commenters provided occurrence data about their individual 
system, which could not be used in the statistical approach. Some 
commenters suggested that EPA should either request data from all 
States, or else augment its data set with data from other sources. As 
noted in EPA's Response-to-Comments document for the January 2001 rule, 
EPA's occurrence estimates are based on finished water data from States 
for which data of adequate quality in the range of interest (3-20 
g/L) were available. EPA requests comment on the assumptions, 
data, methodologies, and results of its occurrence analysis, as well as 
any new occurrence data that commenters believe EPA should consider in 
its occurrence assessment. EPA also requests comment on whether it is 
appropriate to use long-term averages as a proxy for compliance in 
computing costs for various levels of the standard.

D. How did EPA Evaluate the Health Risks of Arsenic in Drinking Water?

1. Summary of Health Risk Elements
    Arsenic ingestion at various levels has been linked to a variety 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 associated with 
cardiovascular, pulmonary, immunological, neurological, endocrine, and 
reproductive and developmental effects. In almost all cases, the 
drinking water levels at which these associations have been found are 
higher than the current 50 g/L standard and the levels 
typically found in U.S. drinking water. Extrapolating these 
associations down to levels of regulatory interest (i.e., less than 50 
g/L) entails uncertainty and there has been debate among 
stakeholders over the appropriate methodology for doing so. Of all the 
studies noted in the report issued by the National Research Council 
(NRC 1999) and literature reviewed by EPA, the Agency believes that 
those studies focusing on bladder and lung cancer provide the best 
basis to quantify dose response relationships and extrapolate these 
relationships down to the levels of regulatory interest. Therefore, the 
Agency based its assessment of the quantifiable health risk reduction 
benefits on the risks of arsenic-induced bladder and lung cancers.
    The Agency's approach for the health risk quantitative analysis 
includes five components. First, EPA developed relative exposure factor 
(REF) distributions, where the life-long REFs indicate the sensitivity 
of exposure of an individual relative to the sensitivity of exposure of 
an ``average'' person weighing 70 kilograms and consuming approximately 
2 liters of water per day. These REFs incorporate data from the recent 
EPA water consumption study (EPA 2000a) with age, sex, and weight data. 
Second, EPA calculated arsenic occurrence distributions for the 
population exposed to arsenic levels above 3 g/L. Third, EPA 
chose risk distributions for bladder and lung cancer for the analysis 
from Morales et al. (2000), a peer-reviewed article published in July 
2000, 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 Notice of 
Data Availability (NODA) (EPA 2000e) published on October 20, 2000 (65 
FR 63027). 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. 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 actual risks faced by U.S. populations 
exposed to arsenic concentrations at or above 3 g/L in their 
drinking water. Finally, EPA identified three significant sources of 
uncertainty and made adjustments to address one of these to derive 
alternate, lower risk estimates that reflect exposure to arsenic in 
cooking water and in food in Taiwan. EPA also recognized and considered 
qualitatively two other sources of uncertainty (e.g., the shape of the 
dose response curve at low exposure levels and the different health and 
nutritional status of the Taiwanese study population relative to the 
typical U.S. population) that it was not able to quantify (see page 
7021 of the January 22, 2001 rule) that might also lead to lower risk 
estimates if it were possible to account for them quantitatively. EPA 
also indicated, in the preamble to the January 2001 rule, that it 
believed that its health risk analysis comprised a plausible range of 
likely risk associated with various concentrations of arsenic in 
drinking water. This analysis is described in more detail at pages 
7001-7009 and 7020-7021 of the January 22, 2001, rule. Finally, EPA 
considered the non-monetizable benefits associated with avoiding 
certain adverse health impacts known to be caused by arsenic at higher 
concentrations, which also may be associated with low level 
concentrations, which included other nonquantified cancer endpoints and 
adverse cardiovascular, pulmonary, immunological, neurological, 
endocrine, reproductive, and developmental effects. EPA listed 
reductions in these health effects as unquantified benefits in Tables 
III.E-3 and III.E-7 that listed the monetizable benefits. In moving off 
the feasible MCL of 3 g/L, EPA considered the costs and 
benefits, including the unquantified benefits (66 FR 6976 at 7022 and 
7023).
2. Request for Comment on Health Issues
    EPA has asked the National Academy of Sciences (NAS) to update the 
findings and recommendations of the NRC report, Arsenic in Drinking 
Water (NRC 1999), based on new studies and analyses, including EPA's 
risk analyses. EPA recognizes that there are a number of uncertainties 
inherent in its risk analysis that reflect the state of existing 
science, available research, and the difficulties associated with 
applying epidemiological data from one

[[Page 37624]]

population to another. The NAS, in its 1999 NRC report, and the Science 
Advisory Board, in its 2000 report (EPA 2000f), highlighted a number of 
key issues, as have stakeholders who have participated in the arsenic 
rule development process. EPA requests comment and any additional data 
that may be available in the following areas:
    (1) Are the data from the southwestern Taiwanese studies presented 
in the NRC report still the most appropriate data set for the dose-
response assessment and risk estimation? What are the uncertainties in 
the data on which the risk estimates are based, and what is the likely 
effect of these uncertainties on the quantitative risk estimates?
    (2) Did EPA's analyses of U.S. risk provide appropriate adjustments 
for population differences, including factors such as diet, health 
status, life style (e.g., smoking, cooking water use), when 
extrapolating from the Taiwanese study population to the U.S. 
population? Is it possible and appropriate for EPA to make additional 
quantitative adjustments to account for such differences using existing 
data?
    (3) Part of EPA's analysis requires the determination of an arsenic 
level that is projected to cause an adverse effect in one per cent of 
the population (ED01). Is the dose-response analysis 
conducted by EPA, as well as any available more recent data, adequate 
for estimating an ED01?
    (4) Did EPA's analysis appropriately consider and characterize the 
available data on mode of action of arsenic, the dose-response 
information, and the information on uncertainties, when assessing the 
public health impacts?
    (5) Are EPA's risk estimates at 3, 5, 10, and 20 g/L 
consistent with available scientific information, including information 
from new studies?
    (6) What is known or can be inferred about the latency period 
between exposure to arsenic in drinking water and increased incidence 
of cancer based on existing research?

E. How Did EPA Calculate the National Costs of Compliance With the 
Arsenic in Drinking Water Rule?

1. Summary of Cost Elements of January 22, 2001 Rule and Record
    EPA listed the national cost estimate for the January 22, 2001, 
rule in Table III.E.1 (66 FR 6976 at 7010). (This information is 
discussed at greater length in the Technology and Cost document (EPA 
2000i) in the record for the January 22, 2001, rule.) The table 
presented national cost estimates for the MCL of 10 g/L and 
the other three options considered in the proposed rule published on 
June 22, 2000. Treatment costs represent the vast majority of the total 
national costs for all four MCL options. For the MCL of 10 g/
L, the treatment costs are estimated to be $169.6 million per year 
using a 3% discount rate and $193 million per year using a 7% discount 
rate.
    In summary, EPA developed the cost of compliance estimate for the 
arsenic in drinking water rule as follows. The treatment costs were 
derived using occurrence data, treatment train unit costs, and decision 
trees. The occurrence data provide 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 that facilities would 
likely install to comply with the options considered for the revised 
arsenic standard. An analysis of the available treatment trains for 
arsenic removal and the unit costs for the 13 treatment trains (listed 
in Exhibits A-7 through A-22 in EPA 2000g) used in the national cost 
estimate are described in the December 2000 document entitled 
``Technologies and Cost for the Removal of Arsenic in Drinking Water'' 
(EPA 2000i). The decision tree and a description of the model used to 
calculate the national cost estimate are described in the December 2000 
document entitled Arsenic in Drinking Water Rule Economic Analysis (EPA 
2000g).
    Many of the comments EPA received on the June 2000 proposed rule 
were on the national cost estimate and the available treatment 
technologies. EPA reviewed these comments and comments from the 
Drinking Water Committee of EPA's Science Advisory Board. The January 
2001 rule incorporates a number of changes based on these comments, 
which are discussed in detail in sections V.F and V.G of the preamble 
(66 FR 6976 at 7034) and are discussed more extensively, in the 
Technology and Cost document (EPA 2000i). The major changes are 
summarized in today's document.
    EPA received many comments on the proposed rule stating that the 
Agency did not adequately consider problems with waste generation and 
disposal when evaluating which technologies would be most appropriately 
used for achieving compliance. Prior to issuing the arsenic rule, EPA 
re-examined the 25 treatment trains considered for the proposed rule. 
The Agency eliminated five treatment trains due to concerns about 
hazardous waste. The ability to discharge brine streams to publicly 
owned treatment works (POTWs) was another issue related to waste 
generation and disposal. Comments indicated that potential increases in 
total dissolved solids and technically based local limits at the POTW 
would limit the discharge of brines to POTWs. EPA eliminated brine 
discharge to POTWs from activated alumina processes as a Best Available 
Technology due to the arsenic concentration in the brine. EPA also 
significantly reduced the use of anion exchange with POTW discharge in 
the decision tree for the January 2001 rule. These issues are discussed 
in greater detail on pages 7036-7038 of the January 2001 preamble.
    The national cost estimate generated a large number of stakeholder 
comments. Many of these comments stated that EPA underestimated the 
costs for implementing the proposed rule. Many of these comments 
referred to the report ``Cost Implications of a Lower Arsenic MCL'' as 
the basis for their comments. This report (Frey et al. 2000a) was 
published by the American Water Works Association Research Foundation 
(AWWARF) in May 2000. The national cost estimates in the AWWARF report 
were updated in October 2000 (Frey et al. 2000b). For the MCL of 10 
g/L, the October 2000 Update lists a national compliance cost 
estimate of $345 million per year with no sensitivity considerations 
(lower bound) and $585 million per year with sensitivity considerations 
(upper bound). (These upper and lower bound estimates result from 
different assumptions about cost model input variables.) EPA reviewed 
the May 2000 AWWARF report and the October 2000 update and summarized 
factors in the report in detail on pages 7040-7041 of the January 2001 
preamble that EPA identified as being key reasons for the differences 
in cost estimates. These factors include differences in flow rate 
assumptions, unit costs, and national estimates for arsenic occurrence. 
The Arsenic Response-to-Comments Document (EPA 2000j) also includes 
more detail on EPA's review of the national cost estimates in ``Cost 
Implications of a Lower Arsenic MCL.''
    In commenting on the proposed rule, the SAB also expressed concern 
that the Agency's cost estimates appeared low. The SAB identified two 
concerns in particular: (1) The assumptions regarding disposal options 
for brine and other residuals (see discussion in section II. E. 1. of 
the revision EPA made to address these concerns); and (2)

[[Page 37625]]

whether the technologies identified as BAT have been implemented or 
optimized for arsenic removal at the treatment plant scale, and whether 
doing so would reduce their effectiveness for the other purpose for 
which they have been designed, in which case compliance costs could be 
underestimated.
    A Working Group of the National Drinking Water Advisory Council 
(NDWAC) is reviewing the costing methodologies, assumptions, and 
information underlying the system-size as well as the aggregated 
national estimate of system costs of the arsenic rule. As a part of 
this review, the Working Group is also evaluating significant 
alternative costing approaches where there is adequate information upon 
which to evaluate the basis for the alternate estimates or approaches, 
including the AWWARF cost reports. The group may identify and comment 
on additional factors affecting these cost estimates (e.g., number of 
entry points to the distribution system) in addition to those discussed 
in the January 2001 rule. The NDWAC Working Group will make a 
recommendation to the full NDWAC based on their review of the national 
cost estimates.
2. List of Cost Issues and Request for Comments
    Specific questions related to the cost of compliance analysis for 
the arsenic rule on which EPA is interested in receiving public comment 
include the following:
    (1) Did EPA use appropriate ``baseline'' assumptions (e.g., 
occurrence, co-occurring contaminants, affected systems, entry points, 
design and average flows, availability of land, in-place treatment)? If 
not, how could these assumptions be improved and what data would 
support such revised assumptions?
    (2) Did EPA identify an appropriate set of treatment ``trains'' and 
make appropriate assumptions about the costs of technologies included 
in those treatment trains as a part of the process of developing 
national cost estimates? Has EPA identified restrictions that may limit 
or eliminate treatment technology and residuals management 
combinations, including the application of treatment technologies to 
arsenic on a large scale, and integration of arsenic removal with other 
treatment plant objectives? If not, how could these assumptions and 
inputs be improved?
    (3) Did EPA use an appropriate ``decision tree'' for the final 
rule? If not, how can that decision tree be improved?

F. How Did EPA Calculate the Benefits of the Arsenic Rule?

1. Summary of the January 22, 2001, Benefits Assessment
    Of the various health effects linked to arsenic ingestion, in the 
January 2001 rule EPA prepared a quantitative assessment of lung and 
bladder cancer. Other health effects and possible non-health benefits 
that EPA was unable to quantify were considered qualitatively as 
required by SDWA, and as discussed in the January 2001 rule.
    The process by which EPA analyzed the benefits of reduced bladder 
and lung cancer cases for the arsenic rule involved several steps. 
These steps included the calculation of risk reductions, calculation of 
the number of cancer cases avoided, monetization of avoided bladder and 
lung cancer cases, qualitative analysis of non-quantifiable benefits, 
and a sensitivity analysis of benefits estimates to examine the impacts 
of discounting over a latency period and accounting for other 
adjustments such as voluntariness and controllability.
    Using the risk estimate calculations described in section II.C. of 
today's notice, EPA calculated the number of bladder and lung cancer 
cases avoided for CWSs and NTNCWSs (see Table III.D-3, 66 FR 6976 at 
7009). Note that EPA derived separate cancer risks for NTNCWSs, as 
summarized in the preamble to the June 2000 proposal (pages 38952-
38956) and described in section 5.3.3 of the Economic Analysis (EPA 
2000g). The lower- and upper-bound risk estimates were applied to the 
exposed population to generate cases avoided for Community Water 
Systems (CWS) serving fewer than 1 million customers. Since the Agency 
had arsenic occurrence information for very large systems (those 
serving greater than one million customers), their system-specific 
arsenic distributions could be directly computed and cases avoided 
calculated from these distributions (appendix b.2 in EPA 2000g). In the 
proposal and January 2001 rule, EPA adjusted the number of bladder 
cancer cases avoided to reflect a possible lower mortality rate in 
Taiwan (a lower death rate would increase the number of estimated 
Taiwanese cases to include more non-fatal cancers) than was assumed in 
the risk assessment process, which is described in section 5.4.1 of the 
Arsenic Economic Analysis (EPA 2000g). The Agency adjusted the upper-
bound U.S. cancer cases avoided to assume an 80% mortality rate for 
bladder cancer and 100% fatality for lung cancer in Taiwan. The Agency 
then divided the U.S. cases avoided into morbidity (non-fatal) and 
premature fatality cases based on U.S. mortality rates of 26% for 
bladder cancer and 88% for lung cancer.
    In order to monetize the benefits from bladder and lung cancer 
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. As noted, EPA assumed a 26% mortality rate for 
bladder cancer and an 88% mortality rate for lung cancer. The current 
VSL value used by the Agency is $6.1 million, in 1999 dollars (66 FR 
6976 at 7012). VSL does not refer to the value of an identifiable life, 
but rather to the value of small reductions in mortality risks in a 
population. A ``statistical'' life is thus the sum of small individual 
risk reductions across an entire exposed population and is not the 
value for saving a particular individual's life.
    Second, EPA used a Willingness to Pay (WTP) value (66 FR 6976 at 
7012) to monetize the cancer cases that do not result in a mortality. A 
WTP value for avoiding a non-fatal cancer is currently not available; 
therefore the Agency used a WTP estimate to reduce a case of chronic 
bronchitis as a proxy. 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 of the Arsenic 
Economic Analysis (EPA 2000g).
    There are also a number of non-quantifiable benefits that EPA 
considered in its analysis of the benefits for the arsenic rule. Chief 
among these are certain health impacts identified in various studies 
involving arsenic levels greater than 50 g/L. To date, the 
extent to which these impacts occur at levels below 50 g/L has 
not been determined. These additional health effects include other 
cancers such as skin, kidney, nasal passage, liver, and prostate 
cancers and non-cancer endpoints such as cardiovascular, pulmonary, 
immunological, neurological, and endocrine impacts. These health 
effects and the relevant studies linking these health effects to 
arsenic in drinking water are discussed in section III.D of the 
preamble to the rule (66 FR 6976 at 7000). Table III.E-3 in the 
preamble to the rule (66 FR 6976 at 7012) shows the estimated benefits 
from reducing arsenic in drinking water for arsenic levels of 3, 5, 10, 
and 20 g/L. This table also includes a listing of the 
potential non-quantifiable benefits associated with reducing arsenic in 
drinking water.
    The Agency also provided a sensitivity analysis on benefits 
estimates in the rule to examine the impacts of

[[Page 37626]]

discounting over a latency period and adjustments for income growth and 
the nature of the risk (the extent to which the risk is voluntary and 
controllable). In a July 2000 letter, the EEAC of the SAB recommended 
that benefits estimates for environmental regulations include 
adjustments for latency and for income growth in the primary analysis, 
while adjustments for other factors, such as the extent to which risk 
is voluntary or controllable, be addressed in a sensitivity analysis. 
For the arsenic rule, the Agency chose to address all of these factors 
in a sensitivity analysis because it lacked quantitative data on cancer 
latency periods associated with arsenic exposure in drinking water. The 
sensitivity analysis used a range of latencies from 5 to 20 years and 
discount rates of 3 and 7%. It also adjusted for income growth and 
included a 7% increase in valuation to account for the lack of 
voluntariness and controllability of risk. The sensitivity analysis 
showed that the adjustments to monetized benefits could range from a 
10% increase (accounting for income growth only) to a 70% decrease 
(accounting for income growth, latency, and voluntariness/
controllability). The sensitivity analysis did not provide estimates 
accounting only for latency and income growth. Tables III.E-5 and 
III.E-6 in the January 2001 preamble illustrate the sensitivity of 
monetized benefits estimates to different assumptions for latency 
period duration, discount rate, rate of income growth, and inclusion of 
a voluntariness and controllability factor. A more detailed description 
of this analysis is shown in section III.E.2.b of the preamble to the 
rule (66 FR 6976 at 7012) and Chapter 5 of the Arsenic Economic 
Analysis (EPA 2000g).
2. List of Key Benefit Analysis Issues
    Significant issues associated with the benefits analysis for the 
arsenic in drinking water rule addressed topics such as the timing of 
health benefits accrual (latency) and the Agency's consideration of 
non-quantifiable benefits in its regulatory decision-making process. 
The Agency requests comments on these and related issues in the 
following summary.
    Specific issues related to the benefits analysis for the arsenic 
rule include:
    a. Discounting benefits over a cancer latency period. The SAB has 
recommended that EPA should discount its monetized benefits over a 
cancer latency period (EPA 2000d). A latency period is generally 
defined as the time between exposure to an environmental carcinogen and 
the resulting cancer fatality. Precise information on the latency 
period for most cancers is generally unavailable, but latency periods 
can be significant. The latency period may also be defined in several 
different ways. This period can be defined as the time between exposure 
and the resulting fatality or the time between exposure and onset or 
diagnosis of the cancer. This definition does not consider the time 
between exposure and early adverse changes at the cellular level in the 
body (i.e., before clinical expression of cancer). Definition of the 
latency period can have a significant impact on the length of time over 
which benefits are discounted, especially for cancer illnesses where 
the period of morbidity (e.g., non-fatal illness) is lengthy. EPA has 
specifically requested the National Academy of Sciences, in their 
review of the health risks of arsenic in drinking water, to examine 
this issue in more detail and discuss what is known or can be inferred 
about the latency period between exposure to arsenic in drinking water 
and increased incidence of cancer based on existing research.
    b. Consideration of non-quantifiable benefits in the regulatory 
decision-making process. Some stakeholders have argued that EPA did not 
fully consider the non-quantifiable benefits in its decision-making 
process for the arsenic rule and that EPA should have performed 
sensitivity analyses to characterize the potential magnitude of these 
benefits. Other stakeholders have argued that EPA placed too much 
emphasis on non-quantifiable benefits in the choice of the arsenic MCL. 
EPA requests comment on how to handle non-quantifiable benefits in its 
selection of a final arsenic MCL.
3. Request for Comments on Benefits
    (1) How should total benefits and costs and incremental benefits 
and costs be addressed in the rule in analyzing regulatory alternatives 
to ensure appropriate consideration by decision makers and the public?
    (2) How should latency be addressed in the benefits estimates for 
the final rule when existing literature does not provide specific 
quantitative estimates of latency periods associated with exposure to 
arsenic in drinking water?
    (3) Should reduction/elimination of exposure be evaluated as a 
separate benefits category, in addition to or in conjunction with 
mortality and morbidity reduction?
    (4) How should health endpoints (other than bladder and lung 
cancer) be addressed in EPA's analysis, when existing literature does 
not provide specific quantification, to ensure appropriate 
consideration by decision makers and the public?
    (5) How should uncertainties be addressed in EPA's analysis to 
ensure appropriate consideration by decision makers and the public?

G. What Process Is EPA Planning for Review of Financial, Technical, and 
Planning Tools for Small Systems?

1. Small System Review Process
    As part of its overall review of the arsenic rule, EPA wishes to 
reassess the financial, technical, and planning tools available to help 
small systems achieve compliance. SDWA provides special consideration 
for small systems in a number of areas and also created the Drinking 
Water State Revolving Fund (DWSRF) to help systems, including small 
systems, comply with the provisions of the Act. The DWSRF provides low 
interest loans, and allows forgiveness of principal for communities 
identified by the States as disadvantaged. The Agency believes that 
State capacity development strategies offer a useful framework within 
which to address small system issues. The Agency seeks comment to help 
it reassess the financial, technical, and planning tools available to 
small systems and determine what, if any, additional steps the Agency 
should take to facilitate compliance with a revised arsenic standard.
2. List of Small System Issues
    a. Affordability, availability of financial assistance, and 
treatment technology. Extensive concerns have been raised regarding the 
ability of households served by small systems to afford compliance with 
a revised arsenic standard. In the January 2001 rule, the Agency 
attempted to address many of these concerns. The preamble of the 
January 2001 rule emphasized the framework established by SDWA to 
consider affordability and the tools available to help address 
affordability concerns. These tools include financial assistance; and 
extended compliance time frames through exemptions. SDWA also provides 
for small system variances, but EPA determined in the January 2001 rule 
that affordable small system compliance technologies are available for 
all categories of system size, so this option is not available for the 
new arsenic standard published in the January 2001 rule.
    The January 2001 preamble points out that about $1 billion/year is 
being made available to large and small systems through the Drinking 
Water State Revolving Fund (DWSRF), and about $780 million/year is 
being made

[[Page 37627]]

available through the water and waste disposal program of the Rural 
Utilities Service (RUS) of the Department of Agriculture. EPA also 
noted that almost one quarter of the DWSRF loans have been made to 
systems States classified as disadvantaged (66 FR 6796 at 7020).
    Treatment technology is another issue around which small system 
concerns have clustered. The major concern voiced in this regard has 
been that small systems may not be able to apply the lower cost 
compliance technologies identified by EPA. The most significant issue 
relates to the application of Point-of-Use (POU) technology. Under the 
arsenic rule, EPA has designated POU technology as an affordable 
compliance technology. The Agency recognizes that application of POU 
technology for compliance is not presently a common practice and water 
systems would face a number of challenges in implementing such an 
approach. EPA's probability decision trees (Exhibits A-7 through A-22 
in the Economic Analysis (EPA 2000g)) assigned POU technologies to 
approximately 5% of systems serving fewer than 500 in the decision 
tree. The Agency believes that customers may be quite supportive of a 
POU solution once they understand the cost-savings it offers based upon 
pilot studies and information that EPA has analyzed.
    b. SDWA Capacity Development Framework. SDWA recognized that small 
systems would find it more challenging than large systems to achieve 
the public health protection goals of the Act. In amending SDWA in 
1996, Congress found that effective protection of public health 
requires water systems with adequate managerial, technical, and 
financial capacity. Congress further found that compliance with the 
requirements of SDWA continues to be a concern at public water systems 
experiencing technical and financial limitations; and Federal, State, 
and local governments need more resources and more effective authority 
to attain the objectives of SDWA. In response to these findings, 
Congress included in the amendments a number of provisions designed to 
help EPA and the States address the needs of small systems, including, 
for the first time, the State Revolving Loan Fund for assisting 
drinking water systems in complying with standards.
    These provisions included new flexibility for EPA in setting 
standards and compliance time frames; explicit authority to allow 
Point-of-Use technologies for compliance; broader and more flexible 
authority for issuing exemptions to provide systems with additional 
time to comply; small system variances in cases where EPA determines 
that affordable small system compliance technologies are not available; 
and financial assistance through a new drinking water State revolving 
fund. In order to help focus these and other tools on helping systems 
develop managerial, technical, and financial capacity, Congress created 
a strong incentive for States to develop a ``capacity development 
strategy.'' States were given broad flexibility in designing their 
strategy, but were required to consider a number of issues including 
how they would use the authority and resources of SDWA or other means 
to assist systems in complying with regulations and to encourage the 
development of partnerships between systems to enhance their capacity.
    All States have developed strategies consistent with the SDWA 
framework. EPA believes that implementation of a revised arsenic 
standard will be the first major test of these strategies. SDWA clearly 
anticipated that systems would need to enhance their technical, 
financial, and managerial capacity in order to achieve the public 
health protection objectives of the law. The extensive concerns which 
have been voiced about systems ability to meet a revised arsenic 
standard serve to confirm the need for such enhancements.
    Successful implementation of a revised standard will require that 
States focus on developing system capacity by fully utilizing the 
flexibilities available under SDWA. In particular, the Agency believes 
that appropriate use of these three provisions will be essential:
    (1) DWSRF assistance, including principal forgiveness for 
disadvantaged communities and set-aside funds to assist systems through 
a State's capacity development strategy.
    (2) Exemptions to allow additional time for systems that 
demonstrate the need for such time to achieve compliance. Such systems 
of any size can be granted an additional 3 years beyond the compliance 
date for the revised MCL to achieve compliance, while systems serving 
3300 persons can be granted up to 6 additional years beyond that date. 
This extra time can be used to obtain financial assistance or undertake 
restructuring or other changes to achieve compliance.
    (3) Application of Point-of-Use (POU) technology.
    States may wish to utilize their capacity development strategy as a 
framework within which to plan the most effective utilization of all of 
the tools available. In addition to the SDWA provisions discussed 
previously, another important tool is financial assistance available 
through the United States Department of Agriculture's Rural Utilities 
Service.
3. Request for Small Systems Comment
    EPA invites comments on all aspects of small system compliance with 
a revised arsenic standard. In particular, the Agency seeks comment on 
the following issues:
    (1) What additional guidance, information, or other assistance, if 
any, do States need to help them develop and apply system-level 
affordability criteria (for prioritizing use of drinking water 
revolving funds in a State; and for determining whether or not to grant 
exemptions)?
    (2) Will exemptions allowing needy systems additional time to 
achieve compliance be a useful tool? What guidance, information, or 
other assistance, if any, should EPA make available to States and or 
systems relative to exemptions?
    (3) To what extent can systems lower their compliance costs or 
enhance their ability to comply by forming partnerships with other 
systems or otherwise restructuring their operations? What barriers 
(physical and/or institutional) exist to the formation of these 
partnerships? What guidance, information, or other assistance, if any, 
should EPA make available to States and or systems to assist in the 
formation of system-level partnerships?
    (4) What challenges or barriers exist to adoption of POU 
technology? What do EPA and or the States need to do to facilitate 
application of POU technology?
    (5) What additional guidance, information, or other assistance do 
States need to help them refine their capacity development strategies 
to facilitate compliance with a revised arsenic standard?

III. Process To Be Employed After Technical Reviews and Public 
Comment

A. How Will EPA Notify the Public of Results of the Technical Reviews 
and the Nature of the Public Comments?

    As previously noted, the findings of the expert review panels will 
be made publicly available. In addition, EPA will publish a notice with 
a summary of these findings for public comment. The purpose of the 
notice will be to provide EPA's perspective on the findings of the 
review of the costs, benefits, and science underlying the arsenic rule. 
In addition, the notice will summarize comments received on this 
proposal and EPA's perspective on those comments. Finally, the notice 
will provide an indication of how the Agency plans to synthesize this

[[Page 37628]]

new information with respect to final decisions on the arsenic in 
drinking water rule. EPA expects that the notice will be published in 
the Fall of 2001.

B. What Process Will EPA Use To Make Final Decisions on the Rule?

    The process of making final decisions on the arsenic in drinking 
water regulation will involve legal, regulatory, policy, and scientific 
considerations. The results of the expert panels' reviews and public 
comment will be significant and important sources of information that 
will be fully considered by the Agency as it makes a final decision. In 
making a final decision, EPA will also exercise judgment and discretion 
based on the record and all applicable legal, regulatory, and policy 
requirements. EPA expects to make a final decision on how to proceed 
with the arsenic rule by February 22, 2001, after considering the 
reviews and public comments.

IV. Administrative Requirements

A. Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866, [58 Federal Register 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:
    (1) have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that the January 22, 2001, rule is a ``significant 
regulatory action'' because it will have annual costs of more than $100 
million. Because this proposal is an extension of a rulemaking 
published on January 22, 2001 (66 FR 6976), and is based on the record 
for that rulemaking, EPA has complied with this Executive Order through 
the economic analyses prepared for the January 22, 2001, rulemaking. 
Those analyses were reviewed by OMB. In addition, this action was 
submitted to OMB for review. Changes made in response to OMB 
suggestions or recommendations are documented in the public record for 
W-99-16-VI.

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 of Counsel for Advocacy.
    For the purposes of assessing the impacts of today's rule on all 
three categories of small entities, EPA considered small entities to be 
systems serving 10,000 or fewer customers. In accordance with the RFA 
requirements, EPA proposed using this alternative definition for all 
three categories of small entities in the Federal Register (63 FR 7605 
at 7620; February 13, 1998), requested public comment and consulted 
with SBA regarding the alternative definition as it relates to small 
businesses. In the preamble to the final Consumer Confidence Reports 
(CCR) regulation (63 FR 4511; August 19, 1998), EPA stated its intent 
to establish this alternative definition for regulatory flexibility 
assessments under the RFA for all drinking water regulations and has 
thus used it in this proposed rulemaking.
    As noted in the previous section, this proposal is an extension of, 
and relies on the record of, a previous rulemaking concerning the same 
regulatory options. In accordance with section 603 of the RFA, EPA 
prepared an initial regulatory flexibility analysis (IRFA) for the 
original proposed rule, published in the Federal Register on June 22, 
2000 (EPA 2000b), 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 1999). The June 2000 proposed rule 
presented a summary of the Panel's recommendations (65 FR 38888 at 
38963).
    As required by section 604 of the RFA, EPA also prepared a final 
regulatory flexibility analysis (FRFA) for the January 2001 rule (EPA 
2001a). The FRFA and the January 2001 arsenic rule's preamble (66 FR 
6976 at 7047) addressed the issues raised by public comments on the 
IRFA, which was part of the regulatory impact analysis for the proposed 
rule (65 FR 38888 at 38962; EPA 2000b). The FRFA (EPA 2000j) is 
available for review in the docket. The previous analyses encompass all 
of the options proposed again today, and as a result, EPA is relying on 
those analyses for compliance with the RFA for this proposal.

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, local, and tribal 
governments and the private sector. Under section 202 of UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, 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 UMRA generally requires EPA to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule. The provisions of section 205 do 
not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including Tribal 
governments, it must have developed under section 203 of the

[[Page 37629]]

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 the January 22, 2001, 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. Because today's proposal is an 
extension of the January 2001 arsenic rulemaking and discusses only 
those options which were fully analyzed in the previous rulemaking, EPA 
is relying on the record of the January, 2001 rule to provide the 
analyses required by UMRA. A detailed description of this analysis is 
presented in EPA's Economic Analysis of the arsenic rule (EPA 2000g) 
which is included in the Office of Water docket for the arsenic rule, 
and summarized in the January 2001 preamble (66 FR 6976 at 7049). 
Through targeting mailing of this notice to entities on the arsenic 
mailing list, we will continue to solicit State, local, and Tribal 
access and dialog on the arsenic rule. EPA will also develop a small 
government agency plan.

D. Paperwork Reduction Act (PRA)

    The information collection requirements in this proposed rule were 
previously submitted for approval to the Office of Management and 
Budget (OMB) under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. As noted in previous sections, today's proposal is 
an extension of a previous rulemaking which analyzed the same options 
presented today. As a result, EPA is relying on the PRA analyses 
prepared for the January 2001 rulemaking and its proposal for 
compliance with the PRA for this rule. OMB has already reviewed and 
approved the information collection request (ICR) in the previous 
rulemaking and assigned OMB control number 2040-0231. This action does 
not impose any additional information collection burden under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, section 12(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., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    EPA's analysis of the NTTAA's application to this rulemaking is 
described in the June 22, 2000, proposal at 65 FR 38971-38972 and the 
January 22, 2001, preamble at 66 FR 7051. EPA requests comment on this 
analysis.

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.
    In the preamble to the June 2000 proposal (65 FR 38888 at 38972), 
EPA noted arsenic concerns raised during the March 12, 1998, 
environmental justice stakeholder meeting. The issues raised included 
confusion over units of measure of test results (i.e., ppb and 
g/L), effects on sensitive subpopulations (e.g., incidence of 
diabetes in Tribal communities), infeasibility of regional 
consolidation, affordable treatments for small systems, increased 
access to funding, considering regional needs in standard setting, more 
training, and protection of low income communities. The Agency took 
these issues into consideration during the development of the January 
2001 arsenic rule and the response-to-comments document. The public is 
invited to comment on EPA's analysis of environmental justice as it 
relates to today's proposal (which was discussed in the June 2000 
proposal and January 2001 rule) and to recommend additional methods to 
address environmental justice concerns with the approach for treating 
arsenic in drinking water.

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 
proposed rule is not subject to Executive Order 13045 because the 
Agency does not have reason to believe that the environmental health 
risks or safety risks addressed by this action present a 
disproportionate risk to children. Nonetheless, EPA evaluated the 
environmental health and safety effects of arsenic in drinking water on 
children as part of the January 2001 rule and its proposal. The public 
is invited to submit or identify any new peer-reviewed studies and data 
that assess results of early life exposure to arsenic via ingestion.

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 that preempts State

[[Page 37630]]

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 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 proposed rule will have federalism 
implications; these are the same federalism implications discussed and 
analyzed in the June 2000 and January 2001 arsenic rules. EPA provided 
the Office of Management and Budget (OMB) with a federalism summary 
impact statement (FSIS) in the preamble to the proposed and final 
rules. EPA provided the FSIS on page 7052 of the January 2001 rule (66 
FR 6976).

I. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249; November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and the Indian tribes.''
    This proposed rule may have tribal implications. It may have 
substantial direct compliance costs on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and the Indian tribes, as specified in Executive Order 
13175. As a result of administrative review of the regulation published 
on January 22, 2001, the Environmental Protection Agency (EPA) is 
requesting additional comments on the regulatory options via this 
proposal. In developing the January 2001 rule, EPA consulted with 
Tribal governments to permit them to have meaningful and timely input 
into its development, as described in the preamble (66 FR 6976 at 
7052). In the spirit of Executive Order 13175, and consistent with EPA 
policy to promote communications between EPA and tribal governments, 
EPA specifically solicits additional comment on this proposed rule from 
tribal officials.

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

    In accordance with sections 1412 (d) and (e) of SDWA, the Agency 
discussed or submitted possible arsenic rule requirements to the 
Science Advisory Board, National Drinking Water Advisory Council 
(NDWAC), and to the Secretary of Health and Human Services and 
requested comment from the Science Advisory Board on the arsenic rule, 
as described in the January 2001 preamble (66 FR 6976 at 7053). In 
addition, the April 23, 2001 proposed rule (66 FR 20580) outlines the 
additional consultations planned with NDWAC. EPA will continue contacts 
with the Department of Health and Human Services during the arsenic 
rule review process.

K. 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 National Primary Drinking Water Regulation (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. EPA provided the analysis 
performed to fulfill this statutory obligation for the January 2001 
rule (EPA 2000a). During this reconsideration process, EPA will review 
the capacity issues further.

L. Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355; May 22, 2001), provides that agencies shall prepare and submit 
to the Administrator of the Office of Information and Regulatory 
Affairs, Office of Management and Budget, a Statement of Energy Effects 
for certain actions identified as ``significant energy actions.'' 
Section 4(b) of Executive Order 13211 defines ``significant energy 
actions'' as ``any action by an agency (normally published in the 
Federal Register) that promulgates or is expected to lead to the 
promulgation of a final rule or regulation, including notices of 
inquiry, advance notices of proposed rulemaking, and notices of 
proposed rulemaking: (1)(i) that is a significant regulatory action 
under Executive Order 12866 or any successor order, and (ii) is likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy; or (2) that is designated by the Administrator of the 
Office of Information and Regulatory Affairs as a significant energy 
action.''
    We have not prepared a Statement of Energy Effects for this 
proposed rule because this rule is not a significant energy action, as 
defined in Executive Order 13211. While this rule is a significant 
regulatory action under Executive Order 12866, it is not likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy.

V. References

Chiou, H.-Y., S.-T. Chiou, Y.-H. Hsu, Y.-L. Chou, C.-H. Tseng, M.-L. 
Wei, and C.-J. Chen. 2001. Incidence of transition cell carcinoma 
and arsenic in drinking water: A follow-up study of 8,102 residents 
in an arsenic-endemic area in Northeastern Taiwan. American Journal 
of Epidemiology. 153:411-418.
Frey, M. M. and M. A. Edwards. 1997. Surveying Arsenic Occurrence. 
Journal of the American Water Works Association. 89(3):105-117.
Frey, M., J. Chwirka, S. Kommineni, and Z. Chowdhury. 2000a. ``Cost 
Implications of a Lower Arsenic MCL''. May 5, 2000. American Water 
Works Association Research Foundation, Denver, CO.
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``Update Cost Implications of a Lower Arsenic MCL''. October 10, 
2000.
Morales, K.H., L. Ryan, T.-L. Kuo, M.-M. Wu and C.-J. Chen. 2000. 
Risk of internal cancers from arsenic in drinking water. 
Environmental Health Perspectives 108:655-661.
National Research Council. 1999. Arsenic in Drinking Water. 
Washington, DC. National Academy Press.
US EPA. 1996. Proposed Guidelines for Carcinogenic Risk Assessment; 
Notice. Federal Register. Vol 61, No. 79, p. 17960. April 23, 1996.
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Confidence Reports. Final Rule. Federal Register. Vol. 63, No. 160, 
p. 44512. August 19, 1998.

[[Page 37631]]

US EPA. 1998b. Benefits Working Group Report to the National 
Drinking Water Advisory Council, unpublished. October 29, 1998.
US EPA. 1999. Analytical Methods Support Document for Arsenic in 
Drinking Water. Prepared by Science Applications International 
Corporation under contract with EPA. December 1999. EPA-815-R-00-
010. Available on web at www.epa.gov/safewater/arsenic.html.
US EPA. 2000a. 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.
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Notification Rule; Final Rule. Federal Register. Vol. 65, No. 87, p. 
25982. EPA 815-Z-00-001. May 4, 2000. Available on web at 
www.epa.gov/safewater/pn.html.
US EPA. 2000c. 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. EPA 815-Z-00-004 June 22, 2000. Available on web at 
www.epa.gov/safewater/arsenic.html.
US EPA. 2000d. 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. 2000e. National Primary Drinking Water Regulations; Arsenic 
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. Available on web 
at www.epa.gov/safewater/arsenic.html.
US EPA. 2000f. Arsenic Proposed Drinking Water Regulation: A Science 
Advisory Board Review of Certain Elements of the Proposal. EPA-SAB-
DWC-1-001. December 12, 2000. Available on web at www.epa.gov/sab.
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for Office of Ground Water and Drinking Water. EPA 815-R-00-026 
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Arsenic from Drinking Water. EPA 815-R-00-028. December 2000. 
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III. December 2000.
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Final Arsenic Rule. December 29, 2000.
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of Fatal Cancer Risk Reduction. EPA-SAB-EEAC-00-013. July 27, 2000. 
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and Clarifications to Compliance and New Source Contaminants 
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and Clarifications to Compliance and New Source Contaminants 
Monitoring; Notice of proposed rulemaking. Federal Register. Vol. 
66, No. 78, p. 20580. April 23, 2001. Available on web at 
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and Clarifications to Compliance and New Source Contaminants 
Monitoring; Notice; request for nominations to the Arsenic Cost 
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and Clarifications to Compliance and New Source Contaminants 
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May 2001.
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National Drinking Water Advisory Council; Notice of Public Meeting. 
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Advisory Committee Meetings. Vol. 66, No. 127, p. 34924. July 2, 
2001.
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Departments and Agencies. Federal Register. Vol. 66, No 66, pg. 
7702. January 24, 2001. Available on web at www.epa.gov/safewater/arsenic.html.
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A retrospective analysis of the occurrence of arsenic in ground 
water resources of the United States and limitations in drinking 
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Report: 99-4279. May 2000. Available on web at: http://co.water.usgs.gov/trace/arsenic.

List of Subjects in 40 CFR Parts 141 and 142

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

    Dated: July 13, 2001.
Christine Todd Whitman,
Administrator.
[FR Doc. 01-18093 Filed 7-18-01; 8:45 am]
BILLING CODE 6560-50-P