[Federal Register Volume 69, Number 173 (Wednesday, September 8, 2004)]
[Rules and Regulations]
[Pages 54476-54555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12017]



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Part III





Environmental Protection Agency





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40 CFR Part 432



Effluent Limitations Guidelines and New Source Performance Standards 
for the Meat and Poultry Products Point Source Category; Final Rule

  Federal Register / Vol. 69, No. 173 / Wednesday, September 8, 2004 / 
Rules and Regulations  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 432

[FRL-7631-2]
RIN 2040-AD56


Effluent Limitations Guidelines and New Source Performance 
Standards for the Meat and Poultry Products Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today's final rule revises Clean Water Act effluent 
limitations guidelines and new source performance standards for meat 
producing facilities. These revisions apply to existing as well as new 
slaughtering facilities ( ``first processors''), to facilities that 
further process meat to produce products like sausages (``further 
processors'') and to independent rendering facilities that convert 
inedible by-products to items like pet food (``renderers''). The rule 
establishes, for the first time, effluent limitations guidelines and 
new source performance standards for existing and new poultry first and 
further processors. Today's guidelines and standards establish 
limitations on wastewater discharges of specified pollutants for meat 
and poultry products facilities that discharge directly to U.S. waters. 
There are no current regulations for facilities that discharge 
indirectly, and EPA has not adopted regulations for those facilities. 
Today's rule applies to wastewater discharges from existing meat and 
poultry facilities above specified production thresholds. Today's new 
source standards apply to new meat facilities above the production 
thresholds and to all new poultry facilities irrespective of their 
production level. EPA is not revising the current effluent limitations 
guidelines or new source performance standards for meat first or 
further processors below the production threshold.
    This final rule will benefit the Nation's receiving waters by 
reducing discharges of conventional pollutants, ammonia, and nitrogen. 
EPA estimates that compliance with this regulation will reduce 
discharges of nitrogen up to 27 million pounds per year, ammonia by 3 
million pounds per year, and conventional pollutants by 4 million 
pounds per year.

DATES: This regulation shall become effective October 8, 2004. The 
Director of the Federal Register approves the incorporation by 
reference on October 8, 2004, of certain publications listed in this 
rule in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. For judicial 
review purposes, this final rule is promulgated as of 1:00 p.m. 
(Eastern time) on September 22, 2004, as provided in 40 CFR 23.2.

ADDRESSES: The docket for today's final rule is available for public 
inspection at the Water Docket in the EPA Docket Center, (EPA/DC) EPA 
West, Room B102, 1301 Constitution Ave., NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: For additional technical information 
contact Samantha Lewis at (202) 566-1058. For additional economic 
information contact James Covington at (202) 566-1034.

SUPPLEMENTARY INFORMATION:

General Information

A. What Entities Are Potentially Regulated by This Final Rule?

    Entities potentially regulated by this action include:

------------------------------------------------------------------------
                                   Examples of
           Category                 regulated      Primary SIC and NAICS
                                    entities               codes
------------------------------------------------------------------------
Industry......................  Facilities
                                 engaged in
                                 first
                                 processing,
                                 further
                                 processing, or
                                 rendering of
                                 meat and
                                 poultry
                                 products, which
                                 may include the
                                 following
                                 sectors:.
                                Meat Packing      2011 (SIC)
                                 Plants.          31161 (NAICS)
                                Animal (except    311611 (NAICS)
                                 Poultry)
                                 Slaughtering.
                                Meat Processed    311612 (NAICS)
                                 from Carcasses.
                                Sausages and      2013 (SIC)
                                 Other Prepared   311612 (NAICS)
                                 Meat Products.
                                Poultry           2015 (SIC)
                                 Slaughtering     311615 (NAICS)
                                 and Processing.
                                Meat & Meat       422470 (NAICS)
                                 Product
                                 Wholesalers.
                                Poultry           311615 (NAICS)
                                 Processing.
                                Rendering and     311613 (NAICS)
                                 Meat By-Product
                                 Processing.
                                Support           11521 (NAICS)
                                 Activities for
                                 Animal
                                 Production.
                                Prepared Feed     2048 (SIC)
                                 and Feed         311119 (NAICS)
                                 Ingredients for
                                 Animals and
                                 Fowls, Except
                                 Dogs and Cats.
                                Dog and Cat Food  311111 (NAICS)
                                 Manufacturing.
                                Other Animal      311119 (NAICS)
                                 Food
                                 Manufacturing.
                                All Other         311999 (NAICS)
                                 Miscellaneous
                                 Food
                                 Manufacturing.
                                Animal and        2077 (SIC)
                                 Marine Fats and  311613 (NAICS)
                                 Oils.
                                Livestock         0751 (SIC)
                                 Services,        311611 (NAICS)
                                 Except
                                 Veterinary..
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your facility is regulated by this action, you should carefully examine 
the applicability criteria listed at 40 CFR parts 432.1, 432.10, 
432.20, 432.30, 432.40, 432.50, 432.60, 432.70, 432.80, 432.90, 
432.100, 432.110, and 432.120 of today's rule. If you have questions 
regarding the applicability of this action to a particular entity, 
consult the person listed for technical information in the preceding 
FOR FURTHER INFORMATION CONTACT section.

B. How Can I Get Copies of This Document and Other Related Information?

1. Docket
    EPA has established an official public docket for this action under 
Docket ID

[[Page 54477]]

No. OW-2002-0014. The official public docket consists of the documents 
specifically referenced in this action, any public comments received, 
and other information related to this action. Although a part of the 
official docket, the public docket does not include information claimed 
as Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. The official public docket is the 
collection of materials that is available for public viewing at the 
Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center 
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through 
Friday, excluding legal holidays. The telephone number for the Public 
Reading Room is (202) 566-1744, and the telephone number for the Water 
Docket is (202) 566-2426. Every user is entitled to copy 266 pages per 
day before incurring a charge. The Docket may charge 15 cents a page 
for each page over the page limit plus an administrative fee of $25.00.
2. Electronic Access
    You may access this Federal Register document electronically 
through the EPA Internet under the ``Federal Register'' listings at 
http://www.epa.gov/fedrgstr/.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to view public comments, 
access the index listing of the contents of the official public docket, 
and to access those documents in the public docket that are available 
electronically. Once in the system, select ``search,'' then key in the 
appropriate docket identification number: OW-2002-0014.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. EPA's policy is that copyrighted material will not be 
placed in EPA's electronic public docket but will be available only in 
printed, paper form in the official public docket. To the extent 
feasible, publicly available docket materials will be made available in 
EPA's electronic public docket. When a document is selected from the 
index list in EPA Dockets, the system will identify whether the 
document is available for viewing in EPA's electronic public docket. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the docket facility identified in section B.1.

C. What Other Information Is Available To Support This Final Rule?

    The two major documents supporting the final regulations are the 
following:
     ``Technical Development Document for the Final Effluent 
Limitations Guidelines and Standards for the Meat and Poultry Products 
Point Source Category'' [EPA-821-R-04-011] referred to in the preamble 
as the Technical Development Document (TDD): This document presents the 
technical information that formed the basis for EPA's decisions in 
today's final rule. The TDD describes, among other things, the data 
collection activities, the wastewater treatment technology options 
considered by the Agency as the basis for effluent limitations 
guidelines and standards, the pollutants found in Meat and Poultry 
Products (MPP) wastewaters, and the estimation of pollutant removals 
associated with certain pollutant control options.
     ``Economic and Environmental Benefits Analysis of the 
Final Meat and Poultry Products Rule'' [EPA-821-R-04-010] referred to 
as the Economic and Environmental Benefits Analysis (EEBA). This 
document presents the methodology employed to assess economic impacts, 
environmental impacts, and environmental benefits of the final rule and 
the results of the analyses.
    Major supporting documents are available in hard copy from the 
National Service Center for Environmental Publications (NSCEP), U.S. 
EPA/NSCEP, P.O. Box 42419, Cincinnati, Ohio, USA 45242-2419, (800) 490-
9198, www.epa.gov/ncepihom. You can obtain electronic copies of this 
preamble and rule as well as major supporting documents at EPA Dockets 
at www.epa.gov/edocket and at www.epa.gov/guide/mpp.

D. What Process Governs Judicial Review for Today's Final Rule?

    In accordance with 40 CFR part 23.2, today's rule is considered 
promulgated for the purposes of judicial review as of 1:00 p.m. Eastern 
Daylight Time, September 22, 2004. Under Section 509(b)(1) of the Clean 
Water Act (CWA), judicial review of today's effluent limitations 
guidelines and new source performance standards may be obtained by 
filing a petition in the United States Circuit Court of Appeals for 
review within 120 days from the date of promulgation of these 
guidelines and standards. Under Section 509(b)(2) of the CWA, the 
requirements of this regulation may not be challenged later in civil or 
criminal proceedings brought to enforce these requirements.

E. What Are the Compliance Dates for Today's Final Rule?

    Each National Pollutant Discharge Elimination System (NPDES) permit 
must include all technology-based effluent limitations promulgated by 
EPA. Consequently, all reissued permits for existing direct dischargers 
must require compliance with today's limitations. Direct dischargers 
that are new sources must comply with applicable new source performance 
standards (NSPS) on the date the new sources begin discharging. For 
purposes of the revised NSPS being promulgated today, a source is a new 
source if it commences construction after October 8, 2004.
    Today's rule does not revise the new source performance standards 
for wastewater discharges from small meat products facilities (i.e., 
those new meat facilities whose production is below the subcategory-
specific production threshold) in Subparts A-I. Therefore, the 
respective new source dates for small facilities in Subparts A-I are 
not affected by today's final rule.

F. How Does EPA Protect Confidential Business Information (CBI)?

    Certain information and data in the record supporting the final 
rule have been claimed as CBI and, therefore, EPA has not included 
these materials in the record that is available to the public in the 
Water Docket. Further, the Agency has withheld from disclosure some 
data not claimed as CBI because release of this information could 
indirectly reveal information claimed to be confidential. To support 
the rulemaking while preserving confidentiality claims, EPA is 
presenting in the public record certain information in aggregated form, 
masking facility identities, or using other strategies.

Table of Contents

I. Definitions, Acronyms, and Abbreviations Used in This Document
II. Under What Legal Authority Is This Final Rule Issued?
III. What Is the Legislative Background of This Rule?
    A. Clean Water Act
    B. Existing Clean Water Act requirements applicable to meat and 
poultry processors
IV. How Was This Final Rule Developed?
    A. February 2002 Proposed Rule
    B. August 2003 Notice of Data Availability
    C. Public Comments
    D. Public Outreach

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V. How Is the Final Rule Different From the Proposed Rule and the 
Approaches Discussed in the NODA?
    A. Definitions
    B. Pollutants
    C. Costs and Economic Impacts
    D. Loadings
    E. Environmental Assessment
    F. Treatment Options
    G. Limitations
VI. Applicability
    A. To Whom does This Rule Apply?
    B. What Is a First Processor?
    C. What Is a Further Processor?
    D. What Is an Independent Renderer?
    E. What Is Included as Meat? What Is Included as Poultry?
    F. What if a Facility Processes Both Meat and Poultry? How Is It 
Categorized?
    G. Are Indirect Dischargers Covered by This Final Rule?
    H. What Changes Have Been Made to the Regulations for Meat 
Products?
    I. What Wastewaters Are Covered?
    J. Which Pollutants Have Limitations and Standards Established 
by This Rule?
    K. Does This Regulation Impose Monitoring Requirements?
VII. What Is the Basis of the Final Regulation?
    A. What Options Did EPA Consider for the Final Rule?
    B. What Is the Basis for EPA's Selected Technology Options for 
Subcategories A-D (Meat First Processors)?
    C. What Is the Basis for EPA's Selected Technology Options for 
Subcategory E (Meat Small Further Processors)?
    D. What Is the Basis for EPA's Selected Technology Options for 
Subcategories F-I (Meat Further Processing)?
    E. What Is the Basis for EPA's Selected Technology Options for 
Subcategory J (Independent Rendering)?
    F. What Is the Basis for EPA's Selected Technology Options for 
Subcategory K (Poultry First Processing)?
    G. What Is the Basis for EPA's Selected Technology Options for 
Subcategory L (Poultry Further Processing)?
VIII. How Did EPA Estimate the Pollutant Loadings and Compliance 
Costs for the Final Rule?
    A. Pollutant Reductions
    B. Compliance Costs
IX. What Are the Economic Impacts Associated With This Rule?
    A. What Methods Were Used To Determine the Costs and Economic 
Impacts?
    B. How Many Closures Are Projected as a Result of the Final 
Rule?
    C. What Company-Level Impacts, Other Than Closure, Are Projected 
Due to the Final Rule?
    D. What Market Level Impacts Are Projected?
    E. What Are the Potential Impacts on Foreign Trade?
    F. What Are the Potential Impacts on Communities?
    G. What Are the Projected Barriers to Entry for New Sources?
    H. What Do the Cost-Reasonableness and Cost-Effectiveness 
Analyses Show?
X. Water Quality Analysis and Environmental Benefits
    A. Summary of the Environmental Benefits
    B. What Pollutants Are in MPP Wastewater, and How Do They Affect 
Human Health and the Environment?
    C. How Will Water Quality and Human Health Be Improved by This 
Rule?
XI. What Are the Other (Non-Water Quality) Environmental Impacts and 
Benefits?
    A. Air Emissions
    B. Energy Consumption
    C. Solid Waste Generation
XII. How Will This Rule Be Implemented?
    A. Implementation of the Limitations and Standards for Direct 
Dischargers
    B. Upset and Bypass Provisions
    C. Variances and Modifications
XIII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act

I. Definitions, Acronyms, and Abbreviations Used in This Document

Act--The Clean Water Act
Agency--U.S. Environmental Protection Agency
AP--Alkylphenol polyethoxylate
APE--Alkylphenol ethoxylate
ASM--Annual Survey of Manufacturers, Census Bureau
AWQC--Ambient Water Quality Criteria
BAT--Best available technology economically achievable, as defined by 
section 304(b)(2)(B) of the Act
BCT--Best conventional pollutant control technology, as defined by 
section 304(b)(4) of the Act
BOD, BOD5--Biochemical oxygen demand
BMP--Best management practices, as defined by section 304(e) of the Act
BPJ--Best professional judgment
BPT--Best practicable control technology currently available, as 
defined by section 304(b)(1) of the Act
CAA--Clean Air Act (42 U.S.C. 7401 et seq., as amended)
CAFO--Concentrated animal feeding operation
CAPDET--Computer Assisted Procedure for Design and Evaluation of 
Wastewater Treatment Systems
CBI--Confidential business information
CBOD--Carbonaceous biochemical oxygen demand
CE--Cost-effectiveness (ratio of compliance costs to the pounds of 
pollutants removed)
CFR--Code of Federal Regulations
CFU--Colony-forming unit
COD--Chemical oxygen demand
Conventional Pollutants--Constituents of wastewater as determined by 
section 304(a)(4) of the Act and the regulations there under 40 CFR 
401.16, including pollutants classified as biochemical oxygen demand, 
suspended solids, oil and grease, fecal coliform, and pH
CWA--Clean Water Act (33 U.S.C. 1251 et seq., as amended)
DAF--Dissolved air flotation
DCN--Document control number
Direct Discharger--An industrial discharger that introduces wastewater 
to a water of the United States with or without treatment by the 
discharger
DMR--Discharge Monitoring Report
DO--Dissolved oxygen
EBT--Earnings before tax
EEBA--Economic and Environmental Benefits Analysis of the Final Meat 
and Poultry Products Rule (EPA-821-R-04-010)
Effluent Limitation--A maximum amount, per unit of time, production, 
volume or other unit, of each specific constituent of the effluent from 
an existing point source that is subject to limitation. Effluent 
limitations may be expressed as a mass loading or as a concentration 
(e.g., milligrams of pollutant per liter discharged).
ELG--Effluent limitations and guidelines
ELWK--Equivalent live weight killed
End-of-Pipe Treatment--Refers to those processes that treat a plant 
waste stream for pollutant removal prior to discharge
ER--Estrogen receptor
FDF--Fundamentally different factor
FR--Federal Register
FSIS--Food Safety Inspection Service
FTE--Full-time equivalents (related to the number of employees)
HACCP--Hazard Analysis and Critical Control Point
HAP--Hazardous air pollutant
HEM--Hexane extractable material
Indirect Discharger--An industrial discharger that introduces 
wastewater into a publicly owned treatment works
kg--Kilogram
kkg--1,000 kilograms
lbs/yr--Pounds per year
LTA--Long-term average concentration
LWK--Live weight killed
mg/L--Milligrams per liter
mL--Milliliter
MPN--Most probable number
MPP--Meat and Poultry Products point source category

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NAICS--North American Industry Classification System
NAWQA--National Water Quality Assessment, a U. S. Geological Survey 
program
NCEPI--EPA's National Center for Environmental Publications
NODA--Notice of Data Availability (August 13, 2003; 68 FR 48472)
Nonconventional Pollutants--Pollutants that have not been designated as 
either conventional pollutants or priority pollutants
NPDES--National Pollutant Discharge Elimination System, a Federal 
program by which industry dischargers, including municipalities, obtain 
permits to discharge pollutants to the nation's water, under section 
402 of the Act
NPV--Net present value
NSPS--New Source Performance Standards
NTTAA--National Technology Transfer and Advancement Act
NWPCAM--The National Water Pollution Control Assessment Model
O&G--Oil and grease
O&M--Operation and maintenance
OMB--Office of Management and Budget
P--Phosphorus
PCS--Permit Compliance System
PE--Pound-equivalents (the units used to weight toxic pollutants)
POTW--Publicly owned treatment works
ppm--parts per million
Priority Pollutants--The 126 pollutants listed at 40 CFR part 423, 
appendix A
PSES--Pretreatment standards for existing sources of indirect 
discharges, under section 307(b) of the Act
PSNS--Pretreatment standards for new sources of indirect discharges, 
under sections 307(b) and (c) of the Act
PV--Present value
RCRA--Resource Conservation and Recovery Act
RFA--Regulatory Flexibility Act
SBA--U.S. Small Business Administration
SBREFA--Small Business Regulatory Enforcement Fairness Act
SER--Small entity representative
SIC--Standard Industrial Classification, a numerical categorization 
scheme used by the U.S. Department of Commerce to denote segments of 
industry
SIU--Significant Industrial User as defined in the General Pretreatment 
Regulations (40 CFR part 403)
SOP--Standard operating procedure
TDD--Technical Development Document for the Final Effluent Limitations 
Guidelines and Standards for the Meat and Poultry Products Point Source 
Category (EPA-821-R-04-011)
TKN--Total Kjeldahl nitrogen
TMDL--Total maximum daily load
TRI--Toxic Release Inventory
TSE--Transmissible spongiform encephalopathy
TSS--Total suspended solids
UMRA--Unfunded Mandates Reform Act
U.S.C.--United States Code
USDA--United States Department of Agriculture
WQI--Water Quality Index
WQS--Water quality standards

II. Under What Legal Authority Is This Final Rule Issued?

    The U.S. Environmental Protection Agency is promulgating these 
regulations under the authority of Sections 301, 304, 306, 307, 308, 
402, and 501 of the Clean Water Act, 33 U.S.C. 1311, 1314, 1316, 1318, 
1342, and 1361.

III. What Is the Legislative Background of This Rule?

A. Clean Water Act

    Congress adopted the Clean Water Act (CWA) to ``restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters'' (Section 101(a), 33 U.S.C. 1251(a)). To achieve this 
goal, the CWA prohibits the discharge of pollutants into navigable 
waters except in compliance with the statute. The Clean Water Act 
confronts the problem of water pollution on a number of different 
fronts. Its primary reliance, however, is on restricting the types and 
amounts of pollutants discharged from various industrial, commercial, 
and public sources of wastewater.
    Congress recognized that regulating only those sources that 
discharge effluents directly into the Nation's waters would not be 
sufficient to achieve the CWA's goals. Congress was also concerned 
about pollutants from facilities that discharge wastewater through 
sewers flowing to publicly-owned treatment works (POTWs). Consequently, 
the CWA requires EPA to promulgate nationally applicable pretreatment 
standards for those pollutants in wastewater from indirect dischargers 
which pass through, interfere with, or are otherwise incompatible with 
POTW operations (Section 307(b) and (c), 33 U.S.C. 1317(b) and (c)). 
Generally, pretreatment standards are designed to ensure that 
wastewater from direct and indirect industrial dischargers are subject 
to similar levels of treatment. In addition, POTWs are required to 
develop and enforce local pretreatment limits applicable to their 
industrial indirect dischargers to satisfy local requirements (see 40 
CFR part 403.5).
1. Effluent Limitations Guidelines and Standards
    Direct dischargers must comply with effluent limitations in 
National Pollutant Discharge Elimination System (NPDES) permits; 
indirect dischargers must comply with pretreatment standards. Effluent 
limitations guidelines and standards are established by regulation for 
categories of industrial dischargers and are based on the degree of 
control that can be achieved using various levels of pollution control 
technology.
Best Practicable Control Technology Currently Available (BPT)--Section 
304(b)(1) of the CWA
    In the regulations, EPA defines BPT effluent limitations for 
conventional, toxic, and non-conventional pollutants. Section 304(a)(4) 
designates the following as conventional pollutants: biochemical oxygen 
demand (BOD5), total suspended solids (TSS), fecal coliform, 
pH, and any additional pollutants defined by the Administrator as 
conventional. The Administrator designated oil and grease (O&G) as an 
additional conventional pollutant on July 30, 1979 (see 44 FR 44501). 
EPA has identified 65 pollutants and classes of pollutants as toxic 
pollutants, of which 126 specific substances have been designated 
priority toxic pollutants (see Appendix A to 40 CFR part 403, reprinted 
after 40 CFR part 423.17). EPA considers all other pollutants to be 
non-conventional.
    In specifying BPT, EPA looks at a number of factors. EPA first 
considers the total cost of applying the control technology in relation 
to the effluent reduction benefits. The Agency also considers the age 
of the equipment and facilities, the processes used and any required 
process changes, engineering aspects of the control technologies, non-
water quality environmental impacts (including energy requirements), 
and such other factors as the EPA Administrator deems appropriate (CWA 
304(b)(1)(B)). Traditionally, EPA establishes BPT effluent limitations 
based on the average of the best performances of facilities of various 
ages, sizes, processes or other common characteristics within the 
industry. Where current performance is uniformly inadequate to meet 
effluent controls, BPT may reflect higher levels of control than 
currently in place in an industrial category if the Agency determines 
the technology can be practically applied.

[[Page 54480]]

Best Conventional Pollutant Control Technology (BCT)--Section 304(b)(4) 
of the CWA
    The 1977 amendments to the CWA required EPA to identify effluent 
reduction levels for conventional pollutants associated with BCT for 
discharges from existing industrial point sources. In addition to the 
other factors specified in Section 304(b)(4)(B), the CWA requires that 
EPA establish BCT limitations after considering a two-part ``cost-
reasonableness'' test. EPA explained its methodology for developing BCT 
limitations in July 1986 (see 51 FR 24974).
Best Available Technology Economically Achievable (BAT)--Section 
304(b)(2) of the CWA
    In general, BAT effluent limitations guidelines represent the best 
available economically achievable reduction in discharges of toxic and 
non-conventional pollutants by plants in the industrial subcategory or 
category. The factors considered in assessing BAT include the cost of 
achieving BAT effluent reductions, the age of equipment and facilities 
involved, the process employed, potential process changes, and non-
water quality environmental impacts, including energy requirements. The 
Agency retains considerable discretion in assigning the weight to be 
accorded these factors. BAT limitations may be based on effluent 
reductions attainable through changes in a facility's processes and 
operations. Where existing performance is uniformly inadequate, BAT may 
reflect a higher level of performance than is currently being achieved 
within a particular subcategory based on technology transferred from a 
different subcategory or category. BAT may be based upon process 
changes or internal controls, even when these technologies are not 
common industry practice.
New Source Performance Standards (NSPS)--Section 306 of the CWA
    NSPS reflect effluent reductions that are achievable based on the 
best available demonstrated control technology. New sources can install 
the best and most efficient production processes and wastewater 
treatment technologies. As a result, NSPS should represent the most 
stringent controls attainable through the application of the best 
available demonstrated control technology for all pollutants--
conventional, non-conventional, and priority pollutants. In 
establishing NSPS, EPA must consider the cost of achieving the effluent 
reduction, any non-water quality environmental impacts, and energy 
requirements.
Pretreatment Standards for Existing Sources (PSES)--Section 307(b) of 
the CWA
    PSES are designed to prevent the discharge of pollutants that pass 
through, interfere with, or are otherwise incompatible with the 
operation of publicly-owned treatment works (POTWs), including POTW 
sludge disposal methods. Pretreatment standards for existing sources 
are technology-based and are like BAT effluent limitations guidelines.
    You can find the General Pretreatment Regulations, which set forth 
the framework for the implementation of national pretreatment 
standards, at 40 CFR part 403.
Pretreatment Standards for New Sources (PSNS)--Section 307(c) of the 
CWA
    Like PSES, PSNS are designed to prevent the discharges of 
pollutants that pass through, interfere with, or are otherwise 
incompatible with the operation of POTWs. PSNS are to be issued at the 
same time as New Source Performance Standards. New indirect dischargers 
have the opportunity to incorporate into their plants the best 
available demonstrated control technologies. The Agency considers the 
same factors in promulgating PSNS as it considers in promulgating New 
Source Performance Standards.
2. Effluent Guidelines Planning Process--Section 304(m) Requirements
    Section 304(m) of the CWA requires EPA every two years to publish a 
plan for reviewing and revising existing effluent limitations 
guidelines and standards and for promulgating new effluent guidelines. 
On January 2, 1990, EPA published an Effluent Guidelines Plan (see 55 
FR 80) in which the Agency established schedules for developing new and 
revised effluent guidelines for several industry categories. Natural 
Resources Defense Council, Inc., and Public Citizen, Inc., challenged 
the Effluent Guidelines Plan in a suit filed in the U.S. District Court 
for the District of Columbia, (NRDC et al v. Reilly, Civ. No. 89-2980). 
On January 31, 1992, the Court entered a consent decree which, among 
other things, establishes schedules for EPA to propose and take final 
action on effluent limitations guidelines and standards for several 
point source categories. The amended consent decree requires EPA to 
take final action on the Meat and Poultry Products effluent guidelines 
by February 26, 2004.
    At the time EPA selected the Meat and Poultry Products (MPP) point 
source category for review, pathogens, nutrients, and oxygen-depleting 
substances were contributing 25 to 35 percent to reported water quality 
problems in impaired rivers and streams. EPA selected the meat and 
poultry products category, along with concentrated animal feeding 
operations and aquatic animal production, as sources of nutrients 
needing additional control. EPA also selected the MPP industry for 
review to analyze changes that have occurred in this industry in the 
United States since the development of the current regulations.

B. Existing Clean Water Act Requirements Applicable to Meat and Poultry 
Processors

    EPA issued effluent limitations guidelines and new source 
performance standards for meat slaughterhouses and packinghouses (40 
CFR part 432 subcategories A through D) in February 1974 and for meat 
further processing facilities (subcategories E through I) in January 
1975. EPA later revised or withdrew some of the BPT and BAT limitations 
due to litigation. The Agency also issued effluent limitations 
guidelines and new source performance standards for independent 
renderers (subcategory J) in January 1975, then promulgated revised BAT 
and NSPS limitations in October 1977. EPA proposed regulations for the 
poultry industry in April 1975, but never finalized them.

IV. How Was This Final Rule Developed?

A. February 2002 Proposed Rule

    On February 25, 2002, EPA published a proposed rule entitled, 
``Effluent Limitations Guidelines and New Source Performance Standards 
for the Meat and Poultry Products Point Source Category'' (see 67 FR 
8582). At that time, EPA proposed to revise the effluent limitations 
guidelines and standards for wastewater discharges from meat processing 
and independent rendering facilities and proposed new guidelines for 
poultry slaughtering and processing facilities.
    EPA identified six groups (12 subcategories) of facilities 
categorized by animal and processing type (i.e., meat or poultry; first 
processor (slaughterer), further processor, or renderer). EPA grouped 
several existing subcategories together (A-D, F-I) because of 
similarities in processes and products. This proposed subcategorization 
scheme allowed EPA to assess more accurately various

[[Page 54481]]

technology options in terms of compliance costs, pollutant reductions, 
benefits, and economic impacts.
    EPA proposed limitations and standards for two new subcategories (K 
and L) for poultry slaughterers and further processors. EPA proposed to 
add limitations for chemical oxygen demand (COD), ammonia (as 
nitrogen), total nitrogen, and total phosphorus. EPA proposed revised 
limitations and standards in nine of the ten existing subcategories, 
choosing not to propose to revise limitations for ``small'' facilities 
in subcategories A-D or for the smallest meat further processors 
(subcategory E). EPA also proposed lowering the production threshold 
for independent renderers so that facilities rendering 10 million 
pounds per year or more would be subject to the guidelines. EPA did not 
propose national pretreatment standards for indirect dischargers (see 
67 FR 8633; February 25, 2002) in any subcategory.

B. August 2003 Notice of Data Availability

    On August 13, 2003, EPA published a Notice of Data Availability 
(NODA) at 68 FR 48472. In the NODA, EPA discussed major issues raised 
in comments on the proposed rule; identified revisions EPA considered 
making to the technical and economic methodologies used to estimate 
compliance costs, pollutant loadings, and economic and environmental 
impacts; presented the results of these suggested methodology changes 
and incorporation of new (or revised) data; and summarized EPA's 
thinking on how these results could affect the final decisions. EPA 
asked for comments on the revised methodologies and data.

C. Public Comments

    This preamble includes a general summary of public comments in the 
discussions of the various issues addressed here. EPA has prepared a 
``Comment Response Document'' that includes responses to comments 
submitted for the proposed rule and the notice of data availability. 
All of the comments, including supporting documents submitted on 
today's action, are available for public review in the administrative 
record for this final rule, filed under docket number OW-2002-0014.
    The proposed regulations were published in the Federal Register on 
February 25, 2002 (67 FR 8582), and the comment period closed on June 
25, 2002. EPA received approximately 50 comments on the proposed rule. 
EPA received comments from a multitude of sources, including facility 
owners and operators, environmental groups, State agencies, publicly 
owned water treatment plants, representatives of various trade 
associations, and private citizens.
    The comment period for the Notice of Data Availability was from 
August 13 through October 14, 2003 (68 FR 48472). EPA received 
approximately 40 comments on the Notice.

D. Public Outreach

    In support of both the proposed rule and today's final rule, EPA 
has conducted outreach activities. During the development of the 
proposed regulations for meat and poultry products, EPA met with 
members of the stakeholder community through meetings, sampling trips, 
and site visits to collect information on waste management practices at 
meat and poultry product operations.
    After the proposed rule was published, EPA conducted two public 
outreach meetings on the proposed regulations and continued to meet 
with representatives of stakeholder groups, including representatives 
of various industry trade associations. EPA used several additional 
means to provide outreach to stakeholders, such as managing websites 
that post information related to these regulations. EPA provided 
supporting documents for the proposed rule on these sites. These 
documents included the ``Technical Development Document,'' ``Economic 
Analysis,'' and ``Environmental Assessment'' of the proposed 
regulations. These are available at www.epa.gov/guide/mpp/.

V. How Is the Final Rule Different From the Proposed Rule and the 
Approaches Discussed in the NODA?

    Since the proposed rule was published, EPA has incorporated a 
significant amount of additional technical and economic data into the 
database used for developing the effluent limitations guidelines and 
new source performance standards. In addition, EPA has modified certain 
assumptions used in its cost and pollutant loadings models. The NODA 
discussed in detail these new data (see 68 FR 48479; August 13, 2003). 
This section summarizes the major changes EPA has made for the final 
rule.

A. Definitions

1. How Has the Definition of a ``Small'' Poultry First Processor 
Changed?
    A small poultry first processor (Subcategory K) is a facility that 
slaughters 100 million pounds or less of poultry per year, measured as 
live weight killed. For the proposed rule, EPA had defined a small 
facility as slaughtering 10 million pounds or less per year, live 
weight killed.
    EPA examined the effect of increasing the threshold for small 
poultry slaughter facilities (Subcategory K) from the proposed 10 
million pounds per year. In its analysis, EPA considered two types of 
competition: Competition between poultry facilities for poultry market 
share, and competition with meat facilities as a substitute for 
poultry.
    Based on the most reliable studies performed to date, significant 
economies of scale exist in poultry slaughter. Extrapolating from 
Ollinger et al. (2000, DCN 25088), a 50 million pounds per year (lbs/
yr) poultry plant has about a 3 percent cost advantage over a 10 
million lbs/yr plant. This cost advantage increases with production: A 
150 million lbs/yr plant has perhaps a 15 percent cost advantage over 
the 10 million lbs/yr plant. Economies of scale in meat slaughter 
plants are not as significant: a 150 million lbs/yr meat slaughter 
plant might have a 5 percent cost advantage over a 10 million lbs/yr 
plant (extrapolated from MacDonald et al., 2000, DCN 328-001).
    In both sectors, compliance costs per pound of production are 
larger for the smaller plants. In the poultry sector, costs per pound 
for slaughtering plants with less than 50 million lbs/yr of production 
are projected to be 20 times larger than those for plants above that 
threshold. This exacerbates the competitive disadvantage under which 
the smaller poultry plants already operate. In the meat sector, the 
compliance cost per pound differential, while still substantial, is 
much smaller.
    In addition, EPA estimates that compliance costs per pound of 
poultry are about 40 percent larger than compliance costs per pound of 
meat. Consumers consider meat and poultry to be substitutes; if the 
price of poultry increases relative to that of meat, consumers will 
increase purchases of meat and decrease purchases of poultry. These 
changes are not large, but are statistically significant.
    In summary, EPA determined that (1) poultry facilities will be 
somewhat disadvantaged by the rule relative to meat facilities if the 
poultry slaughter facility production threshold stays at 10 million 
pounds/year (as proposed) or even at 50 million pounds/year, and (2) 
within the poultry sector, smaller slaughter facilities (at 10 million 
or 50 million pounds/year) will be disadvantaged by the rule relative 
to large slaughter facilities. Therefore, EPA chose to increase the 
small production threshold for small poultry slaughter

[[Page 54482]]

plants from 10 million lbs/yr to 100 million lbs/yr for the final rule. 
This reduces the estimated number of non-small facilities in 
subcategory K from 118 to 99. See Section 2.2.2 of the EEBA for 
discussion on the selection of the production threshold for Subcategory 
K for the final rule.
2. How Has the Definition of Subcategory E Facilities Been Clarified?
    The current Sec.  432.51 (Subpart E) regulations define ``small 
processor'' as ``an operation that produces up to 2,730 kg (6,000 lb) 
per day of any type or combination of finished product.'' Because using 
the words ``up to 6,000 lb per day'' may lead to questions on whether 
facilities that produce 6,000 pounds per day are covered by Subcategory 
E or Subcategories F-I, EPA is changing the language to be consistent 
with the production threshold language in other subcategories of the 
final rule. Therefore, in today's final rule, it states that 
Subcategory (Subpart) E facilities are those that produce no more than 
6,000 pounds per day of finished product.

B. Pollutants

1. How Have the Regulated Pollutants Changed?
    In the proposed rule, EPA proposed limitations for ammonia (as 
nitrogen), biochemical oxygen demand (BOD5), chemical oxygen 
demand (COD), fecal coliforms, oil and grease (as hexane-extractable 
material), pH, total nitrogen, total phosphorus, and total suspended 
solids (TSS). In the final rule, EPA decided not to include limits for 
COD or total phosphorus.
    In 2002, EPA proposed to add COD to the BPT limitations for non-
small meat facilities in Subcategories A-D, F-I, and J to better 
reflect the current BPT treatment technology (67 FR 8630; February 25, 
2002). EPA did not propose to establish COD limitations for the poultry 
subcategories. As discussed in the NODA (68 FR 48484; August 13, 2003), 
commenters stated that COD is not as accurate an indicator of a 
biological treatment system performance as BOD and carbonaceous BOD 
(CBOD), because biological treatment systems are not necessarily 
designed to remove nonbiodegradable chemical oxygen-demanding 
components. In addition, one commenter stated that COD removal would be 
financially burdensome. In today's final rule, EPA has taken these 
comments into account and has not established a COD limitation. This is 
because the current regulations for Subcategories A-D, F-I, and J 
already include limitations for BOD. EPA has determined that with the 
addition of limitations for ammonia (as nitrogen) where they did not 
exist previously and new limitations for total nitrogen, regulation of 
these parameters for these subcategories effectively controls these 
pollutant discharges of concern.
    EPA has decided not to regulate total phosphorus in today's final 
rule for any subcategory. In a change from the proposed rule, EPA did 
not set limitations or standards for total phosphorus because it did 
not select a technology option for the final rule that controls 
phosphorus (i.e., Option 2.5 + P or Option 4). In general, Option 2.5 + 
P and Option 4 were either not economically achievable, not cost-
effective for phosphorus removal, or not available or demonstrated 
technology for a subcategory. The decision to not select a technology 
option that controls phosphorus is subcategory-specific and the reasons 
are explained in detail in Section VII.
2. How Has Reporting of Fecal Coliforms Changed?
    EPA proposed a maximum of 400 MPN (most probable number) per 100 ml 
at any time of fecal coliforms for the BPT limitations and NSPS for 
Subparts K and L (poultry subcategories). These proposed limitations/
standards were the same as the current BPT in place for Subparts A-J, 
which EPA did not propose to change. Based on analyses conducted for 
the proposed rule, EPA tentatively determined that poultry facilities 
could achieve this level.
    Commenters requested that EPA allow monitoring of fecal coliforms 
to be reported in units of colony forming units (CFU) per 100 
milliliters (mL) in addition to MPN per 100 mL specified in the 
existing regulations. Results from either technique can be considered 
comparable, as long as the analyzed volume is equivalent. Therefore, 
EPA revised the limitations and standards to allow results to be 
reported in either MPN units or CFU units per 100 mL. See Section V.C.1 
of the NODA for additional information (68 FR 48484, August 13, 2003).
    Finally, today's final rule will correct 40 CFR 432 for Subparts A 
through J to delete the monthly average limitations/standards for fecal 
coliforms and pH leaving only daily maximum limitations and standards. 
Because the values are currently the same for the daily maximum 
limitations/standards and the monthly average limitations/standards, 
EPA does not expect that any facility will need to change its 
operations with the elimination of the monthly average limitations/
standards currently codified in the CFR for fecal coliforms and pH. As 
discussed in the NODA (68 FR 48499; August 13, 2003), 40 CFR 432 
currently specifies both monthly average limitations/standards and 
daily maximum limitations (at the same limitations) for fecal coliforms 
and pH, while the text of the final rules published in the Federal 
Register (39 FR 7900; February 28, 1974 and 40 FR 906; January 3, 1975) 
included only daily maximum limitations and standards for those 
parameters. For today's final rule the subparts regulating the 
discharge of fecal coliforms include the following daily maximum 
limitation/standard: a maximum at any time of 400 MPN (or CFU)/100 mL. 
For the subparts regulating pH, the daily maximum limitation/standard 
is: within the range of 6.0 to 9.0.

C. Costs and Economic Impacts

1. How Has the Methodology Changed for Calculating the Costs To Upgrade 
Facilities as a Result of This Rule?
    EPA proposed to establish effluent limitations based on the 
performance of biological wastewater treatment designed and operated to 
achieve a specified degree of denitrification (i.e., reduced total 
nitrogen). To estimate the costs of the proposed rule, EPA used a model 
facility approach, applied frequency factors to obtain national 
estimates, and applied an existing computer model (Computer Assisted 
Procedure For Design And Evaluation Of Wastewater Treatment Systems 
(CAPDET)) used for determining capital and operating and maintenance 
costs for various wastewater treatment unit operations. Based on public 
comments on the proposed costing approach and the incorporation of new 
data following proposal, EPA revised its approach for developing 
national estimates of compliance costs for the MPP industry, as 
presented in the NODA. For the costs presented in the NODA, EPA 
developed its own computer model specific to the MPP industry using a 
more facility-specific approach for the surveyed facilities and 
applying survey weights to obtain national estimates. See Section III 
of the NODA for more detailed information (68 FR 48479; August 13, 
2003).
    Since the NODA was published, EPA has made some additional changes 
to the cost model. Based on comment, EPA has further modified the cost 
models and reviewed the assessment of current treatment-in-place (see 
DCN 300-004, Section 10 of the TDD, and Record Section 28 of the 
rulemaking docket). The changes in the cost models include revising the 
values of the constants used

[[Page 54483]]

in the model, accounting for the use of lime as an alkalinity source, 
including costs for a holding/polishing pond with seven day retention, 
and limiting the nitrate recycle rate to a maximum of five times the 
influent flow when costing facilities for Option 2.5 technology and 
higher. See Section VIII of today's preamble for a discussion of the 
cost estimates for the final rule.
2. How Has the Methodology for Closure Analysis Changed?
    For the proposed rule, EPA projected facility-level economic 
impacts using a probability model derived from Census data because 
detailed survey financial information was not available at that time. 
As discussed in the NODA, fewer than 40 percent of direct discharging 
facilities provided facility-level financial data in the detailed 
survey. Industry stated that many companies in the MPP industry do not 
maintain financial records at the facility level, which is how EPA 
typically evaluates economic impacts. Instead they maintain their 
financial records at, for example, the company level, division level or 
product line level. As a result, EPA could not directly scale up its 
facility-level closure analysis to produce a national projection of 
closures. Therefore, EPA used two approaches to deal with the lack of 
facility-level financial data. First, EPA adjusted the weights of 
facilities that did provide financial data to account for facilities 
that did not provide that data. Second, EPA performed a subsidiary 
company-level analysis to supplement the primary facility-level 
analysis.
    For the final rule, EPA used a combination of the probability model 
approach developed for the proposed rule, and the closure model based 
on detailed survey data. EPA used this combination of modeling 
approaches because in Subcategories F-I, Subcategory J, and Subcategory 
L, too few direct discharging facilities submitted detailed surveys to 
estimate costs and project national economic impacts adequately. In 
these subcategories EPA used data from direct discharge screener survey 
facilities to estimate compliance costs and used the probability 
distribution model to project economic impacts. In Subcategories A-D 
and Subcategory K, EPA used the closure model approach based on 
detailed survey data to project impacts. Finally, based on comments to 
the NODA, EPA projects a facility will close if the present value (PV) 
of future compliance costs exceeds the forecast PV of net income under 
two of the three forecasting methods described in Section IX. For the 
NODA, EPA projected closure when the costs exceeded the forecast PV of 
net income under three of the five forecasting methods. EPA has also 
analyzed closures using a more conservative assumption that a facility 
closes if the PV or future compliance cost exceeds the forecast PV of 
net income under one of three forecasting methods. See Section VI.A of 
the NODA (68 FR 48487; August 13, 2003) and Section IX of today's 
preamble for more detailed information.

D. Loadings

1. How Has the Methodology Changed for Calculating the Pollutant 
Loadings Generated by Regulated Facilities?
    As discussed in the NODA (68 FR 48482; August 13, 2003), EPA 
revised the proposed model facility group approach in order to develop 
pollutant loadings and load reductions that are consistent with the 
revised costing methodology, which is based on a facility-level 
analysis. EPA developed the baseline loadings presented in this final 
rule using facility-specific effluent data submitted with the detailed 
surveys or obtained from Discharge Monitoring Reports (DMRs) from the 
Permit Compliance System (PCS), a computerized data base of DMR 
reported effluent values. For facilities without monitoring information 
for some pollutants, EPA used a default data set. Default baseline 
concentrations were developed using data from surveyed or sampled 
facilities that use the same type of pretreatment technology/treatment 
technology and that had similar operations. See Section VIII of today's 
preamble and Section 11 of the Technical Development Document for more 
detailed information on estimating pollutant loads and reductions.
    Because the final long-term averages on which the limits are based 
were developed fairly late in the rulemaking process due to the receipt 
of late submissions of data from industry, some of which was requested 
by EPA, to clarify issues raised by commenters after the NODA, EPA 
estimated facility-by-facility pollutant load reductions for each of 
the technology options by using the target effluent concentrations 
developed prior to the development of the final long-term averages 
(LTAs) used for calculating limitations and standards. The final LTAs 
used for developing limitations are either less stringent or the same 
as the target effluent concentrations used for developing pollutant 
load reductions and compliance cost estimates. Although the target 
effluent concentrations and the final rule LTAs are not identical, EPA 
considers its estimates of pollutant load reductions and costs for 
today's final rule to be generally representative of the load 
reductions and costs that will be realized based on the limitations and 
standards that the Agency is promulgating today. EPA calculated 
pollutant load reductions as the difference between the baseline 
pollutant load and option-specific pollutant load.
2. How Have the Target Effluent Concentrations Used for Calculating 
Loadings Changed?
    The target effluent concentrations used to estimate pollutant load 
reductions and compliance costs for the final rule have not changed 
from those EPA used in the NODA (see 68 FR 48482; August 13, 2003 for 
non-small facilities in Subcategories A-D and K and see Section 10 of 
the TDD for Subcategories F-J and L non-small and small facilities). As 
noted in the previous section, the final LTAs are not identical to the 
target effluent concentrations, but EPA considers the target effluent 
concentrations still generally representative.

E. Environmental Assessment

1. How Has the Methodology Changed for Modeling Water Quality?
    In the proposed rule, EPA used the National Water Pollution Control 
Assessment Model (NWPCAM) version 1.1 to estimate environmental impacts 
to surface water quality resulting from implementation of the proposed 
rule. Ecological effects such as habitat degradation were noted but not 
quantified to avoid double-counting benefits derived using NWPCAM 
version 1.1. Habitat degradation can result from increased suspended 
particulate matter and total suspended solids were already accounted 
for in NWPCAM. In response to comments that NWPCAM did not incorporate 
nutrients, EPA used an updated version of NWPCAM which simulates 
concentrations of nitrogen and phosphorus to more fully estimate the 
water quality change and the associated monetized benefits associated 
with the provisions in today's rule. Commenters also had concerns about 
the missing sources of loadings in the model, especially nonpoint and 
point sources that were not captured in NWPCAM version 1.1. For the 
final rule, EPA used NWPCAM version 2.1, which models water quality 
using a stream reach network with greater resolution and

[[Page 54484]]

incorporates additional point and nonpoint source loadings.
2. How Has the Methodology Changed for Determining Recreational 
Benefits?
    The benefits analysis for the proposed rule used two methods to 
estimate a household's willingness to pay for improvements in water 
quality: (1) A water quality ladder and (2) a continuous water quality 
index (WQI). In the final rule, a continuous water quality index was 
used to estimate a household's willingness to pay for improvements in 
water quality. The ``continuous'' method was suggested by Mitchell and 
Carson (1993) as a means to attribute benefits to marginal water 
quality improvement whether or not it happened to be of sufficient 
magnitude to result in reclassification to a higher use class. The 
benefits analysis of the proposed MPP regulation presented both methods 
in order to contrast their results. The ``continuous'' method of 
monetizing water quality benefits from WQI changes used in the analysis 
of the proposed rule was further revised in the benefit assessment for 
the final effluent limitation guidelines for concentrated animal 
feeding operations (CAFOs), as explained in the NODA (68 FR 48492; 
August 13, 2003). This revision included the application of a benefit 
transfer function developed from the results of the Mitchell and Carson 
survey. EPA believes the water quality index and the Mitchell-Carson 
valuation function may help address some concerns associated with the 
NWPCAM monetization of benefits at proposal. The benefits methodology 
for the final rule is discussed in more detail in Section X.
3. How Has the Methodology Changed for Determining Toxicity Assessment?
    In the proposed rule, EPA did not undertake a toxicity assessment. 
As noted in the NODA (68 FR 48493; August 13, 2003), EPA performed an 
exploratory analysis employing stream dilution modeling techniques, 
which do not take into account fate processes other than complete 
immediate mixing, to assess the potential impacts of releases of ten 
pollutants (ammonia, barium, chromium, copper, manganese, molybdenum, 
nickel, titanium, vanadium, and zinc) from the 53 detailed survey MPP 
facilities for which sufficient data were available to model. Based on 
the results of this assessment, EPA's assessment did not identify 
meaningful health or aquatic life benefits associated with the selected 
BPT or BAT options. EPA thus did not conduct further analyses of these 
types of impacts.

F. Treatment Options

1. What Changes Were Made to the Costed Treatment Option for Each 
Subcategory?
    Table V.F-1 summarizes the treatment options for each of the meat 
and poultry product subcategories that formed the basis for the 
proposed limitations and standards as well as those that are the basis 
of this final rule. See Section VII of today's preamble for the 
identification of the technology basis for each option and a discussion 
of how the options were selected for the final rule. In a change from 
proposal, as discussed in the NODA (68 FR 48499; August 13, 2003), EPA 
is not pursuing Option 3 as a technology basis for the final rule. This 
is because the only MPP facility (a poultry slaughtering facility) to 
identify Option 3 technology on their survey was not able to provide 
EPA with supporting data (i.e., nitrate/nitrite, total Kjeldahl 
nitrogen (TKN), or total nitrogen effluent concentrations). Therefore, 
EPA did not have a facility to use as the basis for establishing long-
term average concentrations for Option 3. The only facilities 
determined to have complete denitrification also used chemicals to 
remove phosphorus. EPA classified these facilities as Option 4.

                       Table V.F-1.--Summary of Technology Options by Subcategory and Size
----------------------------------------------------------------------------------------------------------------
                                 Size threshold
          Subcategory            for final rule     Facility type     Proposed rule           Final rule
----------------------------------------------------------------------------------------------------------------
A-D: Meat First Processors....  Non-small (>50    Existing........  BPT: Option 2...  BPT: Nitrification (Option
                                 million lbs/yr).                   BAT: Option 3...   2/2.5) for ammonia (as
                                                                                       nitrogen), no revision
                                                                                       for conventionals.
                                                                                      BAT: Option 2.5 for total
                                                                                       nitrogen.
                                                  New.............  Option 3........  NSPS = BPT for ammonia (as
                                                                                       nitrogen).
                                                                                      NSPS = BAT for total
                                                                                       nitrogen.
                                                                                      No revision for
                                                                                       conventionals.
                                Small (<=50       Existing/New....  No revision.....  No revision.
                                 million lbs/yr).
E: Smallest Meat Further        Small             Existing/New....  No revision.....  No revision.
 Processors.                     (<=1,560,000
                                 lbs/yr).
F-I: Meat Further Processors..  Non-small (>50    Existing........  BPT: Option 2...  BPT: no revision.
                                 million lbs/yr).                   BAT: Option 3...  BAT: Option 2.5 for total
                                                                                       nitrogen, no revision for
                                                                                       ammonia (as nitrogen).
                                                  New.............  Option 3........  NSPS = BAT (Option 2.5)
                                                                                       for total nitrogen.
                                                                                      NSPS = Nitrification
                                                                                       (Option 2/2.5) for
                                                                                       ammonia (as nitrogen).
                                                                                      No revision for
                                                                                       conventionals.
                                Small             Existing/New....  No revision.....  No revision.
                                 (>1,560,000 but
                                 <=50 million
                                 lbs/yr).
J: Independent Renderers......  (>10 million lbs/ Existing........  Option 2........  BPT: no revision.
                                 yr).                                                 BAT: Option 2.5 for total
                                                                                       nitrogen, no revision for
                                                                                       ammonia (as nitrogen).
                                                  New.............  Option 2........  NSPS = BAT for total
                                                                                       nitrogen.
                                                                                      No revision for ammonia
                                                                                       (as nitrogen) and
                                                                                       conventionals.
K: Poultry First Processors...  Non-small (>100   Existing........  Option 3........  BPT: Nitrification (Option
                                 million lbs/yr).                                      2/2.5) for ammonia (as
                                                                                       nitrogen) and
                                                                                       conventionals.
                                                                                      BAT: Option 2.5 for total
                                                                                       nitrogen,
                                                                                      BAT= BPT for ammonia (as
                                                                                       nitrogen).

[[Page 54485]]

 
                                                  New.............  Option 3........  NSPS = BPT for ammonia (as
                                                                                       nitrogen) and
                                                                                       conventionals,
                                                                                      NSPS = BAT for total
                                                                                       nitrogen.
                                Small (<=100      Existing........  Option 1........  No regulation.
                                 million lbs/yr).
                                                  New.............  Option 1........  Nitrification (Option 2/
                                                                                       2.5) for ammonia (as
                                                                                       nitrogen), Option 2 for
                                                                                       conventionals.
L: Poultry Further Processors.  Non-small (>7     Existing........  Option 3........  BPT: Nitrification (Option
                                 million pounds/                                       2/2.5) for ammonia (as
                                 yr).                                                  nitrogen) and Option 2
                                                                                       for conventionals.
                                                                                      BAT: Option 2.5 for total
                                                                                       nitrogen,
                                                                                      BAT= BPT for ammonia (as
                                                                                       nitrogen).
                                                  New.............  Option 3........  NSPS = BPT for ammonia (as
                                                                                       nitrogen) and
                                                                                       conventionals,
                                                                                      NSPS = BAT for total
                                                                                       nitrogen.
                                Small (<=7        Existing........  Option 1........  No regulation.
                                 million pounds/
                                 yr).
                                                  New.............  Option 1........  Nitrification (Option 2/
                                                                                       2.5) for ammonia (as
                                                                                       nitrogen), Option 2 for
                                                                                       conventionals.
----------------------------------------------------------------------------------------------------------------

G. Limitations

1. Are the Limitations Production-Based or Concentration-Based?
    The current limitations that are not being changed by this rule 
will continue to be production-based. New limits and ammonia limits for 
certain MPP subcategories that have changed due to today's rule are 
concentration-based (e.g., in milligrams per liter). See Section XII 
for a discussion on how the rule will be implemented.
    EPA received several comments from industry about the need to use 
more water to properly implement USDA's Hazard Analysis and Critical 
Control Point (HACCP) program. USDA initiated the HACCP program to 
increase food safety and decrease the risk of food-borne illness while 
allowing facilities more flexibility in processing procedures. One 
aspect of this HACCP rule requires meat and poultry products facilities 
to develop and implement standard operating procedures (SOPs) for 
sanitation. Based on comments, EPA concluded that many facilities 
implementing the sanitation SOPs had increased their use of water to 
clean processing equipment and surfaces. EPA does not want to 
discourage good sanitation SOPs and compliance with HACCP by setting 
production-based limitations which might result in restricted water use 
during periods of increased production. Therefore, for all new or 
revised limitations/standards in today's final rule, EPA is using a 
concentration basis. Concerns over dilution are outweighed by the need 
for food safety. In addition, the NPDES regulations prohibit dilution, 
and permit writers who are concerned about dilution may convert the 
concentration-based limitations to mass-based limitations using a 
reasonable measure of facility-specific flow based on the time period 
after HACCP was implemented at the facility.
2. What Changes Did EPA Make to the Methodology for Calculating Long-
Term Averages (LTAs) and the Limitations and Standards Promulgated 
Today?
    Based on comments about its data selection and the amount of data 
used, EPA has reviewed data from additional sampling episodes and 
facility self-monitoring data in developing the final limitations and 
standards in today's rule. (In this section, a reference to limitations 
also includes new source performance standards.) EPA also reevaluated 
the appropriateness of the data it relied on in evaluating the 
different treatment options at the time of the proposal and for the 
NODA. As a consequence, EPA has retained some data sets used for the 
proposal and/or NODA and excluded others from the calculations. EPA 
also has re-evaluated the technology determinations associated with the 
data sets based on comments and discussions with facilities. As a 
consequence, EPA has moved some data sets from one option to another. 
The discussion below provides further explanation of these changes and 
how these changed the analyses used for EPA's final technology 
determinations and the calculation of the final limitations.
    For the final rule, EPA used the average effluent concentrations 
presented in the NODA to evaluate the costs and pollutant removals 
associated with Options 1 through 4 of the final rule. The results of 
this assessment are explained in detail at Section VII of the preamble.
    After the close of the NODA comment period, based on comments and 
data concerning the Option 2.0 and 2.5 technologies--the technology 
bases that were ultimately selected for the final rule for the 
limitations and standards for both the meat and poultry subcategories--
EPA revised the target effluent concentrations to develop the final 
LTAs. This resulted from EPA's reassessment of its earlier selection of 
model facilities and a recalculation of the long-term average 
concentration based on a reconsideration of the performance of these 
facilities. The revised LTAs were higher than the NODA average effluent 
concentrations.
    Because EPA relied for its reassessment on some of the data that 
were submitted after the close of the NODA comment period, EPA was not 
able to fully reflect the revised LTAs in its analyses of costs, 
removals, economic impact, cost-reasonableness and cost-effectiveness 
of the technology options selected for the final limitations and 
standards for Option 2 and Option 2.5. However, EPA did perform a 
supplemental analysis using a revised LTA for nitrogen that was close 
to the LTAs upon which the final limitations are based. In addition to 
using this revised LTA for total nitrogen in the supplemental analysis 
of costs for both the poultry and meat subcategories, EPA also used 
other information that was received in late comments including 
treatment-in-place classifications, additional costs for methanol, and 
longer storage duration for emergency holding ponds. EPA is presenting 
the results of this supplemental analysis in the TDD (costs and 
removals) and the

[[Page 54486]]

EEBA (economic impacts, cost-reasonableness, and cost-effectiveness). 
Based on this analysis, EPA estimates that the total annualized pre-tax 
compliance costs of the rule could be $52 million (a decrease from the 
$58.2 million estimate in EPA's primary analysis) and the removals of 
total nitrogen could be 20.6 million pounds per year (a decrease from 
the 27 million pounds per year estimate in the primary analysis). EPA 
has concluded that the results of the supplemental analysis would not 
change EPA's selection of the technology bases for BPT, BAT, and NSPS, 
or its determination that the final rule is economically achievable, 
cost-reasonable, and nutrient cost-effective.
    As noted above, EPA did not use the NODA average effluent 
concentrations for calculating the final effluent limitations and 
standards. Rather, EPA based the final LTA concentrations on further 
consideration of the performance of facilities using the model BPT and 
BAT technologies and additional data and information provided in 
comments on the NODA.
    In particular, regarding the total nitrogen LTA, commenters were 
concerned about EPA's intention to transfer the poultry total nitrogen 
LTA for use in the development of the limitations and standards for 
meat facilities. Commenters demonstrated that the average influent 
nitrogen concentrations (i.e., TKN) at meat facilities are almost two 
times higher than the average influent nitrogen concentration at 
poultry facilities which may affect their ability to consistently 
achieve the same effluent concentrations using the BAT technology. For 
the final rule, EPA thus selected the model poultry facility with an 
influent nitrogen concentration that was closest to the average 
influent nitrogen concentration at meat facilities. This led to a total 
nitrogen LTA for meat facilities that was about 20% less stringent than 
the total nitrogen LTA for poultry facilities. Further, based on 
comments concerning the excess detention times in the anoxic basins of 
the two partial denitrification facilities that were used to set the 
limitations (EPA used one of the facilities to calculate the LTAs for 
meat facilities and both were used for poultry facilities), EPA 
reassessed its estimates of the variability among denitrification rates 
at BAT facilities and determined that an additional factor to reflect 
lower denitrification rates at some facilities was appropriate for 
calculating the final nitrogen limitations. This factor was related to 
the consideration of several variables, including anoxic basin size, 
BOD/TKN ratio, and influent total nitrogen variability (see DCN 300-
017).
    In regard to the ammonia (as nitrogen) and conventional pollutant 
LTAs, based on comments regarding the use of all data EPA collected, 
EPA reevaluated its full effluent database (i.e., including data from 
facilities that only provided data reported as summarized monthly 
averages). As a result of this reevaluation, EPA further revised its 
selection of model facilities for use in developing the ammonia (as 
nitrogen) and conventional pollutant LTAs for the rule. (See DCNs 300-
011, 300-012, and 300-013.) In addition, comments were received that 
seasonal changes in performance or wastes to be treated with respect to 
the biological nitrification portion of the process would affect the 
ability to meet ammonia limits. Following evaluation of the ammonia 
data, including the effects of seasonal variability, EPA calculated the 
final limitations using the most representative facility's data and 
applied a seasonality adjustment factor to the final limitations. All 
of these revisions were designed to ensure that facilities operating 
the selected technology would be able to achieve all of the limitations 
and standards of the final rule in all seasons of the year. See Section 
14 of the TDD for the final rule for discussion of the data sets used 
to develop the final limitations and standards for these subcategories 
and pollutants.
    Although EPA recalculated effluent limitations using the new LTAs 
identified above, EPA determined that it was not necessary to make 
further revisions to its cost and removal assessments beyond the 
supplemental analyses discussed above. EPA recalculated the LTAs in 
order to ensure that the effluent limitations guidelines being 
promulgated today reflect the best and most current information 
available to EPA regarding the performance of the BPT and BAT 
facilities. Because these effluent limitations guidelines become the 
basis for enforceable permit limitations, EPA concluded that this 
refinement is justified. EPA's estimates of costs and removals, 
however, have a different function. Unlike the limitations, they are 
not binding. Rather, EPA uses this information as a basis for 
evaluating which BPT and BAT candidate technologies under consideration 
best meet the statutory requirements. EPA has determined that the 
analyses based on the NODA average effluent concentration, along with 
the supplemental analysis, remain generally applicable to the 
technology options considered and use of the final LTAs in calculating 
the costs and removals would not have changed EPA's conclusions about 
the technology on which it should base the final limitations. The new 
LTAs are not significantly different from the LTAs used as the basis 
for EPA's supplemental analysis, and EPA has concluded that the final 
revisions to the LTAs would not change the cost and removal estimates 
in a material way. In other words, when considering the refined 
versions of the LTAs developed for purposes of calculating the 
limitations in light of the analyses it conducted, EPA continues to 
conclude that the chosen technology bases meet the CWA requirements for 
BPT, BAT, and NSPS. For these reasons, EPA believes it is appropriate 
not to recalculate the costs and removal estimates to reflect the new 
LTAs being used to calculate the final limitations and standards. To do 
so would not have materially changed the results.
    In conjunction with its review of its statistical models, EPA 
performed an engineering review to verify that the limitations are 
reasonable based upon the design and expected operation of the control 
technologies and the facility process conditions. As part of the 
engineering review, EPA examined the range of performance from 
facilities with Option 2.5 technology as indicated by the facility 
effluent for those facilities whose data were used to calculate the 
limitations and those that were not used as a basis for the 
limitations. Some facility data sets demonstrated the best available 
technology and achieved the expected performance level. Other facility 
data sets reflected inadequate performance, either in the manner the 
facility operates the technology or because of design differences in 
the technology. For these facilities, EPA has evaluated the impact of 
the costs to the industry for facility upgrades to its design, 
operating, and maintenance conditions to meet the limitations (see 
Section VIII.B for discussion of compliance cost methodology).
    As discussed in the NODA and in more detail in Section VII.B of 
today's final rule, EPA did not identify any non-small meat first 
processing facilities (Subcategories A-D) that meet EPA's criteria for 
selection as operating as a BAT Option 2.5 facility. Therefore, in 
developing limitations associated with Option 2.5 for meat first 
processing facilities, EPA transferred the long-term average 
concentration for total nitrogen from a well-operated Option 2.5 
poultry first processing facility and, as discussed above, included an 
additional factor to adjust the final total nitrogen limitations to 
account for variable denitrification rates and ensure

[[Page 54487]]

achievability. EPA included costs (such as costs for lagoon bypass, 
additional carbon source, or two-stage denitrification) for the meat 
first processing facilities to achieve the Option 2.5 LTA for total 
nitrogen.
    Because commenters stated that two-stage denitrification should not 
be part of EPA's definition of Option 2.5 technology, EPA reviewed the 
costs for the five non-small meat first processors (Subcategories A-D) 
in EPA's database that EPA had costed for two-stage denitrification in 
the preliminary cost analysis due to their high influent TKN (i.e., 
greater than 200 mg/L) levels. EPA then developed alternate costs for 
these facilities in the supplemental analysis, including costs for 
additional pretreatment using DAF and alum addition (to reduce the TKN 
load to the biological nutrient removal system) followed by single-
stage denitrification. On a site-specific basis, these costs were both 
lower and higher than the costs EPA estimated for its original 
analysis, but were still within the range that EPA considers 
economically achievable. These alternate cost estimates do not result 
in any additional economic impacts (i.e., closures). Details of the 
supplemental analyses are provided in Section 10 of the TDD and in the 
EEBA.
3. How Has the Monitoring Frequency Changed?
    In developing the proposed maximum monthly limitations and 
standards, EPA had assumed a monitoring frequency of thirty samples per 
month (i.e., daily monitoring) which had been the assumption for the 
previously promulgated limitations. In the proposal (67 FR 8632), EPA 
solicited comment on whether small poultry facilities should have 
monthly limitations/standards based upon 20 days, rather than 30 days, 
because they would be unlikely to operate on weekends. In response, EPA 
received comments that stated that monitoring every day during the 
month was too frequent for all facilities; one commenter requested 
sampling once per week. An analysis of existing permits for MPP 
facilities showed that the monitoring frequency ranged from daily to 
weekly to monthly. EPA agrees with the commenters and has reduced the 
assumed monitoring frequency to weekly (approximately four times a 
month) for any new limitations and standards promulgated in this 
rulemaking. EPA incorporated this assumed monitoring frequency into the 
monitoring costs and determination of the limitations for the final 
rule. This rule does not establish minimum monitoring frequencies. The 
decision regarding the actual frequency at which facilities must 
monitor for compliance with today's limitations and standards is left 
to the permit writer. See 40 CFR 122.44(1) and 122.48.

VI. Applicability

A. To Whom Does This Rule Apply?

    This regulation applies to meat facilities and poultry and small 
game facilities (referred to as ``poultry facilities'' for convenience) 
that discharge their wastewater directly into waters of the U.S. (e.g., 
stream, lake, ocean) and are required to obtain an NPDES permit. 
Facilities that send their wastewater to a publicly owned treatment 
works (POTW) are not subject to this final rule; they remain subject to 
40 CFR 403 and their local limits (see sections VI.G and XII.A.2).
    Facilities above certain production thresholds (see Table VI.H-1 
for subcategory-specific production thresholds) who are involved in any 
of the following activities are subject to this rule:
     Slaughtering (first processing) meat or poultry or both
     Further processing meat or poultry or both
     Rendering meat or poultry or both.
    Operations or processes for which EPA has not promulgated effluent 
limitations guidelines and standards are subject to technology-based 
limitations determined on a case-by-case basis under 40 CFR 125.3.

B. What Is a First Processor?

    A first processor is a facility that slaughters live animals and 
produces whole or cut-up carcasses. First processing operations can 
include the assembly and holding of animals for slaughter, killing, 
bleeding, removal of hide or hair or feathers, evisceration and variety 
meat (organ) harvest, carcass washing, trimming, carcass chilling and 
refrigeration, and cleanup. For the purposes of this rule, a facility 
is still a first processor if it performs other operations in addition 
to slaughtering such as further processing or rendering and is only 
subject to the limitations for first processors.
    First processors include facilities classified as simple 
slaughterhouses (40 CFR 432 Subpart A), complex slaughterhouses 
(Subpart B), low-processing packinghouses (Subpart C), and high-
processing packinghouses (Subpart D), in addition to the newly created 
Subpart K for poultry first processors.

C. What Is a Further Processor?

    A further processor is a facility that performs operations which 
utilize whole carcasses or cut-up meat or poultry products for the 
production of fresh or frozen products. Further processing operations 
may include the following types of processing: Cutting and deboning, 
cooking, seasoning, smoking, canning, grinding, chopping, dicing, 
forming, breading, breaking, trimming, skinning, tenderizing, 
marinating, curing, pickling, extruding and/or linking. A facility is 
still a further processor if it performs other operations in addition 
to further processing such as rendering (but not slaughtering) and is 
only subject to the limitations for further processors.
    Meat further processors include facilities classified as small 
processors (40 CFR part 432 Subpart E), meat cutters (Subpart F), 
sausage and luncheon meats processors (Subpart G), ham processors 
(Subpart H), and canned meats processors (Subpart I), in addition to 
the newly created Subpart L for poultry further processors.

D. What Is An Independent Renderer?

    A renderer processes slaughtering by-products (e.g., animal fat, 
bone, blood, hair, feathers, dead animals) from either poultry or meat 
into usable products. An independent renderer is subject to 40 CFR part 
432 Subpart J and is a facility that performs rendering operations at a 
production rate greater than 10 million pounds per year and does not do 
any first or further processing.

E. What Is Included as Meat? What Is Included as Poultry?

    For today's rule, ``meat'' includes cattle, calves, hogs, sheep, 
lambs, horses, and all other animal species except poultry, other 
birds, rabbits, and other small game.
    ``Poultry'' includes chickens, turkeys, ducks, other birds, 
rabbits, and other small game.

F. What if a Facility Processes Both Meat and Poultry? How Is it 
Categorized?

    Facilities that discharge wastewater from both meat and poultry 
processing operations will have to comply with limitations and 
standards for two subcategories. Permit writers would use the 
``building block approach'' based on production or wastewater discharge 
flow to apply the two sets of limitations into one final effluent 
limitation in the facility's permit. See Section XII of today's 
preamble for a discussion on how the rule will be implemented.

[[Page 54488]]

G. Are Indirect Dischargers Covered by This Final Rule?

    EPA is not establishing pretreatment standards for existing or new 
sources in today's final rule. Indirect dischargers (i.e., facilities 
that discharge their MPP process wastewater to a publicly owned 
treatment works) remain subject to the General Pretreatment Standards 
(40 CFR 403) and local limitations.
    The current part 432 regulations do not include pretreatment 
standards (beyond a cross-reference to the General Pretreatment 
Standards) and EPA did not propose to add them. However, as discussed 
in the NODA (68 FR 48477; August 13, 2003), following the publication 
of the proposal, EPA continued to gather additional data to determine 
whether or not national categorical pretreatment standards were 
necessary for the MPP industry. In addition, EPA received comments on 
the proposal and NODA regarding the necessity of pretreatment standards 
for the MPP industry. Most commenters supported EPA's proposed decision 
to not promulgate pretreatment standards for new and existing indirect 
dischargers.
    Based on the data gathered through the EPA Regional offices and the 
comments EPA received on this subject, EPA determined that there was 
not sufficient evidence of pass through or interference from MPP 
facilities to warrant establishing national pretreatment standards for 
these facilities. For further discussion and to review the data 
gathered, see DCN 115-077 in the docket for today's notice.
    In today's final rule, EPA has removed the current cross-reference 
to the General Pretreatment Standards (40 CFR part 403) under PSES and 
PSNS for all subcategories. EPA found that this cross-reference was 
potentially confusing and duplicative. All process wastewater 
discharges to publicly owned treatment works (regardless of point 
source category) are subject to part 403 regardless of whether it is 
specified in the codified regulatory text or not.

H. What Changes Have Been Made to the Regulations for Meat Products?

    Today's action revises Part 432 in a number of respects discussed 
elsewhere in today's Federal Register Notice. These revisions include 
promulgation of effluent limitations guidelines and standards for 
poultry processors, which are presented in two new subparts (subparts K 
and L), and the promulgation of limitations and standards for ammonia 
and nitrogen for certain pre-existing subcategories. EPA has also 
adopted a new applicability statement for Part 432 to account for the 
new poultry subcategories and has consolidated into a General 
Definitions section definitions that in the past had been repeated for 
each subcategory. The new General Definitions section, codified at 
Sec.  432.2, contains some new definitions, some revised definitions, 
and some previously codified definitions that remain unchanged. EPA has 
also removed as unnecessary provisions in Part 432 that require 
indirect dischargers to comply with 40 CFR Part 403, because those 
requirements speak for themselves.
    For the convenience of the reader, today's rule presents Part 432 
in its entirety. This presentation includes reprinting portions of Part 
432 for which EPA is making no substantive changes today. Those 
portions of the existing MPP effluent limitations guidelines and 
standards that are not substantively amended by this action are not 
subject to judicial review; nor is their effective date affected by 
today's action.
    Table VI.H-1 explains the changes and additions made to the earlier 
regulation for meat slaughterhouses, packinghouses, and further 
processors. The earlier regulation did not have production thresholds 
distinguishing between small and non-small categories, and it did not 
have Subcategories K and L for poultry slaughterers and further 
processors.

                            Table VI.H-1.--Summary of Changes by Subcategory and Size
----------------------------------------------------------------------------------------------------------------
         Subcategory                  Size                  Description              Changes made by this rule
----------------------------------------------------------------------------------------------------------------
A-D: Meat First Processors...  Small............  Slaughters <= 50 million lb/yr  No revision.
                                                   live weight killed (LWK) of
                                                   meat.
                               Non-small........  Slaughters > 50 million lb/yr   Set BPT limit for ammonia.
                                                   LWK of meat.                   No revision for BPT/BCT for
                                                                                   conventional pollutants.
                                                                                  Set BAT limits for nitrogen.
                                                                                  Set BAT limits for ammonia =
                                                                                   BPT.
                                                                                  Revise NSPS for ammonia = BPT.
                                                                                  Set NSPS for total nitrogen =
                                                                                   BAT.
                                                                                  No revision for NSPS for
                                                                                   conventional pollutants.
E: Meat Small Further          .................  Produces <= 6,000 lb/day of     No revision.
 Processors.                                       meat finished product.
F-I: Meat Further Processors.  Small............  Produces > 6,000 lb/d but <=    No revision.
                                                   50 million lb/yr of meat
                                                   finished product.
                               Non-small........  Produces > 50 million lb/yr of  No revision for BPT/BCT.
                                                   meat finished product.         Set BAT limits for nitrogen.
                                                                                  No revision to BAT limits for
                                                                                   ammonia except for
                                                                                   Subcategory G.
                                                                                  Set NSPS for total nitrogen =
                                                                                   BAT.
                                                                                  Set NSPS for ammonia.
                                                                                  No revision to NSPS for
                                                                                   conventional pollutants.
J: Independent Renderers.....  .................  Renders > 10 million lb/yr of   Lower production rate in
                                                   raw material (meat and/or       definition from 75,000 pounds
                                                   poultry).                       per day to 10 million pounds
                                                                                   per year.
                                                                                  No revision for BPT/BCT.
                                                                                  Set BAT limits for nitrogen.
                                                                                  No revision to BAT limits for
                                                                                   ammonia.
                                                                                  Set NSPS for total nitrogen =
                                                                                   BAT.
                                                                                  No revision to NSPS for
                                                                                   conventional pollutants or
                                                                                   ammonia.
K: Poultry First Processors..  Small............  Slaughters <= 100 million lb/   No national limitations,
                                                   yr LWK of poultry.              except for new sources.
                                                                                  Set NSPS for BOD5, TSS, O&G
                                                                                   (as HEM), pH, ammonia & fecal
                                                                                   coliforms.

[[Page 54489]]

 
                               Non-small........  Slaughters > 100 million lb/yr  Set BPT/BCT/NSPS limits for
                                                   LWK of poultry.                 BOD5, TSS, O&G (as HEM), pH,
                                                                                   ammonia & fecal coliforms.
                                                                                  Set BAT and NSPS limits for
                                                                                   total nitrogen.
                                                                                  Set BAT limits for ammonia =
                                                                                   BPT.
L: Poultry Further Processors  Small............  Produces <= 7 million lb/yr of  No national limitations,
                                                   poultry finished product.       except for new sources.
                                                                                  Set NSPS for BOD5, TSS, O&G
                                                                                   (as HEM), pH, ammonia & fecal
                                                                                   coliforms.
                               Non-small........  Produces > 7 million lb/yr of   Set BPT/BCT/NSPS limits for
                                                   poultry finished product.       BOD5, TSS, O&G (as HEM), pH,
                                                                                   ammonia & fecal coliforms.
                                                                                  Set BAT and NSPS limits for
                                                                                   total nitrogen.
                                                                                  Set BAT limits for ammonia =
                                                                                   BPT.
----------------------------------------------------------------------------------------------------------------

I. What Wastewaters Are Covered?

    This rule covers wastewater generated by the following meat and 
poultry product operations: first processing, further processing, and 
rendering. Examples of this type of wastewater include water from 
carcass washing, bird washing before and after evisceration, water used 
in scalding in the process of feather removal, chilling, cleaning and 
sanitizing of equipment and facilities, and other process area cleanup, 
including washing out trucks and animal holding areas. Stormwater that 
is associated with these activities is also included.
    This rule does not include non-process wastewater such as non-
contact cooling water, sanitary wastewater, and stormwater that is not 
associated with industrial activity.

J. Which Pollutants Have Limitations and Standards Established by This 
Rule?

    EPA is establishing limitations and standards for 5-day biochemical 
oxygen demand (BOD5), total suspended solids (TSS), pH, oil 
and grease (as hexane extractable material), fecal coliforms, ammonia 
(as nitrogen), and total nitrogen. However, for some subcategories EPA 
will not be revising current limitations for all or some pollutants 
(e.g., conventional pollutants) and will therefore only be establishing 
limitations and standards for some of these pollutants (e.g., total 
nitrogen).
    EPA has decided not to regulate total residual chlorine in today's 
final rule, even though EPA evaluated it for regulation for the MPP 
industry. When there is residual chlorine (i.e., chlorine is not used 
up to inactivate bacteria), this chlorine can react with organic 
compounds such as humic materials (i.e., forms of organic carbon 
created by decaying organic matter) and form other chlorinated organic 
compounds such as trihalomethanes (e.g., bromoform, chloroform, 
bromodichloromethane, dibromochloromethane). Trihalomethanes are a 
potential human health concern in drinking water. However, treatment 
processes that meat and poultry products facilities use to remove 
biochemical oxygen demand and other parameters also reduce the 
concentrations of organic compounds in the discharged wastewater and, 
therefore, lessen, to some extent, the potential for the formation of 
trihalomethanes.
    Disinfection via chlorination is part of the BAT technology basis 
for the final limitations and standards for today's final rule. 
Therefore, EPA used chlorination to estimate compliance costs for 
disinfection in the cost model; however, this regulation does not 
require the use of a specific technology-based process for 
disinfection. Thus, facilities may use disinfection technologies other 
than chlorination to comply with this final rule. Other effective 
methods exist besides chlorinating with free chlorine (e.g., use of 
chloramines, ozone, ultraviolet radiation) that may not form the same 
level or type of by-products. In addition, the environmental effects of 
disinfection by-products depend on the characteristics and uses of the 
receiving water. These considerations persuade EPA that disinfection 
by-products from MPP facilities are best controlled through individual 
NPDES permit limits on a facility-by-facility basis.
    In fact, for non-small facilities that responded to EPA's detailed 
survey, 63 percent of facilities in Subcategories A-D (meat first 
processors) and 48 percent of facilities in Subcategory K (poultry 
first processors) already have limits in their NPDES permits for total 
residual chlorine. An additional 5 percent of meat first processors and 
12 percent of poultry first processors have monitoring requirements for 
total residual chlorine without corresponding limits. Therefore, EPA 
concluded that the current system is working well in addressing any 
residual chlorine issues. When a chlorinated discharge enters U.S. 
waters that are high in organic carbon content, then it is a local 
water quality issue best addressed through a tailored, individual NPDES 
permit.
    See Section V.B for discussion of pollutants that EPA proposed for 
regulation but did not regulate in the final rule (i.e., COD and total 
phosphorus).

K. Does This Regulation Impose Monitoring Requirements ?

    EPA is not promulgating any monitoring requirements in this 
regulation. While EPA based its limitations, statistical analysis, and 
corresponding cost estimates for today's rule on monitoring once per 
week, no such frequency is being required today. Rather, actual 
monitoring requirements for individual facilities are specified in the 
NPDES permits issued by the States (or other authorized permitting 
authority).

VII. What Is the Basis of the Final Regulation?

    This section describes, by subcategory, the options considered and 
selected for today's final rule. EPA provides a discussion, as 
applicable, for the regulatory levels that EPA considered for 
regulation (i.e., BPT, BCT, BAT, and NSPS) for each of the 
subcategories of the MPP industry. See summary in Table VII.A-1. For a 
detailed discussion of all technology options considered in the 
development of today's final rule, see the proposal (see 67 FR 8582; 
February 25, 2002, the NODA (see 68 FR 48500; August 13, 2003) or 
Section 9 of the TDD for today's final rule.
    EPA has also determined that each technology it selected as the 
basis for the final limitations has effluent reductions commensurate 
with compliance costs and is economically achievable for the applicable 
subcategory. EPA considered the age, size, processes, and other 
engineering factors pertinent to facilities in the scope of the final 
regulation for the

[[Page 54490]]

purpose of evaluating the technology options. None of these factors, 
except size, provides a basis for selecting different technologies from 
those EPA selected for today's rule. As discussed in the proposal (67 
FR 8582; February 25, 2002) and below, EPA is not promulgating or 
revising national effluent limitations for small facilities in specific 
subcategories. (See Section 5 of the TDD for the final rule for further 
discussion of EPA's analyses of these factors.)
    The new source performance standards (NSPS) EPA is establishing 
today represent the greatest degree of effluent reduction achievable 
through best available demonstrated control technology. The new source 
technology basis is equivalent to the technology basis upon which EPA 
is setting BAT. In selecting its technology basis for today's NSPS, EPA 
considered all of the factors specified in CWA section 306, including 
the cost of achieving effluent reductions. EPA has thoroughly reviewed 
the costs of such technologies and has concluded that such costs do not 
present a barrier to entry (see the Economic and Environmental Benefits 
Analysis in the rulemaking record). The Agency also considered energy 
requirements and other non-water quality environmental impacts for the 
new source technology basis and found no basis for any different 
standards from those selected for NSPS. Therefore, EPA concluded that 
the NSPS technology basis chosen constitutes the best available 
demonstrated control technology. For a discussion on the compliance 
date for new sources, see Section XII of today's final rule.
    EPA decided not to establish BPT, BCT, or BAT limitations for small 
facilities in Subcategories K and L (poultry first and further 
processing, respectively) or to revise current limitations and 
standards for small facilities in Subcategories A-I (see Table VI.H-1). 
EPA is establishing new source performance standards for new small 
facilities in Subcategories K and L. EPA's bases for not promulgating 
revised limitations or standards for small facilities are explained in 
the following sections. Finally, EPA decided not to establish 
pretreatment standards for all existing and new indirect dischargers 
(PSES and PSNS) for the reasons discussed in the NODA (68 FR 48477; 
August 13, 2003) and in Section VI.G of today's rule.

A. What Options Did EPA Consider for the Final Rule?

    As discussed in the NODA (68 FR 48500; August 13, 2003), comments 
on the proposal requested that EPA consider modifications to the 
preferred options selected as the basis for the proposed limitations 
and standards for certain subcategories. As a result of additional data 
and comments, EPA reconsidered the technology options for BPT, BCT, 
BAT, and NSPS that EPA evaluated for the proposed rule. In the NODA, 
EPA presented two additional options for further consideration and 
comment. These additional options include primary and secondary 
biological treatment and disinfection, nitrification, partial 
denitrification, and, for one option, chemical phosphorus removal. EPA 
refers to these options as ``Option 2.5'' and ``Option 2.5+P.'' EPA 
also stated in the NODA that it was considering not revising 
limitations and standards for certain facilities.
    For the final rule, EPA considered the full range of options 
(Option 1 through Option 4) for all non-small facilities (i.e., 
facilities above the proposed subcategory-specific threshold) as well 
as options under which EPA would not promulgate national effluent 
limitations guidelines and standards for those facilities or would not 
revise those limitations and standards currently in place. Table VII.A-
1 describes these options. For small facilities, EPA considered Option 
1, Option 2, or no regulation/no revision. All technology-based options 
EPA considered for the final rule included some pretreatment of the 
wastewaters prior to biological treatment (including combinations of 
screening, dissolved air flotation, equalization, and chemical 
addition) followed by primary and secondary biological treatment and 
disinfection. In Table VII.A-1, EPA uses the terms ``partial'' and 
``more complete'' to describe the varying degrees of nitrification and 
denitrification and to convey the increasing stringency of the options. 
Because 100 percent nitrification or denitrification is not possible, 
EPA chose the term ``more complete'' instead of ``complete'' to 
describe the more stringent technology options.
    For the NODA, EPA evaluated the effectiveness of in-place 
denitrification technology at meat and poultry facilities. For 
facilities for which EPA had data, EPA identified the facilities' 
denitrification treatment systems and the partial denitrification 
levels they achieved (e.g., long-term average nitrate + nitrite or 
total nitrogen effluent concentrations). One commenter stated that it 
believed that the target LTAs used to calculate costs for Option 2.5 
were based upon facilities that had high nitrogen removals, regardless 
of the control technologies used at those facilities (e.g., facilities 
were using two-stage denitrification equipment) and that EPA failed to 
clearly define partial denitrification. Following its consideration of 
comments received on the NODA, EPA has better defined its criteria for 
selecting facilities that are achieving the level of denitrification 
that represents Option 2.5 control (i.e., partial denitrification). EPA 
has used long-term data with individual measurements (i.e., not 
summarized monthly average data) for total nitrogen (or both TKN and 
nitrate+nitrite) from facilities employing BAT partial denitrification 
to determine the Option 2.5 limitation for total nitrogen. For the 
development of the LTA for total nitrogen, EPA considered facilities to 
be operating as BAT partial denitrification (Option 2.5) technology if 
they met all four of the following criteria:
     EPA has long-term effluent data for total nitrogen (or 
both TKN and nitrate+nitrite) for the facility for the period which 
they were operating their treatment system as Option 2.5.
     Facility had the biological treatment components of Option 
2.5 technology in place and had a minimum BOD:TKN ratio of 3 at the 
influent to biological nutrient removal;
     Facility was achieving effluent total nitrogen 
concentrations below 60 mg/L; and
     Facility's current total nitrogen effluent concentration 
can be achieved by EPA's Option 2.5 cost model (i.e., when running the 
cost model starting at the facility's actual influent TKN 
concentration, facility's actual total nitrogen effluent concentration 
can be achieved using single-stage denitrification and a maximum 
nitrate recycle rate of 5).
    EPA chose 60 mg/L based on the documented total nitrogen removal of 
the denitrification processes that is used in EPA's cost model 
(Modified Ludzack-Ettinger process) which can achieve an average 
nitrogen removal of 70 percent. When applying 70 percent removal of 
total nitrogen to the average total nitrogen influent concentration 
(193 mg/L) at meat survey facilities, the resulting concentration is 
approximately 60 mg/L.
    EPA developed the fourth criteria to ensure that it did not select 
facilities as BAT that use components of Option 2.5 technology but 
operate them in a way that is inadequate to achieve a degree of 
nitrification or approaches the performance and costs of EPA's Option 
2.5 cost model. For example, based on comments from industry, EPA's 
Option 2.5 cost model (based on single stage denitrification) allows 
for a maximum nitrate recycle rate of 5 to achieve the Option 2.5 LTAs. 
Some facilities may

[[Page 54491]]

actually use a higher recycle rate when operating their system. When 
estimating compliance costs for such facilities, EPA's costing 
methodology requires the use of the Option 2.5 LTAs with a two-stage 
denitrification system (similar to the equipment used in the Option 4 
cost model). For additional details regarding EPA's cost models or BAT 
facility selection for development of limitations, see Sections 10 and 
14, respectively, of the TDD for the final rule.

                   Table VII.A-1.--Options Considered
------------------------------------------------------------------------
            Option                           Description \1\
------------------------------------------------------------------------
1.............................  Biological Treatment + Partial
                                 Nitrification + Disinfection
2.............................  Biological Treatment + More Complete
                                 Nitrification + Disinfection
2.5...........................  Biological Treatment + Nitrification +
                                 Partial Denitrification + Disinfection
2.5 + P.......................  Biological Treatment + Nitrification +
                                 Partial Denitrification + Chemical
                                 Phosphorus Removal + Disinfection
4.............................  Biological Treatment + Nitrification +
                                 More Complete Denitrification +
                                 Chemical Phosphorus Removal +
                                 Disinfection
------------------------------------------------------------------------
\1\ Note: All Options are preceded by pretreatment steps.

B. What Is the Basis for EPA's Selected Technology Options for 
Subcategories A-D (Meat First Processors)?

    In 2002, EPA proposed revised national regulations for facilities 
in Subcategories A-D that exceed a production threshold of 50 million 
pounds (live weight killed) per year. EPA proposed this threshold to 
reduce potential economic impacts to small facilities by allowing for 
different limitations for small and non-small facilities (i.e., less 
stringent limitations for small facilities). EPA did not receive 
adverse comment on the production threshold and is retaining the 
proposed production threshold for the final rule. Therefore, this 
section discusses small facilities and non-small facilities separately. 
Costs presented in this section are presented in 1999 year dollars 
which is the base year of the survey; however, EPA provides updated 
estimates in 2003 year dollars in Section VIII.B.
1. Meat First Processors That Slaughter Less Than or Equal to 50 
Million Pounds Per Year (Small)
    EPA is not revising limitations or standards for small facilities 
in Subcategories A-D. Such facilities will continue to be subject to 
the current limitations in Meat and Poultry Products effluent 
limitations guidelines (part 432), as applicable. The current 
regulations include production-based limitations for these facilities 
for BOD, TSS, oil & grease, pH, and fecal coliforms for existing 
sources and standards for these same pollutants plus the addition of 
standards for ammonia (as nitrogen) for new sources. The following 
sections discuss EPA's decision to retain the current BPT, BCT, and BAT 
limitations and NSPS for small direct discharge facilities in 
Subcategories A-D.
a. BPT/BCT/BAT
    EPA proposed not to revise the current BPT, BCT, or BAT limitations 
for existing small direct dischargers in Subcategories A-D (meat first 
processors). For the final rule, for these facilities, EPA evaluated 
the cost of achieving pollutant reductions and the economic 
achievability of compliance with best practicable control technology 
(BPT) limitations based on the Option 1 technology and the level of the 
pollutant reductions resulting from compliance with such limitations. 
Option 1 includes biological treatment, partial nitrification, and 
disinfection.
    EPA estimated that the cost of achieving the effluent reductions 
for these facilities at Option 1 would be $198 per pound of pollutant 
removed (1999$).\1\ EPA has promulgated effluent limitations guidelines 
in the past with costs per pound of pollutant removed as high as $37 
per pound (1999$) although generally ELGs have had much lower costs per 
pound. Therefore, EPA evaluated the cost of the treatment technology 
options to small facilities using $37 per pound removed as guidance for 
assessing BPT cost-reasonableness.
---------------------------------------------------------------------------

    \1\ In estimating the pounds of pollutants removed by 
implementing Option 1 technology for these facilities, EPA used the 
sum of BOD5 and ammonia (as nitrogen) removed. EPA did 
not include removals of other pollutants, including COD, in this 
analysis because, for example, BOD and COD address many of the same 
pollutants and including both could result in double counting.
---------------------------------------------------------------------------

    Consequently, following this approach, EPA has determined the total 
costs of effluent reductions using the Option 1 technology are not 
reasonable in relation to the effluent reduction benefits for the 
following reasons. First, although EPA estimates that implementation of 
the Option 1 technology would result in zero closures, EPA estimates 
the cost of effluent reductions using Option 1 technology is $198 per 
pound removed. Moreover, Option 1 does not remove any additional 
nutrients and consequently is not ``nutrient cost-effective'' (see 
Section VII.B.2.c for detailed discussion on nutrient cost-
effectiveness). For the reasons discussed in this section, EPA has 
concluded that for existing small direct dischargers in the 
Subcategories A-D, Option 1 is not the best practicable control 
technology, best conventional pollutant control technology, or best 
available technology economically achievable. Because the other options 
being considered would require more equipment and therefore more costs 
than Option 1, EPA assumed they would not be considered cost-
reasonable. Therefore, EPA has determined that it should not promulgate 
revisions to the current BPT, BCT, or BAT limitations for existing 
small direct dischargers. These facilities will continue to be subject 
to the applicable portions of sections 432.10--432.40.
b. New Source Performance Standards (NSPS)
    When establishing NSPS based on best available demonstrated 
technology, the Agency considers how the cost of complying with any 
more stringent effluent limitations will affect new facilities trying 
to enter the industry. EPA employs a barrier to entry analysis that 
evaluates the barrier posed to new entrants by the cost of complying 
with the regulation. (For further discussion, see Section IX.G.) While, 
as explained previously, the cost of effluent reductions for existing 
small A-D facilities may not be cost reasonable, it is not necessarily 
the case that the costs for new facilities are as great. Generally, it 
is less costly for a new facility to incorporate waste treatment 
technologies during construction than to retrofit existing facilities.
    EPA's barrier to entry analysis compares estimated average 
incremental capital costs a facility or company incurs to meet the 
effluent guidelines to average total assets of existing facilities or 
companies. EPA considered establishing new source performance standards 
for small facilities in Subcategories A-D based on Option 1 technology. 
EPA evaluated the barrier to entry based on a ratio of costs for Option 
1 to assets of existing facilities. The Agency estimates a cost to 
assets ratio of 16.7%, which the Agency concludes will present a 
barrier to entry to new facilities. Because the costs for other options 
would be greater than for Option 1, these would pose an even greater 
barrier to entry. For these reasons, EPA is not revising the NSPS 
limitations for new small direct dischargers in these subcategories. 
New facilities would continue to be subject to

[[Page 54492]]

the current NSPS limitations in sections 432.15, 432.25, 432.35, and 
432.45.
2. Meat First Processors That Slaughter More Than 50 Million Pounds Per 
Year (Non-Small)
a. Pollutants
    For non-small facilities in Subcategories A-D, EPA is revising 
limitations and standards for some pollutants and is establishing total 
nitrogen limitations and standards for the first time. EPA is not 
revising the current limitations (BPT/BCT) or new source performance 
standards (NSPS) for conventional pollutants for these facilities. The 
current regulations include production-based limitations and standards 
for these facilities for BOD, TSS, oil & grease, pH, and fecal 
coliforms. EPA is revising BPT to include limitations for ammonia (as 
nitrogen), establishing a BAT limitation for ammonia (as nitrogen) 
equivalent to the BPT limitation, revising the NSPS for ammonia to be 
equivalent to the BPT limitation, and establishing BAT and NSPS 
limitations for total nitrogen. As discussed in Section V.G, the 
revised and new limitations and standards are concentration-based. The 
following sections discuss the technology bases EPA selected for the 
final rule for the non-small direct discharge facilities in 
Subcategories A-D.
b. Best Practicable Control Technology Currently Available (BPT)
    In 1974, EPA established BPT for the meat subcategories A-D based 
on biological treatment (e.g., aerobic and anaerobic treatment) to 
control five conventional pollutants or pollutant parameters 
(BOD5, TSS, oil & grease, fecal coliforms, and pH). The BPT 
limitations did not include limits for ammonia (as nitrogen) because 
nitrification was not a widely used technology, and therefore, not the 
BPT technology at the time. However, EPA notes that the BPT technology 
that was the basis for the 1974 limitations provided some incidental 
ammonia removal through nitrification during extended aeration, which 
resulted in some reduction in ammonia (as nitrogen). EPA did attempt to 
establish ammonia limitations under BAT based on a technology other 
than nitrification (which was more advanced than the 1974 BPT 
technology). Those limitations were the subject of judicial challenge 
and were remanded to EPA for further consideration (American Meat 
Institute v. Environmental Protection Agency, 526 F.2d 442 (7th Cir. 
1975)). In 2002, EPA proposed new BPT limitations for ammonia (as 
nitrogen) based on Option 2 for non-small facilities in Subcategories 
A-D (facilities with production rates greater than 50 million pounds 
live weight killed (LWK) per year). As shown in Table VII.A-1, Option 2 
consists of biological treatment followed by more complete 
nitrification than Option 1 to further reduce ammonia levels and 
disinfection.
    EPA is establishing BPT limitations for ammonia (as nitrogen) for 
non-small direct dischargers in Subcategories A-D based on the proposed 
technology option (Option 2) with the inclusion of Option 2.5 
facilities as part of evaluating seasonal effects on nitrification. A 
large degree of nitrification must occur in order to achieve sufficient 
partial denitrification to meet the nitrogen limitations, thus, the 
limitations for ammonia are based on data from facilities of both 
option types. EPA has concluded that ``more complete'' nitrification is 
now a widely available pollution control technology that should be the 
basis for the BPT ammonia limitation. For this guideline, EPA did not 
propose revising BPT limitations for the conventional pollutants. (See 
Section VII.B.2.c on BCT for additional information on why EPA is not 
revising current limits for conventional pollutants for facilities in 
these subcategories.)
    EPA has concluded that biological nitrification treatment 
technology represents the best practicable control technology currently 
available for control of ammonia (as nitrogen) while providing 
incidental removals of additional conventional pollutants, particularly 
BOD5 and TSS, and is the basis for the BPT limitations for 
these facilities for the following reasons.
    First, this technology is available and readily applicable to all 
non-small facilities in Subcategories A-D. Approximately 97 percent of 
the non-small direct discharging facilities in these subcategories 
currently use the Option 2 technology or better. Although most 
facilities have the components of Option 2 technology in place (e.g., 
nitrification basin/aerobic reactor), some facilities are not achieving 
the Option 2 long-term average (LTA) concentration for ammonia or the 
additional removals of the conventional pollutants identified in the 
following paragraph. EPA attributes this to their failure to operate or 
maintain the Option 2 technology adequately. Consequently, when 
estimating the costs of compliance with Option 2 for purposes of 
evaluating its reasonableness and for estimating economic impacts, EPA 
included costs for treatment optimization that a number of facilities 
would need in order to achieve the Option 2 LTAs. For example, EPA 
included costs for increased aeration, detention time (capacity), 
chemical addition, sludge handling, process controls, and additional 
in-process sampling and analytical testing. (See Sections 10 and 11 of 
the final Technical Development Document for additional discussion of 
the cost and loading methodologies.)
    Second, the cost of compliance with these limitations relative to 
the effluent reduction benefits is not disproportionate. Based on our 
economic analysis (see Section IX), EPA concludes that compliance with 
BPT limitations based on Option 2 technology should not result in 
closures of any existing non-small direct dischargers in these 
subcategories. Moreover, adopting this level of control will reduce the 
quantity of ammonia (as nitrogen) and other pollutants currently being 
discharged into the environment.
    For meat first processor facilities that produce more than 50 
million pounds LWK per year, EPA estimates an annual compliance cost 
for Option 2 of $7.29 million (pre-tax, 1999$). It also estimates 3.8 
million pounds of BOD5 and ammonia (as nitrogen) removed 
from current discharges into the Nation's waters (for $2.55/pound-
pollutant removed (1999$)). In estimating the pounds of pollutant 
removed by implementing Option 2 technology for these facilities, EPA 
used the sum of BOD5 and ammonia (as nitrogen) removed. EPA 
tried to avoid ``double-counting'' pollutant reductions that would 
occur if, for example, EPA summed removals of COD and BOD. As 
previously explained, EPA has evaluated BPT costs and removals using, 
as guidance, $37/lb-removed in 1999 dollars as a point of comparison. 
EPA has, therefore, determined the total cost of effluent reductions 
due to the Option 2 technology ($2.55 per pound removed) are reasonable 
in view of the effluent reduction benefits.
    EPA found that 32% of the non-small facilities in these 
subcategories use Option 2.5 (which includes partial denitrification). 
Although Option 2.5 technology is demonstrated, it is not as widely 
available as Option 2. Moreover, the pollutant loadings reductions for 
ammonia (as nitrogen) for Option 2.5 are the same as the reduction 
estimated for Option 2 but cost $9 million more every year. Therefore, 
EPA did not select it as the basis of BPT limitations.
    EPA did not select Option 2.5+P or Option 4 as the basis for BPT 
limitations, as they do not achieve additional pollutant reductions at 
a cost EPA considers reasonable. For example, Option 2.5+P does not 
achieve

[[Page 54493]]

additional removals of ammonia (as nitrogen) but would cost an 
additional $36 million annually. Option 4 would remove an additional 
59,000 pounds of ammonia (as nitrogen) at an additional cost of $45 
million annually. Moreover, EPA notes that Option 2.5+P represents 
control technology not closely related to the technology basis for the 
earlier BPT regulations. Chemical phosphorus removal is not closely 
connected to the nitrification and disinfection technology that was the 
basis of the 1974 BPT limitations for Subcategories A-D. The Agency did 
not select other options considered for BPT because they were not 
readily available and/or produced an unfavorable total BPT cost and 
removal comparison. Detailed discussions explaining why EPA rejected 
setting BPT limitations based on these other technology options are 
contained in the proposal and the NODA (see 67 FR 8637; February 25, 
2002 and 68 FR 48499; August 13, 2003). EPA has no information that 
justifies changing these conclusions.
    Although EPA is not changing the technology basis from that 
proposed, the Agency is promulgating BPT limitations for non-small 
facilities in Subcategories A-D that are slightly different than 
proposed. First, where EPA is promulgating BPT limitations for 
pollutants like ammonia (as nitrogen) for which EPA had not previously 
set BPT limits for these subcategories, the final limitations are based 
on revised and additional data reflecting the types of changes 
described in the NODA (see 68 FR 48495). In addition, for the reasons 
discussed in Section V.G, where EPA is adopting new or revised BPT 
limitations, EPA has expressed them in concentration-based form while 
the unchanged limitations will continue to be expressed as production-
based limits. (See Section 15 of the TDD for guidance on how both types 
of limits can be implemented together into permits.)
c. Best Conventional Pollutant Control Technology (BCT)
    For both the proposed and final rules, in deciding whether to adopt 
more stringent limitations for BCT than BPT, EPA considered 
technologies that might achieve greater removals of conventional 
pollutants than those adopted for BPT. It also looked at whether those 
technologies are cost-reasonable under the standards established by the 
CWA. EPA generally refers to the decision criteria as the ``BCT cost 
test.''
    As discussed in Section VII.B.2.a, EPA is not revising the current 
BPT effluent limitations for conventional parameters (i.e., pH, 
BOD5, TSS, O&G, and fecal coliforms) for non-small meat 
first processors (Subcategories A-D). Therefore, when considering a 
technology that would achieve greater removals of conventional 
pollutants than adopted for BPT, EPA compared the removals achievable 
through implementation of the Option 2 technology (which EPA considered 
as the possible technology basis for BCT) to current BPT limitations. 
EPA estimates that Option 2 removes about an additional 610,000 pounds 
per year of BOD5 and 970,000 pounds per year of TSS compared 
to pollutant reductions by facilities meeting or exceeding current BPT 
limitations. There are no additional removals of O&G or fecal 
coliforms.
    EPA evaluated Option 2 under the BCT cost test and it failed (see 
EPA's Economic and Environmental Benefits Analysis for details on the 
Agency's analysis). EPA did not evaluate technology options, such as 
Option 2+F (Option 2 plus the addition of a filter), because they are 
more costly and would not remove significantly more conventional 
pollutants than Option 2. Therefore, if Option 2 did not pass, these 
options would not pass the BCT cost test. The Agency did not identify 
any technologies that pass the BCT cost test and achieve greater 
removals of conventional pollutants than the current BPT technology. 
Thus, EPA is not revising the BCT limitations for these facilities. 
Non-small facilities in Subcategories A-D will continue to be regulated 
by the current BCT limitations (which are equivalent to the current BPT 
limitations) in sections 432.17, 432.27, 432.37, and 432.47.
d. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish the BAT level of regulatory control for 
non-small facilities in Subcategories A-D based on Option 3 (i.e., 
biological treatment, more complete nitrification, more complete 
denitrification and disinfection). As discussed in the NODA, after 
review and evaluation of the revised and new data, EPA has reconsidered 
its assessment of Option 3 as BAT technology. EPA determined that 
Option 3 did not meet all the statutory criteria for BAT. Therefore, 
the Agency refocused its evaluation for the technology basis for BAT on 
Option 2.5, Option 2.5+P and Option 4 for nutrient removal. (See 
Section VII.A of today's preamble for a description of the technology 
options.) For the final rule, EPA is basing the BAT limitations for 
non-small facilities in Subcategories A-D on Option 2.5 technology and 
is promulgating a limitation for total nitrogen on this basis. EPA is, 
however, setting a limitation for ammonia (as nitrogen) that is equal 
to BPT.
    The following section describes EPA's rationale for selecting 
Option 2.5 technology and rejecting Option 2.5+P and Option 4 for the 
basis of the total nitrogen limitation and for selecting to set BAT 
equal to BPT (based on Option 2) for ammonia (as nitrogen). Both the 
proposal and the NODA contain detailed discussions explaining why EPA 
rejected setting BAT limitations based on other more stringent 
technology options (see 67 FR 8629; February 25, 2002 and 68 FR 48499; 
August 13, 2003). The record for today's final rule provides no basis 
for EPA to change these conclusions.
    EPA selected Option 2.5 technology as the basis of BAT for non-
small facilities in Subcategories A-D for the following reasons. First, 
Option 2.5 technology has been demonstrated as available, as 32 percent 
of the non-small facilities in Subcategories A-D use the components of 
Option 2.5 technology (e.g., facility has in place a denitrification 
basin, nitrification basin, and disinfection) or more advanced 
technology. EPA has, however, determined that facilities in 
Subcategories A-D with the components of Option 2.5 technology in place 
are not operating their systems optimally based on review of the 
BOD:TKN ratios (68 FR 48500; August 13, 2003). EPA concluded that for 
effective denitrification to occur, facilities must be achieving a 
minimum BOD:TKN ratio of 3. In addition, these facilities are not 
currently achieving at least a 60 mg/L total nitrogen concentration in 
the effluent. (EPA is using 60 mg/L as a minimum standard for 
facilities it considered in developing the BAT long-term average 
limitation for total nitrogen. See Section VII.A for discussion of BAT 
facility selection criteria.) EPA did have data from poultry first 
processing facilities with Option 2.5 technology that met all BAT 
selection criteria, indicating that the poultry facility's treatment 
systems were well operated. For this reason, when estimating costs and 
pollutant reductions and in developing limitations associated with 
Option 2.5, EPA used the long-term average (LTA) concentration for 
total nitrogen from well-operated Option 2.5 poultry first processing 
facilities (see Section 14 of the TDD for the final rule). EPA included 
costs (such as costs for lagoon bypass, additional carbon source, or 
two-stage denitrification) for the meat first processing facilities to 
achieve the poultry Option 2.5 LTA for total nitrogen.

[[Page 54494]]

    Second, Option 2.5 is economically achievable. EPA estimates the 
pre-tax annualized compliance costs (in 1999 dollars) for Option 2.5 to 
be $16.7 million. Using the facility and company closure methodologies 
described in Section IX.A, EPA estimates that no facilities or 
companies will close. EPA performed an alternate analysis by estimating 
closures using more conservative assumptions (i.e., EPA predicted a 
closure would occur if the facility failed under 1 of 3 forecast 
methodologies, rather than under at least 2 out of 3). Under EPA's more 
conservative alternate analysis, the Agency estimates that there could 
be two closures among subcategory A-D facilities. Because not all 
facilities are covered by the closure analysis, it may understate the 
number of facility closures nationally.
    As discussed in the NODA (68 FR 48489; August 13, 2003), EPA tried 
to determine whether there are additional companies that own direct 
discharging MPP facilities. The Agency identified, based on the 
screener survey results, three additional companies across all 
subcategories that may own direct discharging MPP facilities. 
Therefore, the company-level analysis may underestimate the number of 
company closures nationally, but to a lesser degree than the facility-
level analysis.
    EPA also considered the cost-effectiveness of nutrient removal as 
one aspect of its evaluation of BAT options for this industry as whole. 
As discussed in the proposed rule and the NODA, EPA has established a 
benchmark for nitrogen removal of $4 per pound, based on studies of 
nitrogen removal by POTWs with biological nutrient removal, and a 
benchmark for phosphorus removal of $10 per pound, based on studies of 
agricultural best management practices that reduce phosphorus 
discharges. EPA used these benchmarks for nutrients in connection with 
the effluent guidelines for concentrated animal feeding operations 
(CAFOs).
    For Option 2.5 for subcategories A-D, EPA estimates 15.4 million 
pounds removed per year of total nitrogen and nutrient cost-
effectiveness of $1.08 per pound of total nitrogen removed. Because 
Option 2.5 does not include phosphorus removal, EPA did not calculate 
nutrient cost-effectiveness for phosphorus for Option 2.5. EPA 
concludes that Option 2.5 is nutrient cost-effective for total 
nitrogen.
    EPA considered Option 2.5+P as the basis of BAT, but rejected it 
for the following reasons. First, no facilities in EPA's database for 
Subcategories A-D use Option 2.5+P technology. However, facilities may 
use individual components of the technology. Some facilities in the 
subcategories use Option 2.5 technology (for nitrogen removal) and 
Option 2+P or Option 4 (for phosphorus removal). Second, EPA estimated 
the pre-tax annualized cost of Option 2.5+P to be $42.9 million. EPA 
now believes these costs may be underestimated. Based on information 
provided in comments on the NODA and further analysis, EPA concludes 
that the average annual cost of increased alum addition and the 
resulting increased sludge generation and disposal may range from 
$108,000 to $378,000 more per facility than previously estimated for 
this subcategory (see DCN 300-015). Option 2.5+P removes an estimated 
4.5 million pounds per year of total phosphorus and achieves the same 
level of nitrogen and conventional pollutant reduction as Option 2.5. 
Although the cost per pound of phosphorus removed using the estimated 
cost of $42.9 million is $9.49 per pound, EPA believes that the actual 
cost per pound would be greater than $10 because of the additional 
costs noted above. Although EPA has selected options where the nutrient 
cost-effectiveness is greater then the reference values (i.e., $4/lb 
nitrogen removed and $10/lb phosphorus removed) for an individual 
subcategory or segment, EPA has not done so in cases where selecting 
such an option would raise the nutrient cost-effectiveness of the rule, 
as a whole, over these values. With a phosphorus cost-effectiveness 
over $10/lb for non-small facilities in Subcategory A-D, the phosphorus 
cost-effectiveness for the rule, as a whole, would be greater than $10/
lb total phosphorus removed. Therefore, considering the lack of 
availability of the technology and the unfavorable nutrient cost-
effectiveness for phosphorus, EPA rejected Option 2.5+P as the basis of 
BAT limitations.
    EPA considered Option 4 (which includes more complete 
denitrification and chemical phosphorus removal) as the basis of BAT 
but did not select it due to the high increase in cost compared to 
Option 2.5 and the poor incremental nutrient cost-effectiveness (i.e., 
the high cost to remove additional nutrients compared to Option 2.5+P).
    EPA estimates that there are no direct discharge facilities in 
these subcategories currently operating Option 4 technology. EPA 
estimates the pre-tax annualized compliance costs for Option 4 to be 
$52.0 million (1999$), which is $9.1 million more than Option 2.5+P and 
$35.3 million more than Option 2.5. EPA estimates that Option 4 removes 
18.5 million pounds per year of nitrogen (3.1 million more pounds per 
year than Option 2.5 or Option 2.5+P) and 5.0 million pounds per year 
of phosphorus (approximately 500,000 more pounds per year than Option 
2.5+P). EPA estimates no facility or company closures for Option 4. 
Finally, EPA estimates the incremental nitrogen cost-effectiveness (as 
compared to Option 2.5) to be $11.56 per pound of total nitrogen 
removed and the incremental phosphorus cost-effectiveness (as compared 
to Option 2.5+P) to be $20.09 per pound of total phosphorus removed. 
The incremental nutrient cost-effectiveness of Option 4 is above the 
benchmark values; therefore, EPA does not consider Option 4 to be cost-
effective.
    EPA is establishing BAT limitations for ammonia (as nitrogen) that 
are equivalent to the limitations it is promulgating today under BPT 
for subcategories A-D. EPA considered setting more stringent 
limitations for ammonia (as nitrogen) under BAT; however, the selected 
BAT technology option (Option 2.5) does not remove any additional 
quantity of ammonia (as nitrogen), particularly when considering the 
seasonal effects using data from Option 2 and Option 2.5 facilities. 
Although Option 4 does remove some additional pounds of ammonia (as 
nitrogen) as compared to Option 2, EPA did not select Option 4 for BAT 
for the reasons discussed earlier in this section.
e. New Source Performance Standards (NSPS)
    As previously discussed, when establishing NSPS, EPA considers 
whether increased compliance costs related to the effluent guidelines 
regulation might create a barrier for a new facility to enter the 
industry and whether there are any new source standards currently in 
place for the subcategory. The barrier to entry analysis compares the 
estimated average increase in facility or company capital costs to meet 
the effluent guidelines to the average total assets of existing 
facilities or companies. EPA does not have data on the assets of new 
entrants because, in general, we cannot identify them before they are 
established. Therefore, EPA uses data on the assets of existing 
facilities. The extent to which potential new entrants have total 
assets that are similar to those of existing industry participants 
provides a proxy for potential barriers to entry that new facility 
compliance costs may represent.
    EPA performed an analysis to evaluate the effect of the rule on the 
costs to new entrants into the meat and poultry products industry by 
calculating

[[Page 54495]]

the ratio of average capital costs to average total assets as a measure 
of the potential for barriers to entry that the MPP rule could create 
for these facilities. If the barrier to entry ratio is large, then 
there is a possibility that the rule will discourage entry into the 
meat and poultry products market.
    EPA has estimated the ratio of costs to assets for facilities for 
Options 2.5, 2.5+P and Option 4. The ratios are 1.6% for Option 2.5, 
2.6% for Option 2.5+P, 3.3% for Option 4. The estimates for Option 
2.5+P and Option 4, however, do not reflect EPA's additional evaluation 
of the costs for chemical phosphorus based on comments EPA received 
(see DCN 300-015). From this additional evaluation, EPA concludes that 
the average annualized costs may be $108,000 to $378,000 per facility 
more for chemical phosphorus removal than those used in EPA's barrier 
to entry analysis, as discussed here. EPA is concerned that, with these 
additional costs, the ratio may rise to a level that the Agency would 
consider to be a barrier to entry for Option 2.5+P and Option 4.
    EPA has decided to revise the standards for new sources for ammonia 
(as nitrogen) for facilities in subcategories A-D to be equivalent to 
the BPT limitations being established today and to establish standards 
for total nitrogen equivalent to the BAT limitations being established 
today based on Option 2.5. These standards do not present a barrier to 
entry. Although there are existing NSPS for these facilities, they do 
not include standards for total nitrogen.

C. What Is the Basis for EPA's Selected Technology Options for 
Subcategory E (Meat Small Further Processors)?

    Subcategory E includes the smallest meat further processing 
facilities (i.e., meat further processing facilities that produce 6,000 
pounds or fewer per day). In 2002, EPA proposed not to revise the 
regulations for existing or new direct dischargers in Subcategory E. 
EPA did not propose to revise the existing limitations applicable to 
smaller MPP facilities (including all facilities in Subcategory E) to 
the proposal because EPA determined that ``small'' MPP facilities 
discharge a very small proportion of the total industry discharge and 
that improved treatment would produce only a limited amount of loadings 
removal (67 FR 8582; February 25, 2002). EPA did not receive comment or 
additional information to persuade EPA to revise the existing effluent 
limitations guidelines and standards for this subcategory. Therefore, 
the current part 432 regulations continue to apply to those facilities 
(Sec.  432.50).

D. What Is the Basis for EPA's Selected Technology Options for 
Subcategories F-I (Meat Further Processing)?

    In order to allow for different limitations for small and non-small 
meat further processing facilities, EPA's 2002 proposal called for a 
production threshold of 50 million pounds (finished product) for 
facilities in Subcategories F-I. EPA is retaining that production 
threshold for the final rule. Therefore, EPA addresses small facilities 
and non-small facilities separately. Note the meat processors that 
process 6,000 or fewer pounds per day (1.56 million pounds per year) 
are not included in Subcategories F-I, but are covered under 
Subcategory E (see Section VII.C). Costs presented in this section are 
presented in 1999 year dollars which is the base year of the survey; 
however, EPA provides updated estimates in 2003 year dollars in Section 
VIII.B.
1. Meat Further Processors That Process More Than 6,000 Pounds Per Day 
but Less Than or Equal to 50 Million Pounds Per Year (Small)
    EPA is not revising limitations or standards for small facilities 
in Subcategories F-I except to correct an error in the BAT ammonia 
limitation. Meat further processing facilities that produce greater 
than 6,000 pounds per day but less than or equal to 50 million pounds 
per year of finished product will continue to be subject to the current 
limitations in the Meat and Poultry Products effluent limitations 
guidelines (part 432), as applicable. The following sections discuss 
EPA's decision to retain the current BPT, BCT, and BAT limitations and 
NSPS for small direct discharge facilities in Subcategories F-I.
a. BPT/BCT/BAT
    EPA proposed not to revise the BPT, BCT or BAT limitations for 
existing small meat further processors in Subcategories F-I. In part 
432, small facilities in Subcategories F-I currently have BPT 
limitations for the five conventional pollutants and BAT limitations 
for ammonia. EPA did not propose to revise BPT limitations for 
conventional pollutants for small facilities in these subcategories. 
EPA evaluated the cost of additional technology (e.g., filtration) 
under the BCT cost test and it failed. Therefore, EPA is not revising 
the conventional pollutant limitations under BCT for small facilities 
in Subcategories F-I.
    For the final rule, EPA considered revising the ammonia (as 
nitrogen) limitations under BAT. EPA evaluated the cost of achieving 
pollutant reductions and the economic achievability of compliance with 
limitations based on Option 1 and Option 2 technology. Option 1 
includes biological treatment, partial nitrification, and disinfection, 
and Option 2 accomplishes more complete nitrification (i.e., ammonia 
removal) than Option 1 technology. When evaluating BAT technology, EPA 
must determine whether the technology is available and economically 
achievable. EPA must also determine whether the identified technology 
is best. EPA typically evaluates a technology's cost-effectiveness as a 
factor in its decision. When considering cost-effectiveness (except for 
nutrients), EPA typically evaluates additional pollutant reductions in 
toxic pound-equivalents. EPA estimates that the annualized cost of 
Option 1 and Option 2 are about $1.10 and $1.11 million (pre-tax, 1999 
dollars), respectively, which represents approximately 9.4% of net 
income (as shown in Table IX.B-5). Using the closure methodology 
described in Section IX, there is a very small probability that there 
could be one facility closure out of sixteen facilities under either 
option: the probability of closure is 1.49% and 1.51%, respectively. 
EPA estimates that Option 1 achieves a reduction of 5 toxic pound-
equivalents per year, and Option 2 achieves a reduction of 15.2 toxic 
pound-equivalents per year, resulting in a toxic cost-effectiveness of 
$129,000 per toxic pound-equivalent (in 1981 dollars) for Option 1 and 
$42,900 per toxic pound equivalent ($1981) for Option 2. Historically, 
EPA has evaluated BAT technology using a toxic cost-effectiveness value 
of $200/toxic pound-equivalents (in 1981 dollars). Therefore, EPA has 
determined that Options 1 and 2 are not cost-effective and are not 
economically achievable best available technology.
    For existing small direct dischargers in the Subcategories F-I, the 
Agency found neither Option 1 nor Option 2 is the best practicable 
control technology, best conventional pollutant control technology, or 
best available technology economically achievable. Therefore, EPA is 
not revising BPT, BCT, or BAT limitations for existing small meat 
further processors. These facilities will remain subject to sections 
432.60-432.90, as applicable.

[[Page 54496]]

b. New Source Performance Standards (NSPS)
    In 2002, EPA proposed not to revise the current new source 
performance standards for small facilities in Subcategories F-I (meat 
further processors). For the final rule, EPA has concluded that the 
data on these facilities is insufficient to determine if Option 1 or 
Option 2 technology would present a barrier to entry. In addition, the 
analysis of barrier to entry data for these subcategories was 
complicated by the fact that some facilities performing operations 
fitting within the scope of Subcategories F-I also perform operations 
that are regulated under Subcategory L (poultry further processors). 
(See Section IX for discussion of ``mixed processors.'') EPA notes that 
its analysis of Options 1 and 2 as candidate BAT technologies for 
ammonia removal in these subcategories showed insignificant additional 
removals at extremely high cost (several orders of magnitude above its 
cost-effectiveness benchmark). While new facilities may be able to 
install technology at lower cost than existing facilities, it is 
unlikely that the costs would be low enough for the cost-effectiveness 
to approach a reasonable value. Finally, EPA also considered whether or 
not there were any new source performance standards currently in place 
when deciding whether to revise new source performance standards. There 
are current new source performance standards for these facilities which 
appear to be adequate. Therefore, EPA is not revising NSPS for new 
small meat further processors. New sources are subject to the current 
NSPS limitations in sections 432.65, 432.75, 432.85, and 432.95.
2. Meat Further Processors That Process More Than 50 Million Pounds Per 
Year (Non-Small)
a. Pollutants
    For non-small facilities in Subcategories F-I, EPA is establishing 
limitations for total nitrogen for existing sources, correcting an 
error in the BAT limitation for ammonia, and establishing nitrogen and 
ammonia (as nitrogen) standards for new sources. EPA is not revising 
the current limitations (BPT/BCT) or new source performance standards 
(NSPS) for conventional pollutants and is not revising the current BAT 
limitations for ammonia (as nitrogen). The current regulations include 
production-based limitations and standards for these facilities for 
BOD, TSS, oil & grease, pH, and fecal coliforms for existing and new 
sources and a concentration-based limitation for ammonia (as nitrogen) 
for existing sources. As discussed in Section V.G, the new limitations 
and standards are concentration-based. The following sections discuss 
the technology bases EPA selected for the final rule for the non-small 
direct discharge facilities in Subcategories F-I.
b. Best Practicable Control Technology Currently Available (BPT)
    EPA established BPT for the meat further processors (Subcategories 
F-I) in 1975, based on biological treatment (e.g., aerobic and 
anaerobic treatment) to control five conventional pollutants or 
pollutant parameters (BOD5, TSS, oil & grease, fecal 
coliforms, and pH). The current limitations for ammonia (as nitrogen) 
for non-small meat further processors are contained in BAT and not BPT 
(see Section VII.D.2.d for discussion of BAT options for ammonia 
removal). Therefore, this section does not discuss BPT limitations for 
ammonia (as nitrogen). In February 2002, EPA proposed new BPT 
limitations for chemical oxygen demand (COD) based on Option 2 in an 
effort to better reflect current BPT treatment technology for non-small 
meat further processing facilities (67 FR 8630; February 25, 2002). See 
Section V.B for discussion on why EPA is not establishing BPT 
limitations for COD in today's final rule.
    EPA did not propose revising BPT limitations for conventional 
pollutants. (See Section VII.D.2.c on BCT for additional information on 
why EPA is not revising current limits for conventional pollutants for 
facilities in these subcategories.) Therefore, EPA is not revising the 
conventional pollutant limitations for non-small meat further 
processing facilities (Subcategories F-I) in today's final rule and 
such facilities will remain subject to the BPT limitations in sections 
432.62, 432.72, 432.82, and 432.92.
c. Best Conventional Pollutant Control Technology (BCT)
    When deciding whether to adopt more stringent limitations for BCT 
than BPT, EPA considers technologies that might achieve greater 
removals of conventional pollutants than those adopted for BPT.
    EPA is not promulgating new BPT effluent limitations for 
conventional parameters (i.e., pH, BOD5, TSS, O&G, and fecal 
coliforms) for non-small meat further processors (Subcategories F-I). 
When considering a technology that would achieve greater removals of 
conventional pollutants than adopted for BPT, EPA compared the removals 
achievable through implementation of the Option 2 technology (which EPA 
considered as the possible technology basis for BCT) to current BPT 
limitations. EPA estimates that Option 2 removes approximately 21,700 
pounds more per year of BOD5 compared to conventional 
pollutant reductions by facilities meeting or exceeding current BPT 
limitations. There are no additional removals of TSS, O&G, or fecal 
coliforms.
    EPA evaluated Option 2 under the BCT cost test and it failed (see 
EPA's Economic and Environmental Benefits Analysis for details on the 
Agency's analysis). EPA did not evaluate other technology options, such 
as Option 2 + F (Option 2 plus the addition of a filter), because they 
are more costly and do not remove significantly more conventional 
pollutants than Option 2. If Option 2 did not pass, these more 
expensive options would not pass the BCT cost test. The Agency did not 
identify any technologies that pass the BCT cost test and achieve 
greater removals of conventional pollutants than the current BPT 
technology. Thus, EPA is not revising the BCT limitations for these 
facilities. Non-small meat further processing facilities in 
Subcategories F-I will remain subject to the current BCT limitations 
(which are equivalent to the current BPT limitations for conventional 
pollutants) in sections 432.67, 432.77, 432.87, and 432.97.
d. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish the BAT level of regulatory control for 
non-small meat further processors (Subcategories F-I) based on Option 3 
(i.e., biological treatment, more complete denitrification, more 
complete nitrification, and disinfection). As discussed in the NODA, 
after review and evaluation of the revised and new data, EPA has 
reconsidered its assessment of Option 3 as BAT technology. EPA 
determined that Option 3 did not meet all the statutory criteria for 
BAT. The Agency refocused its evaluation for the technology basis for 
BAT on Option 2.5, Option 2.5+P, or Option 4 for nutrient removal (see 
Section VII.A of today's preamble for a description of the technology 
options). For the final rule, EPA is basing the BAT limitations for 
total nitrogen for these facilities on Option 2.5 technology and is 
promulgating a limitation for total nitrogen on this basis. EPA is not 
revising the current BAT limitation for ammonia (as nitrogen) except to 
correct a typographical error in the daily maximum limitation.

[[Page 54497]]

    EPA evaluated whether revising the current BAT limitation for 
ammonia (as nitrogen) based on Option 2, Option 2.5, Option 2.5+P, or 
Option 4 treatment technologies could be supported. When evaluating 
revision of BAT for non-conventional pollutants that are not nutrients, 
EPA considers not only whether the technology option is available and 
economically achievable, but also whether it is best. EPA typically 
evaluates a technology's cost-effectiveness as a factor in its 
decision. When considering cost-effectiveness (except for nutrients), 
EPA typically looks at the costs of the additional pollutant reductions 
(in toxic pound-equivalents).
    EPA has estimated the annualized cost of each technology option 
under review. The approximate annualized cost of the technology options 
ranged from $266,000 for Option 2 to $798,000 for Option 4 (pre-tax, 
1999 dollars). Using the closure methodology described in Section IX, 
EPA projects that there would be a slight probability (0.5%) that at 
most one facility would close under any of the technology options. 
However, the average toxic cost-effectiveness numbers range from $8,000 
per toxic pound-equivalent ($1981) for Option 2 to $18,400 per toxic 
pound-equivalent ($1981) for Option 4. These high values are due to the 
very minimal incremental reduction in toxic pound-equivalents: 19.4 
toxic pound-equivalents/year for Options 2, 2.5, or 2.5+P and 25.3 
toxic pound-equivalents/year for Option 4. EPA typically uses $200 per 
toxic pound-equivalents (in 1981 dollars) as an indication of cost-
effectiveness for toxic pollutants. Therefore, EPA has determined that 
Options 2, 2.5, 2.5+P, and 4 are a not cost-effective basis for 
revising current ammonia (as nitrogen) limitations for non-small 
facilities in these subcategories when compared with those currently 
being achieved.
    The following section describes EPA's rationale for selecting 
Option 2.5 technology and rejecting Option 2.5+P and Option 4 as the 
basis of BAT limitations for nutrients. EPA did not consider Option 2 
for control of nutrients as it is not designed to reduce total nitrogen 
or total phosphorus. Both the proposal and the NODA contain detailed 
discussions explaining why EPA rejected setting BAT limitations based 
on other technology options (see 67 FR 8629; February 2002 and 68 FR 
48499; August 13, 2003). The record for today's final rule provides no 
basis for EPA to change these conclusions.
    EPA selected Option 2.5 technology as the basis of BAT control for 
total nitrogen for non-small meat further processing facilities 
(Subcategories F-I) because it is demonstrated as available and is 
economically achievable. First, although no facilities in these 
subcategories use Option 2.5 technology, this technology has been 
demonstrated as available in all other subcategories of the MPP 
industry. EPA notes that it did not have any detailed survey 
respondents that are within the scope of Subcategories F-I and that 
based on its screener questionnaire database, EPA estimates only 4 non-
small facilities in these subcategories. Based upon information 
collected from facilities in this subcategory who received screener 
surveys, all of the facilities are estimated to be currently achieving 
the LTA of Option 2.5 for total nitrogen.
    Second, Option 2.5 is economically achievable. EPA estimates the 
pre-tax annualized compliance costs (in 1999 dollars) for Option 2.5 to 
be $329,000. These costs are conservative and may be overstated as they 
include costs for the components of Option 2.5 technology even at 
facilities where the effluent concentrations are below the LTA for 
Option 2.5. EPA chose to possibly overestimate costs in this 
subcategory because of the uncertainty regarding the numbers of 
facilities in these subcategories and lack of detailed information on 
their operations. This is due to the small number of screener survey 
respondents and the fact that EPA does not have any detailed survey 
respondents from these subcategories. In addition, EPA's finding of 
economic achievability in this rule is based on the estimated costs of 
implementing the components of the model technology, not on achieving 
the resulting limitations. Using the facility and company closure 
methodologies described in Section IX.A, EPA estimates a 0.2% 
probability of facility-level closure (i.e., at most one facility 
closure).
    EPA also considered the cost-effectiveness of nutrient removal when 
evaluating BAT options for this industry segment. However, as 
previously noted, all non-small meat further processing facilities 
(Subcategories F-I) in EPA's database are already achieving the Option 
2.5 LTAs. Therefore, EPA estimates zero additional pounds removed per 
year of total nitrogen and could not calculate a nutrient cost-
effectiveness for nitrogen.
    Furthermore, there is the possibility that facilities in 
subcategories A-D that perform further processing may be at a 
competitive disadvantage if facilities in subcategories F-I do not have 
equivalent limits. In addition, EPA does not want to encourage 
companies to split their operations in order to be subject to lower 
limits.
    EPA considered Option 2.5+P as the basis of BAT, but rejected it 
for the following reasons. First, no non-small meat further processing 
facilities in EPA's database use Option 2.5+P technology. Second, 
Option 2.5+P costs an additional $30,000 annually for no additional 
pollutant reductions when compared to Option 2.5, because all of the 
facilities in EPA's database were achieving LTAs for phosphorus much 
lower than the LTA for 2.5+P. Therefore, this technology does not 
appear to be cost-effective.
    EPA considered Option 4 as the basis of BAT but did not select it 
due to the lack of availability of the technology option, the high 
increase in cost compared to Option 2.5, and the poor incremental 
nutrient cost-effectiveness (i.e., the high cost to remove additional 
nutrients compared to Option 2.5+P).
    EPA estimates that there are no facilities in subcategories F-I 
currently operating Option 4 technology. In addition, EPA estimates the 
pre-tax annualized compliance costs for Option 4 to be $798,000 
(1999$), which is $469,000 more than Option 2.5. EPA estimates that 
Option 4 removes approximately 80,000 pounds per year of nitrogen and 
zero pounds per year of phosphorus. Using the facility and company 
closure methodologies described in Section IX.A, EPA estimates a 0.5% 
probability of facility-level closure (i.e., at most one facility 
closure). Finally, EPA estimates the average nutrient cost-
effectiveness for nitrogen to be $10.02 per pound of total nitrogen 
removed, while the incremental nitrogen cost-effectiveness relative to 
Option 2.5 is $5.89 per pound. Both of the figures are above the $4 per 
pound benchmark for nitrogen removal. Therefore, EPA does not consider 
Option 4 to be cost-effective.
e. New Source Performance Standards (NSPS)
    In 2002, EPA proposed to revise the current new source performance 
standards for non-small facilities in Subcategories F-I (meat further 
processors) based on Option 3 technology. EPA estimates only four non-
small direct discharge meat further processing facilities, and 
therefore, has insufficient data on these facilities to determine if 
Options 2.5, 2.5+P, or 4 would present a barrier to entry. When 
deciding whether to promulgate revised new source performance 
standards, EPA also considers whether or not there are any new source 
performance standards currently in place. As discussed in Section 
VII.D.2.d, EPA is revising

[[Page 54498]]

existing source BAT limitations for non-small meat further processors 
based on Option 2.5 technology for total nitrogen and is not revising 
BAT limitations for ammonia (as nitrogen) (except to correct an error). 
Although there currently are new source performance standards for these 
facilities, they do not include limitations for total nitrogen or 
ammonia (as nitrogen). Therefore, for non-small meat further 
processors, EPA is setting NSPS for total nitrogen equivalent to the 
BAT limitations based on Option 2.5 and for ammonia (as nitrogen) based 
on Option 2 (because Option 2.5 does not provide any additional ammonia 
removal). EPA is not revising the current NSPS for conventional 
pollutants.

E. What Is the Basis for EPA's Selected Technology Options for 
Subcategory J (Independent Rendering)?

    Currently section 432.101(b) defines a renderer subject to the 
guidelines limitations as ``an independent or off-site rendering 
operation * * * which manufactures at rates greater than 75,000 pounds 
of raw material per day [or 19.5 million pounds per year based on 260 
work days].'' In 2002, EPA proposed to lower the production threshold 
to 10 million pounds per year based on a review of the available data 
at that time (i.e., screener survey data). EPA selected the threshold 
to design model facilities for use in estimating costs, pollutant 
loadings, non-water quality impacts, and economic impacts for the 
proposed rule. EPA is promulgating this production threshold of 10 
million pounds per year. There were no comments opposing this change in 
the threshold. Facilities that manufacture at rates less than or equal 
to 10 million pounds per year will remain out of the scope of Part 432, 
while facilities above the threshold will be covered by today's final 
regulation. EPA has not identified any additional direct discharging 
rendering facilities producing at rates between 10 million and 19.5 
million pounds per year in its database.
1. Pollutants
    For facilities in Subcategory J, EPA is establishing limitations 
and standards for total nitrogen for existing and new sources. EPA is 
not revising the current limitations (BPT/BCT) or new source 
performance standards (NSPS) for conventional pollutants and is not 
revising the current BAT limitations or NSPS for ammonia (as nitrogen). 
The current regulations include production-based limitations and 
standards for these facilities for BOD5, TSS, oil & grease 
(O&G), pH, fecal coliforms and ammonia (as nitrogen). As discussed in 
Section V.G, the new limitations and standards are concentration-based. 
The following sections discuss the technology bases EPA selected for 
the final rule for the direct discharge facilities in Subcategory J.
2. Best Practicable Control Technology Currently Available (BPT)
    EPA established BPT for Subcategory J (Renderers) in 1975, based on 
biological treatment (e.g., aerobic and anaerobic treatment) to control 
five conventional pollutants or pollutant parameters (BOD5, 
TSS, oil & grease, fecal coliforms, and pH). The current limitations 
for ammonia (as nitrogen) for non-small meat further processors are 
contained in BAT and not BPT (see Section VII.E.4 for discussion of BAT 
options for ammonia removal). Therefore, this section does not discuss 
BPT limitations for ammonia (as nitrogen). In February 2002, EPA 
proposed new BPT limitations for chemical oxygen demand (COD) based on 
Option 2 in an effort to better reflect current BPT treatment 
technology for renderers (67 FR 8630; February 25, 2002). See Section 
V.B for discussion on why EPA is not establishing BPT limitations for 
COD in today's final rule.
    EPA did not propose revising BPT limitations for conventional 
pollutants. (See Section VII.E.3 on BCT for additional information on 
why EPA is not revising current limits for conventional pollutants for 
facilities in this subcategory.) Therefore, EPA is not revising the 
conventional pollutant limitations for independent rendering facilities 
(Subcategory J) in today's final rule and such facilities will remain 
subject to the BPT limitations in section 432.102.
3. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT for facilities in subcategory J, EPA considered technologies 
that might achieve greater removals of conventional pollutants than 
those adopted for BPT. EPA also looked at whether those technologies 
are cost-reasonable under the standards established by the CWA. EPA 
generally refers to the decision criteria as the ``BCT cost test.''
    As discussed in Section VII.E.1, EPA is not promulgating new BPT 
effluent limitations for conventional parameters (i.e., pH, 
BOD5, TSS, O&G, and fecal coliforms) for independent 
rendering facilities (Subcategory J). Therefore, when considering a 
technology that would achieve greater removals of conventional 
pollutants than adopted for BPT, EPA compared the removals achievable 
through implementation of the Option 2 technology (which EPA considered 
as the possible technology basis for BCT) to current BPT limitations. 
EPA estimates that Option 2 removes approximately 34,000 pounds more 
per year of BOD5 compared to conventional pollutant 
reductions by facilities meeting or exceeding current BPT limitations. 
There are no additional removals of TSS, O&G, or fecal coliforms.
    EPA evaluated Option 2 under the BCT cost test and it failed (see 
the Economic and Environmental Benefits Analysis for details on EPA's 
analysis). For the final rule, EPA did not evaluate other technology 
options, such as Option 2 + F (Option 2 plus the addition of a filter), 
because they are more costly and do not remove significantly more 
conventional pollutants than Option 2. Therefore, if Option 2 did not 
pass, these more expensive options would not pass the BCT cost test. 
The Agency did not identify any technologies that pass the BCT cost 
test and achieve greater removals of conventional pollutants than the 
current BPT technology. Thus, EPA is not revising the BCT limitations 
for these facilities. Independent rendering facilities in Subcategory J 
will remain subject to the current BCT limitations (which are 
equivalent to the current BPT limitations for conventional pollutants) 
in section 432.107.
4. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish the BAT level of regulatory control for 
independent renderers (Subcategory J) based on Option 2 and took 
comment on other options in the NODA. For the final rule, EPA is basing 
the BAT limitations for these facilities on Option 2.5 technology and 
is promulgating a limitation for total nitrogen on this basis. EPA is 
not revising the current BAT limitation for ammonia (as nitrogen).
    EPA evaluated whether revising the current BAT limitation for 
ammonia (as nitrogen) based on Option 2, Option 2.5, Option 2.5+P, or 
Option 4 treatment technologies could be supported. When evaluating 
revision of BAT for non-conventional pollutants that are not nutrients, 
EPA not only considers whether the technology option is available and 
economically achievable, but also whether it is best. EPA typically 
evaluates a technology's cost-effectiveness as a factor in its 
decision. When considering cost-effectiveness (except for nutrients), 
EPA typically

[[Page 54499]]

evaluates the additional pollutant reductions (in toxic pound-
equivalents).
    EPA has estimated the annualized cost of each technology option 
under review. The approximate annualized cost of the technology options 
ranged from $628,000 for Option 2 to $10.2 million for Option 4 (pre-
tax, 1999 dollars). Using the closure methodology described in Section 
IX, there is a slight probability (no more than 3.3%) that there could 
be one facility closure under Options 2, 2.5, and 2.5+P and one closure 
under Option 4. However, the average toxic cost-effectiveness numbers 
range from $4,100 per toxic pound-equivalent ($1981) for Option 2 to 
$29,000 per toxic pound-equivalent ($1981) for Option 4. These high 
values are due to the very minimal incremental reduction in toxic 
pound-equivalents (i.e., 90 toxic pound-equivalents/year for Option 2, 
2.5, or 2.5+P and 205 toxic pound-equivalents/year for Option 4) and 
the high incremental cost. EPA typically uses $200 per toxic pound-
equivalents (in 1981 dollars) as an indication of cost-effectiveness 
for toxic pollutants. Therefore, EPA has determined that Options 2, 
2.5, 2.5+P, and 4 are a not cost-effective basis for revising current 
ammonia (as nitrogen) limitations for independent renderers in 
Subcategory J when compared with those currently being achieved.
    The following section describes EPA's rationale for selecting 
Option 2.5 technology and rejecting Option 2.5+P and Option 4 as the 
basis of BAT limitations for nutrients. EPA did not consider Option 2 
for control of nutrients as it is not designed to reduce total nitrogen 
or total phosphorus. Both the proposal and the NODA contain detailed 
discussions explaining why EPA rejected setting BAT limitations based 
on other technology (see 67 FR 8629; February 25, 2002 and 68 FR 48499; 
August 13, 2003). The record for today's final rule provides no basis 
for EPA to change these conclusions. EPA did not propose Option 3 for 
facilities in Subcategory J based on concerns over the economic impact 
and nitrogen cost-effectiveness estimated for the proposed rule. 
However, as discussed in the NODA (68 FR 48476; August 13, 2003), EPA 
has incorporated a significant amount of information into its analyses 
since proposal. This includes surveys from independent rendering 
facilities and comments from a trade association representing 
independent rendering facilities. In light of that data and 
information, EPA now finds a technology option that includes some 
denitrification (Option 2.5) is economically achievable and nutrient 
cost-effective for total nitrogen for independent rendering facilities.
    EPA selected Option 2.5 technology as the basis of BAT limitations 
for total nitrogen for total nitrogen for independent rendering 
facilities because it is demonstrated as available and is economically 
achievable. First, Option 2.5 technology has been demonstrated as 
available in Subcategory J as 38 percent of facilities in EPA's 
database use components of Option 2.5 technology (or more advanced 
technology).
    Second, Option 2.5 is economically achievable. EPA estimates the 
pre-tax annualized compliance costs (in 1999 dollars) for Option 2.5 to 
be $2.8 million. Using the facility and company closure methodologies 
described in Section IX.A, EPA estimates a 1.3% probability of 
facility-level closure (i.e., at most one facility closure).
    EPA also considered the cost-effectiveness of nutrient removal when 
evaluating BAT options for this industry segment. For Option 2.5, EPA 
estimates 1.5 million pounds removed per year of total nitrogen and the 
nutrient cost-effectiveness to be $1.92 per pound of total nitrogen 
removed. Because Option 2.5 does not include phosphorus removal, EPA 
did not calculate nutrient cost-effectiveness for phosphorus for Option 
2.5. EPA concludes that Option 2.5 is nutrient cost-effective for total 
nitrogen.
    EPA considered Option 2.5+P as the basis of BAT, but rejected it 
for the following reasons. Option 2.5+P costs $7.4 million annually for 
1.5 million pounds of total nitrogen reduction per year (i.e., the same 
reduction of total nitrogen as Option 2.5) and 590,000 pounds of total 
phosphorus reduction per year. Therefore, the average nitrogen cost-
effectiveness for Option 2.5+P is $5.06 per pound of total nitrogen 
removed and the average phosphorus cost-effectiveness is $12.59 per 
pound of total phosphorus removed. The nutrient cost-effectiveness 
values for nitrogen and phosphorus exceed the benchmarks that EPA uses; 
therefore, EPA did not select Option 2.5+P.
    EPA considered Option 4 as the basis of BAT but did not select it 
due to the lack of availability of the technology option, the high 
increase in cost compared to Option 2.5, and the poor incremental 
nutrient cost-effectiveness (i.e., the high cost to remove additional 
nutrients compared to Option 2.5+P).
    Based on its database, EPA estimates that there are no facilities 
in subcategory J currently operating Option 4 technology. In addition, 
EPA estimates the pre-tax annualized compliance costs for Option 4 to 
be $10.2 million (1999$), which is $7.4 million more than Option 2.5. 
EPA estimates that Option 4 removes approximately 1.7 million pounds 
per year of total nitrogen (200,000 more than Option 2.5) and 620,000 
pounds per year of total phosphorus (30,000 more than Option 2.5+P). 
Using the facility and company closure methodologies described in 
Section IX.A, EPA estimates a 4.8% probability of facility-level 
closure (i.e., 1 facility closure). Finally, EPA estimates the 
incremental nutrient cost-effectiveness to be $40 per pound of total 
nitrogen removed (compared to Option 2.5) and $85 per pound of total 
phosphorus removed (compared to Option 2.5+P). The nutrient cost-
effectiveness of Option 4 is well above the $4 per pound total nitrogen 
removed and $10 per pound total phosphorus removed benchmarks and 
therefore, EPA does not consider Option 4 to be cost-effective.
5. New Source Performance Standards (NSPS)
    In 2002, EPA proposed to revise the current new source performance 
standards for independent rendering facilities in Subcategory J based 
on Option 2 technology. As discussed in the NODA, with the development 
of Option 2.5, EPA reconsidered technology basis for all subcategories 
(68 FR 48500; August 13, 2003). EPA has selected Option 2.5 technology 
as the basis for BAT limitations (see Section VII.E.4); therefore, EPA 
did not consider Option 2 technology (a less stringent technology) as 
the basis for NSPS for the final rule. EPA has estimated the ratio of 
costs to assets for Options 2.5, 2.5+P and Option 4. The ratios are 
0.3% for Option 2.5, 0.4% for Option 2.5+P, and 0.5% for Option 4. The 
estimates for Option 2.5+P and Option 4, however, do not reflect EPA's 
additional evaluation of the costs for chemical phosphorus based on 
comments EPA received (see DCN 300-015). EPA performed an analysis 
using increased quantities of alum for chemical phosphorus removal for 
the detailed survey respondents (i.e., non-small meat and poultry 
slaughterers). From this additional evaluation, EPA concludes that the 
average costs for meat and poultry slaughterers may be between 4 and 26 
percent more per facility for chemical phosphorus removal (including 
increased sludge disposal) than those used in EPA's barrier to entry 
analysis, as discussed here. EPA is concerned that, with similar 
additional costs, the ratio for independent renderers may rise to a 
level that the Agency would consider to

[[Page 54500]]

be a barrier to entry for Option 2.5+P and Option 4.
    Although this subcategory does have current NSPS, they do not 
include limitations for total nitrogen. Therefore, EPA is establishing 
NSPS for total nitrogen based on Option 2.5 technology. EPA is not 
revising NSPS for ammonia (as nitrogen) or for the conventional 
pollutants.

F. What Is the Basis for EPA's Selected Technology Options for 
Subcategory K (Poultry First Processing)?

    In 2002, EPA proposed a production threshold of 10 million pounds 
(live weight killed) per year for facilities in Subcategory K. EPA 
proposed this threshold to allow for different limitations for small 
and non-small poultry first processing facilities. As discussed in 
Section V.A, EPA has raised the production threshold for the final rule 
from 10 to 100 million pounds per year. Therefore, this section 
discusses small and non-small facilities separately. Costs presented in 
this section are presented in 1999 year dollars which is the base year 
of the survey; however, EPA provides updated estimates in 2003 year 
dollars in Section VIII.B.
1. Poultry First Processors That Slaughter Less Than or Equal to 100 
Million Pounds Per Year (Small)
    For the final rule, small poultry first processing facilities 
include facilities with production rates less than or equal to 100 
million pounds per year (live weight killed). EPA is not establishing 
limitations for any existing small poultry first processing facilities 
in Subcategory K. However, EPA is establishing new source performance 
standards for new facilities. The following sections discuss EPA's 
decision not to establish BPT, BCT, or BAT limitations and to establish 
NSPS for small direct discharge facilities in Subcategory K.
a. BPT/BCT/BAT
    In 2002, EPA proposed new BPT/BCT/BAT for the small poultry first 
processors based on Option 1. EPA has also evaluated Option 2 for small 
facilities in this subcategory. Based on comments on the proposal and 
the incorporation of data from the detailed surveys, EPA is not 
establishing BPT/BCT/BAT limitations for small facilities in 
Subcategory K (poultry first processors) for this final rule for the 
following reasons.
    First, even though Option 1 and Option 2 are available technologies 
(i.e., partial and more complete nitrification, respectively) readily 
applicable to all small facilities in Subcategory K, the cost of 
compliance with these limitations in relation to the effluent reduction 
benefits is disproportionate. For poultry first processor facilities 
with production rates less than or equal to 100 million pounds of live 
weight killed (LWK) per year EPA estimates it will cost $1,487 per 
pound of pollutant removed (1999$) for Option 1 and $501 per pound 
(1999$) for Option 2. These values significantly exceed the $37 per 
pound removed benchmark that EPA is using, as guidance, to assess BPT 
cost reasonableness.
    Consequently, EPA has determined the total cost of effluent 
reductions using the Option 1 technology and the Option 2 technology 
are not reasonable in relation to the effluent reduction benefits. The 
Agency tried to avoid ``double-counting'' pollutant reductions that 
would occur if, for example, EPA summed removals of COD and BOD. 
Therefore, EPA used the sum of BOD5 and ammonia (as 
nitrogen) removed to estimate the pounds of pollutant removed under the 
technology options for these facilities. As noted previously, EPA 
estimates this cost as $1,487 per pound removed for Option 1 and $501 
per pound removed for Option 2. Second, EPA found that compliance with 
limitations based on Option 1 or Option 2 technology will result in at 
least 36 closures for the existing small direct dischargers for which 
facility-level financial data exists. As discussed in Section IX, EPA 
only had sufficient financial data for 9 out of an estimated 37 small 
facilities in this subcategory. Therefore, there may be more closures 
than EPA is able to project.
    Existing small direct discharge facilities in Subcategory K will 
remain subject to permit limits based on the best professional judgment 
of the permit writer.
b. New Source Performance Standards (NSPS)
    For the 2002 proposal, EPA proposed new NSPS based on Option 1. In 
the NODA (68 FR 48500; August 13, 2003), EPA gave notice that it was 
considering the modified options (i.e., Option 2.5, Option 2.5+P, and 
no revision/no regulation) in addition to the proposed options (i.e., 
Option 1 and Option 2) for small slaughtering facilities. Based on 
comments received on the proposal and the completion of the review and 
incorporation of data from the detailed surveys, EPA is establishing 
NSPS standards for small facilities in Subcategory K based on Option 2. 
There are no current new source performance standards for small poultry 
first processors and 75 percent of small facilities in EPA's database 
currently use Option 2 technology (or more advanced technology); 
therefore, Option 2 is demonstrated technology for this segment of 
facilities. However, EPA determined that the ratio of capital costs to 
total assets for the facilities in this subcategory to be 13% for both 
Option 1 and Option 2 technology levels. While 13 percent of average 
total assets is a significant level, EPA has concluded that the limited 
amount of data for these facilities limited the analysis and the actual 
ratio of capital costs to total assets for new facilities may be much 
lower. For example, the analysis includes one facility whose ratio is 
greater than 30%, while another facility has a ratio of approximately 
4%. Thus, since the barrier to entry test results are identical for 
Options 1 and 2, and 75% of existing facilities use Option 2 
technology, EPA selected the more stringent Option 2 as the level of 
control for new sources for ammonia (as nitrogen) and the five 
conventional pollutants.
2. Poultry First Processing Facilities That Slaughter More Than 100 
Million Pounds Per Year (Non-Small)
a. Pollutants
    For non-small facilities in Subcategory K, EPA is, for the first 
time, establishing limitations and standards for BOD5, TSS, 
O&G (as HEM), pH, fecal coliforms, ammonia (as nitrogen), and total 
nitrogen for existing and new sources. As discussed in Section V.G, the 
new limitations and standards are concentration-based. The following 
sections discuss the technology bases EPA selected for the final rule 
for the direct discharge non-small facilities in Subcategory K.
b. Best Practicable Control Technology Currently Available (BPT)
    In 2002, EPA proposed new BPT for the non-small poultry first 
processors (Subcategory K) based on Option 3 to control five 
conventional pollutants or pollutant parameters (BOD5, TSS, 
O&G (as HEM), fecal coliforms, and pH) and also control ammonia (as 
nitrogen), total nitrogen, and total phosphorus. As discussed in the 
NODA, after review and evaluation of the revised and new data, EPA has 
reconsidered its assessment of Option 3 technology.
    EPA is establishing BPT limitations for BOD5, TSS, O&G 
(as HEM), fecal coliforms, pH, and ammonia (as nitrogen) for non-small 
direct dischargers in Subcategory K based on technology Option 2. (See 
Section 8 of the TDD for today's final rule for

[[Page 54501]]

additional details on the Option 2 technology).
    The Agency concluded that the Option 2 treatment technology 
represents the best practicable control technology currently available 
and is the basis for the BPT limitations for these facilities for the 
following reasons.
    First, this technology is available technology and is readily 
applicable to all non-small facilities in Subcategory K. More than 92 
percent of the non-small direct discharging facilities in these 
subcategories are using Option 2 technology, or more advanced 
technology, today. Although most facilities have the components of 
Option 2 technology in place (e.g., nitrification basin/aerobic 
reactor), some facilities are not achieving the projected Option 2 
long-term average concentrations (LTAs). EPA attributes this to their 
failure to operate or maintain the Option 2 technology adequately. (See 
Sections 10 and 11 of the final rule TDD for additional discussion of 
the cost and loading methodologies.) Consequently, when estimating the 
costs of compliance with Option 2, EPA included costs for treatment 
optimization for a number of facilities to achieve the Option 2 LTA. 
For example, EPA included costs for increased aeration, chemical 
addition, sludge handling, process controls, in-process sampling, 
analytical testing, and capacity.
    Second, the cost of compliance with these limitations in relation 
to the effluent reduction benefits is not disproportionate. EPA 
projects that compliance with BPT limitations based on Option 2 
technology will not result in closures of existing non-small direct 
dischargers in these subcategories. Moreover, adopting this level of 
control will create a significant reduction in pollutants discharged 
into the environment. For poultry first processor facilities with 
production rates greater than 100 million pounds LWK per year using 
Option 2, EPA estimates an annual compliance cost of $17.7 million 
(pre-tax, 1999$) and removal of 980,000 pounds of BOD5 and 
ammonia (as nitrogen) from current discharges into the Nation's waters 
at a cost of $18.18 per pound of pollutant removed (1999$). This cost 
per pound of pollutant removed is below the $37 per pound benchmark 
that EPA is using, as guidance, to evaluate cost-reasonableness.
    EPA considered Option 2.5 (which also includes partial 
denitrification) as the basis for BPT limitations. However, Option 2.5 
does not remove any additional pounds of conventional pollutants or 
ammonia (as nitrogen) and costs $9.4 million more annually than Option 
2. In addition, EPA found that 45 percent of non-small facilities in 
Subcategory K in EPA's database are using the components of Option 2.5 
technology (e.g., facility has in place a denitrification basin, 
nitrification basin and disinfection) or more advanced technology. 
Because Option 2.5 costs more, does not remove additional pollutants, 
and is not as widely available as Option 2 technology, EPA did not 
select it as the basis of BPT limitations.
    Furthermore, EPA did not select Option 2.5+P or Option 4 as the 
basis for BPT limitations, as they do not achieve adequate additional 
pollutant reductions as compared to their additional compliance costs. 
Specifically, Option 2.5+P does not achieve any additional removals of 
conventional pollutants or ammonia (as nitrogen) as compared to Option 
2, but it would cost an additional $45.7 million (in 1999 dollars) 
annually. Option 4 would remove an additional 170,000 pounds of ammonia 
(as nitrogen) for an additional $91.4 million (in 1999 dollars) 
annually. Other options the Agency considered for BPT were not selected 
due to lack of availability and/or poor BPT cost and removal 
comparison. Both the proposal and the NODA contain detailed discussions 
explaining why EPA rejected setting BPT limitations based on other 
technology (see 67 FR 8629; February 25, 2002 and 68 FR 48499; August 
13, 2003). The record for today's final rule provides no basis for EPA 
to change these conclusions.
c. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT for Subcategory K, EPA considered whether technologies other 
than those adopted for BPT will achieve greater removal of conventional 
pollutants and whether the costs of those technologies are reasonable 
under the standards established by the CWA. EPA generally refers to the 
decision criteria as the ``BCT cost test.'' EPA is promulgating BCT 
effluent limitations for conventional parameters (e.g., pH, TSS, O&G 
(as HEM)) equivalent to BPT for this subcategory because the Agency did 
not identify technologies that can achieve greater removals of 
conventional pollutants that also pass the BCT cost test. EPA evaluated 
adding a filter to the BPT technology (i.e., Option 2 + F) in order to 
get further conventional pollutant reductions. However, this technology 
option failed the BCT cost test. (For a more detailed description of 
the BCT cost test and details on EPA's analysis, see the Economic and 
Environmental Benefits Analysis in the rulemaking record.)
d. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish the BAT level of regulatory control for 
non-small facilities in Subcategory K based on Option 3 (i.e., 
biological treatment, more complete nitrification, more complete 
denitrification and disinfection). As discussed in the NODA, after 
review and evaluation of the revised and new data, EPA has reconsidered 
its assessment of Option 3 as BAT technology. EPA determined that 
Option 3 did not meet all the statutory criteria for BAT. The Agency 
refocused its evaluation for the technology basis for BAT on Option 
2.5, Option 2.5+P or Option 4 for nutrient removal (see Section VII.A 
of today's preamble for a description of the technology options). For 
the final rule, EPA bases the BAT limitations for these facilities on 
Option 2.5 technology and is promulgating a limitation for total 
nitrogen on this basis. However, EPA is setting a limitation for 
ammonia (as nitrogen) that is equal to BPT, because using Option 2.5 
technology or higher does not result in any additional ammonia removal 
than the technology used to establish BPT (Option 2).
    The following section describes EPA's rationale for selecting 
Option 2.5 technology and rejecting Option 2.5+P and Option 4. The 
proposal and the NODA (see 67 FR 8629 and 68 FR 48499) contain detailed 
explanations why EPA rejected setting BAT limitations based on other 
technology options, and the record for today's final rule provides does 
not support EPA changing these conclusions.
    EPA has determined that Option 2.5 technology is available in 
Subcategory K, as 45 percent of the non-small facilities in this 
subcategory in EPA's database use the components of Option 2.5 (or more 
advanced technology) and is economically achievable. EPA estimates the 
compliance costs for Option 2.5 to be $31.8 million (in 1999 dollars). 
Using the facility and company closure methodologies described in 
Section IX.A, EPA believes that no facilities or companies will close. 
For a sensitivity analysis, EPA also estimated closures using a less 
stringent decision rule (closure under one of three forecast 
methodologies rather than at least two of three). Using the alternate 
analysis, EPA estimates no facilities will close under Option 2.5.
    EPA also considered nutrient removal cost-effectiveness when 
evaluating BAT options for this industry. For Option

[[Page 54502]]

2.5, EPA estimates 9.4 million pounds removed per year of total 
nitrogen and a nutrient cost-effectiveness of $3.40 per pound of total 
nitrogen removed. Because Option 2.5 does not include phosphorus 
removal, EPA did not calculate nutrient cost-effectiveness for 
phosphorus for Option 2.5. EPA concludes that Option 2.5 is nutrient 
cost-effective for total nitrogen.
    EPA considered Option 2.5+P as the basis of BAT, but rejected it. 
Fourteen percent of non-small facilities in Subcategory K in EPA's 
database use Option 2.5+P technology (or more advanced technology). EPA 
estimates the pre-tax annualized cost of Option 2.5+P is $63.4 million 
(1999$), which is $31.6 million more than Option 2.5. EPA estimates no 
facility closures and one company closure for Option 2.5+P Note: 
Facilities that are owned by the company that is projected to close did 
not provide facility-level financial information; therefore, those 
facilities are not part of the facility-level analysis). Option 2.5+P 
removes 4.1 million pounds per year of total phosphorus and achieves 
the same level of nitrogen and conventional pollutant reduction as 
Option 2.5. Therefore, EPA estimates the average nutrient cost-
effectiveness to be $6.77 per pound total nitrogen removed and $15.28 
per pound total phosphorus removed. These values exceed the benchmark 
that EPA is using, as guidance, for cost-effectiveness. Therefore, EPA 
did not select Option 2.5+P due to the poor cost-effectiveness for 
nutrients.
    EPA also considered, but did not select, Option 4 as the basis of 
BAT limitations due to the high increase in cost as compared to Option 
2.5, the poor incremental nutrient cost-effectiveness (i.e., the high 
cost to remove additional nutrients as compared to Option 2.5+P), and 
high number of closures.
    EPA estimates that almost 3 percent of direct discharge non-small 
facilities in this subcategory currently operate Option 4 technology 
(or more advanced technology). EPA estimates the pre-tax annualized 
compliance costs for Option 4 to be $109.1 million (1999$), which is 
$45.7 million more than Option 2.5+P and $77.3 million more than Option 
2.5. EPA also estimates that Option 4 removes 20.9 million pounds per 
year of nitrogen (11.5 million more than Option 2.5 or Option 2.5+P) 
and 4.7 million pounds per year of phosphorus (about 520,000 pounds per 
year more than Option 2.5+P). However, EPA projects 22 facility 
closures and one company closure under Option 4 and estimates the 
average nutrient cost-effectiveness to be $5.22 per pound total 
nitrogen removed and $23.35 per pound total phosphorus removed (see 
Section IX for nutrient cost-effectiveness result for all options by 
subcategory). The incremental nutrient cost-effectiveness is $6.71 per 
pound of nitrogen removed (relative to Option 2.5) and $87.17 per pound 
of phosphorus removed (relative to Option 2.5+P). Option 4 exceeds the 
$4 per pound removed benchmark value for nitrogen and the $10 per pound 
removed benchmark value for phosphorus. Therefore, EPA finds that 
Option 4 is not cost-effective for total nitrogen or phosphorus removal 
and is not economically achievable technology.
    EPA is establishing BAT limitations for ammonia (as nitrogen) that 
are equivalent to the limitations it is promulgating today under BPT 
for facilities in Subcategory K. EPA considered setting more stringent 
limitations for ammonia (as nitrogen) under BAT; however, the selected 
BAT technology option (Option 2.5) does not remove any additional 
quantity of ammonia (as nitrogen). Although Option 4 does remove some 
additional pounds of ammonia (as nitrogen) as compared to Option 2, EPA 
did not select Option 4 for BAT for the reasons discussed earlier in 
this section.
e. New Source Performance Standards (NSPS)
    EPA considers the barrier to entry into the industry for a new 
facility that results from the compliance costs of the regulation and 
whether or not there are new source standards in place for the 
facilities. For this rule, EPA used the ratio of average capital costs 
to average total assets to measure the potential for barrier to entry 
due to the MPP rule. EPA estimated the ratio of costs to assets for 
Option 2.5, 2.5+P, and Option 4: they range from 4.0% for Option 2.5 to 
4.2% for Option 2.5+P to 12.3% for Option 4. The estimates for Option 
2.5+P and Option 4, however, do not reflect EPA's additional evaluation 
of the costs for chemical phosphorus based on comments EPA received 
(see DCN 300-015). From this additional evaluation, EPA concludes that 
for non-small poultry first processors costs may be $25,000 to $106,000 
more per facility for chemical phosphorus removal (including costs for 
additional sludge disposal) than those used in EPA's barrier to entry 
analysis, as discussed here. EPA is concerned that, with these 
additional costs, the ratio may rise to a level that the Agency would 
consider to be a barrier to entry for Option 2.5+P and Option 4. 
Therefore, EPA is setting standards for new sources equivalent to the 
BAT limitations established by today's final rule (i.e., based on 
Option 2.5 technology) for total nitrogen and equivalent to BPT (i.e., 
based on Option 2 technology) for ammonia (as nitrogen) and the five 
conventional pollutants.

G. What Is the Basis for EPA's Selected Technology Options for 
Subcategory L (Poultry Further Processing)?

    In 2002, EPA proposed a production threshold of 7 million pounds 
(finished product) per year for facilities in Subcategory L. EPA 
proposed this threshold to allow for different limitations for small 
and non-small poultry further processing facilities. EPA is retaining 
the proposed threshold for the final rule. Therefore, this section 
discusses small and non-small facilities separately. Costs presented in 
this section are presented in 1999 year dollars which is the base year 
of the survey; however, EPA provides updated estimates in 2003 year 
dollars in Section VIII.B.
1. Poultry Further Processing Facilities That Produce Less Than or 
Equal to 7 Million Pounds Per Year (Small)
    For the final rule, small poultry first processing facilities 
include facilities with production rates less than or equal to 7 
million pounds (finished product) per year. EPA is not establishing 
limitations for any existing small poultry further processing 
facilities in Subcategory L. However, EPA is establishing new source 
performance standards for new facilities. The following sections 
discuss EPA's decision not to establish BPT, BCT, or BAT limitations 
and to establish NSPS for small direct discharge facilities in 
Subcategory L.
a. BPT/BCT/BAT
    In 2002, EPA proposed new BPT/BCT/BAT for the small poultry further 
processors based on Option 1. EPA has also evaluated Option 2 for small 
facilities in this subcategory. Based on incorporation of data from the 
detailed surveys, EPA is not establishing BPT/BCT/BAT limitations for 
small facilities in Subcategory K (poultry first processors) for this 
final rule for the following reasons.
    First, even though Option 1 and Option 2 are available technologies 
(i.e., partial and more complete nitrification, respectively) readily 
applicable to all small facilities in Subcategory L, the cost of 
compliance with these limitations in relation to the effluent reduction 
benefits is disproportionate. For poultry further processor facilities 
with production rates less than or equal to 7 million pounds of live 
weight killed (LWK) per year EPA estimates it will cost approximately 
$74 per pound of

[[Page 54503]]

pollutant removed (1999$) for Option 1 or Option 2, which exceeds the 
$37 per pound removed benchmark that EPA is using, as guidance, to 
evaluate BPT cost-reasonableness.
    Consequently, EPA has determined the total cost of effluent 
reductions using the Option 1 or Option 2 technology is not reasonable 
in relation to the effluent reduction benefits. Second, due to lack of 
facility-level financial data, EPA could not estimate closures that 
would result with BPT limitations based on Option 1 or Option 2 
technology. In addition, the analysis of financial data for small 
facilities in Subcategory L was complicated by the fact that some 
facilities performing operations fitting within the scope of 
Subcategory L also perform operations that are regulated under 
Subcategories F-I (meat further processors). (See Section IX for 
discussion of ``mixed processors.'') Existing small direct discharge 
facilities in Subcategory L will remain subject to permit limits based 
on the best professional judgment of the permit writer.
b. New Source Performance Standards (NSPS)
    In 2002, EPA proposed new NSPS for small poultry further processors 
(Subcategory L) based on Option 1. In the NODA (68 FR 48500; August 13, 
2003), EPA gave notice that it was considering the modified options 
(i.e., Option 2.5, Option 2.5+P, and no revision/no regulation) in 
addition to the proposed options (i.e., Option 1 and Option 2) for 
these facilities. After considering comments and the data from the 
detailed surveys, EPA is establishing NSPS standards for small poultry 
further processing facilities based on Option 2. EPA determined that 
all existing small poultry further processors in EPA's database 
currently use the components of Option 2 technology, although, as noted 
above, they would incur additional costs to meet the Option 2 LTAs. In 
addition, EPA determined that there is no barrier to entry for either 
Option 1 or Option 2 as the ratio of capital costs to total assets for 
the facilities in this subcategory is 0.4% for both Option 1 and Option 
2 technology levels. Finally, there are no current new source 
performance standards in place for small facilities in Subcategory L. 
Since the barrier to entry test results are identical for Options 1 and 
2, and all existing facilities have the components in place for Option 
2 technology, EPA selected the more stringent Option 2 as the level of 
control for new sources for ammonia (as nitrogen) and the five 
conventional pollutants.
2. Poultry Further Processing Facilities That Produce More Than 7 
Million Pounds Per Year (Non-Small)
a. Pollutants
    For non-small facilities in Subcategory L, EPA is, for the first 
time, establishing limitations and standards for BOD5, TSS, 
O&G (as HEM), pH, fecal coliforms, ammonia (as nitrogen), and total 
nitrogen for existing and new sources. As discussed in Section V.G, the 
new limitations and standards are concentration-based. The following 
sections discuss the technology bases EPA selected for the final rule 
for the direct discharge non-small facilities in Subcategory L (poultry 
further processors).
b. Best Practicable Control Technology Currently Available (BPT)
    In 2002, EPA based its proposal for new BPT for the poultry further 
processors (Subcategory L) on Option 3 to control five conventional 
pollutants or pollutant parameters (BOD5, TSS, O&G (as HEM), 
fecal coliforms, and pH) and also control ammonia (as nitrogen), total 
nitrogen, and total phosphorus. As discussed in the NODA, after review 
and evaluation of the revised and new data, EPA has reconsidered its 
assessment of Option 3 technology.
    EPA has today decided to establish BPT limitations for 
BOD5, TSS, O&G (as HEM), fecal coliforms, pH, and ammonia 
(as nitrogen) for non-small direct dischargers in Subcategory L based 
on technology Option 2. (See Section 8 of the TDD for today's final 
rule for additional details on the Option 2 technology).
    The Agency concluded that the Option 2 treatment technology is the 
best practicable control technology currently available, and it should 
be the basis for the BPT limitations for these facilities. First, this 
technology is available and readily applicable to all non-small 
facilities in Subcategory L. EPA estimates that all non-small direct 
discharge facilities in this subcategory currently operate Option 2 
technology (or more advanced technology).
    Second, the cost of compliance with these limitations in relation 
to the effluent reduction benefits is not disproportionate. For poultry 
further processing facilities with production rates greater than 7 
million pounds finished product per year, EPA estimates an annual 
compliance cost under Option 2 of $557,000 (pre-tax, 1999$) and 18,600 
pounds of BOD5 and ammonia (as nitrogen) removed from 
current discharges at a cost of $29.88 (1999$) per pound of pollutant 
removed. In estimating the pounds of pollutant removed based on Option 
2 technology for these facilities, EPA used the sum of BOD5 
and ammonia (as nitrogen) removed. The cost per pound removed 
approaches but is still below the $37 per pound value that EPA uses as 
guidance in evaluating BPT cost-reasonableness.
    EPA considered Option 2.5 (which also includes partial 
denitrification) as the basis for BPT limitations. However, Option 2.5 
does not remove any additional pounds of conventional pollutants or 
ammonia (as nitrogen) compared to Option 2 but costs almost $426,000 
more annually. In addition, EPA found that Option 2.5 technology is not 
as widely available as Option 2 technology. That is, 37 percent of non-
small poultry further processors in EPA's database use Option 2.5 (or 
more advanced) technology, while 100 percent use Option 2 (or more 
advanced) technology. Thus, EPA did not select Option 2.5 as the basis 
of BPT limitations.
    Furthermore, EPA did not select either Option 2.5+P or Option 4 as 
the basis for BPT limitations because they do not achieve adequate 
pollutant reductions relative to additional compliance costs. 
Specifically, Option 2.5+P does not achieve any additional removals of 
conventional pollutants or ammonia (as nitrogen) but would cost 
$918,000 more each year than Option 2. Option 4 would remove an 
insignificant amount of ammonia (as nitrogen) for an additional $2.7 
million annually. EPA did not select other options it considered for 
BPT due to lack of availability and poor BPT cost and removal 
comparison. The 2002 proposal and the NODA (see 66 FR 457 and 68 FR 
48499) contain detailed explanations of why EPA rejected BPT 
limitations based on other BPT technology options. The information in 
the record for today's final rule does not support EPA's changing these 
conclusions.
c. Best Conventional Pollutant Control Technology (BCT)
    In deciding whether to adopt more stringent limitations for BCT 
than BPT, EPA considered whether there are technologies other than 
those adopted for BPT that achieve greater removals of conventional 
pollutants and whether those technologies are cost-reasonable under CWA 
standards. EPA generally refers to the decision criteria as the ``BCT 
cost test.'' EPA is promulgating effluent limitations for conventional 
parameters (e.g., pH, TSS, O&G (as HEM)) equivalent to BPT for 
Subcategory L because it identified no technologies achieving greater 
removals of conventional pollutants that also pass

[[Page 54504]]

the BCT cost test. EPA considered adding a filter to the BPT technology 
(i.e., Option 2 + F) to get further conventional pollutant reductions; 
however, this technology option failed the BCT cost test. For a more 
detailed description of the BCT cost test and details on EPA's 
analysis, see the Economic and Environmental Benefits Analysis in the 
rulemaking record.
d. Best Available Technology Economically Achievable (BAT)
    EPA proposed to establish the BAT level of regulatory control for 
non-small facilities in Subcategory L based on Option 3 (i.e., 
biological treatment, more complete denitrification, more complete 
nitrification, and disinfection). As discussed in the NODA, after 
review and evaluation of the revised and new data, EPA has reconsidered 
its assessment of Option 3 as BAT technology. EPA determined that 
Option 3 did not meet all the statutory criteria for BAT. The Agency 
refocused its evaluation for the technology basis for BAT on Option 
2.5, Option 2.5+P, or Option 4 for nutrient removal (see Section VII.A 
of today's preamble for a description of the technology options). For 
the final rule, EPA bases the BAT limitations for these facilities on 
Option 2.5 technology and is promulgating a limitation for total 
nitrogen on this basis. EPA is, however, setting a limitation for 
ammonia (as nitrogen) that is equal to BPT.
    The following section describes EPA's rationale for selecting 
Option 2.5 technology and rejecting Option 2.5+P and Option 4. The 
proposal and the NODA (see 67 FR 8629 and 68 FR 48499) contain detailed 
explanations why EPA rejected setting BAT limitations based on other 
technology options, and the record for today's final rule does not 
support EPA changing these conclusions.
    EPA selected Option 2.5 technology as the basis of BAT for non-
small facilities in Subcategory L for two reasons. First, Option 2.5 
technology has been demonstrated as available in Subcategory L. EPA 
estimates that 37 percent of non-small direct discharge facilities in 
this subcategory in EPA's database currently operate at or above the 
Option 2.5 technology level. Second, Option 2.5 is economically 
achievable. EPA estimates the compliance costs (pre-tax, 1999$) for 
Option 2.5 to be $983,000 per year. Using the closure methodology 
described in Section IX, there is a slight probability (0.9%) that 
there could be one facility closure under Option 2.5.
    EPA also considered nutrient removal cost-effectiveness when 
evaluating BAT options for this industry. For Option 2.5, EPA estimates 
146,000 pounds removed per year of total nitrogen and a nutrient cost-
effectiveness of $6.71 per pound total nitrogen removed. Option 2.5 
does not include phosphorus removal; therefore, EPA did not calculate 
nutrient cost-effectiveness for phosphorus for Option 2.5. For the 
subcategory, Option 2.5 exceeds the $4/lb removed value EPA uses as 
guidance for nitrogen cost-effectiveness. However, facilities in 
Subcategory L perform operations similar to the facilities covered in 
other subcategories being regulated for nitrogen. Due to the 
competitiveness among these facilities and its economic achievability, 
EPA is including nitrogen limitations in the final rule for this 
subcategory. EPA also notes that Option 2.5 also results in a 
substantial increase in removals of conventional pollutants relative to 
Option 2--in excess of 136,000 pounds of BOD.
    EPA considered Option 2.5+P as the basis of BAT but rejected it. 
EPA estimates that 9 percent of the non-small poultry further 
processors use Option 2.5 (or more advanced) technology with phosphorus 
removal. The pre-tax annualized cost of Option 2.5+P is $1.5 million 
(1999$) and the probability of a facility-level closure is less than 
1.4% (i.e., at most one facility closure). Option 2.5+P removes 25,000 
pounds per year of total phosphorus and achieves the same level of 
nitrogen and conventional pollutant reduction as Option 2.5. Therefore, 
EPA estimates the average nutrient cost-effectiveness to be $58.98 per 
pound of total phosphorus removed. Therefore, EPA did not select Option 
2.5+P due to the poor cost-effectiveness for phosphorus.
    EPA also considered Option 4 as the basis of BAT but did not select 
it due to the high increase in cost compared to Option 2.5 and the poor 
nutrient cost-effectiveness (i.e., the high cost to remove additional 
nutrients compared to Option 2.5+P).
    Nine percent of non-small direct discharge facilities in this 
subcategory operate Option 4 technology (or more advanced technology). 
Therefore, EPA considers the technology to be available. EPA estimates 
the pre-tax annualized compliance costs for Option 4 to be $3.3 million 
(1999$), which is $1.8 million more than Option 2.5+P and $2.3 million 
more than Option 2.5. Option 4 removes 354,000 pounds per year of 
nitrogen (208,000 more than Options 2.5 or 2.5+P) and 27,000 pounds per 
year of phosphorus (approximately 2,000 more pounds per year than 
Option 2.5+P). There is a 3% probability of a facility-level closure 
for Option 4 (i.e., at most one facility closure) and a ratio of 16.8% 
when comparing annualized compliance costs to net income. EPA considers 
this cost to revenue ratio high and an indication that Option 4 is not 
economically achievable for non-small facilities in Subcategory L. 
Finally, the incremental nutrient cost-effectiveness for nitrogen (as 
compared to Option 2.5) is $11 per pound total nitrogen removed and for 
phosphorus (as compared to Option 2.5+P) is $902 per pound total 
phosphorus removed. Therefore, EPA finds that Option 4 is not nutrient 
cost-effective for total nitrogen or total phosphorus removal and is 
not economically achievable.
    EPA is establishing BAT limitations for ammonia (as nitrogen) that 
are equivalent to the limitations it is promulgating today under BPT. 
EPA considered setting more stringent limitations for ammonia (as 
nitrogen) under BAT; however, the selected BAT technology option 
(Option 2.5) does not remove any additional quantity of ammonia (as 
nitrogen). Although Option 4 does remove some additional pounds of 
ammonia (as nitrogen) as compared to Option 2, EPA did not select 
Option 4 for BAT for the reasons discussed earlier in this section.
e. New Source Performance Standards (NSPS)
    For this rule, EPA used the ratio of average capital costs to 
average total assets to measure the potential barrier to entry due to 
the MPP rule. However, several non-small facilities in Subcategory L 
also perform operations that fall under the scope of Subcategories F-I. 
This complicates the analysis of the barrier to entry data. EPA 
estimated the ratio of costs to assets for Option 2.5, Option 2.5+P, 
and Option 4 for non-small poultry further processing facilities 
(Subcategory L). The ratios range from 0.1% for Option 2.5 and Option 
2.5+P to 0.6% for Option 4. The estimates for Option 2.5+P and Option 
4, however, do not reflect EPA's additional evaluation of the costs for 
chemical phosphorus based on comments EPA received (see DCN 300-015). 
EPA performed an analysis using increased quantities of alum for 
chemical phosphorus removal for the detailed survey respondents (i.e., 
non-small meat and poultry slaughterers). From this additional 
evaluation, EPA concludes that costs for poultry slaughterers may be 
between 2 percent and 43% more per facility for chemical phosphorus 
removal (including increased sludge disposal) than those used in EPA's 
barrier to entry analysis, as discussed here. EPA is concerned that, 
with similar additional costs, the

[[Page 54505]]

ratio for further processors may rise to a level that the Agency would 
consider to be a barrier to entry for Option 2.5+P and Option 4. Based 
on these results, EPA has decided to establish standards for new 
sources equivalent to the BAT limitations based on Option 2.5 
technology for total nitrogen and equivalent to BPT (based on Option 2) 
for ammonia (as nitrogen) and the five conventional pollutants.

VIII. How Did EPA Estimate the Pollutant Loadings and Compliance Costs 
for the Final Rule?

A. Pollutant Reductions

1. How Did EPA Estimate Pollutant Loadings and Reductions for the Final 
Rule?
    As discussed in Section V, in response to comments on the proposal 
EPA revised the method to estimate compliance costs. The revised 
assessment of pollutant loading reductions was developed at the 
facility-level similar to the revised analysis of costs.
    EPA developed target effluent concentrations for each treatment 
option for 11 pollutants of concern. These 11 pollutants of concern are 
comprised of the eight pollutants that EPA proposed for regulation 
(ammonia (as N), 5-day biochemical oxygen demand (BOD5), chemical 
oxygen demand (COD), fecal coliforms, oil and grease (as hexane 
extractable material), total nitrogen, total phosphorus, and total 
suspended solids (TSS)), with the addition of 3 other pollutants 
(carbonaceous biological oxygen demand (CBOD), nitrate+nitrite as 
nitrogen, and total Kjeldahl nitrogen (TKN)) that EPA also considered 
for regulation after the proposal. For a discussion on pollutants 
selected for regulation in today's final rule see Section V.B.
    To estimate the baseline pollutant loadings, EPA first established 
baseline pollutant concentrations for the selected 11 pollutants of 
concern for each facility for which EPA had estimated costs. Facility 
baseline concentrations are the estimated pollutant concentrations in 
the MPP wastewaters that a facility is currently discharging.
    For each facility, EPA made extensive efforts to obtain analytical 
effluent wastewater concentration data representative of the treatment 
system in place at the facility. Data sources EPA used to establish the 
baseline pollutant concentration for a specific facility included the 
following: Data provided in the detailed survey; corrections to a 
``fact sheet'' sent to each facility that summarized information about 
the facility's effluent concentrations, wastewater flows, and 
wastewater treatment operations; data provided by the facility through 
telephone communications; sampling episode data; site visit data; 
discharge monitoring report (DMR) data from the EPA Permit Compliance 
System (PCS), EPA Regional Office, or State regulatory agency; and 
effluent data provided in the facility's NPDES permit application.
    When effluent data were available, EPA used the annual average 
concentrations reported for 1999 because 1999 was the base year of the 
MPP detailed survey. EPA also used concentrations reported for years 
after 1999, but only when data from 1999 were unavailable and only if 
facility operations or treatment performance had not significantly 
changed since 1999. In instances where data from more than one source 
were available for a particular facility, EPA used the data that 
represented and encompassed the largest span of time. For example, if 
both detailed survey data and sampling episode data were available for 
a facility, EPA used average concentration from the detailed survey 
data instead of the sampling episode data. In this example the detailed 
survey data represented the average pollutant concentration over a year 
while the sampling episode data represented the average concentration 
over a period of 3 or 5 days.
    When EPA could not obtain effluent data for a pollutant or 
pollutants from any of the above data sources, EPA derived default 
concentrations. In particular, EPA derived default concentrations for 
certain pollutants if data on an associated pollutant parameter were 
available. For example, based on the available data from the sampling 
episodes and detailed survey data, EPA found a strong relationship 
between BOD and CBOD concentrations in MPP wastewaters. Therefore, when 
a facility did not have data on effluent CBOD concentrations, but did 
have effluent BOD data, EPA estimated the CBOD concentration based on 
the BOD data (more detailed information on the calculations and 
formulas development are available in Section 19.6.1, DCN 100-784 of 
the rulemaking record).
    Considerable effort was made to either obtain analytical effluent 
concentration data or to calculate pollutant concentrations based on 
another pollutant where EPA's data demonstrated a correlation. For 
example, EPA calculated baseline concentrations for total nitrogen 
(based on TKN and nitrate+nitrite values) for many facilities. However, 
when analytical effluent data for a particular pollutant was 
unavailable and could not be calculated, then EPA used a default value 
for the facility. EPA calculated default concentrations for 
BOD5, COD, fecal coliforms, ammonia as nitrogen, oil and 
grease (HEM), and TSS. For each regulatory subcategory, EPA averaged 
all the available analytical data for a particular pollutant from all 
the facilities matching the subcategory and EPA used this average as 
the default value. Previously, default concentrations were also 
developed for nitrate+nitrite as nitrogen concentrations. However, by 
using default nitrate+nitrite values it was observed that 
inconsistencies between the influent and effluent total nitrogen 
concentrations occurred at certain facilities. For example, facilities 
with only nitrification treatment would appear to have significant 
denitrification based on the use of default nitrate+nitrate 
concentrations. Therefore, EPA revised the calculation of 
nitrate+nitrite concentrations for facilities with only nitrification 
treatment based on a total nitrogen balance between the influent and 
effluent wastewater concentrations. For facilities with partial 
denitrification treatment, the calculated average total nitrogen 
percent removal at facilities with partial denitrification treatment 
was applied to the influent value to calculate the effluent 
concentration. More detailed information is available in the Technical 
Development Document.
    Because of the general lack of data for the pollutants of concern 
and the similarity in wastewater characteristics for stand-alone meat 
and poultry further processors (Subcategories F-I and L, respectively), 
EPA combined the baseline data from these two facility types. The 
result was one set of default baseline concentrations that applied to 
all further processors, regardless of whether the facility was a meat 
or poultry further processor. EPA has found that the wastewater 
characteristics at further processors are more likely to be dependent 
on the processing operation (e.g., breading, frying) than on the type 
of meat.
    For independent rendering facilities (Subcategory J), in addition 
to the available analytical data from the sources described previously 
in this section, EPA used data provided by the MPP Industry Coalition 
for three independent rendering facilities, and data provided by the 
National Renderers Association for two independent rendering facilities 
in the development of default concentrations for Subcategory J 
facilities.
    After EPA determined pollutant concentrations for each facility, 
EPA

[[Page 54506]]

compared and adjusted the facility baseline concentrations for each 
facility using the permit limits required at the facility. When permit 
limit data were available for a facility (from a copy of the facility's 
NPDES permit or from PCS), EPA lowered the concentration equal to the 
facility's permit limit value if EPA's calculated average baseline 
effluent concentration was greater than the limit specified in the 
permit. When available, EPA used monthly average limits contained in 
the permit. EPA used maximum daily limits when monthly average limits 
were not available. When permits included seasonal limits, EPA 
calculated an average concentration for the permit using all seasonal 
limits. For example, if the permit BOD limit was 20 mg/L for 6 months 
and 10 mg/L for 6 months, EPA used the average value of 15 mg/L for the 
permit limit. In this example, if the facility's average effluent BOD 
was 21 mg/L, EPA would adjust the facility's baseline BOD concentration 
to the average permit limit of 15 mg/L.
    After EPA established baseline pollutant concentrations for each 
facility, EPA calculated baseline pollutant loadings (in pounds per 
year, or million colony-forming units per year) based on the facility's 
baseline concentration and wastewater flow. EPA then estimated national 
baseline pollutant loadings by multiplying each facility's baseline 
pollutant loading by the corresponding survey weight assigned to the 
facility.
    In order to estimate pollutant reductions after the implementation 
of the final limitations and standards for the MPP industry, EPA 
estimated technology option loadings. Technology option loadings are 
defined as the estimated pollutant loadings in MPP wastewaters after 
implementation of the selected technology option; they are also 
referred to as post-compliance or treated pollutant loadings. To 
estimate the technology option loadings for each technology option that 
EPA considered, EPA derived post-compliance pollutant concentrations 
for each facility for which EPA had developed baseline pollutant 
loadings.
    EPA determined post-compliance concentrations for each facility by 
comparing the facility's baseline concentration with the technology 
option target effluent concentration. When the technology option target 
effluent concentration was lower than the facility's baseline 
concentration, EPA used the technology option target effluent 
concentration to represent the facility's effluent pollutant 
concentration after implementation of the final limitations and 
standards.
    EPA then calculated technology option loadings for each facility 
using the facility's post-compliance pollutant concentrations and 
wastewater flow. EPA estimated national technology option loadings by 
multiplying each facility's technology option loading estimates by the 
corresponding survey weight assigned to the facility. Finally, for each 
technology option EPA calculated the national pollutant reductions as 
the difference between the national baseline pollutant loads and the 
national technology option pollutant loads.
2. What Are the Pollutant Reductions Associated With This Rule?
    Tables VIII.A-1 and VIII.A-2 show the estimated pollutant 
reductions for each treatment option. The conventional pollutant 
loadings (i.e., 5-day biological oxygen demand, total suspended solids, 
and oil & grease (as HEM)) removed for Options 2, 2+P, 2.5, and 2.5+P 
are the within each subcategory because the additional components above 
Option 2 technology (i.e., denitrification or phosphorus removal) are 
not designed to remove conventional pollutants. Therefore, in EPA 
analysis of pollutant reductions Options 2+P, 2.5 and 2.5+P represent 
additional removals of nutrients, not conventional pollutants, compared 
to Option 2. In practice, the addition of chemicals (e.g., alum) to 
remove phosphorus would cause incidental reductions of total nitrogen, 
BOD5, and TSS. Option 4 provides additional removals of both 
nutrients and conventional pollutants relative to other options. For 
information see the Technical Development Document in the rulemaking 
docket.

                          Table VIII.A-1.--Removal of Specified Pollutants by Subcategory and Option \1\--Non-Small Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Removals (pounds per year)
                  Subcategory                                   Pollutant                ---------------------------------------------------------------
                                                                                             Option 2       Option 2.5      Opt. 2.5+P       Option 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
A through D (non-small)........................  5-Day Biochemical Oxygen Demand........         609,665         609,665         609,665         640,054
                                                 Total Suspended Solids.................         967,092         967,092         967,092       1,116,025
                                                 Chemical Oxygen Demand.................               0               0               0               0
                                                 Carbonaceous Biochem. Oxygen Demand....         511,342         511,342         511,342         511,342
                                                 Ammonia as Nitrogen....................       2,250,306       2,250,306       2,250,306       2,309,928
                                                 Total Nitrogen.........................               0      15,400,791      15,400,791      18,456,984
                                                 Total Phosphorus.......................               0               0       4,519,867       4,972,188
                                                 Nitrate/Nitrite........................               0      13,574,558      13,574,558      16,374,921
                                                 Total Kjeldahl Nitrogen................       2,212,522       2,212,522       2,212,522       2,228,721
                                                 Oil & Grease (HEM).....................               0               0               0               0
F through I (non-small)........................  5-Day Biochemical Oxygen Demand........          21,703          21,703          21,703          24,467
                                                 Total Suspended Solids.................               0               0               0               0
                                                 Chemical Oxygen Demand.................          42,213          42,213          42,213          42,213
                                                 Carbonaceous Biochem. Oxygen Demand....          18,395          18,395          18,395          18,395
                                                 Ammonia as Nitrogen....................          10,575          10,575          10,575          13,804
                                                 Total Nitrogen.........................               0               0               0          79,677
                                                 Total Phosphorus.......................               0               0               0               0
                                                 Nitrate/Nitrite........................               0               0               0               0
                                                 Total Kjeldahl Nitrogen................          12,945          12,945          12,945          15,677
                                                 Oil & Grease (HEM).....................               0               0               0               0
J..............................................  5-Day Biochemical Oxygen Demand........          34,176          34,176          34,176          36,734
                                                 Total Suspended Solids.................               0               0               0          19,871
                                                 Chemical Oxygen Demand.................               0               0               0               0
                                                 Carbonaceous Biochem. Oxygen Demand....          28,570          28,570          28,570          28,570

[[Page 54507]]

 
                                                 Ammonia as Nitrogen....................          48,965          48,965          48,965          56,388
                                                 Total Nitrogen.........................               0       1,469,407       1,469,407       1,652,506
                                                 Total Phosphorus.......................               0               0         590,434         622,583
                                                 Nitrate/Nitrite........................               0       1,465,011       1,465,011       1,644,216
                                                 Total Kjeldahl Nitrogen................          51,819          51,819          51,819          54,788
                                                 Oil & Grease (HEM).....................               0               0               0               0
K (non-small)..................................  5-Day Biochemical Oxygen Demand........         643,830         643,830         643,830         868,841
                                                 Total Suspended Solids.................       1,309,553       1,309,553       1,309,553       2,573,666
                                                 Chemical Oxygen Demand.................       6,513,778       6,513,778       6,513,778      11,244,275
                                                 Carbonaceous Biochem. Oxygen Demand....         725,207         725,207         725,207         725,207
                                                 Ammonia as Nitrogen....................         331,973         331,973         331,973         502,103
                                                 Total Nitrogen.........................               0       9,367,808       9,367,808      20,883,771
                                                 Total Phosphorus.......................               0               0       4,147,385       4,671,571
                                                 Nitrate/Nitrite 2......................               0      10,112,961      10,112,961      20,103,140
                                                 Total Kjeldahl Nitrogen................         223,255         223,255         223,255         800,944
                                                 Oil & Grease (HEM).....................         313,477         313,477         313,477         329,373
L (non-small)..................................  5-Day Biochemical Oxygen Demand........           9,143           9,143           9,143          18,672
                                                 Total Suspended Solids.................             135             135             135           3,923
                                                 Chemical Oxygen Demand.................          43,609          43,609          43,609          59,123
                                                 Carbonaceous Biochem. Oxygen Demand....          13,889          13,889          13,889          13,889
                                                 Ammonia as Nitrogen....................           9,492           9,492           9,492          16,123
                                                 Total Nitrogen.........................               0         146,364         146,364         354,355
                                                 Total Phosphorus.......................               0               0          25,012          27,000
                                                 Nitrate/Nitrite 2......................               0         153,476         153,476         335,921
                                                 Total Kjeldahl Nitrogen................           5,685           5,685           5,685          19,039
                                                 Oil & Grease (HEM).....................               0               0               0              0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Incremental to baseline of current performance. Current performance based on summarized 1999 DMR data provided in response to detailed surveys.
  Pollutant loading for various treatment options based on sampling data, survey information, and DMR data. (See Section 11 of the Technical Development
  Document for a detailed discussion of loadings methodology).
\2\ EPA recognizes that total nitrogen should be more than nitrate/nitrite as nitrogen because total nitrogen is the sum of nitrate/nitrite as nitrogen
  and total Kjeldahl nitrogen. However, the target effluent concentrations were taken from different sets of facilities (i.e., those that provided total
  nitrogen data and those that provided nitrate/nitrite as nitrogen data). EPA is regulating total nitrogen, not nitrate/nitrite nitrogen for the final
  rule.


        Table VIII.A-2.--Removal of Specified Pollutants by Subcategory and Option \1\--Small Facilities
----------------------------------------------------------------------------------------------------------------
                                                                                   Removals (pounds per year)
                Subcategory                             Pollutant             ----------------------------------
                                                                                  Option 1          Option 2
----------------------------------------------------------------------------------------------------------------
A through D (small).......................  5-Day Biochemical Oxygen Demand..             CBI      Not estimated
                                            Total Suspended Solids...........             CBI      Not estimated
                                            Chemical Oxygen Demand...........               0      Not estimated
                                            Carbonaceous Biochemical Oxygen               CBI      Not estimated
                                             Demand.
                                            Ammonia as Nitrogen..............               0      Not estimated
                                            Total Nitrogen...................               0      Not estimated
                                            Total Phosphorus.................               0      Not estimated
                                            Nitrate/Nitrite..................               0      Not estimated
                                            Total Kjeldahl Nitrogen..........               0      Not estimated
                                            Oil & Grease (HEM)...............               0      Not estimated
F through I (small).......................  5-Day Biochemical Oxygen Demand..          45,264             45,264
                                            Total Suspended Solids...........          52,452             52,452
                                            Chemical Oxygen Demand...........               0                  0
                                            Carbonaceous Biochemical Oxygen            40,586             40,586
                                             Demand.
                                            Ammonia as Nitrogen..............           2,732              8,297
                                            Total Nitrogen...................               0                  0
                                            Total Phosphorus.................               0                  0
                                            Nitrate/Nitrite..................               0                  0
                                            Total Kjeldahl Nitrogen..........          12,423             16,616
                                            Oil & Grease (HEM)...............               0                  0
K (small).................................  5-Day Biochemical Oxygen Demand..             CBI                CBI
                                            Total Suspended Solids...........             CBI                CBI
                                            Chemical Oxygen Demand...........             CBI                CBI
                                            Carbonaceous Biochemical Oxygen               CBI                CBI
                                             Demand.
                                            Ammonia as Nitrogen..............               0                CBI
                                            Total Nitrogen...................               0                  0
                                            Total Phosphorus.................               0                  0

[[Page 54508]]

 
                                            Nitrate/Nitrite..................               0                  0
                                            Total Kjeldahl Nitrogen..........               0                CBI
                                            Oil & Grease (HEM)...............               0                  0
L (small).................................  5-Day Biochemical Oxygen Demand..               3                  3
                                            Total Suspended Solids...........               0                  0
                                            Chemical Oxygen Demand...........               0                  0
                                            Carbonaceous Biochemical Oxygen                11                 11
                                             Demand.
                                            Ammonia as Nitrogen..............             179                179
                                            Total Nitrogen...................               0                  0
                                            Total Phosphorus.................               0                  0
                                            Nitrate/Nitrite..................               0                  0
                                            Total Kjeldahl Nitrogen..........             139                139
                                            Oil & Grease (HEM)...............               0                 0
----------------------------------------------------------------------------------------------------------------
\1\ Incremental to baseline of current performance. Current performance based on summarized 1999 DMR data
  provided in response to detailed surveys. Pollutant loading for various treatment options based on sampling
  data, survey information, and DMR data. (See Section 11 of the Technical Development Document for a detailed
  discussion of loadings methodology).
CBI = Confidential business information is not disclosed due to the limited number of facilities estimated to be
  in the subcategory.

B. Compliance Costs

1. How Did EPA Estimate the Compliance Costs of the Final Rule?
    EPA developed cost models to estimate the costs required to modify 
an existing nitrifying wastewater treatment system to achieve long-term 
average (LTA) concentrations (i.e., target effluent concentrations) of 
the technology options considered for the final rule. EPA developed 
five cost models: the Option 2 cost model, Option 2+P cost model, 
Option 2.5 cost models, Option 2.5+P cost model, and Option 4 cost 
model. EPA used Option 2 cost model with Option 1 LTA concentrations to 
estimate Option 1 costs for small facilities.
    The primary cost model inputs required for each MPP facility are 
treatment in place, wastewater treatment plant flow, and influent and 
effluent pollutant concentrations for select parameters. EPA obtained 
data inputs for each facility from a variety of sources, including the 
MPP detailed survey, sampling episode reports, site visit reports, and 
discharge monitoring reports. In the absence of influent concentrations 
for a facility, EPA used default concentrations. See discussion on 
development of default baseline concentrations in Section VIII.A.1. The 
cost models have the ability to cost several alternate treatment 
systems for the technology options. After reviewing the current 
influent and effluent concentrations and treatment in place at a 
facility, EPA selected and calculated costs for a particular treatment 
system to achieve the Option LTA concentrations.
    Based on the input parameters, the model calculates the design 
parameters (e.g., volume of tanks) of the equipment required to achieve 
the Option LTA concentrations. The calculated design parameters are 
used in the cost equations in the model to estimate the cost of the 
equipment. The summation of the capital costs is annualized and added 
to the total operation and maintenance (O&M) costs to provide the 
overall incremental compliance cost of the rule. EPA developed the 
capital and O&M cost equations from the information obtained from 
vendors, survey, cost models, and industry comments.
    The cost model estimates capital costs for the following treatment 
components: anoxic tanks, aeration tanks, pumps, mixers, an aeration 
system, methanol, polymer and alum feed systems, mix tanks, a 
filtration system, a sludge dewatering system, a holding pond, a lagoon 
bypass cost, and miscellaneous cost. The O&M costs include costs for 
maintenance, labor, energy, alkalinity, alum, methanol, polymer, sludge 
disposal, sampling and analytical, performance improvement, and methane 
revenue loss due to lagoon bypass. For information see the Technical 
Development Document in the rulemaking record.

2. What Are the National Costs Associated With the Final Rule?

    This section presents EPA's estimate of the total annual costs to 
the meat and poultry products industry as a result of today's rule. All 
costs presented in this section are reported in pre-tax 2003 dollars 
(unless otherwise indicated).
    EPA estimates the total pre-tax annualized costs of the final rule 
at $58.2 million for the selected option (see Table VIII.B-1). Capital 
costs account for $234 million under the selected regulatory option. 
Estimated costs per facility are consistently highest for Subcategories 
A-D ($0.6 million), and lowest for Subcategories F-I ($91,000). Table 
VIII.B-1 presents compliance costs by subcategory and treatment option 
for non-small facilities.
    The table shows both pre-tax and -tax and post-tax costs. Pre-tax 
annualized costs are the most complete estimates of annualized control 
costs and reflect the overall cost to society. EPA presents pre-tax 
costs also for its Executive Order 12866 analysis (Section XIII.A) and 
cost-effectiveness analysis (Section IX.H). EPA uses post-tax costs to 
assess financial impacts under the regulation because they net out tax 
savings and more accurately reflect the costs that businesses will 
incur.

[[Page 54509]]



                         Table VIII.B-1.--Total and Average Compliance Costs for Non-Small Facilities by Subcategory and Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Total costs (1000's, 2003 dollars)         Average facility costs (1000's, 2003 dollars)
                                                         -----------------------------------------------------------------------------------------------
                         Option                                              Post-tax         Pre-tax                        Post-tax         Pre-tax
                                                              Capital       annualized      annualized        Capital       annualized      annualized
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Subcategory A-D
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................         $27,165          $5,179          $8,051            $937            $179            $278
Option 2.5..............................................          75,061          12,395          18,435           2,588             427             636
Option 2.5+P............................................          97,662          30,794          47,412           3,368           1,062           1,635
Option 4................................................         121,753          37,382          57,451           4,198           1,289           1,981
---------------------------------------------------------
                                                                   Subcategory F-I \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................           1,106             294             294             276              73              73
Option 2.5..............................................           1,124             363             363             281              91              91
Option 2.5+P............................................           1,216             396             396             304              99              99
Option 4................................................           2,350             882             882             588             220             220
---------------------------------------------------------
                                                                    Subcategory J \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................           1,429             695             695              75              37              37
Option 2.5..............................................           7,755           3,123           3,123             408             164             164
Option 2.5+P............................................           9,978           8,212           8,212             525             432             432
Option 4................................................          12,827          11,237          11,237             675             591             591
---------------------------------------------------------
                                                                      Subcategory K
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................          70,650          15,026          19,598             736             157             204
Option 2.5..............................................         147,592          28,067          35,151           1,537             292             366
Option 2.5+P............................................         177,432          53,370          70,027           1,848             556             729
Option 4................................................         366,069          93,408       1,205,090           3,813             973           1,255
---------------------------------------------------------
                                                                  Subcategory L \1\ \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................           1,495             615             615             149              62              62
Option 2.5..............................................           2,615           1,086           1,086             262             109             109
Option 2.5+P............................................           4,207           1,630           1,630             421             163             163
Option 4................................................           8,641           3,612           3,612             864             361             361
---------------------------------------------------------
                                                                         Totals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 2................................................         101,845          21,808          29,253             645             138             185
Option 2.5..............................................         234,147          45,033          58,157           1,482             285             368
Option 2.5+P............................................         290,495          94,403         127,677           1,839             597             808
Option 4................................................         511,639         146,521         193,691           3,238             927           1,226
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For non-small facilities in Subcategories F-I, J, and L, post-tax annualized costs are equal to pre-tax annualized costs because the analysis is
  based on model facilities, and EPA assumed a tax shield of $0 to avoid underestimating impacts.
\2\ Subcategory includes partial costs for 7 mixed processor facilities with non-small levels of production in Subcategory L and small levels of
  production in Subcategory F-I; on average, 61 percent of their production falls into Subcategory L. Compliance costs for mixed processor facilities
  are distributed between subcategories and tables based on their percentage of production in each.

    Table VIII.B-1 shows only that percentage of costs for mixed 
processors that is attributable to non-small levels of production of 
further processed poultry (Subcategory L). Because EPA chose not to set 
new effluent limitations and guidelines for small facilities under the 
final rule, the costs that small facilities would have incurred under 
the considered (but not selected) options are shown separately in Table 
VIII.B-2.
    Table VIII.B-2 presents estimated total and average compliance 
costs for small facilities under the various options considered. Table 
VIII.B-2 includes costs for mixed processors that are attributable to 
small levels of production of further processed meat (Subcategories F-
I) and poultry (Subcategory L). Thus costs for mixed processors are 
split between different tables and/or subcategories within tables as 
appropriate.

                           Table VIII.B-2.--Total and Average Compliance Costs for Small Facilities by Subcategory and Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Total costs (1000's, 2003 dollars)             Average costs (1000's, 2003 dollars)
                                                         -----------------------------------------------------------------------------------------------
                         Option                                              Post-tax         Pre-tax                        Post-tax         Pre-tax
                                                              Capital     annualized \1\    annualized        Capital     annualized \1\    annualized
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Subcategory A-D \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1................................................    $2,000-4,000    $1,000-2,500    $1,000-2,500        $150-175         $80-120         $80-120
Option 2 \3\............................................              NA              NA              NA              NA              NA              NA
---------------------------------------------------------

[[Page 54510]]

 
                                                                   Subcategory F-I \4\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1................................................           2,550           1,224           1,224             121              58              58
Option 2................................................           2,550           1,233           1,233             121              59              59
---------------------------------------------------------
                                                                    Subcategory K \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1................................................    7,500-10,000     2,500-5,000     2,500-5,000         200-400          75-100          75-100
Option 2................................................    7,500-10,000     2,500-5,000     2,500-5,000         200-400          75-100          75-100
---------------------------------------------------------
                                                                    Subcategory L \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1................................................              19              15              15               6               5               5
Option 2................................................              19              15              15               6               5              5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For small facilities, post-tax annualized costs are equal to pre-tax annualized costs because (1) the facility is an S corporation or LLC
  (Subcategories A-D and K), so taxes are paid on the income of the owning partners or (2) the analysis is based on model facilities (Subcategories F-I
  and L), and EPA assumed a tax shield of $0 to avoid underestimating impacts.
\2\ Estimated costs are presented as a range to prevent the disclosure of confidential business information.
\3\ Option 2 was not costed for small facilities in this subcategory, because EPA did not propose further regulations.
\4\ Subcategory includes a share of costs for 7 mixed processor facilities with small levels of production in Subcategory F-I and non-small levels of
  production in Subcategory L. This subcategory also includes 3 mixed processor facilities with small levels of production in Subcategory F-I and small
  levels of production in Subcategory L. Compliance costs for mixed processor facilities are distributed between subcategories based on their percentage
  of production in each.
\5\ Subcategory includes a share of costs for 3 mixed processor facilities with small levels of production in Subcategory L and small levels of
  production in Subcategory F-I. Compliance costs for mixed processor facilities are distributed between subcategories based on their percentage of
  production in each.

IX. What Are the Economic Impacts Associated With This Rule?

    This section presents EPA's estimate of the economic impacts that 
would be incurred by both existing and new meat and poultry products 
facilities as a result of today's rule. This section also presents 
EPA's cost-effectiveness and cost-reasonableness analysis. All costs 
presented in this section are reported in pre-tax 2003 dollars (unless 
otherwise indicated).
    At the time of the proposal, EPA did not have detailed survey 
financial data to use as a basis for an economic impact assessment. EPA 
therefore developed economic impact methodologies based on publicly 
available information for the proposed rule. These methodologies are 
described in detail in the proposal (67 FR 8614; February 25, 2002) and 
in the accompanying Economic Analysis for the proposed rule. EPA's 
analysis for the proposed rule also describes the methodology it 
anticipated using to evaluate economic impacts based on the detailed 
survey data. EPA described further refinements to those methodologies 
in its NODA (68 FR 48487; August 13, 2003). However, as EPA analyzed 
the results of the detailed survey data, it became clear that few 
direct discharging further processors or renderers (Subcategories E-I, 
Subcategory J, and Subcategory L) had received a detailed survey. Based 
on the screener survey data, EPA has concluded that there are a few 
direct discharging facilities in these subcategories (see EPA's 
proposal at 67 FR 8591 for more information on the screener survey).
    For the final rule, EPA projects economic impacts to direct 
discharging slaughtering facilities (Subcategories A-D and Subcategory 
K) using detailed survey data and the associated methodologies 
described in supporting documents for the proposed rule and in the 
Agency's NODA. EPA projects economic impacts to direct discharging 
facilities that perform further processing and rendering (Subcategories 
F-I, Subcategory J, and Subcategory L) using the methodology described 
in the preamble to the proposed rule, publicly available information, 
and screener survey data. EPA did not revise its estimates of economic 
impacts for Subcategory E (Small Processors) developed for the proposed 
rule because EPA did not propose further regulation of this subcategory 
(see Section VII for discussion on the regulation of facilities in 
Subcategory E).
    Section A of this section reviews the different methodologies EPA 
developed to evaluate economic impacts on MPP facilities from expected 
incremental pollution control costs that will be incurred under the 
final rule. More information on these methodologies is also provided in 
the NODA, the Economic Analysis for the proposed rule, and the Economic 
and Environmental Benefits Analysis for the final rule. Section B 
presents EPA's estimate of the number of facility closures for each 
subcategory under the regulation; Sections C and D present EPA's 
analysis of the projected effects at the company level and market 
level. Sections E and F show EPA's estimate of the final regulation's 
effects on foreign trade and communities, respectively. Section G 
covers EPA's estimate of the economic impacts to new meat and poultry 
products facilities from complying with today's rule, measured in terms 
of business barriers to entry. Section H present EPA's cost-
reasonableness and cost-effectiveness analyses.
    EPA has been examining the causative agents of transmissible 
spongiform encephalopathies (TSEs) as they relate to such matters as 
surface treatments and waste disposal. Given the early stages of this 
examination and ongoing work by other agencies, EPA acknowledges that 
it cannot presently account for the projected costs associated with the 
regulatory demand that may be placed on meat processing facilities in 
the future to deal with transmissible spongiform encephalopathies. 
These cost will depend on future decisions by the relevant federal 
agencies and are not

[[Page 54511]]

available for inclusion in today's rule. Based on what EPA now knows, 
however, the rule is economically achievable.

A. What Methods Were Used To Determine the Costs and Economic Impacts?

    EPA examined impacts at several levels: facility, company, market, 
and national. Several facets of various analyses were modified in 
response to comments on the proposed rule and the NODA. These changes 
are identified in the following sections.
1. What Method Was Used To Assess Business Closures?
    The facility-level analysis examines whether an otherwise 
profitable site closes in response to the additional costs of increased 
pollution control. EPA calculates direct impacts, such as closures and 
losses in employment and revenue based on the survey data for the 
facilities projected to close as a result of the regulation. EPA 
developed two methods of evaluating facility closure. EPA bases the 
first method, as described in the following section (``Facility-
Analysis Method for Sites with Detailed Questionnaire Data''), on 
detailed questionnaire data and uses this approach to estimate closures 
for Subcategories A-D and Subcategory K facilities. As previously 
noted, the detailed questionnaires returned to EPA do not fully 
represent Subcategories E-I, Subcategory J, and Subcategory L 
facilities. Therefore, for these facilities EPA used a combination of 
screener survey data and public data to estimate closures among these 
facilities (see the discussion in the section titled ``Facility-
Analysis Method for Sites without Detailed Questionnaire Data'').
a. Facility-Analysis Method for Subcategories With Sufficient Detailed 
Questionnaire Data
    EPA's closure analysis is a discounted cash flow analysis that 
compares the costs incurred during a 16-year period from 2005 to 2020 
to the earnings accumulated during that same period. This analysis 
discounts both costs and earnings with the facility-specific discount 
rate reported in the detailed questionnaire. This takes into account 
the time value of money and places both time series on a comparable 
basis. To be considered a closure under the final rule, a facility has 
to show both (1) positive long-term earnings without the regulation and 
(2) negative long-term earnings as a result of the regulation in the 
majority of the forecasts. While the analysis may be described simply, 
EPA does address many complexities within the model, including what to 
consider as earnings, which costs to consider, and the number and type 
of forecasting methods used.
    Earnings. EPA uses net income as the basis for earnings where it is 
calculated from detailed questionnaire data as revenues minus operating 
costs; selling, general, and administrative expenses; depreciation; 
interest; and taxes.
    Forecasting Methods. EPA uses a 16-year time period to forecast 
facility future income. For the proposal, EPA stated it would use the 
survey period, 1997 to 1999, as the baseline for projecting facility 
and company net income for use in the closure model. Commenters felt 
that it was not appropriate to use this period as the baseline because 
unusual supply and demand conditions resulted in unusually large 
margins for meat companies, and therefore, atypically profitable years. 
EPA concurs with this assessment. To address these concerns EPA 
developed a forecasting model that uses historical data on the periodic 
cycles of the relevant markets to generate an index. As discussed in 
the NODA, EPA uses this index to forecast net income for MPP 
facilities, accounting for cyclical effects on profits.
    In the meat packer and processing sectors, EPA uses time series 
data from U.S. Department of Agriculture's Economic Research Service 
(USDA/ERS) to develop a forecast of the annual farm-to-wholesale price 
margin. To forecast this margin in the poultry sector, EPA developed a 
new time series by subtracting the USDA/ERS broiler wholesale 
production cost time series from its broiler wholesale price time 
series. These time series data, which span from 1970 to 2002 for beef 
and pork, and from 1990 to 2002 for poultry, are expressed in constant 
1999 prices and are deseasonalized.
    For this analysis, EPA identified ``normal'' or ``average'' margin 
cycles for each animal type over the 1970 to 2002 period, which were 
then econometrically tested to ensure statistical validity. EPA uses 
these cycles to forecast the wholesale margin for the 2005 to 2020 time 
period. Complete details of EPA's methodology to measure and forecast 
the wholesale margin cycles are provided in the docket (see Section 
21.2, DCN 125-502).
    EPA forecasts facility earnings for use in the closure model by 
first developing indices using the historical and projected wholesale 
margin time series and then applies these indices to survey net income 
data. EPA projects net income to vary directly with the farm-to-
wholesale price spread: as the spread narrows, net income declines. As 
noted in public comments received by EPA, the 1997 to 1999 survey 
period was at or near the peak of a cycle, and as a result net income 
could be expected to decline as industry moved toward the cycle trough. 
Therefore, EPA selected cycle high points (largest annual margin) for 
the base period of its indices. Accordingly, both the margin and 
facility net income will, in general, decline as the forecast moves 
further from the baseline year.
    Weight of Evidence to Determine Closure. To account for uncertainty 
in both the forecast future facility net income, and the appropriate 
start point of the forecast, EPA selected three methods for projecting 
future facility net income. One forecast method uses a simple average 
of 1997, 1998, and 1999 net income projected over the 16-year project 
life. Based on comments that these were unusually profitable years, EPA 
developed alternate forecasts where future net income is projected to 
vary directly with a forecast of the farm-to-wholesale price margin. 
Thus, the alternate forecasts can be defined by a combination of start 
points: the net income start point (i.e., the year from which facility 
net income is taken from the survey), and the initial value for the 
price margin. The second forecast starts with both 1999 net income and 
the 1999 margin value as the start point of the business cycle 
forecast. The third forecast takes the simple average of 1997, 1998, 
and 1999 to use as the net income start point, then, to capture the 
peak of the business cycle, selects the largest margin value in the 
1995 to 2001 time frame as the start point of the business cycle 
forecast. EPA used the preponderance of evidence under different 
forecasting methods to determine if a facility is projected to close. 
That is, EPA projects a facility will close if the present value (PV) 
of future compliance costs exceeds the forecast PV of net income under 
two of the three forecasting methods.
    Alternate Analysis. As an alternate analysis, EPA projects closures 
if the PV of future compliance costs exceeds the forecast PV of net 
income under one of the three forecasting methods. EPA believes this 
constitutes a more conservative approach to estimating potential 
closures. The alternative analysis focuses on subcategories A-D and K 
only. The results of this analysis do not indicate that there would be 
a substantial change in the number of estimated facility closures: EPA 
estimates that there could be two closures among subcategory A-D 
facilities and no change for subcategory K facilities. See the 
rulemaking record for additional details.

[[Page 54512]]

    Baseline Industry Conditions. The focus of EPA's analysis is to 
evaluate financial impacts that result from complying with the final 
regulation. However, there are two situations where EPA cannot perform 
this analysis: if (1) The company does not assign costs and revenues 
that reflect the site's true financial health (e.g., the facility is a 
cost center or a captive site), or (2) the site is already in financial 
trouble. Under the first condition, EPA does not have sufficient 
information to evaluate impacts at the site level as a result of the 
rule. In the second case, the facility is unprofitable prior to the 
regulation, and the company may decide to close the site even in the 
absence of the rule. The projected closure of a site that is 
unprofitable prior to a regulatory action is not attributed to the 
regulation. This second case is referred to as a baseline closure.
    In the first situation, EPA is not able to analyze facility-level 
closure impacts when the company does not record sufficient information 
at the site level for the closure analysis to be performed. In the case 
of the MPP industry, many companies do not maintain financial records 
at the facility level. Instead they maintain their financial records 
at, for example, the company level, division level or product line 
level. EPA's detailed survey provides facility-level financial data for 
less than 40 percent of direct discharging facilities. EPA also 
collected company-level financial data in the detailed survey. 
Therefore, EPA performed a closure analysis at the company level as a 
supplement to the facility-level analysis, to compensate for the 
relatively low percentage of detailed surveys with facility-level data.
    Adjustment of Facility Weights to Account for Nonresponse. Detailed 
survey data was not available for use at the time of the proposed 
rulemaking. For proposal, EPA used screener survey data combined with 
model facilities derived from Census data to perform the facility-level 
closure analysis. EPA did use detailed survey data to perform the 
facility-level closure analysis, as presented in the NODA. However, as 
previously noted, EPA did not receive facility-level financial data 
from a significant portion of respondents in response to the Agency's 
detailed survey. In particular, 10 facilities (18 weighted) in 
Subcategory A-D (both small and non-small) and 27 facilities (97 
weighted) in Subcategory K facilities (both small and non-small) did 
not provide sufficient financial information for use in EPA's closure 
analysis. This was generally because the companies do not maintain the 
type of information about each facility that EPA requested. Instead, 
the information is consolidated at the company level. Therefore, EPA 
conducted its facility-level closure analysis on the 10 facilities (28 
weighted) in Subcategory A-D (both small and non-small) and 9 
facilities (45 weighted) in Subcategory K (both small and non-small) 
that provided sufficient data about each facility. As discussed in the 
NODA, analysis of economic impacts to the facilities that did not 
provide financial data were subsumed under the company-level closure 
analysis.
    EPA received public comments on the NODA recommending that the 
Agency account for all surveyed facilities in its facility closure 
analysis, even if no financial information on a facility was obtained 
through the detailed survey. To address these public comments for the 
final rule, EPA accounted for missing data as follows.
    For its facility closure analysis and small business sales test in 
Subcategories A-D and Subcategory K, EPA incorporated additional 
adjustments to the survey weights to account for the facilities without 
the financial information, but that had otherwise responded to the 
questionnaire. EPA believes that its approach is simpler and more 
robust than the approach proposed in the public comments and consistent 
with accepted survey statistical practice. By adjusting in this manner, 
EPA is assuming that the facilities that provided facility-level 
information are similar to those that did not. EPA has no information 
to suggest that this is not the case.
    Commenters suggested that EPA account for incomplete facility-level 
data using available financial data combined with production data to 
estimate a distribution for the facility's net income in 1997, 1998, 
and 1999, thereby allowing the Agency to forecast this net income 
distribution over the 16-year project life. After careful review, EPA 
decided not to adopt this distribution approach for the following 
reasons. First, EPA believes that a distribution approach does not 
maintain the characteristics of facility-level financial conditions as 
compared to an approach that uses adjustment of facility weights. A 
distribution approach also relies on too many statistical assumptions 
to make such an approach workable. Second, EPA believes that 
forecasting a distribution results in greater uncertainty about future 
net income per pound. The resulting broad range of outcomes would make 
meaningful comparisons of costs and incomes streams difficult. The 
distributional approach suggested by commenters has merit and could add 
value if all survey data were initially reported on a per pound basis 
along product, facility, and distributional lines. Third, the 
recommended distribution approach proposed that EPA pool observations 
of net income per pound from both poultry and meat slaughter 
facilities, which have very different economic and financial 
characteristics. Finally, EPA's preliminary assessment indicates that 
its estimate of facility closures using either approach would not be 
significantly changed. More detailed information is available in EPA's 
comment response document and in the rulemaking record.
    Table IX.A-1 lists the number of facilities by subcategory and 
production size, as well as the numbers of facilities that did and did 
not provide financial information for the closure analysis (see the TDD 
and the rulemaking docket for further details on survey stratification 
and facility counts).

                                                             Table IX.A-1.--Facility Counts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Facility counts                          ``Economic
                                                                             ---------------------------------------------------------     analysis''
                 Subcategory                          Production size                                                                  adjustment factor
                                                                                 Eligible (N)      With data (n1)   Without data (n2)        (N/n1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A-D.........................................  non-small.....................                 31                 13                 18               2.38
                                              small.........................                 15                 15                  0               1.00
K...........................................  non-small.....................                105                 36                 69               2.92
                                              small.........................                 36                  9                 27               4.15
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 54513]]

    The final weight whi for a facility i in stratum h can 
be written as follows:

Wh,i = (base weight)h,i x (economic analysis 
adjustment factor)h
Wh,i = (base weight)h,i x (N/
n1)h

(See the Economic Analysis for the proposed rule). In other words, 
there are 31 non-small direct dischargers in subcategories A-D, of 
which 13 provided facility-level financial data; 18 facilities did not. 
The 13 non-small facilities would have their detailed survey weight 
multiplied by 2.38 (\31/13\ = 2.38) to account for the 18 that did not 
provide facility-level data, and so forth for the remaining 
subcategories and size classes.
b. Facility-Analysis Method for Subcategories Without Sufficient 
Detailed Questionnaire Data
    Facilities in Subcategories E-I, J, and L are not well represented 
in the detailed questionnaire data. EPA uses screener survey data to 
estimate compliance costs, then uses size and process information to 
match the screener survey facilities with model facilities to project 
economic impacts using the methodology from the proposed rule.
    EPA's economic model facilities are based on the U.S. Census 
Bureau's 1997 Economic Census of the four NAICS codes for meat and 
poultry product industries (NAICS 311611: Animal (Except Poultry) 
Slaughtering, 311612: Meat Processed From Carcasses, 311613: Rendering 
and Meat Byproduct Processing, and 311615: Poultry Processing). EPA 
uses Census revenue and cost information at both the employment class 
(that is, disaggregated into size groupings based on annual production) 
and the industry level. At the employment class level, EPA uses the 
Census' value of total shipments (a proxy for total revenues), payroll 
and material costs data. EPA uses industry level data on benefits, 
depreciation, rent, and purchased services and attributes it to the 
employment class level using certain assumptions (e.g., employment 
benefits are proportionate to payroll, refuse removal costs are 
proportionate to material costs). EPA divides each component of 
facility income by the number of establishments in the employment class 
to calculate the average for that class. EPA then estimates model 
facility earnings before taxes (EBT) in each class as the average value 
of shipments minus payroll, material costs, benefits, depreciation, 
rent, and purchased services. Because revenues, payroll and cost of 
materials are the most significant components of EBT, the relative 
error introduced by attributing industry level data to the employment 
class level should be small.
    EPA uses data from Census' Annual Survey of Manufacturers (ASM), 
1997 Economic Census, and the Internal Revenue Service code combined 
with additional assumptions to estimate model facility net income from 
EBT. EPA assumes model facility EBT is equal to business entity taxable 
income as the basis for calculating tax payments; EPA then applies 1999 
Federal and an average of State corporate tax rates to EBT. EPA 
estimates industry level interest payments using a combination of ASM 
data on past investment by industry, Census data on relative investment 
in buildings and equipment, and assumptions about investment behavior 
(e.g., all investment in each year was funded through bank loans, the 
interest rate on those loans was equal to the nominal prime rate for 
that year plus 1 percent). EPA attributes interest payments to each 
employment class based on the percentage of industry investment 
accounted for by that employment class in the 1997 Census. EPA 
estimates net income as EBT less estimated tax and interest payments 
for each model facility. EPA inflates all model income measures from 
the Census year, 1997, to the baseline year, 1999, using the implicit 
price deflator for the meat and poultry products industry.
    The resultant model facility represents a distribution of facility 
incomes around the mean. EPA estimates this distribution of income 
around the model facility mean by obtaining from Census a special 
tabulation of the variances and covariances for value of shipments, 
material costs, and payroll in each employment class. EPA assumes that 
the distribution of each variable is normal. Given the relatively large 
number of observations within each employment class, EPA believes this 
assumption is reasonable. Because EPA calculates model facility EBT as 
a linear function of the means of its components, the variance of EBT 
for each employment class can be derived as a linear function of the 
variances and covariances of the components using well established 
formulae. Because the actual income measures differed from the 
approximate income measure (EBT) on which variance is estimated, EPA 
adjusts the variance of each income measure using standard rules 
concerning the expected value of mean and variance.
    In order to perform the economic impact analysis, EPA matches its 
economic model facilities to the engineering model facilities used to 
estimate costs. All red meat (or meat) facilities that perform animal 
slaughter, whether alone or in combination with other processes, are 
assigned economic model facilities from NAICS 311611 (Animal (Except 
Poultry) Processing). EPA assigns meat facilities that perform further 
processing processes but no slaughtering activities to economic model 
facilities from NAICS 311612 (Meat Processed From Carcasses), as are 
facilities that process a mix of both meat and poultry (approximately 
70 percent of their production is meat). EPA assigns facilities that 
process poultry, with or without slaughter, to economic model 
facilities from NAICS 311615 (Poultry Processing). EPA assigns 
facilities that only perform rendering operations as NAICS 311613 
(Rendering and Meat Byproduct Processing). EPA then matches the model 
economic facilities to the model engineering facilities by size. EPA 
uses production from each engineering model, combined with 
representative meat product prices for 1999, to estimate model facility 
revenues. EPA assigns the engineering model to an economic model that 
most closely matched its estimated revenues.
    For facilities in Subcategories E-I, J, and L, EPA chose the ratio 
of cost/net income as its preferred (central) measure of economic 
achievability (the results for all of the ratios are presented in the 
Economic and Environmental Benefits Analysis for the final rule). EPA 
also estimates the probability that a facility may close because 
incremental compliance cost exceeds net income. EPA estimates these 
probabilities using the variance and covariance information provided by 
the Census Bureau to derive the variance of net income. The probability 
that annualized compliance costs are greater than net income provides a 
rough estimate of the probability of that facility closing.
    EPA notes that the use of average ratios could mask considerable 
variability in economic impacts. This is a shortcoming of the use of 
model facilities. EPA has attempted to ameliorate this shortcoming to a 
practicable extent by using multiple model facilities within each 
subcategory. EPA also estimates probabilities of closure from the 
distribution of income around each model facility's mean income to 
account for the variability in economic impacts that would not 
otherwise be reflected in an analysis based on model facilities.
2. What Methods Were Used for Company Analysis?
    EPA uses three methods to examine impacts on companies: closure,

[[Page 54514]]

Altman's Z', and a financial ratio analysis. As with the facility 
analysis, this approach depends on whether the subcategory is 
adequately represented in the detailed questionnaire data. Because a 
substantial portion of the industry does not maintain financial records 
at the facility level, EPA developed a company-level closure analysis 
approach. The Altman's Z' analysis is described in the Economic 
Analysis for the proposed rule (Section 3.1.3.2). EPA uses its 
financial ratio analysis to account for the segment of the industry not 
represented in the detailed questionnaire.
a. Company-Analysis Method for Subcategories With Sufficient Detailed 
Survey Data
    Estimation of company costs. EPA compiled a list of all other meat 
processing facilities owned by each of those corporate parents from a 
review of the 52 non-small direct discharging facilities in 
Subcategories A-D and Subcategory K that received a detailed survey. In 
cases where information is not represented in the detailed survey 
database, EPA relies on the screener survey and the PCS database to 
estimate the number of direct discharging facilities owned by these 
corporate parents. EPA estimates that the 25 corporate parents of those 
52 non-small direct dischargers owned about 323 MPP facilities in 1999. 
Of the 323 facilities owned by these corporate parents, approximately 
117 were direct dischargers. Of these 117 direct dischargers, 52 
received detailed surveys, and 65 required analyses based on non-survey 
data. Indirect discharging facilities are not expected to incur costs 
under this regulation.
    To estimate compliance costs attributable to the 65 non-surveyed 
facilities, EPA applies mean compliance costs by animal type (meat or 
poultry) to each non-surveyed facility. EPA examines alternative means 
of allocating compliance costs to these facilities, such as matching 
costs from detailed survey facilities based on animal type and 
processes performed. Because EPA is unable to determine with a high 
degree of confidence the processes performed and level of production at 
non-surveyed facilities, the Agency assigns the average costs of non-
small facilities in Subcategories A-D and K to the non-surveyed 
facilities (according to meat type). This results in more conservative 
(i.e., higher) cost estimates. See DCN 328-002 for additional 
information on the estimation of non-surveyed direct discharge 
facilities.
    Closure analysis. The company-level closure analysis is identical 
to the facility-level closure analysis with company earnings and costs 
replacing facility earnings and costs in the discounted cash flow 
calculations. If a company is projected to close, company output and 
employment are considered lost. EPA does not attempt to scale up the 
projected company closures to correspond to a national estimate because 
the Agency lacks data on which to base sample weights for the 25 
companies. Thus, the company-level analysis reflects closures only 
among the 25 companies analyzed. EPA made an effort to determine 
whether there are additional companies that own direct discharging MPP 
facilities and found three additional companies based on the screener 
survey results that may own direct discharging MPP facilities. 
Therefore, the company-level analysis could somewhat underestimate the 
number of company closures nationally. See Section IX.B for results of 
the company closure analyses.
    Altman's Z'. To examine firm-level impacts in Subcategories A-D and 
Subcategory K, EPA uses an Altman Z'-score analysis. Such an analysis 
is based on a statistical technique called multiple discriminant 
analysis to predict company bankruptcy based on a weighted combination 
of financial ratios. The Altman Z'-score is a widely-used tool used to 
predict firm ``financial distress'' or bankruptcy. It takes into 
account a company's total assets, total liabilities and earnings, which 
are influenced by total compliance capital costs and other costs 
incurred by a company as a result of complying with the final 
regulation.
    This approach places firms into three levels of financial health: 
financial distress is unlikely, financial distress is indeterminate, 
and financial distress is likely. EPA considers firms that move from an 
indeterminate or unlikely distress prediction to a likely distress 
prediction to be at risk of bankruptcy or other serious financial 
disruption. The actual effects of financial distress are inherently 
unpredictable and a firm may avoid legal bankruptcy by taking other 
measures such as laying off employees, closing facilities, or selling 
assets. These firms still may incur very significant impacts even if 
they do not file for bankruptcy.
    EPA uses the Altman Z'-score to assess the baseline financial 
condition of MPP firms and the incremental impacts of the rule on their 
financial health. This analysis includes the same 25 companies analyzed 
for company closure analysis.
b. Company-Analysis Method for Subcategories Without Sufficient 
Detailed Survey Data
    For subcategories without sufficient detailed survey data, EPA 
could not perform an Altman's Z' analysis (Subcategories F-I, J, and 
L). For the purpose of analyzing facilities in these subcategories, EPA 
assumes the facility and company are identical for this group. EPA 
combines Census data (via the model facilities developed for the 
closure analysis) with Dun & Bradstreet financial ratio data. For each 
model facility, EPA divides net income by the median value for return 
on assets reported by Dun & Bradstreet for the relevant industry to 
estimate the model facility's total assets. Given the model facility's 
net income and total assets, EPA calculates the post-regulatory return 
on assets as: (net income-posttax annualized costs)/(total assets + 
capital costs) and compares this to the current median return on assets 
as an additional measure of the impacts of the rule.
3. What Method Was Used for Impacts on Price and Output?
    EPA developed a market model to examine the impacts of the proposal 
on the price and output of beef, pork, chicken, and turkey. The market 
analysis for each product depends not only on the compliance costs for 
that product but also on the impact of costs on the prices of the other 
three meat and poultry products because as prices for one product rise, 
consumers will purchase less of that product and more of the other 
three products. EPA assumes a perfectly competitive structure for the 
meat and poultry products market model after performing an extensive 
literature search. EPA developed standard domestic supply, domestic 
demand, import supply, and export demand equations for each meat and 
poultry product. EPA specifies domestic demand for each meat and 
poultry product as a function of the price of the other three meat and 
poultry products in addition to its own price. EPA uses USDA data to 
determine baseline market prices and quantities. EPA selected key model 
parameters (e.g., price elasticities) from existing published sources 
following an extensive data search. For each meat and poultry product 
market to be in equilibrium, U.S. domestic demand plus foreign demand 
(exports) must equal U.S. domestic supply plus foreign sales (imports) 
at its current market price.
    Compliance costs shift the supply curve for each meat and poultry 
product by the pre-tax annualized compliance

[[Page 54515]]

costs per pound of carcass weight for each of the four animal types. 
The most appropriate measure of the shift in supply is the cost per 
pound of total industry production because (1) the majority of 
facilities incur no costs and (2) the competition from facilities that 
do not incur costs will discourage affected facilities from increasing 
price by their full cost per pound increase due to today's rule.
    Given the supply shift for each product, EPA solves for the post-
regulatory set of meat prices that result in equilibrium in all four 
markets. This solution provides estimates of post-regulatory impacts. 
Finally, EPA's analysis substitutes the post-regulatory prices back 
into the individual component equations to estimate post-regulatory 
domestic supply, domestic demand, import supply, and export demand for 
each meat and poultry product. Changes in prices and these quantities 
for each meat and poultry product measure the market-level impacts of 
the final rule.

B. How Many Closures Are Projected as a Result of the Final Rule?

1. How Many Non-Small Facilities/Companies in Subcategories A-D and 
Subcategory K Might Close?
    A facility (or company) forecast to have a negative net present 
value (NPV) of net income under at least 2 of 3 methods (described in 
Section IX.A) prior to regulatory costs are called ``baseline 
closures.'' Among non-small facilities in Subcategories A-D there are 5 
baseline closures; in Subcategory K there are 30 baseline closures. The 
economic impact of the rule on ``baseline closures'' cannot be assessed 
using the closure model. Under the alternate analysis in which a 
negative NPV forecast by only one method is sufficient to project a 
closure, the number of baseline closures in each subcategory is 
unchanged.
    For the facility-level closure analysis, EPA projects there are no 
closures in Subcategories A-D under any options. For Subcategory K, EPA 
projects that 22 of the 105 facilities will close under Option 4; no 
facility closures are projected under other treatment options. Thus, 
EPA projects that there are no closures in either subcategory under the 
selected Option 2.5. In the alternate analysis, EPA projects 2 facility 
closures for all options in Subcategory A-D, and 22 closures under 
Option 4 in Subcategory K. Table IX.B-1 presents the facility closure 
impacts for all options that were considered.

         Table IX.B-1--Summary of Projected Non-Small Facility Closure Impacts by Subcategory and Option
----------------------------------------------------------------------------------------------------------------
                                                                 Baseline conditions and projected incremental
                                                                              closure impacts \1\
                            Option                            --------------------------------------------------
                                                                  Number of      Total revenues
                                                                  facilities         ($000)         Employees
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed....................................               31      $17,492,882           49,630
Baseline Closures............................................                5  2,000,000-4,000    14,000-17,500
                                                                                           ,000
Option 2 Closures............................................                0                0                0
Option 2.5 Closures..........................................                0                0                0
Option 2.5+P Closures........................................                0                0                0
Option 4 Closures............................................                0                0                0
--------------------------------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed....................................              105      $13,022,059          107,096
Baseline Closures............................................               30        4,326,777           41,038
Option 2 Closures............................................                0                0                0
Option 2.5 Closures..........................................                0                0                0
Option 2.5+P Closures........................................                0                0                0
Option 4 Closures............................................               22  800,000-1,000,0   12,500-15,000
                                                                                             00
----------------------------------------------------------------------------------------------------------------
\1\ Some revenue and employment impacts are presented as a range to prevent the disclosure of confidential
  business information.

    In the supplemental company-level closure analysis shown in Table 
IX.B-2, EPA projects that one poultry company will close under Option 
2.5+P and Option 4. This company employs between 2,500 and 5,000 
workers. Note that the apparent discrepancy between the facility-level 
and company-level analysis for poultry Option 2.5+P is explained by the 
fact that the poultry company that is projected to close did not 
provide facility-level financial information; therefore, the facilities 
owned by this company were not included in the facility-level analysis. 
Under the alternate analysis, the same poultry company (under the same 
options) is projected to close, as well as one meat company under all 
treatment options, and one mixed meat (i.e., company owns both poultry 
and meat facilities) company under Options 2.5, 2.5+P, and Option 4.

[[Page 54516]]



              Table IX.B-2.--Summary of Projected Company Closure Impacts by Subcategory and Option
----------------------------------------------------------------------------------------------------------------
                                                                 Baseline conditions and projected incremental
                                                                              closure impacts \1\
                            Option                            --------------------------------------------------
                                                                  Number of      Total revenues
                                                                  companies       ($millions)       Employees
----------------------------------------------------------------------------------------------------------------
                                   Meat (own facilities in Subcategories A-I)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed.....................................                9          $29,949           80,755
Baseline Closures............................................                1          250-500      1,000-4,000
Option 2 Closures............................................                0                0                0
Option 2.5 Closures..........................................                0                0                0
Option 2.5+P Closures........................................                0                0                0
Option 4 Closures............................................                0                0                0
--------------------------------------------------------------
                                Poultry (own facilities in Subcategories K and L)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed.....................................               12          $15,441          135,850
Baseline Closures............................................                5            3,384           31,042
Option 2 Closures............................................                0                0                0
Option 2.5 Closures..........................................                0                0                0
Option 2.5+P Closures........................................                1          100-150      2,500-5,000
Option 4 Closures............................................                1          100-150      2,500-5,000
--------------------------------------------------------------
                          Mixed (own facilities in both meat and poultry subcategories)
----------------------------------------------------------------------------------------------------------------
Total Companies Analyzed.....................................                4          $89,439          184,834
Baseline Closures............................................                0              N/A              N/A
Option 2 Closures............................................                0                0                0
Option 2.5 Closures..........................................                0                0                0
Option 2.5+P Closures........................................                0                0                0
Option 4 Closures............................................                0                0               0
----------------------------------------------------------------------------------------------------------------
\1\ Some revenue and employment impacts are presented as a range to prevent the disclosure of confidential
  business information.

    Company-level results are unweighted because the survey sampling 
frame was stratified on the basis of facility-level data, and this 
stratification could not be translated to the company level. Therefore, 
the facility-level and company-level results are not additive. Because 
of the large number of facilities that were unable to submit financial 
data in their survey, EPA performed a subsidiary company-level analysis 
to provide a consistency check on the primary facility-level analysis. 
EPA estimates that the 25 companies in the company-level analysis own 
at least 118 of the 136 in-scope facilities that EPA project will be 
subject to regulation in Subcategories A-D and K. Note however that the 
company-level and facility-level analyses are fairly consistent in that 
both show no closures in the meat subcategories under any option, and 
both show impacts in the poultry subcategories under Option 4. It is 
not surprising that the impacts appear higher under this option for the 
facility-level analysis, because the company-level analysis will not 
capture situations where one or more facilities owned by a company 
close but the company as a whole remains in business. The only 
inconsistency is for poultry Option 2.5, which shows one company-level, 
but no facility-level, impact. This is because the particular 
facilities owned by the closing company did not have detailed survey 
data and thus were not included in the facility-level analysis.
2. How Many Small Facilities in Subcategories A-D and Subcategory K 
Might Close?
    EPA is not promulgating any additional regulations for small 
facilities in these subcategories, so there are no rule-related 
closures. However, EPA analyzed potential closures under the options 
(Options 1 and 2) that EPA considered for small facilities in these 
subcategories.
    Among small facilities in Subcategories A-D and Subcategory K, 
there are no baseline closures. Under the alternate analysis, in which 
a negative NPV under only one method is sufficient to project a 
closure, EPA also estimates there are no baseline closures in either 
subcategory.
    In the facility-level closure analysis, EPA projects there are no 
facility closures for Subcategories A-D under either the primary or 
alternate analysis. The results of the closure analysis for Subcategory 
K cannot be presented due to CBI reasons. However, EPA found a 
substantial percentage of small facilities are projected to close under 
both options in this subcategory. Table IX.B-3 presents these results.

          Table IX.B-3.--Summary of Projected Small Facility Closure Impacts by Subcategory and Option
----------------------------------------------------------------------------------------------------------------
                                                                 Baseline conditions and projected incremental
                                                                              closure impacts \1\
                            Option                            --------------------------------------------------
                                                                  Number of      Total revenues
                                                                  facilities      ($thousands)      Employees
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed....................................               15  $150,000-200,00          500-750
                                                                                              0

[[Page 54517]]

 
Baseline Closures............................................                0                0                0
Option 1 Closures............................................                0                0                0
Option 2 Closures \2\........................................               NA               NA               NA
--------------------------------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Total Facilities Analyzed....................................               36  250,000-500,000      2,000-4,000
Baseline Closures............................................                0                0                0
Option 1 Closures............................................            (\3\)            (\3\)            (\3\)
Option 2 Closures............................................            (\3\)            (\3\)           (\3\)
----------------------------------------------------------------------------------------------------------------
\1\ Revenue and employment data are presented as a range to prevent the disclosure of confidential business
  information.
\2\ Option 2 was not costed for small facilities in this subcategory, because EPA did not propose further
  regulations.
\3\ CBI.

3. How Many Non-Small Facilities in Subcategories F-I, J, and L Might 
Close?
    Table IX.B-4 presents the closure analysis for non-small facilities 
in Subcategories F-I, Subcategory J, and Subcategory L based on the 
model facility methodology used to analyze screener survey facilities. 
Under Option 2.5, EPA estimates that facilities in Subcategories F-I 
will incur compliance costs that are 1.2 percent of net income; 
facilities in these subcategories are expected to have about a 0.2 
percent probability of closure due to the rule. EPA projects that 
facilities in Subcategory J will incur compliance costs of 6.7 percent 
of net income under Option 2.5. Probability of closure due to the rule 
is 1.3 percent for these facilities under the selected option. In 
Subcategory L, EPA expects that facilities will incur compliance costs 
of 5.1 percent of net income under the selected option, with the 
probability of closure due to the rule for these facilities about 0.9 
percent.

           Table IX.B-4.--Summary of Projected Non-Small Facility Closure Impacts by Subcategory and Option Screener Survey Facility Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average
                                                                        annualized    Probability  of
                               Option                                    costs as     closure  due to     Number of     Total  revenues   Employees \2\
                                                                     percent of  net   rule \1\  (%)    facilities \2\     ($000) \2\
                                                                     income \1\  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Subcategories F-I
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities Analyzed................................................               NA               NA                4         $448,654            1,506
Option 2...........................................................              1.0             0.17             0.01              754                3
Option 2.5.........................................................              1.2             0.21             0.01              930                3
Option 2.5+P.......................................................              1.3             0.23             0.01            1,014                3
Option 4...........................................................              3.0             0.50             0.02            2,260                8
--------------------------------------------------------------------
                                                                      Subcategory J
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities Analyzed................................................               NA               NA               19          274,270            1,123
Option 2...........................................................              1.5             0.29             0.06              809                3
Option 2.5.........................................................              6.7             1.29             0.25            3,687               16
Option 2.5+P.......................................................             17.1             3.31             0.63            9,986               45
Option 4...........................................................             24.2             4.47             0.91           13,591               58
--------------------------------------------------------------------
                                                                    Subcategory L \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities Analyzed................................................               NA               NA               10          223,663              974
Option 2...........................................................              2.8             0.51             0.05            1,135                5
Option 2.5.........................................................              5.1             0.91             0.09            1,941                8
Option 2.5+P.......................................................              7.7             1.36             0.14            2,937               12
Option 4...........................................................             16.8             3.03             0.30            6,689              29
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Presented as a weighted average of results over all model facilities in the subcategory.
\2\ Calculated as the probability of closure for each individual model facility multiplied by the number of facilities, revenues and employment
  represented by that model facility. The results are then summed over all model facilities in the subcategory.
\3\ Includes costs and impacts on the portion of production that falls under non-small processor Subcategory L guidelines for 7 mixed processors,
  assuming no costs for that portion of their output that falls under small processor Subcategories F-I guidelines. Costs and impacts if guidelines for
  both types of production are promulgated are covered in Section IX.B.5 below.


[[Page 54518]]

    Table IX.B-4 shows that fractions of facilities are projected to 
close under each option. This result is attributable to the methodology 
used to estimate the probability of closure due to the rule. EPA 
estimates the probability of closure using a continuous distribution 
function. EPA then calculates the number of closures by multiplying the 
probability of closure by the number of facilities represented by that 
model facility. Because relatively few facilities are in each 
subcategory, and because the probabilities of closure are relatively 
small, the projected number of closures in each subcategory is less 
than one. However, to report zero projected closures is not accurate 
since the probability of closure, while small, is greater than zero.
4. How Many Small Facilities in Subcategories F-I and Subcategory L 
Might Close?
    Table IX.B-5 presents the closure analysis for small facilities in 
Subcategories F-I and Subcategory L. EPA is not regulating small 
facilities in these subcategories, but EPA projects that small 
facilities in Subcategories F-I would incur compliance costs that are 
9.4 percent of net income, resulting in a probability of closure due to 
the rule of 1.5 percent if they were regulated based on Option 1 or 2. 
In Subcategory L, facilities would incur costs that compose less than 1 
percent of net income, resulting in a probability of closure due to the 
rule of 0.15 percent if they were regulated.

             Table IX.B-5.--Summary of Projected Small Facility Closure Impacts by Subcategory and Option Screener Survey Facility Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Average
                                                                        annualized     Probability of
                               Option                                    costs as      closure due to     Number of      Total revenues   Employees \2\
                                                                     percent of  net   rule \1\  (%)    facilities \2\     ($000) \2\
                                                                     income \1\  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Subcategories F-I \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities Analyzed................................................               NA               NA               21         $369,692            1,316
Option 1...........................................................              9.4             1.49             0.31            2,632               11
Option 2...........................................................              9.4             1.51             0.31            2,633               11
--------------------------------------------------------------------
                                                                    Subcategory L \4\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Facilities Analyzed................................................               NA               NA                3           22,712               97
Option 1...........................................................              0.9             0.15                0               33                0
Option 2...........................................................              1.0             0.15                0               33               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Presented as a weighted average of results over all model facilities in the subcategory.
\2\ Calculated as the probability of closure for each individual model facility multiplied by the number of facilities, revenues and employment
  represented by that model facility. The results are then summed over all model facilities in the subcategory.
\3\ Includes costs and impacts on the portion of production that falls under small processor Subcategories F-I guidelines for 7 mixed processors,
  assuming no costs for that portion of their output that falls under non-small processor Subcategory L guidelines, and for 3 mixed processors, assuming
  no costs for that portion of their output that falls under small processor Subcategory L guidelines. Costs and impacts if guidelines for both types of
  production are promulgated are covered in Section IX.B.5 below.
\4\ Includes costs and impacts on the portion of production that falls under small processor Subcategory L guidelines for 3 mixed processors, assuming
  no costs for that portion of their output that falls under small processor Subcategories F-I guidelines. Costs and impacts if guidelines for both
  types of production are promulgated are covered in Section IX.B.5 below.

5. How Many Mixed Processors Might Close?
    For mixed processors, EPA presents the results of the closure model 
as a matrix. This is because a mixed processing facility might be 
subject to two different regulatory options depending on the type of 
meat, type of production processes, and quantity of production in 
different parts of the plant. Table IX.B-6 presents the average 
annualized costs as a percent of net income and the probability of 
closure due to the rule for 7 facilities that are both non-small 
poultry further processors (and are therefore subject to Subcategory L 
guidelines and limitations on that portion of their output) and small 
meat further processors (Subcategories F-I). Each possible combination 
of options under Subcategory L (rows) and Subcategory F-I (columns) are 
shown. Under the combination of Option 2.5 selected for non-small 
poultry further processing, and no option selected for small meat 
further processing, these facilities are expected to incur compliance 
costs of 6.2 percent of net income. These costs result in 1.1 percent 
probability of closure due to the rule. To present results concisely, 
the table does not show the number of projected closures, revenue and 
employment losses among the three mixed processor facilities. However, 
all information necessary to make those calculations is provided in the 
tables, and the complete results are included in the rulemaking record.

 Table IX.B-6.--Summary of Projected Non-Small Mixed Processor Facility Closure Impacts Screener Survey Facility
                                                    Analysis
----------------------------------------------------------------------------------------------------------------
                                                                                Options for small facilities in
                                                                                     subcategories F-I \1\
   Options for non-small facilities in                  Variable             -----------------------------------
            subcategory L \1\                                                              Option 1    Option 2
                                                                               None  (%)      (%)         (%)
----------------------------------------------------------------------------------------------------------------
None.....................................  Average Annualized Costs as                NA         1.5         1.5
                                            Percent of Net Income.
                                           Probability of Closure Due to              NA         0.3         0.3
                                            Rule.

[[Page 54519]]

 
Option 2.................................  Average Annualized Costs as               3.1         4.5         4.5
                                            Percent of Net Income.
                                           Probability of Closure Due to             0.5         0.8         0.3
                                            Rule.
Option 2.5...............................  Average Annualized Costs as               6.2         7.6         7.6
                                            Percent of Net Income.
                                           Probability of Closure Due to             1.1         1.3         1.3
                                            Rule.
Option 2.5+P.............................  Average Annualized Costs as               9.1        10.5        10.5
                                            Percent of Net Income.
                                           Probability of Closure Due to             1.6         1.8         1.8
                                            Rule.
Option 4.................................  Average Annualized Costs as              18.8        20.3        20.3
                                            Percent of Net Income.
                                           Probability of Closure Due to             3.3         3.5        3.5
                                            Rule.
----------------------------------------------------------------------------------------------------------------
\1\ This group contains 7 facilities, with revenues of $132 million and 484 employees. On average, 39% of
  production is subject to guidelines and limitations for small processors in Subcategories F-I, and 61% of
  production is subject to non-small Subcategory L guidelines and limitations.

    EPA identified three mixed processors as small further processors 
in both the poultry (Subcategory L) and meat (Subcategories F-I) 
sectors. EPA chose not to establish or revise limits for small 
processors of either animal type. Therefore, no impacts are projected 
for these facilities. Table IX.B-7 presents the results of the impact 
analysis under all possible combinations of regulatory options to which 
these facilities might have been subject. To present results concisely, 
the table does not show the number of projected closures, revenue and 
employment losses among the three mixed processor facilities. However, 
all information necessary to make those calculations is provided in the 
tables, and the complete results are included in the rulemaking record.

   Table IX.B-7.--Summary of Projected Small Mixed Processor Facility Closure Impacts Screener Survey Facility
                                                    Analysis
----------------------------------------------------------------------------------------------------------------
                                                                                Options for small facilities in
                                                                                     subcategories F-I \1\
     Options for small facilities in                    Variable             -----------------------------------
            subcategory L \1\                                                              Option 1    Option 2
                                                                               None  (%)      (%)         (%)
----------------------------------------------------------------------------------------------------------------
None.....................................  Average Annualized Costs as                NA         4.4         4.5
                                            Percent of Net Income.
                                           Probability of Closure Due to              NA         0.7         0.7
                                            Rule.
Option 1.................................  Average Annualized Costs as               1.0         5.4         5.4
                                            Percent of Net Income.
                                           Probability of Closure Due to             0.2         0.8         0.8
                                            Rule.
Option 2.................................  Average Annualized Costs as               1.0         5.4         5.4
                                            Percent of Net Income.
                                           Probability of Closure Due to             0.2         0.8        0.9
                                            Rule.
----------------------------------------------------------------------------------------------------------------
\1\ This group contains 3 facilities, with revenues of $22.7 million and 97 employees. On average, 18% of
  production is subject to guidelines and limitations for small processors in Subcategories F-I, and 82% of
  production is subject to small Subcategory L guidelines and limitations.

C. What Company-Level Impacts, Other Than Closure, Are Projected Due to 
the Final Rule?

    EPA also examined the impacts of the rule on affected firms' 
balance sheets using financial ratio techniques as well as impacts on 
facilities' income (i.e., the closure analysis). As noted previously, 
the availability of detailed survey data affected the company-level 
financial ratio analysis as well as the closure analysis.
1. How Might Companies With Facilities in Subcategories A-D and K Be 
Impacted?
    EPA uses the same method for estimating firm level compliance costs 
for the Altman Z' analysis as it did for the company-level closure 
analysis (see Section IX.A.2).
    For companies that own non-small facilities in Subcategories A-D 
and Subcategory K, the Altman Z' analysis shows that 7 meat companies 
and 8 poultry companies are considered financially healthy in the 
baseline. One meat company, 4 poultry companies, and 3 mixed meat 
companies have Altman Z' scores in the indeterminate range for 
financial health; one meat company and one mixed meat company are 
considered financially stressed. Under Option 4, the Altman Z' score 
for one poultry company changed from the financially healthy to the 
indeterminate range (represented by the +1 and -1 on Table IX.C-1).

[[Page 54520]]



         Table IX.C-1.--Projected Impacts on Non-Small Company Altman Z' Score by Animal Type and Option
----------------------------------------------------------------------------------------------------------------
                                                            Number of companies with baseline Altman Z' score in
                                                              specified range and incremental changes in score
                          Option                           -----------------------------------------------------
                                                               Financially                         Bankruptcy
                                                                 healthy        Indeterminate        likely
----------------------------------------------------------------------------------------------------------------
                                   Meat (own facilities in Subcategories A-I)
----------------------------------------------------------------------------------------------------------------
Baseline..................................................                 7                 1                 1
Option 2..................................................                 0                 0                 0
Option 2.5................................................                 0                 0                 0
Option 2.5+P..............................................                 0                 0                 0
Option 4..................................................                 0                 0                 0
-----------------------------------------------------------
                                Poultry (own facilities in Subcategories K and L)
----------------------------------------------------------------------------------------------------------------
Baseline..................................................                 8                 4                 0
Option 2..................................................                 0                 0                 0
Option 2.5................................................                 0                 0                 0
Option 2.5+P..............................................                 0                 0                 0
Option 4..................................................                -1                +1                 0
-----------------------------------------------------------
                          Mixed (own facilities in both meat and poultry subcategories)
----------------------------------------------------------------------------------------------------------------
Baseline..................................................                 0                 3                 1
Option 2..................................................                 0                 0                 0
Option 2.5................................................                 0                 0                 0
Option 2.5+P..............................................                 0                 0                 0
Option 4..................................................                 0                 0                0
----------------------------------------------------------------------------------------------------------------
Note: A change from one state e.g., financially healthy) to another state e.g., indeterminate) is indicated by
  ``-1'' and ``+1''. The numbers in the ``baseline'' rows represent all companies analyzed, while those in the
  ``option'' rows represent only changes from the baseline.

    A small number of companies that own small facilities in 
Subcategories A-D and Subcategory K provided sufficient financial data 
to analyze using the Altman Z'-score. These companies were determined 
to be financially healthy in the baseline, and did not incur financial 
distress under any of the potential regulatory options examined.
2. How Might Companies With Facilities in Subcategories F-I, J, and L 
Be Impacted?
    EPA assesses impacts to the balance sheet of companies in 
Subcategories F-I, Subcategory J, and Subcategory L by estimating the 
effects of incremental compliance costs to median return on assets. 
Table IX.C-2 presents the results of this analysis for non-small 
companies. Table IX.C-3 shows the results for small companies.
    For non-small companies in Subcategories F-I, the analysis shows 
that the return on assets for the selected option would decrease from 
5.50 percent to 5.42 percent. In Subcategory J, the analysis shows that 
the return on assets would decrease from 2.0 percent to 1.86 percent; 
in Subcategory L, it would decrease from 4.43 percent to 4.16 percent. 
For small companies there are no effects, but Table IX.C-3 shows 
impacts under the non-selected options.

    Table IX.C-2.--Summary of Projected Impacts to Return on Assets Ratio by Subcategory and Option Non-Small
                                               Processor Companies
----------------------------------------------------------------------------------------------------------------
                                                                Median return on assets    Change in return on
                            Option                                     (percent)             assets (percent)
----------------------------------------------------------------------------------------------------------------
                                       Subcategories F-I (4 companies)\1\
----------------------------------------------------------------------------------------------------------------
Pre-reg rate..................................................                     5.50                       NA
Post-reg rate.................................................  .......................  .......................
Option 2......................................................                     5.43                     0.07
Option 2.5....................................................                     5.42                     0.08
Option 2.5+P..................................................                     5.41                     0.09
Option 4......................................................                     5.31                     0.19
---------------------------------------------------------------
                                         Subcategory J (19 companies)\1\
----------------------------------------------------------------------------------------------------------------
Pre-reg rate..................................................                     2.00                       NA
Post-reg rate.................................................  .......................  .......................
Option 2......................................................                     1.97                     0.03
Option 2.5....................................................                     1.86                     0.14
Option 2.5+P..................................................                     1.65                     0.35
Option 4......................................................                     1.51                     0.49
---------------------------------------------------------------

[[Page 54521]]

 
                                       Subcategory L (10 companies)\1\ \2\
----------------------------------------------------------------------------------------------------------------
Pre-reg rate..................................................                     4.43                       NA
Post-reg rate.................................................  .......................  .......................
Option 2......................................................                     4.29                     0.14
Option 2.5....................................................                     4.16                     0.27
Option 2.5+P..................................................                     4.02                     0.41
Option 4......................................................                     3.58                    0.85
----------------------------------------------------------------------------------------------------------------
\1\ For the purpose of this analysis, EPA assumes the companies are identical to the facilities.
\2\ Includes costs and impacts on the portion of production that falls under non-small processor Subcategory L
  guidelines for 7 mixed processors, assuming no costs for that portion of their output that falls under small
  processor Subcategories F-I guidelines.


Table IX.C-3.--Summary of Projected Impacts to Return on Assets Ratio by Subcategory and Option, Small Processor
                                                    Companies
----------------------------------------------------------------------------------------------------------------
                                                                Median return on assets     Percent change in
                            Option                                     (percent)             return on assets
----------------------------------------------------------------------------------------------------------------
                                     Subcategories F-I (21 companies)\1\ \2\
----------------------------------------------------------------------------------------------------------------
Pre-reg rate..................................................                     5.50                       NA
Post-reg rate.................................................  .......................  .......................
Option 1......................................................                     4.94                     0.56
Option 2......................................................                     4.94                     0.56
---------------------------------------------------------------
                                       Subcategory L (3 Companies)\1\ \3\
----------------------------------------------------------------------------------------------------------------
Pre-reg rate..................................................                     5.50                       NA
Post-reg rate.................................................  .......................  .......................
Option 1......................................................                     5.44                     0.06
Option 2......................................................                     5.44                    0.06
----------------------------------------------------------------------------------------------------------------
\1\ For the purpose of this analysis, EPA assumes the companies are identical to the facilities.
\2\ Includes costs and impacts on the portion of production that falls under small processor Subcategories F-I
  guidelines for 7 mixed processors, assuming no costs for that portion of their output that falls under non-
  small processor Subcategory L guidelines, and for 3 mixed processors, assuming no costs for that portion of
  their output that falls under small processor Subcategory L guidelines.
\3\ Includes costs and impacts on the portion of production that falls under small processor Subcategory L
  guidelines for 3 mixed processors, assuming no costs for that portion of their output that falls under small
  processor Subcategories F-I guidelines.

D. What Market Level Impacts Are Projected?

    The market model analysis shows that the decrease in supply will be 
smallest for pork under the selected option, where the costs per pound 
of total production are estimated at approximately $0.00014 and largest 
for chicken with costs per pound of total production of about $0.00079. 
The maximum projected price increase is less than 0.05 percent of 
baseline price for all products under Option 2.5. Table IX.D-1 shows 
the projected impacts for beef, pork, chicken, and turkey. Because 
market impacts are global, the analysis assumes that the same option is 
selected for all subcategories.
    EPA's assessment projects that domestic production of meat and 
poultry products, and therefore industry employment, would decrease by 
less than 0.02 percent under Option 2.5. In general, impacts to 
domestic consumption of meat products are somewhat smaller than impacts 
to domestic supply due to partially offsetting increases in meat 
imports.

                                                Table IX.D-1.--Projected Impacts on Meat Product Markets
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Domestic supply    Domestic demand   Quantity imported  Quantity exported   Compliance costs
                Option                    Price  ($/lb.)    (lbs. x 1 mil.)    (lbs. x 1 mil.)     (lbs. x 1 mil.)    (lbs. x 1 mil.)      per pound
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Beef
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..............................            $1.1105           26,386.0           26,843.0            2,874.0            2,417.0  .................
Option 2..............................             1.1106           26,383.2           26,841.3            2,874.7            2,416.6           $0.00025
Option 2.5............................             1.1108           26,380.3           26,839.6            2,875.4            2,416.1            0.00050
Option 2.5+P..........................             1.1110           26,375.3           26,836.6            2,876.6            2,415.3            0.00095
Option 4..............................             1.1111           26,373.3           26,835.5            2,877.2            2,415.0            0.00113
---------------------------------------
                                                                          Pork
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..............................             1.0038           19,278.0           18,827.0              827.0            1,278.0  .................
Option 2..............................             1.0038           19,278.0           18,827.1              827.0            1,277.9            0.00003
Option 2.5............................             1.0039           19,277.5           18,826.7              827.1            1,277.8            0.00014

[[Page 54522]]

 
Option 2.5+P..........................             1.0040           19,276.0           18,825.7              827.3            1,277.5            0.00040
Option 4..............................             1.0041           19,275.4           18,825.3              827.3            1,277.4            0.00051
---------------------------------------
                                                                         Chicken
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..............................             0.5807           29,741.0           24,826.0                5.0            4,920.0  .................
Option 2..............................             0.5808           29,737.8           24,824.2                5.0            4,918.7            0.00044
Option 2.5............................             0.5809           29,735.4           24,822.8                5.0            4,917.6            0.00079
Option 2.5+P..........................             0.5812           29,729.7           24,819.6                5.0            4,915.1            0.00159
Option 4..............................             0.5815           29,721.6           24,814.7                5.0            4,911.9            0.00270
---------------------------------------
                                                                         Turkey
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..............................             0.6898            5,297.0            4,919.3                1.3              379.0  .................
Option 2..............................             0.6898            5,296.8            4,919.1                1.3              379.0            0.00018
Option 2.5............................             0.6899            5,296.7            4,919.0                1.3              379.0            0.00030
Option 2.5+P..........................             0.6899            5,296.5            4,918.8                1.3              378.9            0.00047
Option 4..............................             0.6900            5,295.9            4,918.3                1.3              378.9            0.00092
--------------------------------------------------------------------------------------------------------------------------------------------------------

E. What Are the Potential Impacts on Foreign Trade?

    Despite its position as one of the largest agricultural producers 
in the world, historically the U.S. has not been a major player in 
world markets for meat products. In fact, until recently, the U.S. was 
a net importer of these products. The presence of a large domestic 
market for meat has limited U.S. reliance on developing export markets 
for its products. As the U.S. has taken steps to expand export markets 
for meat, one major obstacle has been that it remains a relatively high 
cost producer of these products compared to other net exporters, such 
as New Zealand, Australia, Brazil, and other Latin American countries, 
as well as other more established and government-subsidized exporting 
countries, including Canada and the countries in the European Union. 
Increasingly, however, continued efficiency gains and low-cost feed are 
making the U.S. more competitive in world markets for meat.
    In contrast, U.S. poultry products account for a significant share 
of world trade, and exports account for a sizable and growing share of 
annual U.S. production. However, the U.S. position in the world poultry 
market has been subject to increasing competition from countries such 
as Brazil. Because of those, EPA reviewed potential impacts to U.S. 
poultry exports in more detail. One factor suggests that the impacts of 
the rule to U.S. poultry exports may be smaller than projected using 
the market model, at least for poultry products.
    The U.S. primarily exports dark poultry meat, which is considered 
inferior by U.S. consumers, while the U.S. domestic market is dominated 
by sales of white poultry meat. However, dark meat and white meat are 
joint products of the poultry industry--one cannot be produced without 
simultaneously producing the other. Because the market for dark meat, 
whether domestic or foreign, is secondary to U.S. producers, the 
marginal cost of producing dark meat, and therefore its price, are 
relatively low.
    This is because chickens are bred, raised, slaughtered, and 
processed primarily for their white meat. Given that the chicken has 
already been processed for its white meat, the marginal cost of 
producing dark meat is relatively low--the incremental cost of 
processing the dark meat given that the white meat has been processed. 
This is consistent with trade data: it has been estimated that U.S. 
production costs per pound of broiler meat exceeds those of Brazil by 
almost 50 percent. However, while the U.S. export price for both 
boneless breast meat and whole broilers substantially exceeds the 
Brazilian export price, the U.S. export price for chicken leg quarters 
is less than the Brazilian export price.
    For the same reason, there should be relatively little increase in 
the marginal cost of processing dark meat due to the effluent guideline 
and therefore little increase in its price. The impact on the marginal 
cost of producing dark meat given that white meat is already produced 
(and wastewater treatment already purchased for its processing) would 
be relatively small. Therefore, the increase in the marginal cost of 
producing dark meat should be smaller than the increase in the marginal 
cost of producing white meat. The increase in price necessary to earn 
an adequate rate of return can be smaller for exports than for domestic 
sales, and therefore the decrease in exports of dark meat should be 
smaller than projected by the market model, which is based on the 
change in the overall domestic price. See the Economic and 
Environmental Benefits Analysis for more details.
    As part of its market analysis, EPA evaluated the potential for 
changes in traded volumes, such as increases in imports and decreases 
in exports. The results of this analysis are presented in Table IX.E-1.
    EPA includes a sensitivity analysis of trade impacts in Table IX.E-
1. Under the standard analysis, the compliance costs per pound used to 
project decrease in supply is calculated as a weighted average of 
compliance costs per pound of production for direct dischargers and 
compliance costs per pound for indirect dischargers (which are zero), 
where the weights are the relative share of total production. The 
sensitivity analysis assumes the decrease in supply is based on the 
average compliance costs per pound of production to direct dischargers 
only. The standard assumption is more appropriate because the 
competition of indirect dischargers with zero compliance costs will 
discourage direct dischargers from raising their price in response to 
their increased costs. The sensitivity analysis provides a conservative 
upper bound on impacts.
    Under the sensitivity analysis, compliance costs per pound are 2.0 
(chicken) to 6.3 (turkey) times larger than under the standard 
analysis. The largest impact under the sensitivity analysis is observed 
in the beef market, where exports are projected to decrease by 0.11 
percent per year, and overall domestic production is projected to

[[Page 54523]]

decrease by 0.06 percent per year. Under the more realistic standard 
analysis, the largest decrease in exports occurs in the chicken market 
(0.05 percent per year) with an overall decrease in domestic production 
of 0.02 percent per year.

                        Table IX.E-1.--Projected Impacts on Foreign Trade in Meat and Poultry Products Under the Selected Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Domestic supply    Domestic demand   Quantity imported  Quantity exported   Compliance costs
                  Option                   Price  ($/lb.)   (lbs. x 1 mil.)    (lbs. x 1 mil.)     (lbs. x 1 mil.)    (lbs. x 1 mil.)      per pound
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Beef
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................         $1.1105           26,386.0           26,843.0            2,874.0            2,417.0  .................
Option 2.5 \1\...........................          1.1108           26,380.3           26,839.6            2,875.4            2,416.3           $0.00050
Sensitivity Analysis \2\.................          1.1113           26,369.1           26,832.6            2,878.0            2,414.4            0.00147
------------------------------------------
                                                                          Pork
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................          1.0038           19,278.0           18,827.0              827.0            1,278.0  .................
Option 2.5 \1\...........................          1.0039           19,277.5           18,826.7              827.1            1,277.8            0.00014
Sensitivity Analysis \2\.................          1.0040           19,276.8           18,826.6              827.3            1,277.5            0.00034
------------------------------------------
                                                                         Chicken
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................          0.5807           29,741.0           24,826.0                5.0            4,920.0  .................
Option 2.5 \1\...........................          0.5809           29,735.4           24,822.8                5.0            4,917.6            0.00079
Sensitivity Analysis \2\.................          0.5812           29,730.0           24,819.9                5.0            4,915.1            0.00156
------------------------------------------
                                                                         Turkey
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................          0.6898            5,297.0            4,919.3                1.3              379.0  .................
Option 2.5 \1\...........................          0.6899            5,296.7            4,919.0                1.3              379.0            0.00030
Sensitivity Analysis \2\.................          0.6903            5,294.9            4,917.5                1.3              378.7           0.00189
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Compliance costs per pound (shift in supply curve) are equal to the weighted average of compliance costs per pound of production for direct
  dischargers and compliance costs per pound for indirect dischargers (which are zero), where the weights are the relative share of total production.
\2\ Compliance costs per pound (shift in supply curve) are equal to the average compliance costs per pound of production to direct dischargers.

F. What Are the Potential Impacts on Communities?

    The communities where the meat and poultry products facilities are 
located may be affected by the final regulation if facilities cut back 
operations; local employment and income may fall, sending ripple 
effects throughout the local community. Under the options selected for 
this rule, EPA projects that no facilities will close, hence EPA 
concludes that there are no community impacts under the regulation. 
Under the alternative analysis, there are two closures among 
subcategory A-D facilities and no change for subcategory K facilities. 
However, as noted previously, not all surveyed facilities provided 
facility-level financial data, and EPA therefore adjusted survey 
weights to account for nonresponse. In essence, survey nonresponse 
decreases the sample size for this analysis, which increases the 
variance of the collected data. Because of this, EPA has a somewhat 
lower level of confidence in these results than it would if all survey 
recipients had been able to provide facility-level financial data. The 
facility closure analysis and the company closure analysis show impacts 
under Option 2.5+P and Option 4 in Subcategory K. The results of this 
analysis can be found in the rulemaking record. Even under EPA's more 
conservative alternative analysis where two subcategory A-D facilities 
are projected to close, at most a handful of communities would be 
impacted. EPA cannot project how great these impacts would be as it 
cannot identify the communities where the impacts might occur. In 
general, the smaller the community, the greater the impact and the 
larger the community, the smaller the impact.

G. What Are the Projected Barriers to Entry for New Sources?

    When establishing NSPS, EPA considers the barrier that compliance 
costs due to the effluent guidelines regulation may pose to entry into 
the industry for a new facility. In general, it is less costly to 
incorporate waste water treatment technologies as a facility is built 
than it is to retrofit existing facilities. Therefore, where the rule 
is economically achievable for existing facilities, it will also be 
economically achievable for new facilities that can meet the same 
guidelines at lower cost. Similarly, even where the cost of compliance 
with a given technology is not economically achievable for an existing 
source, such technology may be less costly for new sources and thus 
have economically sustainable costs. It is possible, on the other hand, 
that to the extent the up-front costs of building a new facility are 
significantly increased as a result of the rule, prospective builders 
may face difficulties in raising additional capital. This could present 
a barrier to entry. Therefore, as part of its analysis of new source 
standards, EPA evaluates barriers to entry. EPA compares estimated 
average incremental facility or company capital costs incurred to meet 
the effluent guidelines to average total assets of existing facilities 
to ensure that additional capital requirements are relatively small.
    Tables IX.G-1 and IX.G-2, provide the results of the non-small 
facility-level and company-level analysis. Average capital costs of 
$1.9 million per facility under the selected Option 2.5 comprise 1.6 
percent of average facility assets in Subcategories A-D. In Subcategory 
K, average capital costs of $1.1 million per facility are 4.0 percent 
of average facility assets under the selected option. The company-level 
ratio of capital costs to total assets under Option 2.5 is 2.6 percent 
for meat companies, and 1.6 percent for poultry companies. For

[[Page 54524]]

companies that own both meat and poultry facilities, the analysis 
projects that capital costs will comprise about 0.1 percent of company 
total assets under the selected option. Based on the results of this 
analysis, EPA concludes that today's rule should not present barriers 
to entry for new businesses. See Section VII for a more detailed 
discussion by subcategory of NSPS and barriers to entry.

   Table IX.G-1.--Summary of Non-small Facility-Level Ratio of Capital Costs to Assets (Barrier to Entry) \1\
----------------------------------------------------------------------------------------------------------------
                                                                Option 2    Option 2.5     Option      Option 4
                         Subcategory                              (%)           %        2.5+P  (%)      (%)
----------------------------------------------------------------------------------------------------------------
A-D.........................................................          0.6          1.6          2.6          3.3
K...........................................................          2.1          4.0          4.2        12.3
----------------------------------------------------------------------------------------------------------------
\1\ Percentages are based on those facilities for which EPA had asset data and compliance costs.


    Table IX.G-2.--Summary of Non-Small Company-Level Ratio of Capital Costs to Assets (Barrier to Entry) \1\
----------------------------------------------------------------------------------------------------------------
                                                                Option 2    Option 2.5     Option      Option 4
                         Subcategory                              (%)          (%)       2.5+P  (%)      (%)
----------------------------------------------------------------------------------------------------------------
Meat........................................................          0.8          2.6          3.5          4.4
Poultry.....................................................          1.0          1.6          2.1          4.6
Mixed Meat..................................................          0.1          0.1          0.2         0.3
----------------------------------------------------------------------------------------------------------------
\1\ Percentages are based on those facilities for which EPA had asset data and compliance costs.

    Table IX.G-3 provides the small facility-level ratios. In 
Subcategories A-D, average capital costs comprise between 15 and 20 
percent of average facility assets for the non-selected Option 1. 
Average capital costs are 12.9 percent of average facility assets in 
Subcategory K for both options, including Option2 which was selected as 
the basis for the new NSPS.

Table IX.G-3.--Summary of Small Facility-Level Ratio of Capital Costs to
                      Assets (Barrier to Entry) \1\
------------------------------------------------------------------------
                                                  Option 1     Option 2
                  Subcategory                       (%)          (%)
------------------------------------------------------------------------
A-D \2\.......................................       15--20           NA
K.............................................         12.9        12.9
------------------------------------------------------------------------
\1\ Percentages are based on those facilities for which EPA had asset
  data and compliance costs.
\2\ Ratio of capital costs to total assets presented as a range to
  prevent the disclosure of confidential business information.

    EPA also compared projected capital costs with estimated total 
assets for the model facilities used to analyze impacts in 
Subcategories F-I, J, and L. EPA estimated model facility total assets 
from model facility income (based on Census data) combined with the 
median return on assets for the appropriate NAICS code as reported in 
Dun and Bradstreet (see Proposal EA, Chapter 3 for more details). Thus, 
the analysis presented below incorporates a greater degree of 
uncertainty than the results based on detailed survey data for 
Subcategories A-D and K.
    Tables IX.G-4 and IX.G-5 present the results of this analysis to 
non-small and small facilities respectively. These tables only include 
facilities with production that is classified solely in the indicated 
subcategories; the results for mixed processors, with production that 
is classified in more than one subcategory, are presented in Table 
IX.G-6 below. In general, the model facility analysis suggests that 
capital costs are not expected to exceed 2 percent of facility assets.

 Table IX.G-4.--Summary of Non-Small Facility-Level Ratio of Capital Costs to Assets (Barrier to Entry) Screener
                                            Survey Facility Analysis
----------------------------------------------------------------------------------------------------------------
                                                                Option 2    Option 2.5     Option      Option 4
                         Subcategory                              (%)          (%)       2.5+P (%)       (%)
----------------------------------------------------------------------------------------------------------------
F-I.........................................................          0.2          0.2          0.2          0.4
J...........................................................          0.1          0.3          0.4          0.5
L \1\.......................................................          0.1          0.1          0.1         0.6
----------------------------------------------------------------------------------------------------------------
\1\ Results do not include mixed processor facilities.


[[Page 54525]]


Table IX.G-5.--Summary of Small Facility-Level Ratio of Capital Costs to
       Assets (Barrier to Entry) Screener Survey Facility Analysis
------------------------------------------------------------------------
                  Subcategory                     Option 1     Option 2
------------------------------------------------------------------------
F-I \1\.......................................         1.7%        1.7%
------------------------------------------------------------------------
\1\ Results do not include mixed processor facilities.


   Table IX.G-6.--Summary of Mixed Processor Facility Ratio of Capital
  Costs to Assets (Barrier to Entry) Screener Survey Facility Analysis
------------------------------------------------------------------------
                                                               Ratio of
                                                               capital
             Subcategory combination and option                costs to
                                                                assets
------------------------------------------------------------------------
Non-small L (Option 2.5), Small F-I (Option 2).............         1.1%
Small L (Option 2), Small F-I (Option 2)...................         0.4%
------------------------------------------------------------------------

    The results for mixed processors include capital costs for both 
subcategories in which they operate, even though NSPS was not set for 
small facilities in Subcategories F-I. Comparing capital costs for only 
a percentage of production (i.e., small or non-small levels of 
production in Subcategory L) with a facility's total assets for all 
production could result in a misleadingly small ratio of capital costs 
to total assets. Even with this more costly estimate, the ratio of 
capital costs to total assets does not exceed 1.1 percent for mixed 
processors.

H. What Do the Cost-Reasonableness and Cost-Effectiveness Analyses 
Show?

1. For Non-Small Facilities, What Is the Cost-Reasonableness for 
Removing Pollutants?
    EPA based the analysis of Option 2 on the sum of BOD5 
and ammonia (as nitrogen) removals. For Option 2.5, EPA used the sum of 
BOD5 and total nitrogen removals, and for Options 2.5+P and 
4, EPA used the sum of BOD5, total nitrogen, and total 
phosphorus removed. EPA used these sets of pollutant removals to 
characterize the different intentions of each treatment option. For 
example, Option 2 is designed to include nitrification to reduce 
ammonia, while Option 2.5 includes denitrification to reduce TN; 
Options 2.5+P and 4 also include phosphorus treatment. The average BPT 
cost and removal comparison of pollutant removals under the selected 
Option 2 ranges from $2.55 per pound in Subcategories A-D to $29.88 per 
pound in Subcategory L. Table IX.H-1 presents the results of this 
analysis for all subcategories and options.

                      Table IX.H-1.--BPT Cost & Removal Comparison for Non-Small Facilities
----------------------------------------------------------------------------------------------------------------
                                                                             Average BPT cost   Incremental BPT
                                      Pretax annualized     Total pounds        & removal        cost & removal
               Option                   costs  (1999$)        removed1          comparison         comparison
                                                                              (1999$/pound)      (1999$/pound)
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Option 2............................         $7,287,580          2,859,971               2.55                 NA
Option 2.5..........................         16,685,857         16,010,456               1.04                 NA
Option 2.5+P........................         42,914,027         20,530,322               2.09               5.80
Option 4............................         52,001,157         24,069,226               2.16               2.57
-------------------------------------
                                                Subcategories F-I
----------------------------------------------------------------------------------------------------------------
Option 2............................            265,976             32,278               8.24                 NA
Option 2.5..........................            328,936             21,703              15.16                 NA
Option 2.5+P........................            358,850             21,703              16.53              DOM 3
Option 4............................            798,129            104,144               7.66               7.40
-------------------------------------
                                                  Subcategory J
----------------------------------------------------------------------------------------------------------------
Option 2............................            628,890             83,141               7.56                 NA
Option 2.5..........................          2,826,384          1,503,583               1.88                 NA
Option 2.5+P........................          7,433,377          2,094,017               3.55               7.80
Option 4............................         10,171,264          2,311,822               4.40              12.57
-------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Option 2............................         17,738,550            975,803              18.18                 NA
Option 2.5..........................         31,816,725         10,011,639               3.18                 NA
Option 2.5+P........................         63,384,016         14,159,024               4.48               7.61
Option 4............................        109,077,448         26,424,183               4.13               3.73
-------------------------------------
                                                Subcategory L \2\
----------------------------------------------------------------------------------------------------------------
Option 2............................            556,890             18,635              29.88                 NA
Option 2.5..........................            982,661            155,507               6.32                 NA
Option 2.5+P........................          1,475,209            180,519               8.17              19.69
Option 4............................          3,269,380            400,027               8.17              8.17
----------------------------------------------------------------------------------------------------------------
\1\ Total pounds removed equals the: sum of BOD5 and ammonia (as nitrogen) for Option 2; sum of BOD5 and total
  nitrogen for Option 2.5; and sum of BOD5, total nitrogen, and total phosphorus for Options 2.5+P and 4.
\2\ Includes costs and removals for mixed processors attributable to non-small production in Subcategory L.
DOM 3: Option is dominated because it has higher cost and lower or equivalent removals.

[[Page 54526]]

 
NA: The incremental cost reasonableness from Option 2 to Option 2.5 cannot be calculated because the pollutants
  used as the basis for the analysis differs under the two options; the incremental cost reasonableness from
  Option 2.5 to Option 2.5+P can be calculated because total phosphorus removals are zero under Option 2.5.

2. For Non-Small Facilities, What Is the Cost Effectiveness for 
Removing Nitrogen and Phosphorus?
    Tables IX.H-2 and IX.H-3 in this section provide both the 
incremental and average nutrient cost-effectiveness values. For 
nitrogen, EPA used a cost-effectiveness benchmark established by its 
Chesapeake Bay Program to assess the costs to wastewater treatment 
plants to implement system retrofits to achieve biological nutrient 
removal. This nitrogen benchmark estimate is approximately $4 per pound 
of nitrogen removed.
    For phosphorus, EPA assumed a cost-effectiveness benchmark of 
roughly $10 per pound based on a review of values reported in the 
agricultural research of the costs to remove phosphorus using various 
nonpoint source controls and management practices. For more information 
about the development of these benchmarks, see Appendix E of the 
Economic Analysis of the Final Revisions to the National Pollutant 
Discharge Elimination System Regulation and the Effluent Guidelines for 
Concentrated Animal Feeding Operations'' [EPA-821-R-03-002].
    Table IX.H-2 displays the results for the nitrogen cost-
effectiveness and, therefore, includes only options specifically 
designed to remove total nitrogen (i.e., Option 2.5 and Option 4). 
Option 2.5+P is also omitted from Table IX.H-2 because it provides no 
additional total nitrogen removals relative to Option 2.5. Similarly, 
Table IX.H-3 displays the results for the phosphorus cost-effectiveness 
and, therefore, only includes those options with a chemical phosphorus 
treatment step (i.e., Option 2.5+P and Option 4).
    Average cost-effectiveness (cost per pound of nitrogen removed) 
ranges from $1.08 in Subcategories A-D to $6.71 in Subcategory L under 
the selected option. Because Option 2 removes no total nitrogen, the 
incremental cost-effectiveness for Option 2.5 is identical to the 
average cost-effectiveness. In Subcategories A-D, Subcategory J, and 
Subcategory K the average cost per pound of total nitrogen removed is 
below the $4 per pound benchmark.
    The average cost-effectiveness (cost per pound of phosphorus 
removed) ranges from greater than $10 to $58.98 under Option 2.5+P. 
Again, incremental cost-effectiveness is identical to the average cost-
effectiveness for this option because no total phosphorus is removed 
under any lower options.
    EPA notes that the nutrient cost-effectiveness numbers presented on 
Table IX.H-2 represent upper bounds because they assign all the costs 
for an option to either total nitrogen or total phosphorus removal even 
though the options also remove other pollutants. EPA used this approach 
to provide a conservative estimate of cost-effectiveness and because it 
does not have a good basis to divide up removal costs among pollutants. 
EPA received no public comments on this approach in its analysis 
supporting the proposed rulemaking and NODA.

               Table IX.H-2.--Nutrient Cost-Effectiveness for Non-Small Facilities: Total Nitrogen
----------------------------------------------------------------------------------------------------------------
                                                                                          Average    Incremental
                                                                 Pretax       Total     nutrient CE  nutrient CE
                           Option                              annualized     pounds       for TN       for TN
                                                                 costs     removed \1\    (1999$/      (1999$/
                                                                (1999$)                    pound)       pound)
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Option 2.5..................................................  $16,685,857   15,400,791         1.08         1.08
Option 4....................................................   52,001,157   18,456,984         2.82        11.56
-------------------------------------------------------------
                                                 Subcategory F-I
----------------------------------------------------------------------------------------------------------------
Option 2.5..................................................      328,936            0  Undefined 2        DOM 2
Option 4....................................................      798,129       79,677        10.02        10.02
-------------------------------------------------------------
                                                  Subcategory J
----------------------------------------------------------------------------------------------------------------
Option 2.5..................................................    2,826,384    1,469,407         1.92         1.92
Option 4....................................................   10,171,264    1,652,506         6.16        40.11
-------------------------------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Option 2.5..................................................   31,816,725    9,367,808         3.40         3.40
Option 4....................................................  109,077,448   20,883,771         5.22         6.71
-------------------------------------------------------------
                                                Subcategory L \1\
----------------------------------------------------------------------------------------------------------------
Option 2.5..................................................      982,661      146,364         6.71         6.71
Option 4....................................................    3,269,380      354,355         9.23       10.99
----------------------------------------------------------------------------------------------------------------
\1\ Includes costs and removals for mixed processors attributable to non-small production in Subcategory L.
DOM 2: Option is dominated because it has higher cost and lower or equivalent removals. ``Undefined'' since
  removals are estimated to be zero.


[[Page 54527]]


              Table IX.H-3.--Nutrient Cost-Effectiveness for Non-Small Facilities: Total Phosphorus
----------------------------------------------------------------------------------------------------------------
                                                                             Average nutrient     Incremental
               Option                 Pretax annualized     Total pounds    CE for TP (1999$/   nutrient CE  for
                                        costs (1999$)         removed             pound)       TP  (1999$/pound)
----------------------------------------------------------------------------------------------------------------
                                              Subcategories A-D \1\
----------------------------------------------------------------------------------------------------------------
Option 2.5+P........................       >$42,914,027          4,519,867             >10.00             >10.00
Option 4............................         52,001,157          4,972,188              10.46              20.09
-------------------------------------
                                                  Subcategory J
----------------------------------------------------------------------------------------------------------------
Option 2.5+P........................          7,433,377            590,434              12.59              12.59
Option 4............................         10,171,264            622,583              16.34              85.16
-------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Option 2.5+P........................         63,384,016          4,147,385              15.28              15.28
Option 4............................        109,077,448          4,671,571              23.35              87.17
-------------------------------------
                                                Subcategory L \2\
----------------------------------------------------------------------------------------------------------------
Option 2.5+P........................          1,475,209             25,012              58.98              58.98
Option 4............................          3,269,380             27,000             121.09            902.36
----------------------------------------------------------------------------------------------------------------
\1\ Based on comments and further analysis, EPA concludes that the cost of increased alum addition and the
  resulting increased sludge generation and disposal, may be between $108,000 to $378,000 more per facility for
  Option 2.5+P than those used in EPA's analysis (see the rulemaking record)
\2\ Includes costs and removals for mixed processors attributable to non-small production in Subcategory L. DOM:
  Option is dominated because it has higher cost and lower or equivalent removals.

3. For Non-Small Facilities, What Is the Cost Effectiveness for 
Removing Toxic Pollutants
    Table IX.H-4 presents the cost-effectiveness of removing toxic 
pollutants from the wastewater streams of non-small direct dischargers. 
Pollutant removals included in the analysis are ammonia (as nitrogen) 
and nitrate/nitrite. Under the selected option, average cost-
effectiveness in 1981 dollars ranges from about $2,000 per pound 
equivalent in Subcategories A-D to $21,300 per pound equivalent in 
Subcategory L.

                        Table IX.H-4.--Toxic Cost-Effectiveness for Non-Small Facilities
----------------------------------------------------------------------------------------------------------------
                                                                              Average cost-    Incremental cost-
                                      Pretax annualized     Total pounds      effectiveness      effectiveness
               Option                    costs (1999$)      removed \1\       ($1981/pounds      ($1981/pounds
                                                                               equivalent)        equivalent)
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Option 2............................         $7,287,580          2,250,306              1,032              1,032
Option 2.5..........................         16,685,857         15,824,864              1,963              6,515
Option 2.5+P........................         42,914,027         15,824,864              5,048                DOM
Option 4............................         52,001,157         18,684,849              5,787             72,875
-------------------------------------
                                                Subcategories F-I
----------------------------------------------------------------------------------------------------------------
Option 2............................            265,976             10,575              8,018              8,018
Option 2.5..........................            328,936             10,575              9,917                DOM
Option 2.5+P........................            358,850             10,575             10,818                DOM
Option 4............................            798,129             13,804             18,434             52,550
-------------------------------------
                                                  Subcategory J
----------------------------------------------------------------------------------------------------------------
Option 2............................            628,890             48,965              4,095              4,095
Option 2.5..........................          2,826,384          1,513,977              9,139             14,115
Option 2.5+P........................          7,433,377          1,513,977             24,035                DOM
Option 4............................         10,171,264          1,700,605             28,929            173,529
-------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Option 2............................         17,738,550            331,973             17,035             17,035
Option 2.5..........................         31,816,725         10,444,933             15,037             13,100
Option 2.5+P........................         63,384,016         10,444,933             29,955                DOM
Option 4............................        109,077,448         20,605,243             29,391             48,431
-------------------------------------

[[Page 54528]]

 
                                                Subcategory L \1\
----------------------------------------------------------------------------------------------------------------
Option 2............................            556,890              9,492             18,704             18,704
Option 2.5..........................            982,661            162,968             21,324             26,105
Option 2.5+P........................          1,475,209            162,968             32,012                DOM
Option 4............................          3,269,380            352,044             37,897             56,902
----------------------------------------------------------------------------------------------------------------
\1\ Includes costs and removals for mixed processors attributable to non-small production in Subcategory L.
DOM: Option is dominated because it has higher cost and/or lower removals.

4. For Small Facilities, What Is the Cost-Reasonableness for Removing 
Pollutants?
    BPT costs per pound removed are significantly higher for small 
facilities than for non-small facilities. In Subcategory F-I, for 
example, average cost per pound removed is $24 under Option 2 for small 
processors compared to $12 per pound for large processors under the 
same option (Table IX.H-1). In the other subcategories, these figures 
are even larger: BPT cost per pound approaches $200 in Subcategory A-D, 
exceeds $1,400 per pound in Subcategory K, and approaches $4,000 per 
pound in Subcategory L. Table IX.H-5 presents the results of this 
analysis for all subcategories and options.

                        Table IX.H-5.--BPT Cost & Removal Comparison for Small Facilities
----------------------------------------------------------------------------------------------------------------
                                                                                  Average BPT    Incremental BPT
                                                   Pretax        Total pounds    cost & removal  cost &  removal
                   Option                        annualized      removed \1\       comparison       comparison
                                               costs  (1999$)                    (1999$/pound)    (1999$/pound)
----------------------------------------------------------------------------------------------------------------
                                                Subcategories A-D
----------------------------------------------------------------------------------------------------------------
Baseline....................................               $0                0               NA               NA
Option 1....................................              CBI              CBI              198              198
Option 2....................................               NA               NA               NA               NA
---------------------------------------------
                                              Subcategories F-I \2\
----------------------------------------------------------------------------------------------------------------
Baseline....................................                0                0               NA               NA
Option 1....................................        1,108,033           47,997               23               23
Option 2....................................        1,116,096           53,562               21                1
---------------------------------------------
                                                  Subcategory K
----------------------------------------------------------------------------------------------------------------
Baseline....................................                0                0               NA               NA
Option 1....................................              CBI              CBI            1,487              DOM
Option 2....................................              CBI              CBI              501              501
---------------------------------------------
                                                Subcategory L \2\
----------------------------------------------------------------------------------------------------------------
Baseline....................................                0                0               NA               NA
Option 1....................................           13,258              183               73               73
Option 2....................................           13,476              183               74              DOM
----------------------------------------------------------------------------------------------------------------
\1\ Total pounds removed equals the sum of BOD5 and ammonia (as nitrogen).
\2\ Includes costs and removals attributable to small levels of production in subcategory by mixed processors.
DOM: Option is dominated because it has higher cost and/or lower removals.

X. Water Quality Analysis and Environmental Benefits

A. Summary of the Environmental Benefits

    This section presents EPA's estimates of the environmental and 
human health benefits, including pollutant reductions, that will occur 
from this rule. Table X.A-1 shows the annualized benefits EPA projects 
will result from the effluent limitations and guidelines (ELG) 
requirements for today's rule. The total monetized benefits associated 
with the ELG requirements are estimated to approximate $2.6 million 
with a range of approximately zero to $10 million annually. These 
values represent those benefits which EPA is able to quantify and 
determine an economic value. Evidence from the nutrient criteria 
analysis (see Section X.C.3.d) suggests that nutrient loads from MPP 
facilities are significant, relative to background loads. However, the 
significance of MPP load reductions may not be fully captured by 
monetized benefit, due to the fact that the water quality index used in 
benefits analysis does not acknowledge current information about the 
contribution of nutrients to water quality, as represented by recent 
304(a) recommended ecoregional water quality criteria for nutrients 
(see DCN 316-511). As discussed later in this section, EPA has also 
identified additional environmental benefits that will result

[[Page 54529]]

from this rule but is unable to attribute a specific economic value to 
these additional nonmonetized or nonquantified benefits.
    EPA's detailed assessment of the environmental benefits that will 
be gained by this rule, as well as the benefits estimates for other 
regulatory options considered during this rulemaking, is presented in 
the Economic and Environmental Benefits Analysis (DCN 320-001).

   Table X.A-1.--Annualized Benefits of ELG Requirements for Meat and
                   Poultry Product Facilities (2003$)
------------------------------------------------------------------------
            Types of benefits                   Total for all MPPs
------------------------------------------------------------------------
Recreational and non-use benefits from    $2.6 million.
 improved water quality in freshwater
 rivers, streams, and lakes.
Reduced loadings of pathogens; oil and    Non-monetized.
 grease \1\.
Reduced public water treatment costs....  Negligible.
Reduced aquatic life and human health     Negligible.
 toxicity.
Reduced eutrophication (calculated as     Non-monetized.
 reduced exceedences of nutrient
 criteria) \1\.
                                         -------------------------------
Total Monetized Benefits................  $2.6 million.
------------------------------------------------------------------------
\1\ May be partially captured in the monitized recreational and non-use
  benefits.

B. What Pollutants Are in MPP Wastewater, and How Do They Affect Human 
Health and the Environment?

1. What Pollutants Are Present in the MPP Wastewater?
    The primary pollutants associated with MPP wastes are nutrients 
(particularly nitrogen and phosphorus), organic matter, solids, and 
pathogens. EPA identified 30 pollutants of concern for the meat 
processing segment of the industry and 27 pollutants of concern for the 
poultry processing segment of the industry (see Section VB). This list 
includes ammonia (as nitrogen), carbonaceous BOD5 (CBOD), 
chemical oxygen demand (COD), nitrate+nitrite (as nitrogen), oil & 
grease, pH, temperature, total nitrogen and total phosphorus (as 
PO4). The following sections discuss the main constituents 
in meat and poultry processing industry waste streams and information 
from the National Water Quality Inventory: 2000 Report (hereinafter the 
``2000 Inventory''). Prepared every two years under Sec.  305(b) of the 
Clean Water Act, the 2000 Inventory summarizes State reports of the 
impairment of their water bodies and their suspected sources.
a. Nutrients
    The 2000 Inventory lists nutrients as the leading stressor of 
impaired lakes, ponds, and reservoirs. Nutrients are also the fifth 
leading stressor for impaired rivers and streams, among the top 10 
stressors of impaired estuaries, and the second leading stressor 
reported for the Great Lakes.
    Nitrogen occurs in several forms, including ammonia and nitrate. 
These forms of nitrogen may produce adverse environmental impacts when 
available in excess quantitiest. Ammonia is of environmental concern 
because it is toxic to aquatic life and exerts a direct oxygen demand 
on the receiving water as it biodegrades, thereby reducing dissolved 
oxygen levels and the ability of a water body to support aquatic life. 
Excessive amounts of ammonia can lead to eutrophication, or nutrient 
over-enrichment, of surface waters. The most documented impact of 
nutrient pollution is eutrophication and its attendant overgrowth of 
plants, including algal blooms, in surface waters. When blooms die and 
decay oxygen levels are depressed and contribute further to 
eutrophication.
    Like nitrogen, phosphorus is a nutrient that may lead to 
eutrophication and associated adverse impacts, e.g. fish kills, reduced 
biodiversity, objectionable tastes and odors, increased drinking water 
treatment costs, and growth of toxic organisms. At concentrations 
greater than 1.0 milligram per liter, phosphorus may interfere with the 
coagulation process in drinking water treatment plants thus reducing 
treatment efficiency. Phosphorus is of particular concern in fresh 
waters, where plant growth is typically limited by phosphorus levels. 
Under high pollutant loads of phosphorus, however, fresh water may 
become nitrogen-limited. Then, because there is an abundance of 
phosphorus available for plant growth, nitrogen becomes the limiting 
factor for plants.
b. Organic Matter
    BOD5 and COD are important measures of the organic 
content of an effluent. The 2000 Inventory indicates that low dissolved 
oxygen (DO) levels caused by organic enrichment (oxygen-depleting 
substances) are the third leading stressor in impaired estuaries. They 
are the fourth greatest stressor in impaired rivers and streams, and 
the fifth leading stressor in impaired lakes, ponds, and reservoirs. 
Severe reductions in dissolved oxygen levels may lead to fish kills. 
Even moderate decreases in oxygen levels may adversely affect water 
bodies through decreases in biodiversity characterized by the loss of 
fish and other aquatic animal populations, and a dominance of species 
that can tolerate low levels of dissolved oxygen.
c. Solids
    The 2000 Inventory indicates that dissolved solids are the fourth 
leading stressor in impaired lakes, ponds, and reservoirs. Excessive 
solids increase cloudiness of surface waters, physically damage aquatic 
plants and animals, and provide a protected environment for pathogens. 
Also, increased cloudiness reduces light penetration through the water 
column and limits the growth of desirable aquatic plants that are 
critical habitat for fish, shellfish, and other aquatic organisms. 
Solids that settle out as bottom deposits may alter or destroy habitat 
for fish and organisms that live at the bottom of the water.
d. Oil and Grease
    Oil and grease may have toxic effects on aquatic organisms (i.e., 
fish, crustacea, larvae and eggs, gastropods, bivalves, invertebrates, 
and flora). The marine larvae and benthic invertebrates appear to be 
the most intolerant of oil and grease, particularly the water-soluble 
compounds, at concentrations ranging from 0.1 ppm to 25 ppm and 1 ppm 
to 6,100 ppm, respectively. The oil and grease designation includes 
many organic compounds with varying physical, chemical, and 
toxicological properties, and EPA has not established a numerical 
criterion applicable to all types of oil and grease. Therefore, water 
quality standards and some permit limits are described as requiring 
``no visible sheen.'' For this assessment, EPA does not model the 
effects of oil and grease on the environment.
e. Pathogens
    Pathogens are defined as disease-causing microorganisms. A subset 
of

[[Page 54530]]

microorganisms, including species of bacteria, viruses, and parasites, 
may cause sickness and disease in humans. The 2000 Inventory indicates 
that pathogens (specifically bacteria) are the leading stressor in 
impaired rivers and streams and the fourth leading stressor in impaired 
estuaries. Pathogens are known to impact a variety of water uses 
including recreation, drinking water sources, and aquatic life and 
fisheries (Docket No. W-01-06, Record No. 10024--Pathogen TMDL report). 
Bacteria (e.g., fecal coliforms, E. coli, and fecal streptococcus) are 
introduced into natural waters by municipal and industrial wastewater 
discharges, combined sewer overflows, and urban and rural runoff. High 
loading rates are most commonly associated with untreated or poorly 
treated human sewage or animal waste.
    There are numerous reports associating E. coli 0157-caused illness 
with consumption of contaminated beef (Valcour et al., 2002; Michino et 
al., 1999; Tuttle et al., 1999), wild game (Gagliardi et al., 1999) or 
under-processed fruit juice (Kudva et al., 1998). Additional cases of 
illness have been caused by drinking water contaminated with the 
pathogen (Novello, 1999; Bruce-Grey Owen Sound Health Unit, 2000; 
Jackson et al., 1998). In most, if not all, these reports, animal 
feces, bovine in particular, were the probable vehicle for transmitting 
E. coli 0157:H7 to other animals, food, and into the environment. 
Epidemiological investigations have demonstrated that cattle, 
especially young animals, are a principal reservoir of E. coli 0157:H7 
(Wang et al., 1996).
f. Other Potential Contaminants
    Surfactants have been identified as an emerging issue related to 
water quality from waste effluent. Alkylphenol polyethoxylates (AP) are 
nonionic industrial surfactants used globally in detergents, paints, 
herbicides, and cosmetics. All categories and subcategories of the MPP 
industry addressed in this final rule conduct relatively thorough 
sanitation processes, involving large amounts of chemical cleansers. 
These agents contain alkylphenol ethoxylate (APE) surfactants. 
Alkylphenols such as octylphenol, nonylphenol, and nonylphenol 
diethoxylate are commonly found in sewage treatment plant effluents and 
receiving waters as microbial breakdown products of these surfactants. 
These degradation products have been shown to be estrogenic 
(inadvertently mimic the biological activity of the female hormone 
estrogen) in in vitro fish, avian, and mammalian assays, with their 
molecular action mediated through the estrogen receptor (ER) (White et 
al., 1994). Findings of AP estrogenicity in vitro have been 
substantiated by reports of inhibited testicular growth after AP 
exposure of rats (Sharpe et al., 1995) and fish (Jobling et al., 1996) 
in vivo. The potential range of impacts of estrogen receptor binding 
chemicals include altered protein expression on the cellular level, 
changes in hormone levels in the ova and testis, expression of 
secondary sex characteristics and altered reproductive capability of 
individuals, which may lead to skewed genders within a population which 
ultimately may impact the long-term efficacy of the population. While 
these chemicals are relatively weak ER binders they may be of concern 
due to their hydrophobicity (i.e., repel water) and potential to 
bioaccumulate (Schmeider et al., 2000). Tighter discharge limits and 
effluent treatment processes to reduce the concentration of AP and its 
degradation products have been shown to reduce the estrogenic activity 
of the watercourses into which the effluents are discharge (Sheehan et 
al., 2002).
    Growth promoters (e.g., trenbolone acetate--a synthetic anabolic 
steroid used to promote growth in cattle) are extensively used in the 
United States. These steroids, and more importantly their metabolites 
(e.g., 17-beta-trenbolone from trenbolone acetate), have been shown to 
be comparatively stable in animal waste, suggesting the potential for 
exposure to aquatic animals via direct discharge, runoff, or both. 
Reproductive alterations have been reported in fish living in waters 
receiving cattle feedlot effluent (Jegou et al., 2001) and in in vitro 
androgenic activity displayed by feedlot effluent samples (Gray et al., 
2001). Little is known of the toxicity of these promoters and 
metabolites. However, recent studies on one such chemical, 17-beta-
trenbolone, indicate the potential for androgenic activity in in vitro 
and in vivo assays and induction of developmental abnormalities (Wilson 
et al., 2002). Furthermore, studies on 17-beta-trenbolone observed 
androgenic activity in the fathead minnow as evidenced by secondary sex 
characteristics in females (production of dorsal nuptial tubercles, 
structures normally present only on the heads of males), and altered 
reproductive physiology of the male (Ankley et al., 2003). The presence 
of these chemicals in the environment and their potential toxicity are 
the subject of further study.
2. How May Water Quality Be Impaired by MPP Wastewater?
    EPA identified 10 articles documenting environmental impacts due to 
meat and poultry processing facilities. Documented impacts include 4 
stream reaches with nutrient loadings, 2 sites with contaminated well 
water, 1 site with contaminated ground water, and 1 lake threatened by 
nutrient loadings. Additional information may be found in the Economic 
and Environmental Benefits Analysis (DCN 320-001) in the rulemaking 
docket.
    EPA has made significant progress in implementing Clean Water Act 
programs and in reducing water pollution. Despite such progress, 
however, many water quality problems persist throughout the country. 
Sources of information on these problems include reports from States to 
EPA, documented in the 2000 Inventory, and the U.S. Geological Survey's 
National Water Quality Assessment (NAWQA) Program.
    The 2000 Inventory data identify the leading pollutants impairing 
surface water quality in the United States to include nutrients, 
pathogens, sediment/siltation, and oxygen-depleting substances. These 
pollutants originate from many different sources, including the animal 
production industry.
    Over 40 percent of our assessed waters amounting to over 20,000 
individual river reaches, lakes, and estuaries still do not meet the 
applicable water quality standards. These impaired waters include 
approximately 300,000 miles of rivers and shorelines and approximately 
5 million acres of lakes. A majority of the U.S. population (218 
million) live within 10 miles of the impaired waters.
    Under section 303(d) of the 1972 Clean Water Act, states, 
territories, and authorized tribes are required to assess and develop 
lists of waters that do not meet water quality standards. The law 
requires that these jurisdictions establish priority rankings for 
waters and develop total maximum daily loads (TMDLs) for these waters. 
A TMDL specifies the maximum amount of a single pollutant that a 
waterbody can receive and still attain its applicable standard. The 
calculation of the TMDL must include a margin of safety to ensure that 
the waterbody can be used for the purposes the jurisdiction has 
designated. The calculation must also account for seasonal variation in 
water quality.
    MPP facilities primarily discharge pollutants to rivers and 
streams. EPA has found that 66 of the 112 waterbodies receiving 
discharges from in scope meat

[[Page 54531]]

and poultry facilities are listed as impaired, meaning that these meat 
and poultry processing facilities may be subject to requirements to 
reduce their discharges of the impairing pollutants, if appropriate. Of 
those 66 waterbodies, 19 have proposed or promulgated TMDLs, 11 of 
which are for nutrients. Eight waterbodies are scheduled for TMDLs, and 
of those, 5 are impaired for nutrients. The remaining 39 impaired 
waterbodies have either no information on the timing of TMDLs that EPA 
could find or the TMDLs are not scheduled. Of those 39 waterbodies, 18 
are impairments are due to nutrients.

C. How Will Water Quality and Human Health Be Improved by This Rule?

1. What Reductions in Pollutant Discharges Will Result From This Rule?
    The pollutant load reductions due to today's requirements were 
estimated based on the additional wastewater treatment needed by 
facilities to achieve the limits specified by this rule. See Section 
VIII.A for discussion on EPA's pollutant loading reduction. These 
estimates were used in the water quality models and other environmental 
benefits assessment models to estimate the human health and 
environmental benefits accruing from this rule.
    EPA estimated the reduction of nitrogen and the metals barium, 
chromium, copper, manganese, molybdenum, nickel, titanium, vanadium, 
and zinc for the final rule. Fecal coliform was used as a surrogate 
measure to estimate pathogen reductions that would be achieved by this 
rule. EPA expects that other pathogens (e.g., E. coli) will also be 
reduced to a similar degree due to disinfection requirements. Table 
X.C-1 presents the pollutant reductions expected to result from this 
rule.

                    Table X.C-1.--Pollutant Reductions: Combined Total for All MPP Facilities
                                     [Includes baseline closures facilities]
----------------------------------------------------------------------------------------------------------------
                                                           Baseline
                      Parameter                        pollutant loading    Post-regulation        Pollutant
                                                       (pre-regulation)    pollutant loading       reduction
----------------------------------------------------------------------------------------------------------------
Nitrogen (million lb)...............................                48.4                20.0                28.5
Pathogens (1019 cfu)................................             1,340.2               249.0             1,091.2
Sediment (million lb)...............................                 8.5                 6.1                 2.4
----------------------------------------------------------------------------------------------------------------

2. What Was the Approach for Determining the Benefits of This Rule?
    EPA modeled the water quality improvements expected to result from 
the new requirements being promulgated today and estimated the 
environmental and human health benefits of the pollutant reductions. 
The benefits described in this section are primarily associated with 
direct improvements in surface water quality.
    For this rule, EPA conducted five benefit studies to estimate the 
impacts of reductions in pollutant discharges from MPP facilities. The 
first study used the National Water Pollution Control Assessment Model 
(NWPCAM) that estimates pollutant discharge to rivers, streams, and, to 
a lesser extent, lakes in the U.S. in order to estimate the value 
society places on improvements in surface water quality associated with 
today's rule. As noted in Section X.C.3.a, EPA is using a newer version 
of the NWPCAM than was used for the proposal that enables us to model 
nutrient loadings. The second study evaluated reduced public water 
treatment costs. The second study differs from the other four by 
providing a change in costs. The third study assessed the potential 
impacts of ten pollutants on aquatic life or human health by comparing 
the modeled instream pollutant concentrations under baseline treatment 
levels to EPA's published guidance for aquatic life criteria or human 
health criteria. The fourth study assessed reductions of nutrient 
criteria exceedances under today's technology options. In the fifth 
study ORD compared the background concentrations of nitrogen with the 
facility-generated loads.
    For the benefits analyses, EPA translates, where possible, 
pollutant reductions and other environmental improvements on human 
health and the ecosystem to monetary values. In some cases, EPA could 
identify some improvements that will result from this rule, but could 
not estimate the monetary value of the improvement or quantify the 
amount of improvement expected. Nevertheless, these environmental 
improvements most likely result in improved ecological conditions. The 
following discussion details these non-monetized and non-quantified 
benefits. Given the limitations to assigning monetary values to some of 
the improvements, the monetized benefit values described here and in 
the Economic and Environmental Benefits Analysis should be considered 
as a subset of the total benefits of this rule. For example, the 
economic valuation EPA used for this rule assigns monetary values for 
the improvements due to reductions of certain important pollutants from 
MPP facilities (e.g., nitrogen). It does not include values for 
improvements expected from reductions of other pollutants of potential 
importance, such as oil and grease.
3. Benefits From Improved Surface Water Quality
    Economic benefits of the MPP rule can be broadly defined according 
to categories of goods and services provided by improved water quality. 
The first category includes benefits that pertain to the use (direct or 
indirect) of the affected resources. The direct use benefits can be 
further categorized according to whether or not affected goods and 
services are traded in the market. For this rule, EPA has not 
identified any goods that are traded. The non-traded or non-market 
``use'' benefits assessed in this final rule include recreational 
activities and drinking water (treatment). The second category includes 
benefits that are independent of any current or anticipated use of the 
affected resource; these are known as ``nonuse'' or ``passive use'' 
values. Nonuse benefits reflect human values associated with existence 
and bequest motives associated with preservation and/or quality of 
environmental resources. Although the public may not use a resource 
directly, they may nevertheless be affected by changes in the status or 
quality of that resource.
    The economic value of benefits is estimated using a range of 
valuation methods, with the specific approach being dependent on the 
type of benefit category, data availability, and other suitable 
factors. Recreational use benefits can be valued using primary 
(original) or secondary research involving revealed preference methods 
(e.g., random utility models). Estimating nonuse benefits is more 
challenging because these values cannot be observed in markets or 
inferred from revealed or observed behavior. Researchers

[[Page 54532]]

therefore rely on stated preference methods to derive nonuse values, 
whereby individuals are asked to ``state'' their preference or value 
for particular (and often hypothetical) resource conditions outlined in 
survey questions. For this final rule, time and resource constraints 
preclude the use of primary research for deriving use or nonuse benefit 
values. EPA therefore does not conduct primary research to support the 
benefits analysis and instead relies on benefit transfer of values from 
existing studies to monetize benefits. EPA's Guidelines for Preparing 
Economic Analyses (EPA 240-R-00-003) recommends consideration of 
benefits transfer under these conditions. The following sections 
outline the methods and results of the benefits analysis
a. Freshwater Recreational Benefits
    EPA used the NWPCAM to estimate the national economic benefits to 
surface water quality that will result from implementation of today's 
requirements. EPA used the NWPCAM to simulate the results of reductions 
in pollutant loadings from meat and poultry product facilities on water 
quality in the Nation's surface waters. MPP loads data for nitrogen, 
phosphorus, pathogen indicators, BOD5, DO, and TSS were used 
as inputs to the NWPCAM for this analysis. EPA modeled a sample set of 
65 facilities. EPA estimates that the final rule will improve overall 
use of approximately 631 stream miles for the sample set. Most of the 
improvements came from within a use designation (e.g., boatable waters 
moved closer to becoming fishable waters). The MPP loadings were used 
as inputs to the NWPCAM to estimate in-stream pollutant concentrations 
on a detailed spatial scale and to produce estimates for changes in 
concentrations resulting from this rule. EPA used the NWPCAM modeling 
output (improved water quality) to monetize improvements to water 
quality, and as inputs for other benefits analyses used to support this 
rule.
    EPA used a water quality valuation technique to estimate the 
monetary value of the recreation and nonuse benefits associated with 
the changes in water quality. This method uses a composite measure of 
water quality calculated from six parameters (called the ``water 
quality index'' approach) and further assigns monetary values along a 
continuum of water quality improvements. The monetary value assigned to 
the benefits captures what the public is willing to pay for these 
improvements to water quality. The benefits of improved surface water 
quality resulting from reduced pollutant discharges from the 65 non-
small direct discharge facilities are estimated to be $841,000 annually 
(2003$).
    Raking post-stratification was used to extrapolate these results 
from the 65 non-small direct discharge facilities to the universe of 
169 regulated facilities. The basic concept of the raking method is 
that facility sample weights derived from the size of the plant and 
type of production may not be the most appropriate for extrapolating 
benefits to non-sample plants. Other factors influence the occurrence 
and size of benefits so their omission can lead to a conditional bias 
in the extrapolated results. The raking process proceeds by 
categorizing all of the facilities that will be affected by the 
regulation by their receiving waters and local population. The goal of 
the post-stratification weighting process is to ensure that the revised 
sample weights generate the same marginal percentages for the receiving 
waters and local population categorization as found in the affected 
population. For information see the Economic and Environmental Benefits 
Analysis in the rulemaking docket.
    The revised weights are applied to sample facilities to generate a 
national total. However, the NWPCAM calculates changes in water quality 
by river reach rather than facility. Using network analysis tools, EPA 
identified the MPP model facilities upstream from each affected reach. 
Up to six facilities may have contributed to the changes in any 
particular reach. For most reaches, there was only one model facility 
upstream so only that weight was used. Otherwise, the average raking 
weight for all of the facilities upstream of the reach was applied to 
aggregate the benefits estimated for reaches affected by the model 
facilities to an estimate for all of the facilities within the scope of 
the rule. Based on the NWPCAM analysis using the water quality index 
approach, EPA estimates the benefits of improved surface water quality 
resulting from reduced pollutant discharges from MPP facilities to be 
$2.6 million annually (2003$).
    Water quality predictions generated by the NWPCAM, as well as by 
other models, contain prediction errors. As a consequence, there is 
some degree of uncertainty associated with calculated values of 
benefits. Monte Carlo analysis is used to characterize the uncertainty 
and compute error bounds around calculated benefit values (see EEBA, 
DCN 320-001). The range of benefits estimated by uncertainty analysis 
is approximately zero to $10 million per year (2003$), based on 10 
percent lower and 90 percent upper bound values respectively. The broad 
range in values is not uncommon for large scale (i.e., national-level) 
water quality models and is expected given the relatively small number 
of facilities affected by the rule and the choice of the 10th and 90th 
percentiles as uncertainty bounds.
b. Reduced Public Water Treatment Costs
    Total suspended solids (TSS) entering surface waters from MPP 
facilities may hinder effective drinking water treatment by interfering 
with coagulation, filtration, and disinfection processes. EPA used the 
NWPCAM to predict how pollutant reductions from MPP facilities would 
affect the concentration of TSS in the source waters of public water 
supply systems. To measure the value of reductions in TSS 
concentrations, EPA estimated the extent to which lower TSS 
concentrations reduce operation and maintenance (O&M) costs related to 
conventional treatment techniques. EPA estimates reduced drinking water 
treatment costs will be negligible from reduced discharges of 
pollutants due to today's rule (see DCN 316-511 for details about the 
reduced drinking water treatment costs).
c. Toxicity Assessment
    EPA used a stream dilution modeling technique to assess the aquatic 
life and human health toxicity impacts of releases of ten pollutants 
(ammonia, barium, chromium, copper, manganese, molybdenum, nickel, 
titanium, vanadium, and zinc). The stream dilution modeling techniques 
assume complete immediate mixing of effluents and receiving water flows 
and do not take into account fate processes other than complete 
immediate mixing. These simplified stream dilution techniques have been 
used in other effluent guidelines (e.g., Iron and Steel, Metal Products 
and Machinery, and Transportation Equipment Cleaning). EPA based this 
analysis on 53 MPP facilities that responded to detailed surveys and 
directly discharge wastewaters to streams.
    EPA projected possible impacts on aquatic life by comparing the 
modeled instream pollutant concentrations under baseline treatment 
levels to EPA's published aquatic life criteria guidance \2\

[[Page 54533]]

or, for pollutants for which there are no water quality criteria, to 
toxic effect levels (i.e., lowest reported or estimated concentration 
that is toxic to aquatic life).
---------------------------------------------------------------------------

    \2\ In performing this analysis, EPA uses guidance documents 
published by EPA that recommend numeric human health and aquatic 
life water quality criteria for numerous pollutants. States often 
use these guidance documents when adopting criteria as part of their 
water quality standards. The simplified stream dilution techniques 
are used for screening priority pollutants. Therefore, EPA uses the 
national criteria values in lieu of more site-specific values. We do 
not use this as a comprehensive analysis, but rather as a trigger to 
identify potential impacts on aquatic life and human health. A more 
site-specific analysis could be undertaken if the simplified stream 
dilution technique projected in-stream exceedances of national 
aquatic life and human health criteria.
---------------------------------------------------------------------------

    EPA projects impacts to human health by (1) comparing estimated 
instream pollutant concentrations to health-based toxic effect values 
or criteria, and (2) estimating the potential noncarcinogenic hazards 
from eating contaminated fish or drinking contaminated water. EPA 
evaluated systemic hazards for the general population for drinking 
water, and evaluated systemic hazards for sport and subsistence fishers 
and their families from eating contaminated fish. However, EPA did not 
look at carcinogenic risks because none of these 10 pollutants 
discharged by MPP facilities and considered in this analysis are known 
carcinogens.
    EPA projects that modeled instream pollutant concentrations of 
copper, at current discharge levels, will slightly exceed chronic 
aquatic life criteria or toxic effects levels in one of the 53 
receiving streams. The model did not predict any exceedances of acute 
aquatic life criteria or toxic effect levels. EPA also projects that 
manganese will marginally exceed human health criterion or toxic effect 
levels in one of the receiving streams. At current discharge levels, no 
systemic toxic effects are projected for fishers and their families 
from eating fish they catch from any of the receiving streams. Because 
EPA did not identify damages resulting from the MPP discharges for the 
10 pollutants identified at the beginning of this section, EPA projects 
no meaningful health or aquatic life benefits as a result of the 
selected BPT or BAT options. (see DCN 316-518 for details about the 
toxicity assessment).
d. Nutrient Criteria Assessment
    EPA's recommended section 304(a) ecoregional water quality criteria 
for nutrients were developed with the aim of reducing and preventing 
cultural eutrophication (i.e., over enrichment of nutrient levels 
associated with human activities) on a national scale. The criteria 
were empirically derived to represent conditions of surface waters that 
are minimally impacted by human activities and protective of aquatic 
life and recreational uses. The nutrient criteria are numerical values 
for both causative (phosphorus and nitrogen) and response (chlorophyll 
a and turbidity) variables associated with the prevention and 
assessment of eutrophic conditions. The problem of cultural 
eutrophication is national in scope, but specific levels of 
overenrichment leading to these problems vary from one region of the 
country to another because of factors such as geographical variations 
in geology, vegetation, climate, and soil types. EPA has, therefore, 
developed its recommended nutrient criteria on an ecoregional basis.
    For this analysis, EPA estimates nutrient concentrations one 
kilometer downstream from facilities assuming (1) no background 
concentrations of nitrogen, (2) 7Q10 and mean flow conditions, and (3) 
exponential decay of nitrogen within the one kilometer stretch. EPA 
then compares estimated concentrations with 304(a) criteria or 
reference conditions. Given the assumptions, this analysis is not 
designed to predict actual concentrations, but instead evaluate, at a 
screening level, the relative impacts of MPP facilities and treatment 
controls required under this rule. In the absence of all other sources 
of nitrogen and assuming 7Q10 flow, the results of this analysis show 
that, prior to the rule, loads from 45 MPP facilities (out of 63), are 
projected as being capable of creating instream nitrogen concentrations 
that exceed 304(a) nitrogen criteria representing the upper 25th 
percentile reference conditions of ``least impacted'' streams in 
respective subecoregions. The 25th percentile was chosen by EPA to 
represent reference conditions; the natural least impacted conditions, 
or what is considered the most attainable condition. The number of 
exceedances drops to 41 facilities when estimated instream nitrogen 
concentrations are compared to the 50th (i.e., median) percentile 
reference conditions. It is possible, in reality, that many of these 
streams will exceed the 25th and 50th percentile reference conditions, 
even in the absence of MPP facility loads, but these results are 
provided to demonstrate the potential for MPP loads to affect nutrient 
water quality. The complete analysis is available in the EEBA.
    When loads from the MPP facilities are reduced in accordance with 
the requirements under this rule, a total of six of the 45 25th 
percentile exceedances are projected to be eliminated. Correspondingly, 
a total of four out of the 41 50th percentile exceedances are projected 
to be eliminated. When mean flow (versus 7Q10) is assumed, eight out of 
16 projected 25th percentile exceedances are estimated to be 
eliminated, and seven out of 14 projected 50th percentile exceedances 
are estimated to be eliminated. In reality, these exceedances may not 
in fact be eliminated due to the assumptions outlined above for this 
analysis, but these results demonstrate the potential capacity of this 
rule to affect water quality related to nutrient loads.
    Similar analyses have been conducted by EPA's Office of Research 
and Development (DCN 317-001). Using land cover data, ORD estimated 
non-point source (NPS) loads for watersheds containing MPP facilities. 
NPS loads and recommended loads based on EPA's 304(a) nutrient criteria 
guidance were compared to MPP loads. The results identified several 
MPPs where NPS loads were substantially lower than MPP loads and BAT 
Option 2.5 could significantly improve water quality. Other plants were 
identified that currently exceed established EPA nutrient criteria 
levels, and implementing BAT Option 2.5 would decrease nutrient loads.

XI. What Are the Other (Non-Water Quality) Environmental Impacts and 
Benefits?

    Under Sections 304(b) and 306 of the Clean Water Act, EPA may 
consider non-water quality environmental impacts (including energy 
requirements) when developing effluent limitations guidelines and 
standards. Accordingly, EPA has considered the potential impact of 
today's final regulation on air emissions, energy consumption, and 
solid waste generation.
    While it is difficult to calculate environmental impacts across all 
media and energy use, EPA has determined that the benefits from 
complying with these limitations and standards justify the multi-media 
impacts identified in this section (see Section X for a discussion on 
the environmental benefits associated with this regulation). Because 
today's rule only affects non-small facilities who directly discharge 
their wastewaters, impacts from those facilities are the only ones 
discussed here. For impacts associated with treatment options that were 
not selected for the final regulation and other information on non-
water quality impacts, see Section 12 of the ``Technical Development 
Document for the Final Effluent Limitations Guidelines and Standards 
for the Meat and Poultry Products Point Source Category.''

[[Page 54534]]

A. Air Emissions

    EPA has determined that wastewater treatment processes recommended 
in this rule will not generate significant air emissions above the 
current emissions, either directly from the facility or indirectly from 
the facilities that provide energy to MPP facilities. Possible non-
odorous gases that may be emitted from these processes include nitrogen 
and carbon dioxide. Nitrogen gas will be formed during the 
denitrification process, and will escape to the atmosphere. Since 
nitrogen comprises over 78% of the Earth's atmosphere and is not 
considered a greenhouse gas, its generation is not considered to pose 
an environmental impact. Carbon dioxide will be released when BOD is 
oxidized by oxygen-containing compounds. However, the BOD being treated 
will generally not increase, and therefore there will generally be no 
incremental increase in carbon dioxide over current treatment levels. 
Carbon dioxide will be incrementally increased only for facilities 
requiring additional BOD for denitrification, which constitutes 
approximately 20% of the MPP facilities.
    Odors are the only significant air pollution problem associated 
with the treatment of MPP wastewaters and generally are associated with 
anaerobic conditions. Thus, flow equalization basins, dissolved air 
flotation (DAF) units, and anaerobic lagoons are possible sources of 
malodors. Potential odorous substances associated with MPP wastewater 
include ammonia, hydrogen sulfide, and organic compounds. Ammonia in 
MPP wastewaters is typically due to breakdown of more complex 
substances, and can be released under certain circumstances. However, 
aerobic nitrifying conditions will favor keeping ammonia in solution as 
it is converted to nitrate, meaning that odors will generally be 
suppressed. In addition, maintenance of pH around neutral conditions 
will disfavor stripping ammonia, leaving it in the wastewater to be 
oxidized or assimilated. Furthermore, denitrification processes will 
favor additional conversion of ammonia. Thus, any incremental ammonia 
generation will be minimal.
    Hydrogen sulfide can be formed under anaerobic and anoxic 
conditions such as in the denitrification reactors. Hydrogen sulfide 
generation requires the presence of sulfate in the wastewater, which is 
typically low in MPP wastes. (In most cases the source of sulfates in 
MPP wastewater is the source water supply.) In addition, the formation 
of sulfide is less favored than the reduction of nitrate to nitrogen, 
meaning that under most circumstances, sulfide will not be formed to a 
greater degree than is currently the case, especially if the facility 
is well-managed. Review of the MPP detailed surveys shows that only 20% 
of the MPP facilities that currently do not denitrify or treat their 
wastewater anaerobically have the potential for increased hydrogen 
sulfide generation.
    Volatile odorous organic compounds can be generated in anaerobic 
lagoons. However, most facilities currently have such lagoons in place, 
meaning that incremental additional generation of such substances will 
be minimal. If specific facilities have odor difficulties, then covers 
over the lagoons can be used to capture odorous substances that are 
then subsequently destroyed by some oxidation or combustion process. 
Some facilities capture anaerobically generated methane for fuel; if 
that gas stream must be scrubbed before use, the waste will be recycled 
to the wastewater treatment plant, resulting in no net environmental 
impact. Such oxidation and combustion processes will potentially result 
in additional carbon dioxide generation; however, that generation 
constitutes minimal incremental generation, since the organic 
substances involved would have gone through oxidation naturally. 
Typically, odorous organic compounds are well-destroyed in aerobic 
systems. Overall, the incremental odor problems associated with this 
regulation are small. Odor problems usually are significant only when 
the sulfur content of MPP wastewaters is high, especially when 
treatment facilities are not well managed. Generally, MPP wastewater 
treatment facilities using anaerobic processes for treating wastewater 
with a low sulfur concentration have few odor problems. At such 
facilities, maintaining a naturally occurring layer of floating solids 
in anaerobic contact basins and lagoons generally minimizes odors. 
Thus, the technology options should not increase emissions of odorous 
compounds from well-managed MPP wastewater treatment facilities. EPA 
visited several MPP facilities, and none had odor control problems.
    If a facility uses nitrification to meet the ammonia limitations, 
then any ammonia odors will be minimal because the process keeps the 
ammonia in solution as it is converted to nitrate. However, using 
anaerobic treatment for initial BOD reduction before aerobic treatment 
will increase emissions of methane and volatile organic compounds, but 
the increases should be negligible given today's extensive use of 
lagoons and other anaerobic processes in MPP wastewater treatment. In 
addition, covering anaerobic lagoons and flaring the gas captured can 
reduce these emissions. If the volume of captured gas is sufficient, it 
can be used as a fuel to produce process heat or electricity. EPA 
observed a couple of facilities capturing gas for use as fuel during 
its site visits.

B. Energy Consumption

    EPA estimates that compliance with this rule will create a small 
increase in nationwide energy consumption for all subcategories, except 
Subcategory J, which is projected to have decreased energy 
requirements. This estimated decrease for Subcategory J is because the 
facilities will all have decreased aeration requirements due to BOD 
removal during anoxic processes (before the aeration tank); because the 
BOD is removed beforehand, less aeration is needed for BOD removal in 
the aeration process. Although other subcategories may also decrease 
their aeration requirements, that decrease may be offset by 
requirements associated with ensuring there is enough BOD to achieve 
the desired nitrate reduction. For non-small direct discharging 
facilities nationwide, EPA estimates a 7.3 percent increase in annual 
energy consumption for wastewater treatment (about 17.7 million 
kilowatt-hours per year). Table XI.B-1 presents the estimates of energy 
use EPA expects as a result of this regulation, organized by 
subcategory.
    By comparison, electric power generation facilities generated 3.123 
billion megawatt-hours of electric power in the United States in 1997 
(Energy Information Administration, Electric Power Annual 1998 Volume 
1, Table A1). Additional energy requirements for EPA's selected options 
are acceptable (i.e., significantly less than 0.001 percent of national 
requirements).

[[Page 54535]]



 Table XI.B-1.--Incremental Energy Use for Non-Small Direct Discharging
                             MPP Facilities
------------------------------------------------------------------------
                                                            Incremental
                                             Baseline     energy use for
         40 CFR 432 subcategorya          energy use for  MPP WWTP (KWH/
                                          MPP WWTP  (KWH/     yr)  [%
                                                yr)          Increase]
------------------------------------------------------------------------
A, B, C, D..............................      62,381,835       8,100,573
                                                                  [11.5]
F, G, H, I..............................       1,711,465          51,931
                                                                   [2.9]
J.......................................      10,440,620        -611,232
                                                                  [-6.2]
K.......................................     162,511,445       9,891,034
                                                                   [5.7]
L.......................................       6,470,812         346,789
                                                                  [5.1]
------------------------------------------------------------------------
a Facilities in Subcategory E are not affected by today's rule,
  therefore, there is no net incremental energy use.

    These are national estimates. Individual facilities may decrease 
their energy consumption if they use the anaerobic lagoon effluent as 
the source of organic carbon necessary for denitrification. BOD 
reduction that occurs during denitrification reduces the oxygen 
transfer requirements and associated electricity needed for aerobic BOD 
reduction after the anaerobic treatment. For other facilities, energy 
use may increase due to additional pumping requirements.

C. Solid Waste Generation

    The most significant non-water quality impact for this rule is the 
generation of solid wastes from MPP wastewater treatment. EPA estimates 
that compliance with the final rule will slightly increase the amount 
of wastewater treatment sludge generated for meat first and further 
processors and decrease the amount for renderers and poultry first and 
further processors. For non-small direct discharging facilities 
nationwide, EPA estimates a 2.3 percent reduction in total annual 
sludge produced ( or about 3,200 tons). The reduction in sludge 
generation for renderers and poultry processes is due to the increased 
use of anoxic processes, which inherently tend to generate less sludge 
than aerobic processes, while not having increased sludge generation 
from TSS removal. Table XI.C-1 presents the amount of wastewater 
treatment sludge expected to be generated at non-small direct 
discharging facilities as a result of this regulation. Actual sludge 
generation at individual facilities will vary from the percentages 
shown in the table. Depending on the current treatment process, a 
facility's sludge generation may increase even though the total amount 
for the subcategory decreases.

    Table XI.B-1. Incremental Sludge Generation for Non-Small Direct
                       Discharging MPP Facilities
------------------------------------------------------------------------
                                                            Incremental
                                             Baseline         Sludge
                                              Sludge      Generation for
         40 CFR 432 subcategorya          Generation for     MPP  WWTP
                                             MPP WWTP      (tons/yr)  [%
                                             (tons/yr)       Increase]
------------------------------------------------------------------------
A, B, C, D..............................          25,503             675
                                                                   [2.6]
F, G, H, I..............................           1,586            0.64
                                                                  [0.04]
J.......................................           6,514            -568
                                                                  [-9.5]
K.......................................          96,846          -3,203
                                                                  [-3.4]
L.......................................           7,606            -126
                                                                 [-1.7]
------------------------------------------------------------------------
a Facilities in Subcategory E are not affected by today's rule,
  therefore, there is no net incremental sludge generation.

    The estimates of sludge production in Table XI.B-1 are based on the 
concentrations of BOD entering the biological part of the treatment 
system after pretreatment (e.g., DAF or anaerobic lagoon), and include 
sludge generation by facilities that may require a supplemental carbon 
source for denitrification. In a denitrification/nitrification process, 
the denitrification portion of the process removes a significant 
portion of BOD in the wastewater, thereby reducing the amount of BOD 
available for removal during the aerobic portion of the treatment 
process. The sludge yield coefficient for the denitrification process 
is lower than the coefficient for the aerobic process, therefore the 
amount of sludge generated per BOD unit will be lower for the 
denitrification part than the nitrification part. The majority of MPP 
facilities perform nitrification; converting a nitrification treatment 
system to one that includes denitrification reduces the amount of 
sludge generated.
    EPA also expects that more emphasis on pollution prevention (e.g., 
by increased segregation of waste materials that can be used for 
producing rendered products from wastewater flows) could further reduce 
sludge generation,

[[Page 54536]]

although the Agency did not calculate these potential reductions as 
they are not attributable to the rule. Examples of such pollution 
prevention practices include using alternatives to fluming to remove 
viscera from processing areas and ``dry cleaning'' facilities as the 
initial step in the daily cleaning of equipment and facilities. If 
contact with water is prevented, fats and proteins (that would 
otherwise dissolve and pass through screening and dissolved air 
flotation) do not become sources of BOD and ammonia and, consequently, 
sources of sludge.

XII. How Will This Rule Be Implemented?

    This section helps permit writers and MPP facilities implement this 
regulation. This section also discusses the relationship of upset and 
bypass provisions, variances, and modifications to the final 
limitations and standards. For additional implementation information, 
see Section 15 of the Technical Development Document for today's final 
rule.

A. Implementation of the Limitations and Standards for Direct 
Dischargers

    Effluent limitations and new source performance standards act as 
important mechanisms to control the discharges of pollutants to waters 
of the United States. These limitations and standards are applied to 
individual facilities through NPDES permits issued by the EPA or 
authorized States under Section 402 of the Act.
    In specific cases, the NPDES permitting authority may elect to 
establish technology-based permit limits for pollutants not covered by 
this regulation. In addition, where State water quality standards or 
other provisions of State or Federal law require limits on pollutants 
not covered by this regulation (or require more stringent limits or 
standards on covered pollutants in order to attain and maintain water 
quality standards), the permitting authority must apply those 
limitations or standards. See CWA Section 301(b)(1)(C).
1. What Are the Compliance Dates for Existing and New Sources?
    New and reissued NPDES permits to direct dischargers must include 
these effluent limitations, and the permits must require immediate 
compliance with such limitations. If the permitting authority wishes to 
provide a compliance schedule, it must do so through an enforcement 
mechanism.
    New sources must comply with the new source standards (NSPS) of 
this rule when they commence discharging MPP process wastewater. 
Because the final rule was not promulgated within 120 days of the 
proposed rule, the Agency considers a discharger to be a new source if 
its construction commences after October 8, 2004.
    There are meat product facilities that were new sources subject to 
the earlier NSPS provisions because they commenced construction after 
promulgation of the earlier NSPS. The CWA provides for a protection 
period for such facilities from any more stringent standards. The 
protection period is generally 10 years from the completion of 
construction. See section 306(d) of the CWA, 33 U.S.C. 1316(d) and 40 
CFR 122.29(d). Thus, any source that commenced construction after 
promulgation of the earlier NSPS and before promulgation of today's 
NSPS will not be subject to any more stringent BAT limitations in 
today's rule until the protection period identified in 40 CFR 122.29(d) 
expires.
2. Who Does Part 432 Apply To?
    In Section VI of this preamble and Section 2 of the TDD, EPA 
provides detailed information on the applicability of this rule. The 
revised 40 CFR part 432 will apply to all existing and new meat first 
processing (slaughtering) and further processing facilities; existing 
and new independent rendering facilities over a certain production 
threshold (10 million pounds/year); existing poultry first processing 
(slaughtering) and further processing facilities over a certain 
production threshold (100 million pounds LWK/year and 7 million pounds/
year of finished product, respectively); and all new poultry first 
processing and further processing facilities. EPA notes that in some 
cases the limitations and standards for small MPP facilities may be 
different (e.g., less stringent and/or production-based) than for non-
small MPP facilities in the same subpart.
3. How Will This Rule Be Implemented for Facilities That Perform 
Multiple Operations?
    The applicability of subparts A-D and subpart K are defined not 
only to include wastewater discharges from first processing operations, 
but also from further processing and rendering operations at the same 
facility. For example, a facility that has wastewater discharges from 
meat slaughtering and meat further processing would fall within 
subparts A-D (whether it was subpart A, B, C, or D would depend on the 
specific slaughtering operations), but would not be covered by any of 
subparts E-I.
    Facilities that discharge wastewater from both meat and poultry 
processing operations, however, will have to comply with limitations 
and standards from two subcategories. Permit writers would use the 
``building block approach'' based on production or wastewater discharge 
flow to combine the two sets of limitations into one final effluent 
limitation in the facility's permit. For example, if an existing 
facility discharges wastewater from meat slaughtering operations 
commingled with wastewater discharges from poultry further processing 
operations, the permit writer must calculate a single effluent limit 
for the permit that is a weighted combination of the limitations for 
subparts A-D and subpart L with the weights based on relative 
production or wastewater discharge for the two types of operations. In 
cases where one part of the wastewater comes from operations with no 
limitations, (e.g., small poultry), the permit writer must first 
establish best professional judgement (BPJ) limitations for this 
portion of the wastewater, and then combine these with any applicable 
national limitations using the building block approach.
4. How Can a Facility Get a Waiver for Pollutants That Are Not Present?
    In May 2000, EPA promulgated a regulation streamlining the NPDES 
regulations (``Amendments to Streamline the National Pollutant 
Discharge Elimination System Program Regulations: Round Two'' (see 65 
FR 30886; May 15, 2000)) which includes a monitoring waiver for direct 
dischargers subject to effluent guidelines. Direct discharge facilities 
may choose not to sample a guideline-limited pollutant if that 
discharger ``has demonstrated through sampling and other technical 
factors that the pollutant is not present in the discharge or is 
present only at background levels from intake water and without any 
increase in the pollutant due to activities of the discharger'' (see 65 
FR 30908; 40 CFR 122.44). EPA noted in the preamble to the final NPDES 
streamlining rule that the Agency is granting a waiver from monitoring 
requirements but not a waiver from the limit. In addition, the 
provision does not waive monitoring for any pollutants for which there 
are limits based on water quality standards. The waiver for direct 
dischargers lasts for the term of the NPDES permit and is not available 
during the term of the first permit issued to a discharger. Any request 
for this waiver must be submitted with the application for a reissued 
permit or a request for modification of a reissued permit. When

[[Page 54537]]

their permit writer authorizes it, direct discharge facilities covered 
by any effluent guidelines (including today's rule) may use the 
monitoring waiver contained in the NPDES streamlining final rule.
5. Compliance With Limitations and Standards
    The same basic procedures apply to the calculation of all effluent 
limitations guidelines and standards for this industry, regardless of 
whether the technology is BPT, BCT, BAT, or NSPS. For simplicity, the 
following discussion refers only to effluent limitations guidelines; 
however, the discussion also applies to new source standards.
a. Definitions
    The limitations for pollutants for each option, as presented in 
today's notice, are expressed as maximum daily discharge limitations 
and maximum monthly average discharge limitations. Definitions provided 
in 40 CFR 122.2 state that the ``maximum daily discharge limitation'' 
is the ``highest allowable `daily discharge' '' and the `` maximum 
average for monthly discharge limitation'' is the ``highest allowable 
average of `daily discharges' over a calendar month, calculated as the 
sum of all `daily discharges' measured during a calendar month divided 
by the number of `daily discharges' measured during that month.'' Daily 
discharge is defined as the ``discharge of a pollutant'' measured 
during a calendar day or any 24-hour period that reasonably represents 
the calendar day for purposes of sampling.''
b. Percentile Basis for Limits, Not Compliance
    EPA promulgates limitations that facilities are capable of 
complying with at all times by properly operating and maintaining their 
processes and treatment technologies. EPA established these limitations 
on the basis of percentiles estimated using data from facilities with 
well-operated and controlled processes and treatment systems. However, 
because EPA uses a percentile basis, the issue of exceedences (i.e., 
values that exceed the limitations) or excursions is often raised in 
public comments on limitations. For example, comments often suggest 
that EPA include a provision that allows a facility to be considered in 
compliance with permit limitations if its discharge exceeds the 
specified monthly average limitations one month out of 20 and the daily 
average limitations one day out of 100. As explained in Section 14 of 
the TDD, these limitations were never intended to have the rigid 
probabilistic interpretation implied by such comments. The following 
discussion provides a brief overview of EPA's position on this issue.
    EPA expects that all facilities subject to the limitations will 
design and operate their treatment systems to achieve the long-term 
average performance level on a consistent basis because facilities 
using well-designed and operated treatment systems have demonstrated 
that this can be done. Facilities that are designed and operated to 
achieve the long-term average effluent levels used in developing the 
limitations should be capable of compliance with the limitations at all 
times, because the limitations incorporate an allowance for variability 
in effluent levels about the long-term average. The allowance for 
variability is based on control of treatment variability demonstrated 
in normal operations.
    EPA recognizes that, as a result of modifications to 40 CFR Part 
432, some dischargers may need to improve treatment systems, process 
controls, and/or treatment system operations in order to consistently 
meet the new and/or revised effluent limitations and standards. As 
noted previously, however, given the fact that the promulgated 
limitations reflect an allowance for variability and the demonstrated 
ability of facilities to achieve the LTA, the limitations are 
achievable.
c. Requirements of Laboratory Analysis
    The permittee is responsible for communicating the requirements of 
the analysis to the laboratory, including the sensitivity required to 
meet the regulatory limits associated with each analyte of interest. In 
turn, the laboratory is responsible for employing the appropriate set 
of method options and a calibration range in which the concentration of 
the lowest non-zero standard represents a sample concentration no 
higher than the regulatory limit for each analyte. (See Sierra Club v. 
Union Oil, 813 F.2d 1480, page 1492 (9th Cir. 1987).)
d. Monitoring
    In developing the limitations and standards for today's rule, EPA 
assumed a weekly monitoring frequency (approximately four times a 
month). (The assumed daily monitoring frequency remains the same for 
the unchanged limitations and standards.) EPA incorporated this assumed 
monitoring frequency into the monitoring costs and determination of the 
limitations for the final rule. However, actual monitoring requirements 
for individual facilities are specified in the NPDES permits issued by 
the States (or other authorized permitting authority). EPA has 
concluded that facilities properly operating and maintaining the 
treatment technology, used as the basis of today's limitations, will 
comply with the monthly average limitation/standard when they sample at 
the assumed weekly monitoring frequency, although compliance is 
required regardless of the number of samples analyzed and averaged in a 
month. EPA would, however, discourage the practice of allowing the 
number of monitoring samples to vary arbitrarily merely to allow a 
facility to achieve a desired average concentration, i.e., a value 
below the limit. EPA expects that enforcement authorities would prefer, 
or even require, monitoring samples at some regular, pre-determined 
frequency. If a facility has difficulty complying with the standards on 
an ongoing basis, then the facility should improve its equipment, 
operations, and/or maintenance.

B. Upset and Bypass Provisions

    A ``bypass'' is an intentional diversion of the streams from any 
portion of a treatment facility. An ``upset'' is an exceptional 
incident in which there is unintentional and temporary noncompliance 
with technology-based permit effluent limitations beyond the reasonable 
control of the permittee. You can find EPA's regulations concerning 
bypasses and upsets for direct dischargers at 40 CFR 122.41(m) and (n) 
and for indirect dischargers at 40 CFR 403.16 and 403.17.

C. Variances and Modifications

    While the CWA requires application of effluent limitations 
established pursuant to section 301 to all direct dischargers, the 
statute also provides for the modification of these national 
requirements in a limited number of circumstances. Moreover, the Agency 
established administrative mechanisms to provide an opportunity for 
relief from the application of the national effluent limitations 
guidelines for categories of existing sources for toxic, conventional, 
and nonconventional pollutants.
1. Fundamentally Different Factors Variances
    EPA will develop effluent limitations or standards different from 
the otherwise applicable requirements if an individual discharging 
facility is fundamentally different with regard to the factors the 
Agency used to establish the limitations or standards. Such a 
modification is known as a

[[Page 54538]]

``fundamentally different factors'' (FDF) variance.
    Early on, EPA by regulation provided for the FDF modifications for 
direct dischargers from the best practicable control technology 
effluent limitations (BPT), best available technology economically 
achievable limitations for toxic and nonconventional pollutants, and 
BPT limitations for conventional pollutants. For indirect dischargers, 
EPA provided for modifications from pretreatment standards. FDF 
variances for toxic pollutants were challenged judicially and 
ultimately affirmed by the Supreme Court (Chemical Manufacturers Assn 
v. NRDC, 479 U.S. 116 (1985)).
    Subsequently, in the Water Quality Act of 1987, Congress added a 
new section 301(n) explicitly authorizing modifications of the 
otherwise applicable BAT effluent limitations or categorical 
pretreatment standards for existing sources if a facility is 
fundamentally different with regard to the factors EPA used to 
establish the effluent limitations or pretreatment standards. Section 
301(n) also defined the conditions under which EPA may establish 
alternate requirements. Under Section 301(n), an application for a FDF 
variance must be based solely on (1) information submitted during 
rulemaking raising the factors that are fundamentally different or (2) 
information the applicant did not have an opportunity to submit. The 
alternate limitation or standard must be no less stringent than 
justified by the difference and must not result in markedly more 
adverse non-water quality environmental impacts than the national 
limitation or standard would create.
    EPA regulations (40 CFR part 125 Subpart D), authorizing the 
Regional Administrators to establish alternate limitations and 
standards, further detail the criteria used to evaluate FDF variance 
requests for direct dischargers. Thus, 40 CFR 125.31(d) identifies six 
factors (for example, volume of process wastewater or age and size of a 
discharger's facility) that may be considered in determining if a 
facility is fundamentally different. The Agency must determine whether, 
on the basis of one or more of these factors, the facility is 
fundamentally different from facilities and factors used by EPA to 
develop the nationally applicable effluent guidelines. The regulation 
also lists four other factors (for example, infeasibility of 
installation within the time allowed or a discharger's ability to pay) 
that may not be a basis for an FDF variance. In addition, under 40 CFR 
125.31(b)(3), a request for limitations less stringent than the 
national limitation may be approved only where compliance with the 
national limitations would result in either (a) a removal cost wholly 
out of proportion to the removal cost considered during development of 
the national limitations or (b) a non-water quality environmental 
impact (including energy requirements) fundamentally worse than the 
impact considered during development of the national limits. The 
conditions for approval of and factors considered for a request to 
modify applicable pretreatment standards are the same as those for 
direct dischargers.
    The legislative history of Section 301(n) underscores the necessity 
for the FDF variance applicant to establish eligibility for the 
variance. EPA's regulations at 40 CFR 125.32(b)(1) explicitly impose 
this burden upon the applicant. The applicant must show that the 
factors controlled by the applicant's permit which the applicant claims 
to be fundamentally different are, in fact, fundamentally different 
from those factors EPA used to establish the guidelines. The 
pretreatment regulations incorporate a similar requirement at 40 CFR 
403.13(h)(9).
    Facilities must submit all FDF variance applications to the 
appropriate Director (defined at 40 CFR 122.2) no later than 180 days 
from the date the limitations or standards are established or revised 
(see CWA section 301(n)(2) and 40 CFR 122.21(m)(1)(i)(B)(2)). EPA 
regulations clarify that effluent limitations guidelines are 
``established'' or ``revised'' on the date those effluent limitations 
guidelines are published in the Federal Register (see 40 CFR 
122.21(m)(1)(i)(B)(2)). Therefore, all facilities requesting FDF 
variances from the effluent limitations guidelines in today's final 
rule must submit FDF variance applications to their Director (as 
defined at 40 CFR 122.2) no later than March 7, 2005.
    An FDF variance is not available to a new source subject to New 
Source Performance Standards.
2. Water Quality Variances
    So long as the discharge does not violate any water quality-based 
effluent limitations, Section 301(g) of the CWA authorizes a variance 
from best available technology economically achievable (BAT) effluent 
guidelines for certain non-conventional pollutants due to local 
environmental factors. These pollutants include ammonia, chlorine, 
color, iron, and phenols (as measured by the colorimetric 4-
aminoantipyrine (4AAP) method). Dischargers subject to new or revised 
BAT limitations promulgated today for those pollutants may be eligible 
for a section 301(g) variance. Please note that section 301(g)(4)(c) 
requires that section 301(g) variance applications pertaining to the 
new or revised limits in this rule be filed not later than June 6, 
2005. Existing section 301(g) variances for limitations not being 
revised today are not affected by today's action.
3. Permit Modifications
    Even after the permitting authority has issued a final permit to a 
direct discharger, the permit may still be modified under certain 
conditions. (When a permit modification is under consideration, 
however, all other permit conditions remain in effect.) A permit 
modification may be triggered by several circumstances, including a 
regulatory inspection or information submitted by the permittee which 
reveals the need for modification. Any interested person may request a 
permit modification. There are two classifications of modifications: 
Major and minor. From a procedural standpoint, they differ primarily 
with respect to public notice. Major modifications require public 
notice, while minor modifications do not. Virtually any modification 
that results in less stringent conditions is treated as a major 
modification, with provisions for public notice and comment. Conditions 
that would necessitate a major modification of a permit are described 
at 40 CFR 122.62. Minor modifications are generally non-substantive 
changes. The conditions for minor modification are described at 40 CFR 
122.63.

XIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 [58 FR 51,735 (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,

[[Page 54539]]

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 this rule is a ``significant regulatory action.'' As 
such, this action was submitted to OMB for review. Changes made in 
response to OMB suggestions or recommendations will be documented in 
the public record.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
All facilities within the scope of the final regulations are direct 
dischargers that, regardless of whether or not they are currently 
regulated by effluent guidelines, must follow the compliance monitoring 
and reporting requirements of the National Pollutant Discharge 
Elimination System (NPDES). Therefore, there is no information 
collection associated with this rulemaking.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., 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.
    For the purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as (1) a small business that is small 
according to RFA default definitions for small business (based on Small 
Business Administration (SBA) size standards); (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000; and 
(3) a small organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    EPA expects this final rule to regulate up to 33 small businesses 
that own MPP facilities. All small business-owned facilities that EPA 
found to be affected by the rule are in Subcategories F-I, Subcategory 
J, and Subcategory L. Thus, the economic impact analysis for these 
facilities is based on screener survey data (see Section IX). The scope 
of the final rule does not include any small governmental jurisdictions 
or not-for-profit organizations.
    Only facilities that exceed the subcategory-specific production 
thresholds are subject to this rule. EPA projected no small business-
owned facility closures for the final rule. However, EPA cannot state 
that the probability of closure as a result of the rule is zero for 
those facilities, although it is small (see Table IX.B-4). In addition, 
of the 33 potentially small entities, 2 entities are estimated to incur 
annualized post-tax compliance costs greater than three percent of 
revenues; 5 are estimated to incur compliance costs composing more than 
one but less than three percent of revenues; 24 small entities are 
estimated to incur compliance costs of less than one percent of 
revenues. The scope of the final rule does not include any small 
governmental jurisdictions or not-for-profit organizations.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of this rule on small entities. The final 
rule will include subcategory-specific production thresholds that will 
allow smaller production facilities to retain their existing 
limitations or to remain without national effluent limitations. In 
addition, EPA is not promulgating pretreatment standards. In total, EPA 
is excluding more than 6,400 of the estimated 6,600 MPP facilities.
    After considering the economic impacts of today's final rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and Tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective, or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective, or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including Tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and Tribal governments, in the aggregate, or the private 
sector in any one year. The total annual cost of this rule is estimated 
to be no more than $60 million. Thus, today's rule is not subject to 
the requirements of sections 202 and 205 of the UMRA. The facilities 
which are affected by today's rule are direct dischargers engaged in 
the slaughtering

[[Page 54540]]

or processing of meat and poultry and the rendering of by-products 
resulting from these activities. These facilities are subject to 
today's requirements through the issuance or renewal of an NPDES permit 
either from the Federal EPA or authorized State governments. These 
facilities should already have NPDES permits as the Clean Water Act 
requires a permit be held by any point source discharger before that 
facility may discharge wastewater pollutants into surface waters. 
Therefore, today's rule requires these permits to be revised to comply 
with revised Federal standards, but should not require a new permit 
program be implemented. In addition, EPA did not propose and is not 
promulgating pretreatment standards for indirect dischargers in this 
point source category, therefore, there would be no impact on States or 
local governments to oversee a pretreatment program. Thus, today's rule 
is not subject to the requirements of sections 202 and 205 of the UMRA.
    EPA has determined that this rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments. First, no governments are directly regulated by this 
rulemaking. Second, as discussed above, these regulated facilities 
should already have NPDES permits as the Clean Water Act requires a 
permit be held by any point source discharger before that facility may 
discharge wastewater pollutants into surface waters. Therefore, today's 
rule requires these permits to be revised to comply with revised 
Federal standards, but should not require a new permit program be 
implemented.

E. 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.''
    This final rule does not have federalism implications. It will not 
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, 
as specified in Executive Order 13132. EPA estimates that, when 
promulgated, these revised effluent guidelines and standards will be 
incorporated into NPDES permits with minimal costs to authorized 
States. Further, the revised regulations would not alter the basic 
State-Federal scheme established in the Clean Water Act under which EPA 
authorizes States to carry out the NPDES permitting program. The final 
rule maintains the existing relationship between the national 
government and the States in the administration of the NPDES program; 
and it preserves the existing distribution of power and 
responsibilities among various levels of government. Thus, Executive 
Order 13132 does not apply to this rule.

F. 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'' are 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 Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or the distribution 
of power and responsibilities between the Federal government and Indian 
tribes as specified in Executive Order 13175. The MPP effluent 
limitations guidelines and standards will be implemented through 
permits issued under the NPDES program. No tribal governments are 
currently authorized pursuant to section 402(b) of the CWA to implement 
the NPDES program. In addition, EPA's analyses show that no facility 
subject to this rule is owned by tribal governments and thus this rule 
does not affect Tribes in any way in the foreseeable future. Thus, 
Executive Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health 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.
    Today's rule is not subject to Executive Order 13045 because it is 
not economically significant under Executive Order 12866. Further, this 
regulation does not concern an environmental health or safety risk that 
EPA has reason to believe may have a disproportionate effect on 
children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. As discussed in 
Section XI, EPA estimates that compliance with this rule will create a 
small increase in nationwide energy consumption for MPP facilities. For 
non-small direct discharging facilities nationwide, EPA estimates an 
approximate increase of 17.7 million kilowatt-hours per year for 
wastewater treatment. By comparison, electric power generation 
facilities generated 3,123 billion kilowatt hours of electric power in 
the United States in 1997 (Energy Information Administration, Electric 
Power Annual 1998 Volume 1, Table A1). Additional energy requirements 
for EPA's selected options are acceptable (i.e., significantly less 
than 0.001 percent of national requirements), and not significant under 
the terms of Executive Order 13211.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law No. 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

[[Page 54541]]

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 the OMB, explanations when the Agency decides not to 
use available and applicable voluntary consensus standards.
    This rulemaking involves technical standards. Today's rule requires 
certain facilities that produce meat or poultry products to monitor for 
fecal coliform, BOD5, TSS, oil & grease (as HEM), ammonia 
and total nitrogen (sum of nitrate/nitrite and total Kjeldahl nitrogen 
(TKN)). As discussed in the proposed rule, EPA performed a search to 
identify potentially voluntary consensus standards that could be used 
to measure the parameters in today's guideline. EPA's search revealed 
that consensus standards for these parameters exist and are already 
specified in the tables at 40 CFR 136.3. In addition, EPA proposed to 
add another method (Method 300.0) for measuring nitrate/nitrite and 
solicited public comment. EPA did not receive any comments on this 
aspect of the proposed rulemaking and is therefore adding Method 300.0 
to measure nitrate/nitrite for the final rule.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 requires that, to the greatest extent 
practicable and permitted by law, each Federal agency must make 
achieving environmental justice part of its mission. Executive Order 
12898 states that each Federal agency must conduct its programs, 
policies, and activities that substantially affect human health or the 
environment in a manner that ensures such programs, policies, and 
activities do not have the effect of excluding persons (including 
populations) from participation in, denying persons (including 
populations) the benefits of, or subjecting persons (including 
populations) to discrimination under such programs, policies, and 
activities because of their race, color, or national origin.
    Today's final rule would require non-small MPP facilities to meet 
specified technology-based limitations and standards to control the 
discharge of conventional pollutants, ammonia, and nitrogen. EPA has 
determined that this rulemaking will not have a disproportionate effect 
on minority or low income communities because the technology-based 
effluent limitations guidelines are uniformly applied nationally 
irrespective of geographic location. The final regulation will reduce 
the negative effects of meat and poultry products industry waste in our 
nation's waters to benefit all of society, including minority and low-
income communities. The cost impacts of the rule should likewise not 
disproportionately affect low-income communities given the relatively 
low economic impacts of the rule.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. A major rule 
may not take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective 30 days from the date of 
publication.

List of Subjects in 40 CFR Part 432

    Environmental protection, incorporation by reference, meat and meat 
products, poultry and poultry products, waste treatment and disposal, 
water pollution control.

    Dated: February 26, 2004.
Michael O. Leavitt,
Administrator.

0
For the reasons set forth in this preamble, 40 CFR part 432 is revised 
as follows:

PART 432--MEAT AND POULTRY PRODUCTS POINT SOURCE CATEGORY

Sec
432.1 General applicability.
432.2 General definitions.
432.3 General limitation or standard for pH.
432.5 Incorporation by reference.

Subpart A--Simple Slaughterhouses

432.10 Applicability.
432.11 Special definitions.
432.12 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.13 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.14 Pretreatment standards for existing sources (PSES).
432.15 New source performance standards (NSPS).
432.16 Pretreatment standards for new sources (PSNS).
432.17 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart B--Complex Slaughterhouses

432.20 Applicability.
432.21 Special definitions.
432.22 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.23 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.24 Pretreatment standards for existing sources (PSES).
432.25 New source performance standards (NSPS).
432.26 Pretreatment standards for new sources (PSNS).
432.27 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart C--Low-Processing Packinghouses

432.30 Applicability.
432.31 Special definitions.
432.32 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.33 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.34 Pretreatment standards for existing sources (PSES).
432.35 New source performance standards (NSPS).
432.36 Pretreatment standards for new sources (PSNS).
432.37 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart D--High-Processing Packinghouses

432.40 Applicability.
432.41 Special definitions.
432.42 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.43 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.44 Pretreatment standards for existing sources (PSES).
432.45 New source performance standards (NSPS).
432.46 Pretreatment standards for new sources (PSNS).
432.47 Effluent limitations attainable by the application of the 
best control

[[Page 54542]]

technology for conventional pollutants (BCT).

Subpart E--Small Processors

432.50 Applicability.
432.51 Special definitions.
432.52 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.54 Pretreatment standards for existing sources (PSES).
432.55 New source performance standards (NSPS).
432.56 Pretreatment standards for new sources (PSNS).
432.57 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart F--Meat Cutters

432.60 Applicability.
432.61 Special definitions.
432.62 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.63 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.64 Pretreatment standards for existing sources (PSES).
432.65 New source performance standards (NSPS).
432.66 Pretreatment standards for new sources (PSNS).
432.67 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart G--Sausage and Luncheon Meats Processors

432.70 Applicability.
432.71 Special definitions.
432.72 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.73 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.74 Pretreatment standards for existing sources (PSES).
432.75 New source performance standards (NSPS).
432.76 Pretreatment standards for new sources (PSNS).
432.77 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart H--Ham Processors

432.80 Applicability.
432.81 Special definitions.
432.82 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.83 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.84 Pretreatment standards for existing sources (PSES).
432.85 New source performance standards (NSPS).
432.86 Pretreatment standards for new sources (PSNS).
432.87 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart I--Canned Meats Processors

432.90 Applicability.
432.91 Special definitions.
432.92 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.93 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.94 Pretreatment standards for existing sources (PSES).
432.95 New source performance standards (NSPS).
432.96 Pretreatment standards for new sources (PSNS).
432.97 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart J--Renderers

432.100 Applicability.
432.101 Special definitions.
432.102 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.103 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.104 Pretreatment standards for existing sources (PSES).
432.105 New source performance standards (NSPS).
432.106 Pretreatment standards for new sources (PSNS).
432.107 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart K--Poultry First Processing

432.110 Applicability.
432.111 Special definitions.
432.112 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.113 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.114 Pretreatment standards for existing sources (PSES).
432.115 New source performance standards (NSPS).
432.116 Pretreatment standards for new sources (PSNS).
432.117 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

Subpart L--Poultry Further Processing

432.120 Applicability.
432.121 Special definitions. [Reserved]
432.122 Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).
432.123 Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).
432.124 Pretreatment standards for existing sources (PSES).
432.125 New source performance standards (NSPS).
432.126 Pretreatment standards for new sources (PSNS).
432.127 Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Authority: 33 U.S.C. 1311, 1314, 1316, 1317, 1318, 1342 and 
1361.


Sec.  432.1  General Applicability.

    As defined more specifically in subparts A through L of this part, 
this part applies to discharges of process wastewater to waters of the 
U.S. from facilities engaged in the slaughtering, dressing and packing 
of meat and poultry products for human consumption and/or animal food 
and feeds. Meat and poultry products for human consumption include meat 
and poultry from cattle, hogs, sheep, chickens, turkeys, ducks and 
other fowl as well as sausages, luncheon meats and cured, smoked or 
canned or other prepared meat and poultry products from purchased 
carcasses and other materials. Meat and poultry products for animal 
food and feeds include animal oils, meat meal and facilities that 
render grease and tallow from animal fat, bones and meat scraps. 
Manufacturing activities which may be subject to this part are 
generally reported under the following industrial classification codes:

------------------------------------------------------------------------
                                             North American  industrial
  Standard industrial classification \1\     classification  system \2\
------------------------------------------------------------------------
SIC 0751..................................  NAICS 311611.
SIC 2011..................................  NAICS 311612.
SIC 2013..................................  NAICS 311615.
SIC 2015..................................  NAICS 311613.
SIC 2047..................................  NAICS 311111.
SIC 2048..................................  NAICS 311119.
SIC 2077..................................  NAICS 311999.
------------------------------------------------------------------------
\1\ Source: 1987 SIC Manual
\2\ Source: 1997 NAICS Manual

Sec.  432.2  General definitions.

    As used in this part:
    (a) The general definitions and abbreviations in 40 CFR part 401 
shall apply.
    (b) ELWK (equivalent live weight killed) means the total weight of 
animals

[[Page 54543]]

slaughtered at locations other than the slaughterhouse or packinghouse 
that processes the animals hides, blood, viscera or other renderable 
materials.
    (c) Fecal coliform means the bacterial count, as determined by 
approved methods of analysis for Parameter 1 in Table 1A in 40 CFR 
136.3.
    (d) Finished product means the final fresh or frozen products 
resulting from the further processing as defined below of either whole 
or cut-up meat or poultry carcasses.
    (e) Further processing means operations that utilize whole 
carcasses or cut-up meat or poultry products for the production of 
fresh or frozen products, and may include the following types of 
processing: Cutting and deboning, cooking, seasoning, smoking, canning, 
grinding, chopping, dicing, forming, breading, breaking, trimming, 
skinning, tenderizing, marinating, curing, pickling, extruding and/or 
linking.
    (f) LWK (live weight killed) means the total weight of animals 
slaughtered.
    (g) Meat means products derived from the slaughter and processing 
of cattle, calves, hogs, sheep and any meat that is not listed under 
the definition of poultry below.
    (h) Packinghouse means a plant that both slaughters animals and 
subsequently processes carcasses into cured, smoked, canned or other 
prepared meat products.
    (i) Poultry means products derived from the slaughter and 
processing of broilers, other young chickens, mature chickens, hens, 
turkeys, capons, geese, ducks, small game fowl such as quail or 
pheasants, and small game such as rabbits.
    (j) Raw material means the basic input materials to a renderer 
composed of animal and poultry trimmings, bones, blood, meat scraps, 
dead animals, feathers and related usable by-products.
    (k) Slaughterhouse means a facility that slaughters animals and has 
as its main product fresh meat as whole, half or quarter carcasses or 
small meat cuts.
    (l) The approved methods of analysis for the following six 
parameters are found in Table 1B in 40 CFR 136.3. The nitrate/nitrite 
part of total nitrogen may also be measured by EPA Method 300.0 
(incorporated by reference, see Sec.  432.5).
    (1) Ammonia (as N) means ammonia measured as nitrogen.
    (2) BOD5 means 5-day biochemical oxygen demand.
    (3) O&G means total recoverable oil and grease.
    (4) O&G (as HEM) means total recoverable oil and grease measured as 
n-hexane extractable material.
    (5) Total Nitrogen means the total of nitrate/nitrite and total 
Kjeldahl nitrogen.
    (6) TSS means total suspended solids.


Sec.  432.3  General limitation or standard for pH.

    Any discharge subject to BPT, BCT, or NSPS limitations or standards 
in this part must remain within the pH range of 6 to 9.


Sec.  432.5  Incorporation by reference.

    (a) The material listed in this section is incorporated by 
reference in the corresponding sections in this part, as noted. The 
Director of the Federal Register approves the incorporation by 
reference of this material in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. This material is incorporated as it exists on the date of the 
approval, and notice of any change in this material will be published 
in the Federal Register. The material is available for purchase at the 
address in paragraph (b) of this section and is available for 
inspection at the Office of the Federal Register, 800 North Capitol 
Street, NW., Suite 700, Washington, DC, or at the EPA Docket Center, 
1301 Constitution Ave., NW., EPA West Room B-102, Washington, DC.
    (b) The following material is available for purchase from the 
National Technical Information Service, U.S. Department of Commerce, 
5285 Port Royal Road, Springfield, Virginia 22161. The toll-free 
telephone number is (800) 553-6847.
    (1) ``Method 300.0 Determination of Inorganic Anions by Ion 
Chromatography'' (Revision 2.1) found in ``Methods for the 
Determination of Inorganic Substances in Environmental Samples,'' EPA 
600-R-93/100 (order number PB94-120821), August 1993, IBR approved for 
Sec.  432.2(l).
    (2) [Reserved]

Subpart A--Simple Slaughterhouses


Sec.  432.10  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of meat carcasses, in whole or in part, by simple 
slaughterhouses. Process wastewater includes water from animal holding 
areas at these facilities.


Sec.  432.11  Special definitions.

    For the purpose of this subpart: Simple slaughterhouse means a 
slaughterhouse that provides only minimal, if any, processing of the 
by-products of meat slaughtering. A simple slaughterhouse would include 
usually no more than two by-product processing operations such as 
rendering, paunch and viscera handling, or processing of blood, hide or 
hair.


Sec.  432.12  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following limitations:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg. \1\
------------------------------------------------------------------------
BOD 5.........................................         0.24         0.12
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.12         0.06
TSS...........................................         0.40        0.20
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.
\2\ Maximum of 400 most probable number (MPN) or colony forming units
  (CFU) per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (2) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing (defleshing, washing and curing) of hides derived from 
animals slaughtered at locations off-site, the following limitations 
apply:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg. \1\
------------------------------------------------------------------------
BOD 5.........................................         0.04         0.02
TSS...........................................         0.08        0.04
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (3) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the following limitations apply:

[[Page 54544]]



                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg. \1\
------------------------------------------------------------------------
BOD 5.........................................         0.04         0.02
TSS...........................................         0.08        0.04
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (4) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with wet or 
low-temperature rendering of material derived from animals slaughtered 
at locations off-site and dead animals, the following limitations 
apply:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg. \1\
------------------------------------------------------------------------
BOD 5.........................................         0.06         0.03
TSS...........................................         0.12        0.06
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (5) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the following limitations apply:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                  daily\1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.02         0.01
TSS...........................................         0.04         0.02
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following limitations:
    (1) All facilities must achieve the following effluent limitation 
for ammonia (as N):

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0           4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (2) In the case of process wastewater associated with the 
slaughtering of animals on-site, the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in paragraph (a)(1) of this 
section apply.
    (3) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing (defleshing, washing and curing) of hides derived 
from animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in paragraph (a)(2) of this section 
also apply.
    (4) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing of blood derived from animals slaughtered at 
locations off-site, the limitations for BOD5 and TSS 
specified in paragraph (a)(3) of this section apply.
    (5) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with wet or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(4) of this section 
apply.
    (6) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with dry rendering of material derived from animals slaughtered at 
locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(5) of this section 
apply.


Sec.  432.13  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 50 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BAT:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
Total Nitrogen..............................         194           134
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.14  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.15  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following performance 
standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, O&G, and TSS are the same as the corresponding limitations 
specified in Sec.  432.12(a)(1); and standards for ammonia (as N) are 
as follows:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.34          0.17
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.

    (2) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with 
processing of blood derived from animals slaughtered at locations off-
site, the standards for BOD5 and TSS specified in Sec.  
432.12(a)(3) and the following standards for ammonia (as N) apply:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.06          0.03
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (3) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with wet or 
low-temperature rendering of material derived from animals slaughtered 
at locations off-site and dead animals, the standards for 
BOD5 and TSS specified in Sec.  432.12(a)(4) and the 
following standards for ammonia (as N) apply:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.10          0.05
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (4) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of case of process

[[Page 54545]]

wastewater associated with dry rendering of material derived from 
animals slaughtered at locations off-site and dead animals, the 
standards for BOD5 and TSS specified in Sec.  432.12(a)(5) 
and the following standards for ammonia (as N) apply:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.04          0.02
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) ELWK.

    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following performance standards.
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, O&G, and TSS are the same as the limitations specified in 
Sec.  432.12(a)(1) and the standards for ammonia (as N) and total 
nitrogen are as follows:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
Total Nitrogen..............................         194           134
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (2) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with 
processing of blood derived from animals slaughtered at locations off-
site, the standards for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (3) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with wet or 
low-temperature rendering of material derived from animals slaughtered 
at locations off-site and dead animals, the standards for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (4) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the standards for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.15 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.12 
and 432.13.


Sec.  432.16  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.17  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, TSS, O&G, and fecal coliform are the same as the 
corresponding limitation specified in Sec.  432.12.

Subpart B--Complex Slaughterhouses


Sec.  432.20  Applicability.

    This part applies to discharges of process wastewater associated 
with the production of meat carcasses, in whole or in part, by complex 
slaughterhouses. Process wastewater includes water from animal holding 
areas at these facilities.


Sec.  432.21  Special definitions.

    For the purpose of this subpart: Complex slaughterhouse means a 
slaughterhouse that provides extensive processing of the by-products of 
meat slaughtering. A complex slaughterhouse would usually include at 
least three processing operations such as rendering, paunch and viscera 
handling, or processing of blood, hide or hair.


Sec.  432.22  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following effluent limitations:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.42         0.21
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.16         0.08
TSS...........................................         0.50        0.25
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (2) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing (defleshing, washing and curing) of hides derived from 
animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(2) apply.
    (3) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the limitations for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (4) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with wet or 
low-temperature rendering of material derived from animals slaughtered 
at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (5) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following limitations:
    (1) All facilities must achieve the following effluent limitation 
for ammonia (as N):

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0          4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).


[[Page 54546]]

    (2) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the limitations for BOD5, fecal 
coliform, O&G, and TSS are the same as the limitations specified in 
paragraph (a)(1) of this section.
    (3) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing (defleshing, washing and curing) of hides derived 
from animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in paragraph (a)(2) of this section 
apply.
    (4) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing of blood derived from animals slaughtered at 
locations off-site, the limitations for BOD5 and TSS 
specified in paragraph (a)(3) of this section apply.
    (5) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with wet or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(4) of this section 
apply.
    (6) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with dry rendering of material derived from animals slaughtered at 
locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(5) of this section 
apply.


Sec.  432.23  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 50 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BAT: Limitations 
for ammonia (as N) and total nitrogen are the same as specified in 
Sec.  432.13.


Sec.  432.24  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.25  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following performance 
standards:
    (1) In the case of process wastewater associated with slaughtering 
of animals on-site or the processing of the carcasses of animals 
slaughtered on-site, the standards for BOD5, fecal coliform, 
O&G, and TSS are the same as the limitations specified in Sec.  
432.22(a)(1), and the standards for ammonia (as N) are as follows:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.48         0.24
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.

    (2) In addition to the standard specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the supplemental limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(3) and the standards for ammonia (as N) 
specified in Sec.  432.15(a)(2) apply.
    (3) In addition to the standard specified in paragraph (a)(1) of 
this section, in the case of associated with the wet or low-temperature 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the supplemental limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) and the 
standards for ammonia (as N) specified in Sec.  432.15(a)(3) apply.
    (4) In addition to the standard specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) and the standards for ammonia (as N) 
specified in Sec.  432.15(a)(4) apply.
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following performance standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, O&G, and TSS are the same as the corresponding limitations 
specified in Sec.  432.22(a)(1) and the standards for ammonia (as N) 
and total nitrogen are the same as the limitations specified in Sec.  
432.15(b)(1).
    (2) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the standards for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (3) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the standards for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (4) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the standards for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.25 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.22 
and 432.23.


Sec.  432.26  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.27  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, TSS, and O&G are the same as the 
corresponding limitation specified in Sec.  432.22.

Subpart C--Low-processing Packinghouses


Sec.  432.30  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of meat carcasses, in whole or in part, by low-
processing packinghouses. Process wastewater includes water from animal 
holding areas at these facilities.

[[Page 54547]]

Sec.  432.31  Special definitions.

    For the purpose of this subpart: Low-processing packinghouse means 
a packinghouse that processes no more, and usually fewer than, the 
total number of animals slaughtered at that plant.


Sec.  432.32  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following limitations:
    (1) In the case of process wastewater associated with slaughtering 
of animals on-site or the processing of the carcasses of animals 
slaughtered on-site:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD 5.........................................         0.34         0.17
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.16         0.08
TSS...........................................         0.48        0.24
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (2) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing (defleshing, washing and curing) of hides derived from 
animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(2) apply.
    (3) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the limitations for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (4) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (5) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following limitations:
    (1) All facilities must achieve the following effluent limitation 
for ammonia (as N):

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0          4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (2) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the limitations for BOD5, fecal 
coliform, O&G, and TSS are the same as the corresponding limitations 
specified in paragraph (a)(1) of this section.
    (3) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing (defleshing, washing and curing) of hides derived 
from animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in paragraph (a)(2) of this section 
apply.
    (4) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing of blood derived from animals slaughtered at 
locations off-site, the limitations for BOD5 and TSS 
specified in paragraph (a)(3) of this section apply.
    (5) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the wet or low-temperature rendering of material derived from 
animals slaughtered at locations off-site and dead animals, the 
limitations for BOD5 and TSS specified in paragraph (a)(4) 
of this section apply.
    (6) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the dry rendering of material derived from animals slaughtered at 
locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(5) of this section 
apply.


Sec.  432.33  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 50 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BAT: the 
limitations for ammonia (as N) and total nitrogen are the same as 
specified in Sec.  432.13.


Sec.  432.34  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.35  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following performance 
standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, TSS, and O&G are the same as the limitations specified in 
Sec.  432.32(a)(1) and the standards for ammonia (as N) are as follows:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................         0.48         0.24
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.

    (2) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the limitations for BOD5 and TSS specified in Sec.  
432.12(a)(3) and the standards for ammonia (as N) specified in Sec.  
432.15(a)(2) apply.
    (3) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) and the 
standards for ammonia (as N) specified in

[[Page 54548]]

Sec.  432.15(a)(3) apply in addition to the standards specified in 
paragraph (a)(1) of this section.
    (4) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) and the standards for ammonia (as N) 
specified in Sec.  432.15(a)(4) apply.
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following performance standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, TSS, and O&G are the same as the corresponding limitations 
specified in Sec.  432.32(a)(1) and the standards for ammonia (as N) 
and total nitrogen are the same as the limitations specified in Sec.  
432.15(b)(1).
    (2) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the standards for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (3) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the standards for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (4) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the standards for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.35 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.32 
and 432.33.


Sec.  432.36  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.37  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, TSS, and O&G are the same as the 
corresponding limitation specified in Sec.  432.32.

Subpart D--High-Processing Packinghouse


Sec.  432.40  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of meat carcasses, in whole or in part, by high-
processing packinghouses. Process wastewater includes water from animal 
holding areas at these facilities.


Sec.  432.41  Special definitions.

    For the purpose of this subpart: High-processing packinghouse means 
a packinghouse which processes both animals slaughtered at the site and 
additional carcasses from outside sources.


Sec.  432.42  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following limitations:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
              Regulated parameter                 Maximum      monthly
                                                 daily \1\     avg. \1\
------------------------------------------------------------------------
BOD5 \2\......................................         0.48         0.24
Fecal Coliform................................        (\3\)        (\4\)
O&G \5\.......................................         0.26         0.13
TSS \2\.......................................         0.62        0.31
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.
\2\ The values for BOD5 and TSS are for average plants, i.e., plants
  where the ratio of avg. wt. of processed meat products/avg. LWK is
  0.55. Adjustments can be made for high-processing packinghouses
  operating at other such ratios according to the following equations:
  lbs BOD5/1000 lbs LWK = 0.21 + 0.23 (v--0.4) and lbs TSS/1000 lbs LWK
  = 0.28 + 0.3 (v--0.4), where v equals the following ratio: lbs
  processed meat products/lbs LWK.
\3\ Maximum of 400 MPN or CFU per 100 mL at any time.
\4\ No maximum monthly average limitation.
\5\ May be measured as hexane extractable material (HEM).

    (2) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing (defleshing, washing and curing) of hides derived from 
animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(2) apply.
    (3) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the limitations for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (4) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply.
    (5) In addition to the limitations specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following limitations:
    (1) All facilities must achieve the following effluent limitations 
for ammonia (as N):

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated parameter                 Maximum    monthly avg.
                                                 daily 1          1
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0          4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (2) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site,

[[Page 54549]]

the limitations for BOD5, fecal coliform, TSS, and O&G are 
the same as the limitations specified in paragraph (a)(1) of this 
section.
    (3) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing (defleshing, washing and curing) of hides derived 
from animals slaughtered at locations off-site, the limitations for 
BOD5 and TSS specified in paragraph (a)(2) of this section 
apply.
    (4) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the processing of blood derived from animals slaughtered at 
locations off-site, the limitations for BOD5 and TSS 
specified in paragraph (a)(3) of this section apply.
    (5) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with wet or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(4) of this section 
apply.
    (6) In addition to the limitations specified in paragraphs (b)(1) 
and (2) of this section, in the case of process wastewater associated 
with the dry rendering of material derived from animals slaughtered at 
locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in paragraph (a)(5) of this section 
apply.


Sec.  432.43  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 50 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BAT: Limitations 
for ammonia (as N) and total nitrogen are the same as specified in 
Sec.  432.13.


Sec.  432.44  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.45  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that slaughter no more than 50 million pounds per 
year (in units of LWK) must achieve the following performance 
standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, TSS, and O&G are the same as the limitations specified in 
Sec.  432.42(a)(1); and standards for ammonia (as N) are as follows:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
             Regulated parameter                 Maximum    monthly avg.
                                                 daily 1          1
------------------------------------------------------------------------
Ammonia (as N)..............................         0.80         0.40
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) LWK.

    (2) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the limitations for BOD5 and TSS specified in Sec.  
432.12(a)(3) and the standards for ammonia (as N) specified in Sec.  
432.15(a)(2) apply.
    (3) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the limitations for 
BOD5 and TSS specified in Sec.  432.12(a)(4) and the 
standards for ammonia (as N) specified in Sec.  432.15(a)(3) apply.
    (4) In addition to the standards specified in paragraph (a)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the limitations for BOD5 and TSS 
specified in Sec.  432.12(a)(5) and the standards for ammonia (as N) 
specified in Sec.  432.15(a)(4) apply:
    (b) Facilities that slaughter more than 50 million pounds per year 
(in units of LWK) must achieve the following performance standards:
    (1) In the case of process wastewater associated with the 
slaughtering of animals on-site or the processing of the carcasses of 
animals slaughtered on-site, the standards for BOD5, fecal 
coliform, TSS, and O&G are the same as the limitations specified in 
Sec.  432.42(a)(1); and standards for ammonia (as N) and total nitrogen 
are the same as the limitations specified in Sec.  432.15(b)(1).
    (2) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the 
processing of blood derived from animals slaughtered at locations off-
site, the standards for BOD5 and TSS specified in Sec.  
432.12(a)(3) apply.
    (3) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the wet 
or low-temperature rendering of material derived from animals 
slaughtered at locations off-site and dead animals, the standards for 
BOD5 and TSS specified in Sec.  432.12(a)(4) apply in 
addition to the standards specified in paragraph (b)(1) of this 
section.
    (4) In addition to the standards specified in paragraph (b)(1) of 
this section, in the case of process wastewater associated with the dry 
rendering of material derived from animals slaughtered at locations 
off-site and dead animals, the standards for BOD5 and TSS 
specified in Sec.  432.12(a)(5) apply.
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.45 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.42 
and 432.43.


Sec.  432.46  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.47  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, TSS, and O&G are the same as the 
corresponding limitation specified in Sec.  432.42.

Subpart E--Small Processors


Sec.  432.50  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of finished meat products such as fresh meat cuts, 
smoked products, canned products, hams, sausages, luncheon meats, or 
similar products by a small processor.


Sec.  432.51  Special definitions.

    For the purpose of this subpart:
    (a) Finished product means the final product, such as fresh meat 
cuts, hams, bacon or other smoked meats, sausage,

[[Page 54550]]

luncheon meats, stew, canned meats or related products.
    (b) Small processor means an operation that produces no more than 
6000 lbs (2730 kg) per day of any type or combination of finished 
products.


Sec.  432.52  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                  daily\1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................          2.0          1.0
Fecal Coliform................................          (2)          (2)
O&G 3.........................................          1.0          0.5
TSS...........................................          2.4         1.2
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ No limitation.
\3\ May be measured as hexane extractable material (HEM).

Sec.  432.54  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.55  New source performance standards (NSPS).

    Any source that is a new source subject to this subpart must 
achieve the following performance standards:

                          Performance Standards
                                 (NSPS)
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                Maximum       monthly
                                                 daily 1        avg.1
------------------------------------------------------------------------
BOD5.........................................          1.0          0.5
Fecal Coliform...............................          (2)        (2)
O&G 3........................................          0.5          0.25
TSS..........................................          1.2          0.6
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ No limitation.
\3\ May be measured as hexane extractable material (HEM).

Sec.  432.56  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.57  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, TSS and O&G are the same as the corresponding 
standard specified in Sec.  432.55.

Subpart F--Meat Cutters


Sec.  432.60  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of fresh meat cuts, such as steaks, roasts, chops, 
etc. by a meat cutter.


Sec.  432.61  Special definitions.

    For the purpose of this subpart:
    (a) Finished product means the final product, such as fresh meat 
cuts including, but not limited to, steaks, roasts, chops, or boneless 
meats.
    (b) Meat cutter means an operation which cuts or otherwise produces 
fresh meat cuts and related finished products from larger pieces of 
meat (carcasses or not carcasses), at rates greater than 6000 lbs (2730 
kg) per day.


Sec.  432.62  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................        0.036        0.018
Fecal Coliform................................          (2)          (3)
O&G \4\.......................................        0.012        0.006
TSS...........................................        0.044       0.022
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in paragraph (a) of this 
section.


Sec.  432.63  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BAT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0          4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the following effluent limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
Total Nitrogen................................          194         134
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.64  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.65  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the limitations for 
BOD5, fecal coliform, O&G, and TSS specified in Sec.  
432.62(a).
    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in Sec.  432.62(b) and the 
limitations for ammonia (as N) and total nitrogen specified in Sec.  
432.63(b).
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.65 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.62 
and 432.63.

[[Page 54551]]

Sec.  432.66  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.67  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, O&G, and TSS are the same as the 
corresponding limitation specified in Sec.  432.62.

Subpart G--Sausage and Luncheon Meats Processors


Sec.  432.70  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of fresh meat cuts, sausage, bologna and other 
luncheon meats by a sausage and luncheon meat processor.


Sec.  432.71  Special definitions.

    For the purpose of this subpart:
    (a) Finished product means the final product as fresh meat cuts, 
which includes steaks, roasts, chops or boneless meat, bacon or other 
smoked meats (except hams) such as sausage, bologna or other luncheon 
meats, or related products (except canned meats).
    (b) Sausage and luncheon meat processor means an operation which 
cuts fresh meats, grinds, mixes, seasons, smokes or otherwise produces 
finished products such as sausage, bologna and luncheon meats at rates 
greater than 6000 lbs (2730 kg) per day.


Sec.  432.72  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.56         0.28
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.20         0.10
TSS...........................................         0.68        0.34
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in paragraph (a) of this 
section.


Sec.  432.73  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided by 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BAT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0          4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the following effluent limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
Total Nitrogen................................          194         134
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.74  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.75  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the standards for 
BOD5, fecal coliform, O&G, and TSS specified in Sec.  
432.72(a).
    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in Sec.  432.72(b) and the 
limitations for ammonia (as N) and total nitrogen specified in Sec.  
432.73(b).
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.75 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.72 
and 432.73.


Sec.  432.76  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.77  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, O&G, and TSS are the same as the 
corresponding limitation specified in Sec.  432.72.

Subpart H--Ham Processors


Sec.  432.80  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of hams, alone or in combination with other 
finished products, by a ham processor.


Sec.  432.81  Special definitions.

    For the purpose of this subpart:
    (a) Finished products means the final product as fresh meat cuts, 
which includes steaks, roasts, chops or boneless meat, smoked or cured 
hams, bacon or other smoked meats, sausage, bologna or other luncheon 
meats (except canned meats).
    (b) Ham processor means an operation producing hams, alone or in 
combination with other finished products, at rates greater than 6000 
lbs (2730 kg) per day.

[[Page 54552]]

Sec.  432.82  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.62         0.31
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.22         0.11
TSS...........................................         0.74         0.37
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in paragraph (a) of this 
section.


Sec.  432.83  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided by 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BAT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0           4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the following effluent limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
Total Nitrogen................................          194          134
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.84  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.85  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the standards for 
BOD5, fecal coliform, O&G, and TSS specified in Sec.  
432.82(a).
    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in Sec.  432.82(b) and the 
limitations for ammonia (as N) and total nitrogen specified in Sec.  
432.83(b).
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.85 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.82 
and 432.83.


Sec.  432.86  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.87  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, O&G, and TSS are the same as the 
corresponding limitations specified in Sec.  432.82.

Subpart I--Canned Meats Processors


Sec.  432.90  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of canned meats, alone or in combination with any 
other finished products, by a canned meats processor.


Sec.  432.91  Special definitions.

    For the purpose of this subpart:
    (a) Canned meats processor means an operation which prepares and 
cans meats (stew, sandwich spreads, or similar products), alone or in 
combination with other finished products, at rates greater than 6000 
lbs (2730 kg) per day.
    (b) Finished products means the final product, such as fresh meat 
cuts which includes steaks, roasts, chops or boneless meat, smoked or 
cured hams, bacon or other smoked meats, sausage, bologna or other 
luncheon meats, stews, sandwich spreads or other canned meats.


Sec.  432.92  Effluent limitations attainable by the application of the 
best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BPT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.74         0.37
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.26         0.13
TSS...........................................         0.90         0.45
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of finished product.
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in paragraph (a) of this 
section.


Sec.  432.93  Effluent limitations attainable by the application of the 
best available technology economically achievable (BAT).

    Except as provided by 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BAT:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the following effluent 
limitations:

[[Page 54553]]



                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................          8.0           4.0
------------------------------------------------------------------------
\1\ mg/L (ppm).

    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the following effluent limitations:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
Total Nitrogen................................          194          134
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.94  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.95  New source performance standards (NSPS).

    Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:
    (a) Facilities that generate no more than 50 million pounds per 
year of finished products must achieve the standards for BOD 
5, fecal coliform, O&G, and TSS specified in Sec.  
432.92(a).
    (b) Facilities that generate more than 50 million pounds per year 
of finished products must achieve the limitations for BOD5, 
fecal coliform, O&G, and TSS specified in Sec.  432.92(b) and the 
limitations for ammonia (as N) and total nitrogen specified in Sec.  
432.93(b).
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.95 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.92 
and 432.93.


Sec.  432.96  Pretreatment standards for new sources (PSNS). [Reserved]


Sec.  432.97  Effluent limitations attainable by the application of the 
best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, fecal coliform, O&G, and TSS are the same as the 
corresponding limitation specified in Sec.  432.92.

Subpart J--Renderers


Sec.  432.100  Applicability.

    This part applies to discharges of process wastewater resulting 
from the production of meat meal, dried animal by-product residues 
(tankage), animal oils, grease and tallow, and in some cases hide 
curing, by a renderer.


Sec.  432.101  Special definitions.

    For the purpose of this subpart:
    (a) Raw material (RM) means the basic input materials to a renderer 
composed of animal and poultry trimmings, bones, meat scraps, dead 
animals, feathers and related usable by-products.
    (b) Renderer means an independent or off-site rendering operation, 
which is conducted separate from a slaughterhouse, packinghouse or 
poultry dressing or processing operation, uses raw material at rates 
greater than 10 million pounds per year, produces meat meal, tankage, 
animal fats or oils, grease, and tallow, and may cure cattle hides, but 
excludes marine oils, fish meal, and fish oils.
    (c) Tankage means dried animal by-product residues used in 
feedstuffs.
    (d) Tallow means a product made from beef cattle or sheep fat that 
has a melting point of 40[deg]C or greater.


Sec.  432.102  Effluent limitations attainable by the application of 
the best practicable control technology currently available (BPT).

    (a) Except as provided in 40 CFR 125.30 through 125.32, any 
existing point source subject to this subpart must achieve the 
following effluent limitations representing the application of BPT:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
BOD5..........................................         0.34         0.17
Fecal Coliform................................        (\2\)        (\3\)
O&G \4\.......................................         0.20         0.10
TSS...........................................         0.42        0.21
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of raw material (RM).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.
\4\ May be measured as hexane extractable material (HEM).

    (b) The limitations for BOD5 and TSS specified in 
paragraph (a) of this section were derived for a renderer which does 
not cure cattle hide. If a renderer does cure cattle hide, the 
following formulas should be used to calculate BOD5 and TSS 
limitations for process wastewater associated with cattle hide curing 
that apply in addition to the limitation specified in paragraph (a) of 
this section:

lbs BOD5/1000 lbs RM = 17.6 x (no. of hides)/lbs RM
kg BOD5/kkg RM = 8 x (no. of hides)/kg RM
lbs TSS/1000 lbs RM = 24.2 x (no. of hides)/lbs RM
kg TSS/kkg RM = 11 x (no. of hides)/kg RM


Sec.  432.103  Effluent limitations attainable by the application of 
the best available technology economically achievable (BAT).

    Except as provided by 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BAT:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                   daily         avg.
------------------------------------------------------------------------
Ammonia (as N) \1\............................         0.14         0.07
Total Nitrogen \2\............................          194         134
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (g/kg) of raw material (RM).
\2\ mg/L (ppm).

Sec.  432.104  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.105  New source performance standards (NSPS).

    (a) Except as provided in paragraph (c) of this section, any source 
that is a new source subject to this subpart must achieve the following 
performance standards:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                   daily         avg.
------------------------------------------------------------------------
Ammonia (as N) \1\............................         0.14         0.07
BOD 5 \1\.....................................         0.18         0.09
Fecal coliform................................        (\2\)        (\3\)
O&G \1\ \4\...................................         0.10         0.05
Total Nitrogen \5\............................          194          134
TSS \1\.......................................         0.22        0.11
------------------------------------------------------------------------
\1\ Pounds per 1000 lbs (or g/kg) of raw material (RM).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

[[Page 54554]]

 
\4\ May be measured as hexane extractable material (HEM).
\5\ mg/L (ppm).

    (b) The standards for BOD5 and TSS specified in 
paragraph (a) of this section were derived for a renderer that does not 
cure cattle hide as part of the plant operations. If a renderer does 
cure hide, the same empirical formulas specified in Sec.  432.107(b) 
should be used to calculate BOD5 and TSS limitations for 
process wastewater associated with cattle hide curing that apply in 
addition to the standards specified in paragraph (a) of this section.
    (c) Any source that was a new source subject to the standards 
specified in Sec.  432.105 of title 40 of the Code of Federal 
Regulations, revised as of July 1, 2003, must continue to achieve the 
standards specified in this section until the expiration of the 
applicable time period specified in 40 CFR 122.29(d)(1) after which it 
must achieve the effluent limitations specified in Sec. Sec.  432.103 
and 432.107.


Sec.  432.106  Pretreatment standards for new sources (PSNS). 
[Reserved]


Sec.  432.107  Effluent limitations attainable by the application of 
the best control technology for conventional pollutants (BCT).

    (a) Except as provided in 40 CFR 125.30 through 125.32, any 
existing point source subject to this subpart must achieve the 
following effluent limitations representing the application of BCT: 
Limitations for BOD5, fecal coliform, O&G, and TSS are the 
same as the corresponding limitation specified in Sec.  432.105(a).
    (b) The limitations for BOD5 and TSS specified in 
paragraph (a) of this section were derived for a renderer which does 
not cure cattle hide. If a renderer does cure hide, the following 
formulas should be used to calculate BOD5 and TSS 
limitations for process wastewater associated with cattle hide curing, 
in addition to the limitation specified in paragraph (a) of this 
section:

lbs BOD5/1000 lbs RM = 7.9 x (no. of hides)/lbs RM
kg BOD5/kkg RM = 3.6 x (no. of hides)/kg RM
lbs TSS/1000 lbs RM = 13.6 x (no. of hides)/lbs RM
kg TSS/kkg RM = 6.2 x (no. of hides)/kg RM

Subpart K--Poultry First Processing


Sec.  432.110  Applicability.

    This part applies to discharges of process wastewater resulting 
from the slaughtering of poultry, further processing of poultry and 
rendering of material derived from slaughtered poultry. Process 
wastewater includes water from animal holding areas at these 
facilities.


Sec.  432.111  Special definitions.

    For the purpose of this subpart: Poultry first processing means 
slaughtering of poultry and producing whole, halved, quarter or smaller 
meat cuts.


Sec.  432.112  Effluent limitations attainable by the application of 
the best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 100 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BPT:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
BOD5..........................................           26           16
Fecal Coliform................................        (\2\)        (\3\)
O&G (as HEM)..................................           14          8.0
TSS...........................................           30          20
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

Sec.  432.113  Effluent limitations attainable by the application of 
the best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that slaughters more than 100 
million pounds per year (in units of LWK) must achieve the following 
effluent limitations representing the application of BAT:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
Total Nitrogen................................          147         103
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.114  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.115  New source performance standards (NSPS).

    Any source that is a new source subject to this subpart must 
achieve the following performance standards:
    (a) Facilities that slaughter no more than 100 million pounds per 
year (in units of LWK) must achieve the following performance 
standards:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
BOD5..........................................           26           16
Fecal Coliform................................      ( \2\ )      ( \3\ )
O&G (as HEM)..................................           14          8.0
TSS...........................................           30          20
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

    (b) Facilities that slaughter more than 100 million pounds per year 
(in units of LWK) must achieve the following performance standards:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
BOD5........................................          26            16
Fecal Coliform..............................       (\2\)         (\3\)
O&G (as HEM)................................          14             8.0
TSS.........................................          30            20
Total Nitrogen..............................         147          103
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

Sec.  432.116  Pretreatment standards for new sources (PSNS). 
[Reserved]


Sec.  432.117  Effluent limitations attainable by the application of 
the best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, TSS, O&G (as HEM), and fecal coliform are the same 
as the corresponding limitation specified in Sec.  432.112.

Subpart L--Poultry Further Processing


Sec.  432.120  Applicability.

    This part applies to discharges of process wastewater resulting 
from further processing of poultry.

[[Page 54555]]

Sec.  432.121  Special definitions. [Reserved]


Sec.  432.122  Effluent limitations attainable by the application of 
the best practicable control technology currently available (BPT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that further processes more than 7 
million pounds per year (in units of finished product) must achieve the 
following effluent limitations representing the application of BPT:

                          Effluent Limitations
                                  [BPT]
------------------------------------------------------------------------
                                                               Maximum
             Regulated  parameter                 Maximum      monthly
                                                 daily \1\     avg.\1\
------------------------------------------------------------------------
Ammonia (as N)................................          8.0          4.0
BOD5..........................................           26           16
Fecal Coliform................................        (\2\)        (\3\)
O&G (as HEM)..................................           14          8.0
TSS...........................................           30          20
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

Sec.  432.123  Effluent limitations attainable by the application of 
the best available technology economically achievable (BAT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart that further processes more than 7 
million pounds per year (in units of finished product) must achieve the 
following effluent limitations representing the application of BAT:

                          Effluent Limitations
                                  [BAT]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
Total Nitrogen..............................         147          103
------------------------------------------------------------------------
\1\ mg/L (ppm).

Sec.  432.124  Pretreatment standards for existing sources (PSES). 
[Reserved]


Sec.  432.125  New source performance standards (NSPS).

    Any source that is a new source subject to this subpart must 
achieve the following performance standards:
    (a) Facilities that further process no more than 7 million pounds 
per year (in units of finished product) must achieve the following 
performance standards:

                          Performance Standards
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
BOD5........................................          26            16
Fecal Coliform..............................       (\2\)         (\3\)
O&G (as HEM)................................          14             8.0
TSS.........................................          30           20
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

    (b) Facilities that further process more than 7 million pounds per 
year (in units of finished product) must achieve the following 
performance standards:

                          Effluent Limitations
                                 [NSPS]
------------------------------------------------------------------------
                                                               Maximum
            Regulated  parameter                 Maximum       monthly
                                                daily \1\      avg.\1\
------------------------------------------------------------------------
Ammonia (as N)..............................           8.0           4.0
BOD5........................................          26            16
Fecal Coliform..............................       (\2\)         (\3\)
O&G (as HEM)................................          14             8.0
TSS.........................................          30            20
Total Nitrogen..............................         147          103
------------------------------------------------------------------------
\1\ mg/L (ppm).
\2\ Maximum of 400 MPN or CFU per 100 mL at any time.
\3\ No maximum monthly average limitation.

Sec.  432.126  Pretreatment standards for new sources (PSNS). 
[Reserved]


Sec.  432.127  Effluent limitations attainable by the application of 
the best control technology for conventional pollutants (BCT).

    Except as provided in 40 CFR 125.30 through 125.32, any existing 
point source subject to this subpart must achieve the following 
effluent limitations representing the application of BCT: Limitations 
for BOD5, TSS, O&G (as HEM), and fecal coliform are the same 
as the corresponding limitation specified in Sec.  432.122.
[FR Doc. 04-12017 Filed 9-7-04; 8:45 am]
BILLING CODE 6560-50-P