ENV-49-12-00012-P Amend Provisions of 6 NYCRR Subpart 750-1, 6 NYCRR Subpart 360-4 and 6 NYCRR Subpart 360-5

12/5/12 N.Y. St. Reg. ENV-49-12-00012-P

NEW YORK STATE REGISTER

VOLUME XXXIV, ISSUE 49

December 05, 2012

RULE MAKING ACTIVITIES

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

PROPOSED RULE MAKING

HEARING(S) SCHEDULED

 

I.D No. ENV-49-12-00012-P

Amend Provisions of 6 NYCRR Subpart 750-1, 6 NYCRR Subpart 360-4 and 6 NYCRR Subpart 360-5

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Addition of sections 360-1.3, 360-4.2, 360-5.3, 360-5.5, 360-5.6 and 750-1.5; and amendment of sections 360-4.2, 360-5.3, 360-5.5, 360-5.6, 750-1.2, 750-1.7, 750-1.21 and 750-1.24 of Title 6 NYCRR.

Statutory authority:

33 U.S.C. 1251, et seq. (Federal Water Pollution Control Act); Environmental Conservation Law, section 1-0101; art. 3, title 3; section 8-0113; section 11-0325; art. 17, titles 3, 5, 7 and 8; section 19-0303; section 19-0304; section 19-0306; section 19-0307; art. 27, titles 1, 3, 5, 7, 9 and 13; and art. 70, title 1

Subject:

Amend provisions of 6 NYCRR Subpart 750-1, 6 NYCRR Subpart 360-4 and 6 NYCRR Subpart 360-5.

Purpose:

Remove requirement that certain CAFOs maintain ECL SPDES Permit coverage; revise land application, storage and composting rules.

Public hearing(s) will be held at:

2:00 p.m., Jan. 4, 2013 at Department of Environmental Conservation, 625 Broadway, Albany, NY; 2:00 p.m., Jan. 4, 2013 at State Fairgrounds, Eddy Rm., Syracuse, NY; and 2:00 p.m., Jan. 4, 2013 at Department of Environmental Conservation, Ray Brook, NY; and 2:00 p.m., Jan. 4, 2013 at Department of Environmental Conservation, Avon, NY.

Interpreter Service:

Interpreter services will be made available to hearing impaired persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.

Accessibility:

All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.

Substance of proposed rule (Full text is posted at the following State website: http://www.dec.ny.gov/65.html):

Subpart 750-1

The proposed rulemaking amends provisions of 6 NYCRR Subpart 750-1 to eliminate the requirement that non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) with 200 to 299 mature dairy cows, milked or dry, obtain an ECL SPDES permit because for purposes of ECL § 17-0101(16) these Medium CAFOs would no longer be considered point sources. The proposed rulemaking revisions to Subpart 750-1 are not intended to make any changes with respect to the federal definition of a Large, Medium or Small CAFO or to limit, in any way, the scope of federal law. Instead, the proposed Subpart 750-1 changes exempt non-discharging Medium CAFOs with 200 to 299 mature dairy cows from the requirement to obtain an ECL SPDES permit, while clarifying that although ECL SPDES permit requirements for these Medium CAFOs would be discontinued, state law is still more stringent than federal law. This is the case because unlike federal law which generally regulates discharges from point sources, state law regulates the creation of point sources even if there is not a discharge. The specific substantive revisions to 6 NYCRR Subpart 750-1 are summarized below.

Paragraph (21) of Subdivision 750-1.2(a) is revised to define the term "CAFO" and the different categories of CAFOs for purposes of state law. The definition of a "Large CAFO" and "Medium CAFO" in Section 750-1.2(a)(21) is defined to match the federal animal threshold numbers set forth in 40 CFR § 122.23(b)(4) and (6). Specifically, animal threshold numbers for a Medium dairy CAFO remain the same as those under federal law -- 200 to 699 mature dairy cows, whether milked or dry. Paragraph (12) of Subdivision 750-1.2(a) also makes explicit that the Department may designate an Animal Feeding Operation (AFO) as a Small CAFO, consistent with the Department's current practice. Under the ECL, if an AFO is designated as a Small CAFO, it is a point source that is required to have an ECL SPDES permit even if there is not a discharge.

Paragraph (12) of 6 NYCRR § 750-1.5(a), however, has been added to exempt Medium CAFOs with 200-299 mature dairy cows, whether milked or dry, without a discharge from obtaining an ECL SPDES permit. This category of non-discharging Medium CAFOs, however, may still elect to obtain ECL SPDES permit coverage, and if permit coverage is granted, the Medium CAFO would be considered a point source throughout permit coverage. Importantly, this provision provides flexibility by allowing all CAFOs that are no longer required to obtain an ECL SPDES permit the option to maintain permit protection. The overall effect of these changes, both the definition and the exception, is to: (1) require permit coverage of all CAFOs that discharge; (2) require permit coverage for dairy CAFOs above the threshold of 300 mature dairy cows irrespective of whether there is a discharge or not; and (3) exempt from permit coverage CAFOs with 200-299 mature dairy cows, whether milked or dry, without a discharge, unless the CAFO elects to seek coverage.

Subdivision (c) of Section 750-1.7 has been amended to incorporate 6 NYCRR Part 621 as part of a permit application requirement for CAFOs. This change would specifically apply to those CAFOs required to obtain an ECL CAFO SPDES permit. Paragraph (4) of Subdivision 750-1.21(b) has also been revised to clarify the Department's authority to issue a SPDES General Permit for CAFOs that do not discharge, by deleting the word "discharge." Subdivision 750-1.21(b) would now explicitly authorize a general permit for discharges or potential discharges from CAFOs. In addition, Subdivision (c) of Section 750-1.24 has been revised to update references applicable to CAFOs.

Subparts 360-4 and 360-5

The proposed rulemaking makes a number of substantive changes to Subpart 360-4 (Land Application and Associated Storage Facilities) and Subpart 360-5 (Composting and Other Class A Organic Waste Processing Facilities). As discussed in greater detail below, these revisions establish criteria for anaerobic digestion (AD) facilities, provide exemptions from permit and registration requirements for specified activities at farms and CAFOs, and make other changes to these Subparts to promote sound environmental practices and reduce regulatory overlap.

6 NYCRR Section 360-4.2(a)(1), as currently in effect, states that land application facilities for animal manure and associated bedding material are exempt from the requirements of Subpart 360-4. The proposed rule defines the term "bedding material" for purposes of the exemption to clarify that this exemption applies to common bedding material used at farms (e.g., hay, straw, sawdust, wood shavings, newsprint, and sand).

6 NYCRR Section 360-4.2(a)(4) is added to exempt land application facilities for undigested food and fecal material emanating from New York State-owned or licensed fish hatcheries from the requirements of Subpart 360-4 where the waste is applied at or below agronomic rates. This new exemption allows the Department to dispose of fish hatchery waste in a responsible manner.

6 NYCRR Section 360-4.2(a)(5) is added to create an exemption for a land application facility or manure storage facility on a Part 750 permitted CAFO that also involves food processing waste or other waste if the waste handling is addressed in a CNMP. The exemption does not apply if the waste contains any human fecal matter or if the amount of non-manure waste placed in the storage facility exceeds 50% of the total volume of waste placed in the storage facility on an annual basis.

6 NYCRR Subdivision 360-4-2(a) has been revised to effectuate the exemptions described above -- Sections Section 360-4.2(a)(4) and (5) -- on the effective date of this proposed rulemaking by deregistering those facilities that were previously registered provided that all required annual reports for the facility have been submitted to the department.

6 NYCRR Section 360-4.2(b)(1)(vii), is revised to expand the eligibility for registration (rather than requiring a permit) by increasing the amount of nonrecognizable food processing waste that may be accepted at a manure storage facility from 10% to 40%, but only if certain design and operational requirements are met.

6 NYCRR Section 360-5.3(a)(1) is revised to provide an exemption from Subpart 360-5 for a composting facility that accepts crop residues and to clarify that the exemption from Subpart 360-5 applies to farms.

6 NYCRR Section 360-5.3(a)(2) is revised to specify that the exemption from Subpart 360-5 applies to either processed or unprocessed yard waste and to indicate that precipitation, surface water, and groundwater that come in contact with yard waste or the resultant compost is not leachate, but must be managed in an acceptable manner to the Department.

6 NYCRR Section 360-5.3(a)(4) adds an exemption from Subpart 360-5 for certain composting facilities for animal mortalities located on a farm or CAFO and Section 360-5.3(a)(5) adds an exemption from Subpart 360-5 for AD facilities that accept specified farm waste. Certain activities associated with AD facilities are also exempted, including CAFOs implementing a CNMP for manure, food processing waste, fats, oil, grease, and other wastes without human fecal matter, provided that non-manure waste is less than 50%, by volume, of the waste placed in the AD unit on an annual basis. This section also exempts land application of solids and liquids from AD facilities and other activities relating to dewatered solids.

6 NYCRR Section 360-5.3(b)(1)(iv) is added to expand the eligibility for registration (rather than requiring a permit) for organic processing facilities for animal mortalities or parts generated from a farm, slaughterhouse, butcher or other generator; and Section 360-5.3(b)(1)(v) establishes eligibility for registration for composting facilities for dewatered solids from an AD that is subject to registration. Furthermore, Section 360-5.3(b) has been revised to create eligibility for registration for AD facilities that accept less than 50 tons of waste per day not containing human fecal matter provided that certain operating conditions are met. AD facilities accepting any waste containing human fecal matter or accepting 50 tons or more of waste per day must obtain a permit. Moreover, while land application of solids and liquids generated from an AD facility would require registration, land application that occurs at a Part 750 permitted CAFO is exempt if land application is addressed in a CNMP.

6 NYCRR Section 360-5.5(b) is revised to exempt AD digestate used on farms from pathogen reduction alternatives under this subdivision. Section 360-5.5(d)(14) is added to establish specific criteria, including pathogen reduction, for the operation of AD facilities.

6 NYCRR Section 360-5.6 makes certain revisions with respect to source separated organics processing facilities. Specifically, the revisions include permit application requirements, pathogen and vector attraction criteria, pollutant limits and product use for material distributed to the public, and design criteria and operational requirements. Subdivision (f) is added to set forth AD criteria.

Text of proposed rule and any required statements and analyses may be obtained from:

Robert Simson, New York State Department of Environmental Conservation, 625 Broadway, Albany, NY 12233-3500, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

January 21, 2013.

This action was not under consideration at the time this agency's regulatory agenda was submitted.

Summary of Regulatory Impact Statement

Statutory Authority and Legislative Objectives. The Department's statutory authority to undertake amendments to Part 750 is found in Environmental Conservation Law (ECL) Article 3, Title 3; Article 17, Titles 3, 5, 7, 8; Article 70, Title 1; and the Federal Water Pollution Control Act, 33 USC 1251, et seq. Animal Feeding Operations (AFOs) are lots or facilities where animals have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12-month period, and crops, vegetation, forage growth, or post-harvest residues are not sustained in the normal growing season over any portion of the lot or facility [40 CFR § 122.23(b)]. CAFOs are primarily defined based upon their animal threshold numbers, and are categorized as either large, medium or small. Under federal law, to meet the definition of a Medium CAFO there must also be a discharge of pollutants into the waters of the United States. Furthermore, based on recent case law and a federal rule change, CAFOs can only be required to obtain SPDES permit coverage under the Clean Water Act (CWA) if there is a discharge into the waters of the United States.

Conversely, the ECL provides the Department with authority to regulate the creation of a point source even if there is no discharge. Specifically, ECL § 17-0701(1)(a) states that, "it shall be unlawful for any person, until a written SPDES permit therefore has been granted … to: (a) make or cause to make or use any outlet or point source for the discharge of sewage, industrial waste, or other wastes or the effluent there from, into the waters of this state…." (emphasis added). ECL § 17-0105(16) defines a CAFO as a point source. Currently, consistent with the more stringent standards imposed by the ECL, the Department classifies Medium and Large CAFOs as "point sources" based upon the animal thresholds set forth in the federal regulations, irrespective of whether there is a discharge. Accordingly, under its authority to regulate the creation of a point source, the Department issues an ECL CAFO SPDES general permit for CAFOs that do not discharge.

The ECL CAFO General Permit requires the development and implementation of a site specific Comprehensive Nutrient Management Plan (CNMP). CNMPs are developed in accordance with conservation practice standards established by the Natural Resources Conservation Service (NRCS) to identify pollutant sources on the farm and recommend BMPs to prevent or minimize water pollution. The CNMP prescribes cyclical manure management techniques through recycling of manure and other organic wastes (both generated on the CAFO or from outside sources) into soil.

ECL § 1-0101(3) broadly sets forth the legislative objectives to achieve "social, economic and technological progress for present and future generations" while guaranteeing beneficial use of the environment without risk to health and safety when undertaking regulatory action. This proposed rulemaking clarifies the scope of the Department's regulatory authority regarding Medium CAFOs by including a definition for Medium CAFOs consistent with federal requirements, while explicitly exempting those CAFOs (200-299 mature dairy cows) that do not discharge from needing SPDES general permit coverage. Furthermore, the proposed rules provide flexibility by allowing non-discharging CAFOs with 200-299 mature dairy cows to voluntarily seek CAFO SPDES permit coverage.

The proposed rulemaking to amend Subparts 360-4 and 360-5 is also consistent with the public policy objectives that the Legislature sought to advance. ECL § 3-0301(1)(f) provides the Department with the power to "[f]oster and promote sound practices for the use of agricultural land, river valleys, open land, and other areas of unique value." ECL § 27-0101 also sets forth the intent "to encourage the development of economical projects for the present and future collection, treatment and management of solid and hazardous waste in such a manner as will assure full consideration of all aspects of planning for proper and effective solid and hazardous waste disposal." Moreover, the State Administrative Procedure Act § 202-a(3)(f) encourages agencies to "minimize the impact" of duplication or overlap between regulatory rules. The Department's statutory authority to promulgate amendments to Part 360 is found in ECL § 1-0101; Article 3, title 3; Article 27, titles 1, 3, 7, 9, 13, and 15; Article 70, title 1; and, Sections 8-0113, 11-0325, 19-0301, 19-0303, 19-0304, 19-0306, and 19-0310.

Part 360 provides regulatory oversight for solid waste management facilities in the State. Under existing regulations, if the waste management on a farm is confined to the farm and involves only waste (manure, crop residues) produced on such farm, the activities are exempt from Part 360. Conversely, if a farm accepts nutrient-based wastes from off-site, such as food processing wastes from yogurt producers, Part 360 criteria apply. Food processing waste may be land applied, placed in a manure lagoon, or added to a farm anaerobic digester to boost gas production.

Under the existing Part 360 regulations, there is overlap between the solid waste requirements and requirements for CAFOs permitted farm under Part 750. For example, land application of whey obtained from an outside source requires both registration under Part 360 and compliance with the requirements set forth in a SPDES permit. This duplication is unnecessary and burdensome on the affected farms, and provides no additional environmental protection. The primary changes to Part 360 eliminate this overlap by exempting these activities from Part 360. Part 360 is also being revised to add specific criteria for anaerobic digestion ("AD") facilities. The lack of criteria and applicable standards in the current Part 360 regulations has led to confusion -- primarily in the farming community.

The changes would clarify that Part 360 exempts farm ADs for agricultural waste and includes a tiered structure based on size for the acceptance of off-site waste. This will help promote the development of ADs on farms which will advance manure management and provide an avenue for whey management. Accordingly, pursuant to this rulemaking, 6 NYCRR §§ 360-4.2(a)(5) and 360-5.3(a)(4), (5) would be revised, to create an exemption from registration or permitting for a land application facility, manure storage facility or an AD facility associated with a Part 750 permitted CAFO, if the waste handling is addressed in a CNMP. Similarly, Section 360-5.5(b) would be revised to exempt AD digestate used on farms from pathogen reduction alternatives.

Other changes to Part 360 would exempt land application facilities for undigested food and fecal material emanating from New York State owned or licensed fish hatcheries from the requirements of Subpart 360-4 where the waste is applied at or below agronomic rates; expand eligibility for registration (rather than requiring a permit) for organics processing facilities for animal mortalities or parts generated from a farm,; establish eligibility for registration for composting facilities for dewatered solids from an AD facility that is subject to registration and AD facilities that accept less than 50 tons of waste per day that does not contain human fecal matter provided that certain operating conditions are met; and make revisions to application requirements, pathogen and vector attraction criteria, pollutant limits and product use for material distributed to the public, and design criteria and operational requirements with respect to source separate organics processing and AD facilities.

Needs and Benefits. By relieving non-discharging CAFOs with 200-299 mature dairy cows from the obligation to obtain SPDES general permit coverage, smaller non-discharging dairy farms would be less restricted in deciding whether to expand their herds. Increased milk production associated with expanded dairy farms is expected to create jobs both in the dairy service sector and the agricultural service industries. The establishment of larger farms and increased yogurt production will dictate the need for additional management infrastructure for manure and whey. Anaerobic digesters located on farms provide a superior method to manage both manure and whey, by providing the yogurt manufacturers with a long term, viable method to recycle this material and providing the farm with income from tipping fees and increased electricity production. The Part 360 revisions would promote the establishment of anaerobic digesters on farms by exempting some AD facilities from permit requirements, establishing registration criteria for those AD facilities that require registration, and providing a clearer regulatory path for those AD facilities that would still need a Part 360 permit.

Costs. There are no significant costs anticipated for the regulated community. The proposed rulemaking is expected to reduce costs for the regulated community by reducing regulatory overlap.

Local Government Mandates. There are no programs, services, duties or responsibilities imposed by the rule upon any county, city, town, village, school district, fire district or other special district. However, there may be some increased costs to local governments associated with water bodies that are subject to Total Maximum Daily Loads (TMDLs), if the proposed change in the Department's CAFO permitting program results in a shift of wasteload allocation from CAFOs in general to other types of facilities, such as wastewater treatment plants.

Paperwork. CAFOs that are no longer required to obtain an ECL CAFO SPDES permit and that opt to discontinue permit coverage must file a one page Notice of Termination form with the NYSDEC. There are no other reporting requirements required as a result of this rule.

Duplication. The proposed changes to Subpart 750-1 clarify the different regulatory requirements for CAFOs that meet the federal definition of a Medium CAFO as compared to those CAFOs regulated pursuant to the ECL, thereby avoiding any duplication between the federal standards and the State standards. In addition, the proposed changes to Subparts 360-4 and 360-5 address unnecessary overlap between the regulations governing land application in Part 360 and Part 750 permit requirements for CAFOs.

Alternatives. The Department examined the no regulatory action alternative, but this alternative is not as likely to achieve the economic benefits and regulatory efficiencies associated with the rule making. The Department also considered exempting from permit coverage those CAFOs from 200-299 without a discharge, but requiring mandatory enrollment in the Agricultural Environmental Management (AEM) Program. Like the no-action alternative, this alternative may also fall short of meeting the rulemaking goals of expanding milk production to foster the yogurt industry in New York because it would essentially substitute one set of mandatory requirements with another. Similarly, the Department rejected a third alternative that would exempt from permit coverage those CAFOs from 200-299 without a discharge but require mandatory enrollment in the Department of Agriculture and Markets' Agricultural Environmental Management (AEM) Program for CAFOs located in watersheds with an impaired waterbody. This patchwork approach would be difficult to employ. Finally, the Department considered terminating the ECL Permit program and simply administering the CWA permit and its corresponding standards. The Department rejected this alternative because it would not provide the necessary environmental protection, as the potential for a significant environmental impact from a discharge also proportionally grows by the increase in the number of mature dairy cows.

Federal Standards. The proposed rule change is consistent with federal standards because the applicable regulatory provisions and permit program for CAFOs that meet the federal definition and that fall under the CWA remain unchanged by this proposed rulemaking. With respect to the proposed changes to Subparts 360-4 and 360-5, there are no federal regulations for the facilities and activities contained in the proposed rulemaking.

Compliance Schedule. This rule eliminates permitting requirements for non-discharging Medium CAFOs with 200-299 mature dairy cows, as well as regulatory overlap between Part 750 and Part 360. Therefore, there is no additional time needed to achieve compliance with the rule. With respect to all other changes to Part 360, the regulated community will be required to comply upon enactment of the proposed regulations.

Regulatory Flexibility Analysis

1. 'Effect of Rule.' There are currently approximately 855 dairy farms that have 100-199 mature dairy cows in New York State. The Department of Agriculture and Markets estimates that as a result of this rulemaking approximately 285 of these farms will increase the size of their herds to more than 200 mature dairy cows over the next decade. Based upon input from dairy industry experts and agricultural service providers in the field, it is estimated that approximately 50 dairy farms are positioned to expand above 200 cows within the first year of the policy change. From that point, the balance of herd growth above 200 mature milking cows is likely to occur at a rate of 10-30 farms per year. This rulemaking is forecasted to increase the total NYS herd size by approximately 25,000 milking cows based upon 285 dairy farms expanding on average by 90 cows per farm. Based upon cow labor needs, it is estimated that one dairy farm job is created for every 40-50 cows added, so the addition of 25,000 cows over the next several years equates to 500-625 new on farm jobs.

The Cornell University study, Schmit and Bills (2012; http://dyson.cornell.edu/outreach/ extensionpdf/2012/Cornell-Dyson-eb1211pdf) finds that new on-farm jobs lead to additional jobs in the agricultural services industry (feed, animal health, fertilizer, farm equipment, crop protection, construction, milking systems, fuel, trucking, etc.). Therefore, a total of 700 to 875 jobs could be realized at the farm production level. The same study estimates job multipliers at the dairy processing level, as well. For every job created in the dairy processing sector, approximately 5 additional jobs are created in the various food processing service industries (dairy processing systems, manufacturing services, packaging, trucking, construction, fuel, marketing, etc). A June 2012 study by the NYS Department of Labor (http://www.labor.ny.gov/stats/PDFs/enys0612.pdf) shows that Greek yogurt processors have created approximately 1,300 jobs since 2007, with another major yogurt plant set to add nearly 200 jobs by the summer of 2013. Considering the multiplier for dairy processing jobs, the growth since 2007 equates to an additional 7,500 jobs, totaling 9,000 jobs overall in the dairy processing and associated service industries. Increasing milk production in New York State is considered critical to maintaining the processing plants responsible for the jobs and, based on the positive trends for Greek yogurt consumption, will be a key element for continuing the job growth in dairy processing and associated support industries.

The Schmit and Bills study referenced above also finds that, like jobs, economic growth by farms and dairy processors is also coupled with multipliers, because those industries tend to make large portions of their business expenditures within the state. For dairy farms, for every $1 of output, $0.67 of additional economic activity is generated by the agricultural service industries. Assuming a milk price of $17.50/cwt and an eventual increase in milk production of 500 million lbs/year (5 million cwt/yr), the value of the increased production to farmers equates to $87.5 million/year. Applying the economic multiplier brings an additional $59 million/year, totaling nearly $150 million in additional economic activity with this policy. When applied to the dairy processing sector, the study finds that for every $1 of output, $1.18 of additional economic activity is generated by the dairy processing service industries. While the impact of this policy on Greek yogurt production is not quantified, Chobani estimates that it will achieve $1 billion in annual revenues in 2012 (http://www.nado.org/wp-content/uploads /2012/09/yogurt.pdf). The economic multiplier is substantial when added to direct economic output from dairy processing plants. With positive trends in Greek yogurt consumption, increasing milk production to help maintain and grow New York's dairy processing industries will likely result in significant economic growth. The Division of Milk Control has recently reported that they are aware of 37 different dairy processing projects that are under consideration. Of those 37 dairy processing facility projects, 26 are new plants. The majority of these new processors are primarily engaged in manufacturing of cheese; however at least 5 are yogurt facilities. Cumulatively, these new dairy processors represent a 10 % expansion of facilities inspected by the Department. The remaining 11 dairy processing projects involve expansions and upgrades. Specifically, 2 of these are larger dairy processors engaged in the manufacturing of yogurt.

It is possible that some non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) with 300 or more mature dairy cows may decrease the size of their herds to less than 300 mature dairy cows to relieve themselves from the permit requirement, but the number of Medium CAFOs downsizing for this reason is expected to be insignificant. CAFOs that are required to obtain an ECL SPDES permit must submit Comprehensive Nutrient Management Plans at the time that they are initially permitted and an annual Nutrient Management Plan thereafter. These Nutrient Management Plans are prepared by certified planners. This rule making will decrease the number of Medium CAFOs that must have permits and submit Nutrient Management Plans (although some of these farms may voluntarily opt to maintain permit coverage or maintain Nutrient Management Plans). As a result, it is estimated that a negligible number of certified planners may lose business as a result of this rule. These certified planners, however, should still have opportunities to prepare Nutrient Management Plans, provide other necessary agricultural services and may in fact see an increase in business from dairy herd expansion over time.

2. 'Compliance Requirements.' There are no reporting, recordkeeping or other affirmative acts that a small business or local government will have to undertake to comply with this rule.

3. 'Professional Services.' There are no professional services that a small business or local government is likely to need to comply with the changes associated with this rule.

4. 'Compliance Costs.' This rule reduces capital costs for smaller AFOs that don't discharge by allowing them to expand to up to 299 mature dairy cows without needing to obtain an ECL SPDES permit and incurring the costs associated with structural and non-structural permit requirements.

5. 'Economic and Technological Feasibility.' This rule making promotes economic development and does not impose any economic or technological burdens on small business or local government.

6. 'Minimizing Adverse Impact.' This rule will have a positive economic impact on small businesses or local governments because the rule encourages economic expansion by allowing smaller non-discharging AFOs to expand to up to 299 mature dairy cows without having to obtain a permit and incur costs associated with permit requirements. This is expected to create on farm jobs and increase employment in the agricultural services industry, dairy processing industry, and food processing service industry.

7. 'Small business and local government participation.' The New York State Department of Environmental Conservation (NYSDEC) has complied with SAPA § 202-b(6) by assuring that small businesses and local governments have been given an opportunity to participate in the rule making. This participation has occurred through publication of the notice of proposed rulemaking in the State Register and through meetings and interaction with a CAFO Work Group composed of individuals from the following organizations:

• New York State Department of Agriculture and Markets

• New York State Department of Health

• Cornell University

• Environmental Advocates of New York

• Citizens Campaign for the Environment

• New York Farm Bureau

• Northeast Dairy Producers Association

• Certified Planners

• CAFO farmers

• NYSDEC central office and regional staff

The NYSDEC also met with the Sierra Club, Riverkeeper, and the National Resource Defense Council with respect to the proposed rulemaking. The Department offered to meet with the New York League of Conservation Voters, but the invitation was not accepted. Furthermore, the NYSDEC will be accepting public comments to the Notice of Proposed Rulemaking and will be providing responses to any comments that are received. A public hearing will also be held. Finally, the following documents required by the State Environmental Quality Review Act (SEQRA) have been or will be published in the Environmental Notice Bulletin: Environmental Assessment Form, Positive Declaration, Draft Environmental Impact Statement, and Final Environmental Impact Statement. The NYSDEC will be reviewing comments to the Draft Environmental Impact Statement and will provide responses to comments prior to issuing the Final Environmental Impact Statement.

8. 'Cure Period' This rulemaking does not involve the establishment or modification of a violation or of penalties associated with a violation. Therefore, no cure period is included in the proposed rule.

Rural Area Flexibility Analysis

1. 'Types and Estimated Numbers of Rural Areas.' This rule applies to the entire State and impacts all rural areas of the State.

2. 'Reporting, Recordkeeping and Other Compliance Requirements; and Professional Services.' The rule will reduce reporting, recordkeeping or other compliance requirements. No professional services will be needed in rural areas to comply with the rule.

3. 'Costs.' There are no initial capital costs or annual costs to comply with the rule.

4. 'Minimizing Adverse Impact.' The rule is expected to have a positive economic impact on rural areas by encouraging the expansion of Animal Feeding Operations (AFOs) since the threshold at which non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) are required to obtain an ECL SPDES Permit is being increased from 200 to 300 mature dairy cows. As these dairy farms increase the size of their herds, milk production will increase, creating new on farm jobs and increasing employment in the agricultural services industry, dairy processing industry, and food processing service industry. In terms of adverse environmental impacts on rural areas, dairy farms with less than 300 mature dairy cows are still required to fully comply with other environmental laws and regulations. There is an increased risk, however, that removing the requirement of permit coverage for Medium CAFOs with 200-299 mature dairy cows could lead dairy farms already in this size range (and smaller CAFOs expanding to this size) to relax, discontinue, or fail to implement structural and non-structural Best Management Practices. This could result in discharges causing adverse impacts to ground and surface water, including fish and aquatic habitats. Medium CAFOs that are no longer required to maintain permit coverage may still voluntarily maintain permit coverage or voluntarily participate in the Agricultural Environmental Management (AEM) program administered by New York State Department of Agriculture and Markets.

5. 'Rural Area Participation.' The New York State Department of Environmental Conservation (NYSDEC) has complied with SAPA § 202-bb(7) by assuring that public and private interests in rural areas have been given an opportunity to participate in the rule making process. This participation has occurred through publication of the notice of proposed rulemaking in the State Register and through meeting and interaction with a CAFO Work Group composed of individuals from the following organizations:

• New York State Department of Agriculture and Markets

• New York State Department of Health

• Cornell University

• Environmental Advocates of New York

• Citizens Campaign for the Environment

• New York Farm Bureau

• Northeast Dairy Producers Association

• Certified Planners

• CAFO farmers

• NYSDEC central office and regional staff

The NYSDEC also met with the Sierra Club, Riverkeeper, and the National Resource Defense Council with respect to the proposed rulemaking. The Department offered to meet with the New York League of Conservation Voters, but the invitation was not accepted. Furthermore, the NYSDEC will be accepting public comments to the Notice of Proposed Rulemaking and will be providing responses to any comments that are received. A public hearing will also be held. Finally, the following documents required by the State Environmental Quality Review Act (SEQRA) have been or will be published in the Environmental Notice Bulletin: Environmental Assessment Form, Positive Declaration, Draft Environmental Impact Statement, and Final Environmental Impact Statement. The NYSDEC will be reviewing comments to the Draft Environmental Impact Statement and will provide responses to comments prior to issuing the Final Environmental Impact Statement.

Job Impact Statement

1. 'Nature of Impact.' This rule is expected to create jobs and employment opportunities.

2. 'Categories and Numbers Affected.' There are currently approximately 855 dairy farms that have 100-199 mature dairy cows in New York State. The Department of Agriculture and Markets estimates that as a result of this rulemaking approximately 285 of these farms will increase the size of their herds to more than 200 mature dairy cows over the next decade. Based upon input from dairy industry experts and agricultural service providers in the field, it is estimated that approximately 50 dairy farms are positioned to expand above 200 cows within the first year of the policy change. From that point, the balance of herd growth above 200 mature milking cows is likely to occur at a rate of 10-30 farms per year. This rulemaking is forecasted to increase the total NYS herd size by approximately 25,000 milking cows based upon 285 dairy farms expanding on average by 90 cows per farm. Based upon cow labor needs, it is estimated that one dairy farm job is created for every 40-50 cows added, so the addition of 25,000 cows over the next several years equates to 500-625 new on farm jobs.

The Cornell University study, Schmit and Bills (2012; http://dyson.cornell.edu/outreach/ extensionpdf/2012/Cornell-Dyson-eb1211pdf) finds that new on-farm jobs lead to additional jobs in the agricultural services industry (feed, animal health, fertilizer, farm equipment, crop protection, construction, milking systems, fuel, trucking, etc.). Therefore, a total of 700 to 875 jobs could be realized at the farm production level. The same study estimates job multipliers at the dairy processing level, as well. For every job created in the dairy processing sector, approximately 5 additional jobs are created in the various food processing service industries (dairy processing systems, manufacturing services, packaging, trucking, construction, fuel, marketing, etc). A June 2012 study by the NYS Department of Labor (http://www.labor.ny.gov/stats/PDFs/enys0612.pdf) shows that Greek yogurt processors have created approximately 1,300 jobs since 2007, with another major yogurt plant set to add nearly 200 jobs by the summer of 2013. Considering the multiplier for dairy processing jobs, the growth since 2007 equates to an additional 7,500 jobs, totaling 9,000 jobs overall in the dairy processing and associated service industries. Increasing milk production in New York State is considered critical to maintaining the processing plants responsible for the jobs and, based on the positive trends for Greek yogurt consumption, will be a key element for continuing the job growth in dairy processing and associated support industries.

The Schmit and Bills study referenced above also finds that, like jobs, economic growth by farms and dairy processors is also coupled with multipliers, because those industries tend to make large portions of their business expenditures within the state. For dairy farms, for every $1 of output, $0.67 of additional economic activity is generated by the agricultural service industries. Assuming a milk price of $17.50/cwt and an eventual increase in milk production of 500 million lbs/year (5 million cwt/yr), the value of the increased production to farmers equates to $87.5 million/year. Applying the economic multiplier brings an additional $59 million/year, totaling nearly $150 million in additional economic activity with this policy. When applied to the dairy processing sector, the study finds that for every $1 of output, $1.18 of additional economic activity is generated by the dairy processing service industries. While the impact of this policy on Greek yogurt production is not quantified, Chobani estimates that it will achieve $1 billion in annual revenues in 2012 (http://www.nado.org/wp-content/uploads/2012/09/yogurt.pdf). The economic multiplier is substantial when added to direct economic output from dairy processing plants. With positive trends in Greek yogurt consumption, increasing milk production to help maintain and grow New York's dairy processing industries will likely result in significant economic growth. The Division of Milk Control has recently reported that they are aware of 37 different dairy processing projects that are under consideration. Of those 37 dairy processing facility projects, 26 are new plants. The majority of these new processors are primarily engaged in manufacturing of cheese; however at least 5 are yogurt facilities. Cumulatively, these new dairy processors represent a 10% expansion of facilities inspected by the Department. The remaining 11 dairy processing projects involve expansions and upgrades. Specifically, 2 of these are larger dairy processors engaged in the manufacturing of yogurt.

It is possible that some non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) with 300 or more mature dairy cows may decrease the size of their herds to less than 300 mature dairy cows to relieve themselves from the permit requirement, but the number of Medium CAFOs downsizing for this reason is expected to be insignificant. CAFOs that are required to obtain an ECL SPDES permit must submit Comprehensive Nutrient Management Plans at the time that they are initially permitted and an annual Nutrient Management Plan thereafter. These Nutrient Management Plans are prepared by certified planners. This rule making will decrease the number of Medium CAFOs that must have permits and submit Nutrient Management Plans (although some of these farms may voluntarily elect to maintain permit coverage and submit Nutrient Management Plans). As a result, it is estimated that a negligible number of certified planners may lose business as a result of this rule. These certified planners, however, should still have opportunities to prepare Nutrient Management Plans, provide other necessary agricultural services and may in fact see an increase in business from dairy herd expansion over time.

3. 'Regions of Adverse Impact.' There are no regions in the State where this rule making will have a disproportionate adverse impact on jobs or employment opportunities.

4. 'Minimizing Adverse Impact.' There are no unnecessary adverse impacts on existing jobs. This rulemaking is expected to create new on farm jobs and increase employment in the agricultural services industry, dairy processing industry, and food processing service industry.