Harmonizing the Diparate Treatment of Animal Feeding Operations under Federal and State Law

Steven Shropshire
Jordan Schrader Attorneys at Law

In September 2000, the federal Environmental Protection Agency's (EPA) Region 10 office levied a $50,000 fine against W.S. Ranches, an Oregon beef cattle operation, for violations of the federal Clean Water Act (CWA). Although Oregon administers the CWA as a fully delegated state, EPA stepped in with this enforcement action because the Oregon definition of a concentrated animal feeding operation (CAFO) was not as stringent as the federal definition. This disparity between the CAFO programs is one of several that Oregon has been trying to remedy since the fines were levied. This article contains a brief overview of federal CAFO regulation, a case study of the Oregon experience, and some conclusions regarding lessons to be applied in other jurisdictions.

CAFO Background and the Federal CAFO Program

Historically, runoff from agricultural operations has been outside the scope of the CWA's regulatory power. However, this state of affairs changed dramatically for livestock operations when the federal government began regulating concentrated animal feeding operations. Today, EPA regulates CAFOs as point sources of pollution under the federal CWA.

An animal feeding operation (AFO) is a livestock-raising operation, such as a hog, cattle or poultry farm, that confines and concentrates animal populations and their wastes. EPA has determined that such operations have the potential to cause serious water quality impacts if waste water is not properly managed. EPA estimates that animal feedlots cause or contribute to 7% of water quality impaired lake acres, and 13% of impaired river and stream miles - more than combined sewer overflows, storm sewers, or industrial sources. Compliance Assurance Implementation Plan for CAFOs, p. 3, available at http://es.epa.gov/oeca/strategy.html. A 1995 General Accounting Office Report showed that out of approximately 650,000 farms in the U.S., 450,000 had confined, non-pasture feedlots. Id. at p. 2. In every major livestock category, there has been a trend toward an increased number and market share of the larger CAFOs, and a decrease in the number of smaller feedlots. Id. At the time of the study, approximately 35% of the total livestock population existed in livestock facilities that would generally meet the definition of a CAFO, yet only 25% of CAFOs had National Pollutant Discharge Elimination System (NPDES) permits listed in EPA's permit compliance system. Id.

Most AFOs are regulated under the CWA. An AFO is defined by current federal regulations to be any animal feeding operation that stables or confines, and feeds or maintains animals for a total of 45 days or more in any 12-month period, in an area that does not sustain crops, vegetation, forage growth, or post-harvest residues during the normal growing season (i.e., devoid of vegetation). 40 C.F.R. § 122.23(b)(1). Whether an operation is classified as a concentrated AFO - "CAFO," depends on the type and number of animals confined. 40 C.F.R. 122.23(b)(3), Part 122 Appendix B. The NPDES permitting authority may also designate operations as CAFOs on a case-by-case basis if the AFO discharges pollutants to waters of the United States. All CAFOs are defined as point sources under section 502(14) of the CWA, and therefore subject to NPDES permitting. 33 U.S.C. § 1362(14) and 40 C.F.R. § 122.23(a).

According to current federal regulations, any AFO with more than 1,000 animal units is a CAFO. Id. (An animal unit is based on one unit per feeder cow, with other animals weighted more or less, depending on their waste load, e.g., ducks are 0.2, horses 2.0, and sheep 0.1 animal units.) Operations with 301-1000 animal units are CAFOs if:
(1) they directly discharge pollutants into waters that originate outside of and pass over, across or through the facility or otherwise come into direct contact with the confined animals, or (2) pollutants are discharged through a man-made conveyance.

A smaller operation may be designated as a CAFO by EPA or an authorized state agency upon a determination that it is a significant contributor of pollution to waters of the United States. 40 C.F.R. § Part 122 Appendix B. Operations that discharge only during a 25-year 24-hour storm event are currently excepted from the definition of a CAFO. Id. EPA has also established an effluent limitation guideline for CAFOs larger than 1,000 animal units that requires a zero discharge standard, except in the event of a 25-year, 24-hour storm. 40 C.F.R. § 412.

EPA is currently engaged in a rulemaking proceeding to revise the CAFO regulations for large operations (more than 1,000 animal units). On December 15, 2000, EPA published proposed revisions to strengthen the CAFO regulations. 66 Fed. Reg. 2959 (Jan. 12, 2001). The new regulations include the following proposed changes: revisions to the definition of a CAFO; inclusion of dry manure poultry and immature swine and heifer operations; elimination of the 25-year, 24-hour storm permit exception; and a requirement that all CAFOs apply for a NPDES permit. The proposed revisions would also include regulation of land application of CAFO manure, and increased data and publicly available reporting requirements. The comment period for the proposed revisions expires on July 30, 2001. By court order, EPA must take final action on the new regulations by December 15,2002. Current information on the revisions is available at http://cfpub.epa.gov/npdes/afo/caforule.cfm?program_id=7.

EPA Regulation of CAFOs

In 1998, in accordance with the Clinton administration's Clean Water Action Plan, EPA initiated a strategy directed at strengthening the implementation and enforcement of existing CAFO regulations. Compliance Assurance Implementation Plan for CAFOs, supra. The implementation plan emphasized risk-based compliance monitoring, coordination with state and federal agencies and stakeholders, increased compliance assistance and education efforts, and development of state-specific strategies aimed at creating "a more consistent national program." Id. at 2. The plan also provides that states and EPA regions should strive for effective integrated compliance assistance and enforcement, including compliance incentives such as reduced penalties for self-auditing and voluntary compliance. Id. at 4. Strategic enforcement is emphasized, not only to achieve compliance on an individual basis, but also to "obtain publicity in the mainstream press, and to signal to animal feedlot producers the Agency's resolve to address compliance issues." Id. at 8.

Also as part of the Clean Water Action Plan, in March 1999, the U.S. Department of Agriculture (USDA) joined forces with EPA to create a Unified National Strategy for Animal Feeding Operations to address threats to public health and water quality from AFOs, and to assist AFO owners and operators in meeting compliance goals. USDA/EPA Unified National Strategy for Animal Feeding Operations, March 9, 1999, available at www.epa.gov/owm/finafost.htm. The strategy expands EPA's regulatory efforts and voluntary compliance programs related to AFOs through increased enforcement, expanded monitoring and data collection, regulation of land application of manure, and development of Comprehensive Nutrient Management Plans for management of all AFO wastes. The key implementation tools of the Unified Strategy are: (1) a watershed approach to improving water quality, (2) stronger federal and state water quality standards, (3) natural resource stewardship and (4) informed citizens and public officials.

In accordance with these implementation initiatives, in 2000 EPA Region 10 stepped-up CAFO compliance and enforcement efforts in Oregon, where an estimated 1.5 million head of cattle produce at least 7.5 million tons of manure each year. EPA's CAFO Compliance Effort: Oregon Update, U.S. EPA Region 10 Fact Sheet, p. 1, December 2000, available at http://yosemite.epa.gov/R10/enforce.nsf/webpage/Office+of+Enforcement+&+Compliance#media10 ("December 2000 Oregon Update"). Although CAFOs have been subject to federal regulations since 1972, EPA has only been involved in inspections and enforcement of CAFOs in Oregon since 1994, and just recently began actively regulating beef cattle operations. Id. at 2. Few beef cattle operations ever received EPA compliance inspections before 2000. Id. In 2000, however, EPA began targeting enforcement actions against the "worst cases" of violators, where: (1) confinement areas are actually in the stream; (2) streams run though the CAFO with no attempt to keep manure out; or (3) there is direct discharge of waste to surface waters. Id. Penalties assessed by EPA in Oregon have ranged from $11,000 to $50,000. (Under the CWA, EPA may assess administrative penalties of up to $11,000 per day per violation up to $137,000 total, or civil penalties of up to $27,000 per day per violation without limit. 33 U.S.C. § 1319(g).)

A Case Study - Oregon's Voluntary-Based Approach to AFO Regulation

CAFOs are present in every state and most rural counties, and most of the states, including Oregon, have been authorized by EPA to administer the NPDES permitting program under the CWA. Many states have their own CAFO regulatory authorities that are broader than the federal CWA system. Compliance Assurance Implementation Plan for CAFOs, supra. Oregon began launching its CAFO regulatory program in the early 1980s through the Oregon Department of Environmental Quality (DEQ). Shortly thereafter, at the behest of livestock industry leaders, the Oregon Department of Agriculture (ODA) took over as program administrator and investigating authority. (Oregon's DEQ delegated its CWA permitting authority to the ODA without first submitting its federal CAFO program to EPA for approval - a point raised by EPA in criticism of Oregon's program. See December 2000 Oregon Update, p. 3).

The initial ODA program was based on voluntary compliance with assistance from the state's Soil and Water Conservation Districts, which are affiliated with ODA. The ODA undertook infrequent, complaint-based investigations, resulting in even more infrequent enforcement actions. In 1987, due to increasing complaints of discharges, and pressure to step-up the regulatory program, the Oregon Legislature gave the ODA express authority to inspect all CAFOs for compliance with water quality laws. In 1993, the ODA took over administration of the entire CAFO program, including permit issuance and enforcement, and has since adopted a regular inspection program of all CAFOs in Oregon.

Before the September 2000 enforcement actions by EPA, voluntary compliance and educational outreach were the primary tools used to achieve the water quality goals of Oregon's CAFO program. When such voluntary measures fail, the ODA's enforcement measures usually include a Water Quality Advisory letter, Notice of Noncompliance, or a Plan of Correction explaining what needs to be done to achieve compliance. ODA and DEQ also have authority to assess civil penalties against violators. ORS 468B.230 (1999). In 1999 ODA had 3.5 CAFO inspectors (known as livestock water quality specialists) who visited 514 permitted operations. Of these, 263 facilities were found in compliance; the remainder received notices of noncompliance, plans of correction, or water quality advisories, and seven were issued civil penalties. "Livestock operators now getting more out of CAFO," p. 1, June 21, 2000, available at www.oda.state.or.us/Information/sow/CAFO_inspections.html. This represented a five-fold increase of facilities inspected from 1997, and a decreased percentage of violations and concerns. Id. at p. 2. During inspections, corrective actions are usually negotiated between the CAFO inspector and the operator, and the resulting action is immediate. According to one industry leader, this cooperative and performance-based approach, "has become a program that is very constructive in attempting to get producers into compliance." Id.

A Comparison of the Oregon and Federal CAFO Programs

While both state and federal regulators have pursued and implemented CAFO regulation with increasing vigor in recent years, important disparities remain between state and federal laws, and in how they are carried out and enforced. EPA retains enforcement authority under the CWA even where it has authorized states to implement the NPDES program. Consequently CAFO operators are subject to federal standards as a minimum, and may also be subject to more stringent standards adopted by the state. EPA regional officers participate in some joint CAFO inspections, as well as education and compliance assistance programs (along with the Natural Resource Conservation Service), but EPA has also initiated its own enforcement actions in some cases. Compendium of State AFO Programs, U.S. EPA, August 1999 available at www.epa.gov/owm/stcpfin.pdf at p. 6. One reason for such unilateral action is if EPA considers a state's enforcement actions ineffective for a particular case. Another reason could be the result of differences in the law concerning what operations are subject to regulation. This is the disparity that caused EPA to bring its enforcement action against W.S. Ranches in September 2000.

At that time, the Oregon DEQ held a general NPDES permit covering all CAFOs in the state, while the ODA issued individual state permits granting coverage under the general permit. ODA also carried out the majority of compliance and enforcement functions. The definition of what kind of AFO qualifies as a CAFO subject to permitting and inspection was then different under state and federal regulations in Oregon. In contrast to the federal animal unit and time-based classifications described above (confinement over 45 days), Oregon's regulations excluded any CAFO that: (1) does not have a waste water control facility; (2) confines animals for four months or less; and (3) does not discharge wastes to waters of the state without a permit (or in violation of a permit). ORS 468B.215(2) (1999). This effectively exempted certain operations from the state program, such as beef cattle operations that confine their herds only part of the year. However, it is now apparent that EPA considers such operations to be within the continuing scope of federal enforcement.

This disparity appears to be the basis for EPA's inspection of W.S. Ranches mentioned above. This action was part of the Region's stepped-up enforcement campaign designed to reduce the number of agricultural polluters throughout Oregon, Washington, and Idaho. EPA conducted a flyover of ranches in the area in March 2000, followed by a site visit later that month during which EPA inspectors observed cattle coming in direct contact with the Wallowa River. See Richard Cockle, EPA Fine Against Rancher Creates Stir in Wallowa County, The Oregonian, Sept. 19, 2000. One reason this case caused such a stir (aside from the amount of the fine), is that the ranch operators were in the process of completing a $100,000 project designed to bring the facility into compliance with the CWA, in cooperation with the local NRCS office. To avoid such future confusion in the potentially regulated community, the State of Oregon launched an effort to harmonize its CAFO program with the federal program.

The Aftermath - Oregon's Attempt to Harmonize State and Federal Law

In January 2001, House Bill 2156 was introduced in the Oregon legislature in an attempt to amend Oregon's CAFO laws and achieve consistency between state and federal regulation of CAFOs. While the bill was pending, EPA agreed to suspend further inspections of central and eastern Oregon ranches, feedlots and dairies. House Bill 2156 was signed into law by Governor Kitzhaber on May 30, 2001 and went into effect on July 1, 2001.

House Bill 2156 clarifies ODA's authority to fully implement the state's CAFO program as one of the two authorized CWA NPDES agencies along with Oregon DEQ. This is done with the intent that ODA will take over all aspects of the state CAFO program. To further this goal, the bill directs the agencies to seek EPA approval of DEQ's assignment of the state's CAFO program to ODA. The new statutory scheme also exempts CAFOs covered by NPDES permits from the factors to consider when levying fines, and the cap on first time offender fines. Finally, the scheme creates new flexibility for changing the definition of a CAFO in Oregon. The bill removes the definition from state statute and instead provides that the term will be defined by rules adopted by ODA or DEQ. This should allow ODA/DEQ to keep the state's CAFO definition consistent with shifting federal regulations.

Following the enactment of House Bill 2156, ODA launched a rulemaking proceeding to adopt new permanent rules governing Oregon CAFOs. A temporary rule was filed in July 2001, aligning Oregon's definition of a CAFO with the federal definition. The temporary rules expire on December 28, 2001. Meanwhile, formal rulemaking is proceeding. An initial round of formal rulemaking has produced a set of proposed rules that define different categories of confined and concentrated animal feeding operations subject to regulation under state law. Among other changes, these definitions now incorporate by reference the federal CAFO definitions set forth at 40 C.F.R. § 122.23. The new rules also provide a method for receiving and evaluating complaints against livestock facilities by ODA. The comment period on the proposed rules closed on December 7, 2001. It is expected that the new permanent rules will be in place no later than January 1, 2002. Meanwhile, the rulemaking committee is still at work on additional rules for the CAFO program that will be submitted for public comment at a later date.

The regulated community and ODA hope the new legislation and administrative rules in Oregon will signal the end of a problematic regulatory system providing enforcement authority to the agencies of two separate governments operating under two different sets of rules. Getting the regulations in order should resolve some of the differences. However, until ODA adopts rules that more clearly define the CAFO program implementation and enforcement process, the specter of EPA intervention with alleged violators will continue to linger. EPA has made it clear that "even if Oregon were to correct its deficiencies, EPA would still have a duty under the Clean Water Act to oversee state CAFO program implementation." December 2000 Oregon Update, p. 3. Only time will tell whether this means EPA will continue to take an active role in the enforcement of the CWA or whether it will defer to the ODA under the new statutory and regulatory scheme.

National Implications of Oregon's Experience

The problems with Oregon's CAFO program are not unique in the United States. There are other states with laws and regulations that do not precisely track those promulgated by EPA. From the Oregon experience, we now know that EPA is particularly concerned with state programs in which CAFO definitions differ from those contained in the federal regulations. Practitioners should be aware of such differences and alert to the possibility of an EPA enforcement action against operators who may consider themselves exempt from regulation under the applicable state laws. Additionally, as with all federally delegated regulatory programs, EPA retains the power to bring and enforcement action if it believes a state environmental agency is not enforcing the environmental laws with sufficient rigor. Where such disagreement exists, the regulated community and their attorneys must guard against a false sense of security generated by a less stringent state enforcement program.

The author thanks Chris Schwindt for his research assistance with this article.