1The
total
estimated
number
of
facilities
is
516.
The
total
number
cited
in
the
NODA
is
522.
The
difference
is
a
single
facility
with
an
approximate
survey
weight
of
5
that
was
deemed
not
to
discharge.
That
decision
was
made
after
December
2003.

2A
facility
in
the
20,000
to
100,000
lb/
yr
category
belongs
to
a
17th
company
that
also
owns
in­
scope
(>
100,000
lb/
yr)
facilities.
In
order
to
avoid
double­
counting
this
company,
it
is
not
included
in
the
count
of
companies
in
the
20,000
to
100,000
lb/
yr
group.

1
Date:
7
May
2004
To:
Renee
Johnson
,
EPA
From:
Maureen
F.
Kaplan
and
Ian
Cadillac,
ERG
Subject:
Technical
Directive
No.
3,
Items
1
and
2
Description
and
Economic
Impact
Analysis
of
CAAP
Facilities
that
Produce
Between
20,000
to
100,000
lb/
yr
in
Flow­
Through,
Recirculating,
and
Net
Pen
Systems
1.
Description
1.1
Facility
Counts
There
are
approximately
257
facilities
with
production
between
20,000
to
100,000
lb/
yr
based
on
the
detailed
questionnaire.
The
estimated
number
of
in­
scope
facilities
is
259.1
That
is,
the
100,000
lb/
yr
threshold
selected
by
EPA
reduced
the
number
of
facilities
within
the
scope
of
the
rule
by
about
half.
Table
1
summarizes
the
number
of
commercial
and
noncommercial
facilities
by
production
system.

1.2
Commercial
Facilities
Of
the
81
commercial
facilities,
36
(
or
44
percent)
report
unpaid
labor
and
or
management.
Thirty­
five
(
or
43
percent)
are
unprofitable
in
the
facility
closure
analysis
before
the
inclusion
of
incremental
pollution
control
costs.
The
81
(
weighted)
commercial
facilities
are
represented
by
16
unweighted
companies2
with
the
following
organizational
structure:
7
sole
proprietorships,
2
partnerships
(
1
limited
and
1
general),
4
S
Corporations,
and
3
C
Corporations.
In
other
words,
approximately
41
percent
of
the
organizations
are
sole
proprietorships.
Of
the
16
companies,
all
but
one
are
small
businesses.

Table
2
summarizes
the
differences
between
the
group
of
facilities
that
EPA
excluded
from
the
rule
(
20,000
to
100,000
lb/
yr)
and
the
in­
scope
facilities
(>
100,000
lb/
yr).
Overall,
then,
facilities
that
produce
between
20,000
and
100,000
lb/
yr
are
more
likely
to
be
sole
proprietorships,
more
dependent
on
unpaid
labor
and
management,
belong
to
a
small
business,
and
less
likely
to
be
profitable.
2
Table
1
Number
and
Types
of
Facilities
with
Annual
Production
between
20,000
and
100,000
Pounds
Estimated
Number
of
Facilities
Production
System
Owner
Initial
Facility
Count
Baseline
Closures
In
Analysis
[
1]
In
Analysis
that
Incur
Costs
In
Cost
Totals
[
2]

Continuous
Commercial
81
35
46
41
47
Discharge
Noncommercial
175
NA
175
175
175
Net
Pen
Commercial
0
0
0
0
0
Noncommercial
1
NA
1
0
1
Total
Commercial
81
35
46
41
47
Noncommercial
176
NA
176
176
176
Totals
may
not
sum
due
to
rounding
NA:
not
applicable.
[
1]
In
analysis
counts
are
calculated
by
subtracting
out
baseline
closures
from
the
initial
facility
count.
[
2]
Start­
up
operations
are
in
the
cost
totals
but
have
insufficient
information
to
be
in
the
economic
analysis.

Table
2
Comparison
of
Out­
of­
Scope
and
In­
Scope
Commercial
Facilities
Flow­
through,
Recirculating,
and
Net
Pen
Systems
Percentage
of
Group
with
Characteristic
Out­
of­
Scope
(
20,000
to
100,000
lb/
yr)
In­
Scope
(>
100,000
lb/
yr)

Report
unpaid
labor
and/
or
management
44.4%
0.3%

Baseline
failure
43.2%
31.8%

Organizational
structure
is
sole
proprietorship
43.8%
11.4%

Small
Business
93.3%
31.4%
3
1.2
Noncommercial
Facilities
The
176
noncommercial
facilities
in
the
detailed
questionnaire
data
that
produce
between
20,000
to
100,000
lb/
yr
include:

#
154
Government
facilities
#
7
Alaska
nonprofit
organizations
#
1
Academic/
research
facilities
#
14
Tribal
facilities
Only
government
facilities
(
State
or
Federal
hatcheries)
are
considered
in­
scope
(
annual
production
>
100,000
lb)
based
on
the
detailed
questionnaire
data.
In
contrast,
the
20,000
to
100,000
lb/
yr
group
of
facilities
encompasses
three
additional
types
of
organizations:
Alaska
nonprofits,
Tribal
facilities,
and
academic/
research
facilities.

2.
Impact
Analysis
2.1
Commercial
Facilities
Table
3
summarizes
the
impact
on
this
group
of
facilities.
If
a
facility
if
financially
healthy
enough
to
pass
the
baseline
analysis,
it
is
healthy
enough
to
remain
open
under
Option
A
or
Option
B.
None
of
the
commercial
companies
experience
a
change
in
financial
health
or
suffer
impaired
credit.
Nearly
one
in
five
facilities,
however,
fail
the
3
percent
sales
test
threshold
and
none
fail
the
5
percent
sales
test
threshold.

2.2
Noncommercial
Facilities
2.2.1
Budget
and
RelatedTests
Table
4
summarizes
the
budget
tests
for
noncommercial
facilities
while
Table
5
compares
the
budget
test
results
for
the
in­
scope
and
out­
of­
scope
noncommercial
facilities
for
Option
B.
Note
that
substantially
higher
percentages
of
the
out­
of­
scope
noncommercial
facilities
fail
the
test
thresholds.
EPA's
decision
matrix
for
economic
achievability
considers
facilities
that
incur
costs
that
are
10
percent
or
greater
of
the
facility
budget
to
incur
stress.

No
Tribal
or
academic/
research
facility
fails
the
5%
budget
test.
No
Alaska
nonprofit
facility
incurs
costs
in
excess
of
5%
of
salmon
revenues.
4
Table
3
Economic
Effects
Existing
Commercial
Operations
with
Annual
Production
Between
20,000
to
100,000
Pounds
Budget
Threshold
Estimated
Number
of
Facilities
for
Which
Impacts
Can
be
Assessed
Option
A
Option
B
Closure
Analysis
46
0
0
Additional
Analysis
Criteria
Sales
test
>
3%
47
10
10
Sales
test
>
5%
47
0
0
Sales
test
>
10%
47
0
0
Company
Change
in
Financial
Health
16
0
0
Credit
test
>
80%
9
0
0
Table
4
Noncommercial
Operations
with
Annual
Production
Between
20,000
to
100,000
Pounds
Number
of
Facilities
Estimated
to
Exceed
Budget
Threshold
Budget
Threshold
Estimated
Number
of
Facilities
Option
A
Option
B
3%
168
16
47
5%
168
12
30
10%
168
8
23
5
Table
5
Comparison
of
Budget
Test
Results
for
Out­
of­
Scope
and
In­
Scope
Noncommercial
Facilities
Option
B
Flow­
through,
Recirculating,
and
Net
Pen
Systems
Budget
Test
Threshold
Out­
of­
Scope
(
20,000
to
100,000
lb/
yr)
In­
Scope
(>
100,000
lb/
yr)

3%
28.0%
18.8%

5%
17.9%
11.4%

10%
13.7%
5.4%

2.2.2
User
Fee
Test
Table
6
summarizes
the
results
of
the
user
fee
test
for
noncommercial
facilities
that
fail
the
budget
test.
Typically,
more
than
half
the
facilities
that
fail
the
budget
test
report
no
revenues
from
user
fees.

Table
6
Noncommercial
Operations
with
Annual
Production
Between
20,000
to
100,000
Pounds
Number
of
Facilities
Estimated
to
Exceed
Budget
Threshold
Budget
Threshold
Estimated
Number
of
Facilities
Option
A
Option
B
3%
Total
Failing
16
47
No
User
Fee
12
31
>
10%
Increase
4
15
5%
Total
Failing
12
30
No
User
Fee
8
16
>
10%
Increase
4
15
10%
Total
Failing
8
23
No
User
Fee
8
11
>
10%
Increase
0
11
6
3.
Barrier
to
Entry
Analysis
To
evaluate
potential
effects
to
new
aquaculture
facilities,
EPA
examined
possible
barriers
to
entry
to
a
new
commercial
facility
with
annual
production
planned
to
be
in
the
20,000
lb
to
100,000
lb
range
resulting
from
the
final
CAAP
rule.
First,
EPA
examines
the
proportion
of
commercial
facilities
that
incur
no
costs
under
each
option
(
Table
7).
Fewer
than
one
in
ten
facilities
incur
no
costs
under
Options
A
or
B.

Second,
EPA
examines
the
proportion
of
commercial
facilities
with
no
land
or
capital
costs
under
each
option.
Nearly
two­
thirds
of
the
facilities
incur
no
land
or
capital
costs
under
Options
A
or
B.
That
is,
although
almost
all
facilities
incur
costs,
the
costs
are
annual
costs
rather
than
land
or
capital
for
two
of
every
three
facilities.

Third,
for
the
subset
of
companies
with
incremental
land
or
capital
costs,
EPA
examines
the
ratio
of
those
costs
to
total
company
assets.
This
comparison
is
calculated
on
company
data
because
asset
data
were
collected
only
at
the
company
level.
(
Facility
weights
cannot
be
used
for
the
company
analyses.)
EPA
calculates
the
ratio
for
each
company
and
took
the
average
of
the
ratios.
The
incremental
land
and
capital
costs,
where
they
were
incurred,
are
nearly
1.5
percent
of
total
assets,
see
Table
8.

Table
7
Percent
of
Facilities
Costed
by
Option
for
Facilities
Producing
Between
20,000
to
100,000
Pounds/
Year
No
Land
or
Option
Total
Costed
Percent
Not
Costed
Percent
Capital
Costs
Percent
Option
A
81
76
93%
5
7%
52
64%
Option
B
81
76
93%
5
7%
52
64%
Option
1
81
76
93%
5
7%
81
100%
Option
2
81
76
93%
5
7%
52
64%
Option
3
81
81
100%
0
0%
11
14%
7
Table
8
Average
Ratio
of
Land
and
Capital
Costs
over
Total
Assets
for
Facilities
Producing
Between
20,000
to
100,000
Pounds/
Year
Only
Facilities
All
With
Land/
Option
Facilities
Capital
Costs
Option
A
0.53%
1.42%
Option
B
0.53%
1.42%
Option
1
0.00%
NA
Option
2
0.53%
1.42%
Option
3
4.21%
4.81%

NA:
No
facilities
exist
