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1 of 210 EO12866 _DSW 2050
- AG62 NPRM Preamble

_20110225 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 260, 261, and 270 [EPA
- HQ
- RCRA
- 2010
- 0742; FRL
- ] RI N 2050
- AG 62 Rulemaking on the Definition of Solid Waste AGENCY: Environmental Protection Agency
. ACTION: Proposed rule. SUMMARY: The Environmental Protection Agency (EPA or the Agency) is proposing to revise certain exclusions from the definition of solid waste under Subtitle C of the Resource Conservation and Recovery Act (RCRA) for hazardous secondary materials intended for reclamation. The purpose of these proposed revisions is to ensure that the recy cling regulations, as implemented, encourage reclamation in a way that does not result in increased risk to human health and the environment from discarded hazardous secondary material. DATES: Comments must be received on or before [Insert date 60 day s after publication in the Federal Register] ADDRESSES: Submit y our comments, identified by Docket ID No. EPA
- HQ
- RC RA
- 2010
- 0742 by one of the following methods:

 www.regulations.gov : Follow the on
- line instructions for submitting comments.

 Email: Comments may be sent by

electronic mail (email) to RCRA
- docket@epa.gov , Attention Docket ID No. EPA
- HQ
- RCRA
- 2010
- 0742
.
 Fax: Fax comments to: 202
- 566
- 0270, Attention Docket ID No. EPA
- HQ
- RCRA
- 2010
- 0742*** E.O. 12866 Review

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2 of 210  Mail: Send comments to: OSWER Docket, EPA Docket Center, Mail Code 5305T, Environmental Protection Agency , 1200 Penns yl vania Avenue N.W. Washington D.C. 20460, Attention Docket ID No. EPA
- HQ
- RCRA
- 2010
- 0742. Please include two copies of y our comments. In addition, please mail a copy of y our comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., Washington D.C. 20503.

 Hand delivery : Deliver two copies of y our comments to: Environmental Protection Agency , EPA Docket Center, Room 3334, 1301 Constitution Avenue, N.W., Washington D.C., Attention Docket ID No. EPA
- HQ
- RCRA
- 20 10
- 0742. Such deliveries are onl y accepted during the doc ket’s normal hours of operation and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID Number EPA
- HQ
- RCRA
- 2010
- 0742. EPA’s policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov , including an y personal information provided, unless the comment includes information claimed to be Confidential Business In formation (CBI) or other information whose disclosure is restricted b y statute. Do not submit information that y ou consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an “anony mous access” sy stem, which means EPA will not know y our identity or contact information unless you provide it in the body of y our comment. If you send an email comment directl y t o EPA without going through www.regulations.gov , y our email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit*** E.O. 12866 Review

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3 of 210 an electronic comment, EPA recommends that you include your name and other contact information in the body

o f y our comment and with any disk or CD
- ROM y ou submit. I f EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider y our comment. Electronic files should avoid the use of special ch aracters, an y form of encry ption, and be free of any

defects or viruses. Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not public ly available, such as CBI or other information whose disclosure is restricted b y statute. Certain other material, such as copy righted material, will be publicly

available only

in hard copy
. Publicly

available docket materials are av ailable either electroni call y at www.regulations.gov or in hard cop y at the OSWER Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., N.W., Washington DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m. Monday through Friday , excluding legal holiday s. The telephone number for the Public Reading Room is (202) 566
- 1744, and the telephone number for the OSWER Docket is ( 202 ) 566
- 0270. FOR FURTHER INFORMATION CONTACT: For more detailed information on specific aspects of th is rulemaking, contact Maril yn Goode, Office of Resource Conservation and Recovery , Materials Recovery and Waste Management Division, MC 5304P, Environmental Protection Agency , 1200 Pennsylvania Ave. N.W., Washington DC 20460, (703) 308
- 8800, ( goode.maril yn@epa.gov) or Tracy Atagi, Office of Resource Conservation and Recovery , Materials Recovery

and Waste Management Division, MC 5304P, Environmental Protection Agency , 1200 Penns yl vania Ave. N.W., Washington DC 20 460, at (703) 308
- 8672 ( atagi.tracy @epa.gov)
. SUPPLEMENTARY INFORMATION:*** E.O. 12866 Review

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4 of 210 A. Regulated Entities Entities potentially

affected by

today 's action include approximately between 1,100 to 11,500 facilities (depending on the regulatory optio n(s) selected) in 280 industry sectors that generate or recy cle hazardous secondary materials that are (1) currentl y regulated as RCRA Subtitle C hazardous wastes, (2) hazardous secondary materials currently

excluded under the 2008 DSW rule, or (3) hazardous secondary materials currentl y excluded from RCRA Subtitle C under other solid waste exclusions. In aggregate, the Regulatory I mpact Analy sis estimates the future average annualized costs to industry to comply

with the eight propo sed revisions at between $3.8 million to $11.3 million per y ear under a lower
- bound state adoption scenario, which presumes 11 percent of the recy cling facilities implementing the revisions, and between $6.5 million to $61.8 million per year under an upper
- bound state adoption scenario, which presumes 6 7 percent of recy cling facilities implement the revisions. More detailed information on the potentially

affected entities, industries, and industrial materials, as well as the economic impacts of this propose d rule, is presented in Section XVII.A of this preamble and in the Regulatory

Impact Analysis available in the docket for this final rule. B. What to Consider When Preparing Comments for EPA. 1. Submitting CBI
. Do not submit this information to EPA throu gh www.regulations.gov or email. Clearly

mark all information that you claim to be CBI. For CBI information in a disk or CD
- ROM that y ou mail to EPA, mark the outside of the disk or CD
- ROM as CBI and then identify e lectronically

within the disk or CD
- ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a cop y of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed, except*** E.O. 12866 Review

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5 of 210 in accordance with procedures set forth in 40 CFR p art 2. 2. Tips for Preparing Your Comments. When submitting comments, remember to:

 Id entify

the rulemaking by

docket number and other identifying information (subject heading, Federal Register date and page number).

 Follow directions. The Agency may ask for commenters to respond to specific questions or organize comments b y referencing a Code of Fed eral Regulations (CFR) part or s ection number.

 Explain why

y ou agree or disagree; suggest alternatives and substitute language for y our requested changes.

 Describe an y assumptions and provide an y technical information and/or data that you used.

 If estimati ng burden or costs, explain methods used to arrive at the estimate in sufficient detail to allow for it to be reproduced.

 Provide specific examples to illustrate any concerns and suggest alternatives.

 Make sure to submit comments by the comment period dea dline identified above. Preamble Outline I. Statutory

Authorit y II. List of Abbreviations and Acron ym s III. What is the Intent of this Proposal? IV . What is the Scope of this Proposal? V. History

of the Definition of Solid Waste VI . Definition of Solid Waste Environmental Justice Analy sis VII. Withdrawal of the Exclusion For Hazardous Secondary Materials That Are Transferred*** E.O. 12866 Review

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6 of 210 For The Purpose Of Legitimate Reclamation VIII. Alternative Subtitle C Regulation for Hazardous Recy clable Materials IX . Revi sions to the Exclusion for Hazardous Secondary Materials that are Legitimately Reclaimed Under the Control of the Generator X. Revisions to the Definition of Legitimacy XI . Revisions to Solid Waste Variances and Non
- Waste Determinations XII. Request for Comment on Re
- Manufacturing Exclusion XIII. Request for Comment on Revisions to Other Recycling Exclusions and Exemptions XI V. Effect of this Proposal on Other Programs XV. Implementation I ssues with 2008 DSW Final Rule XVI. State Authorization XVII. Administrative Requirements for This Rulemaking I. Statutory Authority These regulations are proposed under the authority of sections 2002, 3001, 3002, 3003, 3004, 3007, 3010, and 3017 of the Solid Waste Disposal Act of 1970, as amended b y the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6921, 6922, 6923, and 6924. This statute is commonly

referred to as “RCRA.” II. List of Abbreviations and Acronyms CERCLA

– Comp rehensive Environmental Response, Compensation, and Liability Act CFR

– Code of Federal Regulations DOT

– Department of Transportation DSW

– Definition of Solid Waste*** E.O. 12866 Review

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7 of 210 EPA

– Environmental Protection Agency HSWA

– Hazardous and Solid Waste Amendments of 1984 LDR

– Land Disposal Restrictions NAI CS

– North American Industry Classification Sy stem NPL

– National Priority

L ist RCRA

– Resource Conservation and Recovery Act of 1976 RIA

– Regulatory

I mpact Analy sis III. What is the Intent of this Proposal? Today ’s proposal would revise and clarify the RCRA definition of solid waste (DSW) for certain t ypes of hazardous secondary materials that are currentl y conditionally excluded from the definition of solid waste. These exclusions were promulgated in October 2008 ( 73 FR 64688, October 30, 2008) and were intended to encourage the recovery and reuse of valuable resources as an alternative to land disposal or incineration, while at the same time maintaining protection of human health and the environment. In response to concerns raised by stakeholders about potential increases in risks to human health and the environment from hazardous secondary materials, EPA is proposing to revise the 2008 DSW rule in order to ensure that the rule, as implemented, encourages reclamat ion in a way that protects human health and the environment from the mismanagement of hazardous secondary materials. IV. What is the Scope of this Proposal? In today ’s notice, EPA is proposing to revise the definition of solid waste regulations that were promulgated in October 2008 and that deal with the regulatory status of certain ty

pes of hazardous secondary

materials sent for reclamation. The 2008 DSW final rule does not apply to*** E.O. 12866 Review

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8 of 210 recy cling of “inherently

waste - like” materials (40 CFR 261.2(d)); recy cl ing of hazardous secondary materials that are “used in a manner constituting disposal,” or “used to produce products that are applied to or placed on the land”(40 CFR 261.2(c)(1)); or for “burning of hazardous secondary

materials for energy

recovery ” or “u sed to produce a fuel or otherwise contained in fuels” (40 CFR 261.2(c)(2)). The regulatory

changes being proposed today are summarized below. The intent of this summary is to give a brief overview of the proposed changes. More detailed discussions, inclu ding the Agency ’s rationale for the changes, are discussed in later sections. In addition, to aid commenters in their review, EPA has also included in the docket for today’s proposal an informational redline/strikeout version of the proposed revised regulations as compared to the current Code of Federal Regulations. A. Wi thdrawal of The Exclusion For Hazardous Secondary Materials That Are Transferred For The Purpose of Reclamation EPA is proposing to withdraw the exclusion at 40 CFR 261.4(a)(24) and (25) f or hazardous secondary

materials that are transferred from the generator to other persons for the purpose of reclamation
. 1 EPA’s anal ys es of potential hazards posed b y the 2008 DSW rule indicate that, when implemented, the transfer
- based exclusion may pose significant risk to human health and the environment from hazardous secondary material that may

become discarded. While the transfer of materials is inherent in ordinary commerce and does not automatically

indicate discard has occurred, in the case of hazardous secondary materials transferred for reclamation, EPA has determined that only a specific set of hazardous secondary materials and reclamation practices clearly do not involve discard. EPA believes that in most

1 A hazardous secondary material is a secondary material (e.g., spent material, by
- product, or sludge) that, when discarded, w ould be identified as hazardous waste under 40 CFR part 261.*** E.O. 12866 Review

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9 of 210 cases, hazardous secondary materials transferred to another party for reclamation are discarded and are best regulated under RCRA Subtitle C. Further discussion of this proposed withdrawal can be found in Section VII of this preamble. B. Alternative Subtitle C Regulation for Hazardous Recyclable Materials EPA is requesting comment on an alternative Subtitle C regulation in 40 CFR 266.30 for hazardous recy clable materials , with the intention of promoting the safe and sustainable reclamation of these materials. 2 Under these alternative requirements, the hazardous recyclable materials must be managed according to the current RCRA Subtitle C requirements, including manifesting and hazardous waste permits for storage, except that generators may accumulate hazardous recy clable materials for up to a y ear without a RCRA permit if the generator makes advance arrangements for legitimate reclamation and documents those arrangements in a reclamation plan. EPA also requests comment on setting an upper limit on the amount of hazardous recy clable material accumulated at the generator at any one time. Further discussion of these proposed alternative standards can be found in Sect ion VIII of this preamble. C. Revisions to the Exclusion for Hazardous Secondary Materials Reclaimed Under the Control of the Generator EPA is proposing to retain the exclusion for hazardous secondary materials reclaimed under the control of the generator with certain revisions, including (1) adding a regulatory definition of “contained” to 40 CFR 260.10; (2) making notification a condition of the exclusion ; (3) adding a recordkeeping requirement for speculative accumulation in 40 CFR 261.1(c)(8); and (4) adding a recordkeeping requirement for reclamation under toll manufacturing agreements in 40 CFR 261.4(a)(23)(i)(C)
. EPA is also requesting comment on whether to withdraw the toll

2 Hazardous recyclable materials are hazardous wastes that are recycled. Unlike hazardous secondary materials, hazardous recyclable materials have clearly been discarded and therefore are always solid wastes.*** E.O. 12866 Review

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10 of 210 manufacturing provision of the exclusion. Further discussion of these propos ed revisions can be found in Section IX of this preamble. D. Legitimacy EPA is also proposing revisions to the definition of legitimacy in 40 CFR 260.43 , including (1) appl yi ng the codified definition to all recycling activities regulated under 40 CFR 2 60

–2 66 ; (2) making all legitimacy factors mandatory , with a petition process for the rare instance that a factor is not met, but the recy cling is still legitimate; and (3) requiring documentation of legitimacy . Further discussion of these proposed revision s can be found in Section X of this preamble. E. Revisions to Solid W

aste Variances and Non
- Waste Determinations EPA is also proposing revisions to the solid waste variances and non
- waste determinations found in 40 CFR 260.30

–260.34 in order to foster greater consistency on the part of implementing agencies and help ensure the protectiveness of the implementation of the soli d waste variances and non
- waste determinations. Proposed revisions include (1) requiring facilities to re - appl y for a variance in the event of a change in circumstances that affects how a material meets the criteria upon which a solid waste variance has been based ; (2) requiring facilities to re
notify every two y ears with updated information ; (3) revising the criteria for the partial reclamation variance to more clearl y explain when the variance applies and to require, among other things, that the criteria for this variance must be reviewed and evaluated collectivel y ; (4) revising the criteria for the non
- waste determination in 40 CFR 260.34 and requiring that petitioners demonstrate why the existing solid waste exclusions would not apply to their hazardous secondary

material s; and (5) designating the Regional Administrator as the EPA recipient of petitions for variances and non
- waste determinations. Further discussion of these*** E.O. 12866 Review

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11 of 210 proposed revisions can be found in Section XI of this preamble. F. Request for Comment on Re
- Manufacturing Exclusion EPA is also requesting comment on an exclusion from the definition of solid waste for specifi c t ypes of high er - value hazardous secondary materials sent for re
- manufacturing into similar products and on a petition process for higher
- value hazardous secondary materials that are not included within this exclusion, but that are destined to be re
- manuf actured into similar products. This exclusion would help promote sustainable materials management by extending the productive use of these materials and thus minimizing the amount of raw materials used overall and all the associated environmental impacts of production
. Further discussion of this possible exclusion can be found in Section XII of this preamble. G. Request for Comment on Revisions to Other Recycling Exclusions and Exemptions EPA is also requesting comment on revisions that would affect othe r definition of solid waste exclusions and hazardous waste exemptions for recyclable materials. These possible revisions include (1) recordkeeping for speculative accumulation in all cases; (2) requiring facilities to re
- notify

every two y ears with updated information on their operating status under the various exclusions and exemptions; and (3) containment standards for excluded hazardous secondary material. Further discussion of these possible revisions can be found in Section XIII of this preamble. V. H istory of the Definition of Solid Waste A. Background RCRA gives EPA the authority to regulate hazardous wastes ( see, e.g., RCRA sections 3001

– 3004). The original statutory designation of the subtitle for the hazardous waste program was Subtitle C and the national hazardous waste program is referred to as the RCRA Subtitle C*** E.O. 12866 Review

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12 of 210 program. Subtitle C is codified at 42 USC 6921 through 6939e. “Subtitle C” regulations are found at 40 CFR parts 260 through 279. “Hazardous wastes” are those that, because of their qu antity , concentration, or phy sical, chemical, or infectious characteristics , may (1) cause, or significantl y contribute to an increase in mortality or an increase in serious irreversible or incapacitating reversible illness, or (2) pose a substantial prese nt or potential hazard to human health or the environment when improperl y treated, stored, transported, or disposed of, or otherwise managed ( see RCRA section 1004(5)). Hazardous wastes are a subset of solid wastes. Materials that are not solid wastes are not subject to regulation as hazardous wastes under RCRA Subtitle C. Thus, the definition of “solid waste” play s a key role in defining the scope of EPA’s authorities under Subtitle C of RCRA. The statute defines “solid waste” as “...an y garbage, refuse, sludge from a waste treatment plant, water suppl y treatment plant, or air pollution control facility

and other discarded material ... resulting from industrial, commercial, mining, and agricultural operations, and from community activities...” (RCRA Section 1004 (27) (emphasis added)). Since 1980, EPA has interpreted “solid waste” under its Subtitle C regulations to encompass both materials that are destined for final, permanent treatment and placement in disposal units, as well as certain materials that are destined for recy cling (see 45 FR 33090

– 95, May 19, 1980; 50 FR 604

– 656, January 4, 1985 ( see in particular pages 616

– 618)). EPA has offered three arguments in support of this:

 The statute and the legislative history suggest that Congress expected EPA to regulate certain materials that are destined for recycling as solid and hazardous wastes (see 45 FR 33091, citing numerous sections of the statute and U.S. Brewers’ Association v. EPA , 600*** E.O. 12866 Review

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13 of 210 F. 2d 974 (D.C. Cir. 1979); 48 FR 14502

– 04, April 3, 1983; and 5 0 FR 616

– 618, January 4, 1985).

 Hazardous secondary materials stored or transported prior to recycling have the potential to present the same t ypes of threats to human health and the environment as hazardous wastes stored or transported prior to disposal. Infact, EPA has found that recy cling operations have accounted for a number of significant damage incidents. For example, hazardous secondary

materials destined for recy cling were involved in one
- third of the first 60 filings under RCRA’s imminent and sub stantial endangerment authority and in 20 of the initial sites listed under the Comprehensive Environmental Response, Compensation and L iability Act (CERCLA) (48 FR 14474, April 4, 1983). Congress also cited some damage cases which involve recy cling (H.R. Rep. 94
- 1491, 94th Cong., 2d Sess., at 17, 18, 22). More recent data (i.e., information on damage incidents occurring after 1982) included in the rulemaking docket for today ’s proposed rule corroborate the fact that recy cling operations can and have result ed in significant damage incidents.

 Excluding all hazardous secondary materials destined for recy cling would allow materials to move in and out of the hazardous waste management sy stem depending on what an y person handling the hazardous secondary material s intended to do with them, which is inconsistent with the RCRA mandate to track hazardous wastes and control them from “cradle to grave.” Hence, RCRA confers on EPA the authority to regulate discarded hazardous secondary materials even if they

are destin ed for recy cling and may be beneficiall y reused . The Agency has therefore developed in part 261 of 40 CFR a definition of “solid waste” for Subtitle C regulatory purposes. (Note: This definition is narrower than the definition of “solid waste” for RCRA*** E.O. 12866 Review

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14 of 210 end angerment and information
- gathering authorities. (See 40 CFR 261.1(b). Also Connecticut Coastal Fishermen’s Association v. Remington Arms Co. , 989 F.2d 1305, 1315 (2d Cir.1993) holds that EPA’s use of a narrower and more specific definition of solid waste for Subtitle C purposes is a reasonable interpretation of the statute. See also Military Toxics Project v. EPA , 146 F.3d 948 (D.C. Cir. 1998).) EPA has alway s asserted that hazardous secondary materials are not excluded from regulation as solid wastes mer el y because of a claim that they will be recycled. EPA has consistently

considered hazardous secondary materials intended for “sham recycling” to be discarded and, hence, to be solid wastes for Subtitle C purposes (see 45 FR 33093, May 19, 1980; 50 FR 638

– 639, January 4, 1985). The U.S. Court of Appeals for the D.C. Circuit has agreed that materials undergoing sham recycling are discarded and, consequently , are solid wastes under RCRA (see American Petroleum Institute v. EPA , 216 F.3d 50, 58

– 59 (D.C.Cir. 20 00)). B. A Series of D.C. Circuit Court Decisions on the Definition of Solid W aste Because the interpretation of what constitutes a solid waste is the foundation of the hazardous waste regulatory program, there has been quite a bit of litigation over the meaning of “solid waste” under Subtitle C of RCRA. Specifically , i ndustries representing mining and oil refining interests challenged EPA’s January 1985 regulatory

definition of solid waste. In 1987, the D.C. Circuit held that EPA exceeded its authority “i n seeking to bring materials that are not discarded or otherwise disposed of within the compass of ‘waste’” ( American Mining Congress
v . EPA (“ AMC I ”), 824 F.2d 1177, 1178 (D.C. Cir. 1987)). The Court held that certain of the materials EPA was seeking to regulate were not “discarded materials” under RCRA section 1004(27). The Court also held that Congress used the term “discarded” in its ordinary sense, to*** E.O. 12866 Review

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15 of 210 mean “disposed of” or “abandoned” (82 4 F.2d at 1188

– 89). The Court further held that the term “discarded materials” could not include materials “...destined for beneficial reuse or recycling in a continuous process b y the generating industry itself (because they) are not y et part of the waste disposal problem” (824 F.2d at 1190). The Court held that Congress had directly spoken to this issue, so that EPA’s definition was not entitled to deference under Chevron U.S.A., Inc. v . NRDC , 467 U.S. 837 (1984) (824 F.2d at 1183, 1189

– 90, 1193). At th e same time, the Court held that recy cled materials could be regulated as discarded materials . The Court mentioned at least two examples of recy cled materials that may be regulated as wastes, noting that used oil can be considered a solid waste (824 F.3d at 1187 (fn 14)). Also, the Court suggested that materials disposed of and recy cled as part of a waste management program may be regulated as solid wastes (824 F. 2d at 1179). Subsequent decisions by

the D.C. Circuit also indicate that materials destined f or recy cling may

be considered “discarded .” In particular, the Court held that emission control dust from steelmaking operations listed as hazardous waste “K061” is a solid waste, even when sent to a metals reclamation facility , at least where that is the treatment method required under EPA’s land disposal restrictions program ( American Petroleum Institute v . EPA (“ API I ”), 906 F.2d 729 (D.C. Cir. 1990)). In addition, the Court held that it is reasonable for EPA to consider as discarded (and solid wastes) l isted wastes managed in units that are in part wastewater treatment units, especially

where it is not clear that the industry actuall y reuses the materials ( AMC II , 907 F. 2d 1179 (D.C. Cir. 1990)). It also is worth noting that two other Circuits also have held that EPA may regulate at least some materials destined for reclamation rather than final discard. The U.S. Court of Appeals for the Eleventh Circuit found that “[i]t is unnecessary to read into the term ‘discarded’*** E.O. 12866 Review

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16 of 210 a congressional intent that the w aste in question must finally and forever be discarded” ( U.S. v. ILCO , 996 F.2d 1126, 1132 (Eleventh Cir. 1993) (finding that used lead batteries sent to a reclaimer have been “discarded once” b y the entity that sent the battery to the reclaimer)). In addi tion, the Fourth Circuit found that slag held on the ground untouched for six months before sale for use as road bed could be a solid waste ( Owen Electric Steel Co. v. EPA , 37 F.3d 146, 150 (4th Cir. 1994)). In 1998, EPA promulgated a rule in which EPA r egulated under Subtitle C hazardous secondary materials recycled by

reclamation within the mineral processing industry , the “LDR Phase IV rule” (63 FR 28556, May 26, 1998). In that rule, EPA promulgated a conditional exclusion for all ty

pes of mineral proc essing hazardous secondary materials destined for reclamation. As a condition of the exclusion, EPA prohibited the land
- based storage of these mineral processing secondary materials prior to reclamation because it considered hazardous secondary materials f

rom the mineral processing industry that were stored on the land to be part of the waste disposal problem (63 FR 28581, May 26, 1998). The conditional exclusion decreased regulation over spent materials stored prior to reclamation, but increased regulation over b y - products and sludges that exhibit a hazardous characteristic and that are stored prior to reclamation. EPA noted that the statute does not authorize it to regulate “materials that are destined for immediate reuse in another phase of the industry ’s ongoing production process.” EPA, however, took the position that hazardous secondary materials that are removed from a production process for storage are not “immediately reused,” and therefore are “discarded” (63 FR 28580, May

26, 1998). The mining in dustry

challenged the rule, and the D.C. Circuit vacated the provisions that expanded EPA regulation over characteristic b y - products and sludges destined for reclamation*** E.O. 12866 Review

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17 of 210 ( Association of Battery Recyclers v . EPA (“ ABR ”), 208 F.3d 1047 (D.C. Cir. 2000)). The Court held that it had alread y resolved the issue presented in ABR in its opinion in AMC I , where it found that “...Congress unambiguousl y expressed its intent that ‘solid waste’ (and therefore EPA’s regulatory

authority) be limited to materials that are ‘discarded’ by virtue of being disposed of, abandoned, or thrown away ” (208 F.2d at 1051). It repeated that materials reused within an ongoing industrial process are neither disposed of nor abandoned (208 F.3d at 1051

– 52). Itexplained that the intervening API I and AMC II decisions had not narrowed the holding in AMC I (208 F.3d at 1054

– 1056). Notably , the Court did not hold that storage before reclamation automatically makes materials “discarded.” Rather, it held that “... at least some of the secondary material EPA seeks to regulate as solid waste (in the mineral processing rule) is destined f or reuse as part of a continuous industrial process and thus is not abandoned or thrown away ” (208 F.3d at 1056). In its most recent opinion dealing with the definition of solid waste, Safe Food and Fertilizer v . EPA (“ Safe Food ”), 350 F.3d 1263 (D.C. Ci r. 2003), the D.C. Circuit upheld an EPA rule that excludes from the definition of solid waste hazardous secondary materials used to make zinc fertilizers, and the fertilizers themselves, as long as the recy cled materials meet certain handling, storage , an d reporting conditions and the resulting fertilizers have concentration levels for lead, arsenic, mercury , cadmium, chromium, and dioxins that fall below specified thresholds (Final Rule, “Zinc Fertilizers Made From Recy cled Hazardous Secondary Materials” (“Fertilizer Rule”), 67 FR 48393, July 24, 2002). EPA determined that if these conditions are met, the hazardous secondary

materials used to make the fertilizer have not been discarded. The conditions also apply

to a number of recy cled materials not produc ed in the fertilizer production industry , including certain zinc
- bearing hazardous secondary materials, such as brass foundry*** E.O. 12866 Review

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18 of 210 dusts. EPA’s reasoning was that market participants, consistent with the EPA
- required conditions in the rule, would treat the ex empted materials more like valuable products than like negativel y - valued wastes and, thus, would manage them in way s inconsistent with discard. In addition, the fertilizers derived from these recy cled feedstocks are chemically indistinguishable from analog ous commercial products made from raw materials (350 F.3d at 1269). The C ourt upheld the rule based on EPA’s explanation that market participants manage materials in way s inconsistent with discard, and the fact that the levels of contaminants in the recy cl ed fertilizers were “identical” to the fertilizers made with virgin raw materials. The C ourt held that this interpretation of “discard” was reasonable and consistent with the statutory purpose. The C ourt noted that the identity

principle was defensible bec ause the differences in health and environmental risks between the two t ypes of fertilizers are so slight as to be substantively meaningless. The C ourt also stated that it “need not consider whether a material could be classified as a non - discard exclusi vel y on the basis of the market
- participation theory” (350 F.3d at 1269). The C ourt only

determined that the combination of market participants’ treatment of the materials, EPA
- required management standards, and the “identity principle” constitutes a reaso nable set of tools to establish that the recycled hazardous secondary materials and fertilizers are not discarded. C. October 2003 Proposal to Revise the Definition of Solid W aste Prompted by

concerns articulated in various Court opinions decided up to th at point, in October 2003, EPA proposed a rule which defined those circumstances under which hazardous secondary materials would be excluded from RCRA’s hazardous waste regulations because they*** E.O. 12866 Review

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19 of 210 are generated and reclaimed in a continuous process within the same industry
. In addition, the Agency also clarified in a regulatory context the concept of “legitimate recy cling,” which has been a key

component of RCRA’s regulatory program for hazardous material recy cling, but which up to that point, had been impleme nted without specific regulatory criteria (68 FR 61558, October 28, 2003). In response to the October 2003 DSW proposal, a number of commenters criticized the Agency for not having conducted a study of the potential impacts of the proposed regulatory chang es. These commenters expressed the general concern that deregulating hazardous secondary materials that are reclaimed in the manner proposed could result in the mismanagement of these materials, and could create new cases of environmental damage that would require remedial action under federal or state authorities. Some of the commenters further cited a number of examples of environmental damage that were attributed to hazardous secondary material recy cling, including sites listed on the Superfund National Priorities L ist (NPL). Other commenters to the 2003 DSW proposal expressed the view that the great majority of these cases of recy cling
- related environmental problems occurred before RCRA, CERCLA, or other environmental programs were established in the e arl y 1980s. These commenters argued that these environmental programs

— most notably , RCRA's hazardous waste regulations and the liability provisions of CERCLA

— have created strong incentives for proper management of recy clable hazardous secondary materials and recy cling residuals. Sever al commenters further noted that, because of these developments, industrial recy cling practices have changed substantially

since the early

1980s and present day

generators and recy clers are much better environmental stewards than in the pre
- RCRA/
- CERCLA er a. Thus, they argued that cases of*** E.O. 12866 Review

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20 of 210 “historical” recy cling
- related environmental damage are not particularl y relevant when modifying the current RCRA hazardous waste regulations for hazardous secondary materials recy cling. D. Recycling Studies In light of these comments on the 2003 DSW proposal, and in deliberating on how to proceed with the rulemaking effort, the Agency decided that additional information on hazardous secondary material recy cling would benefit its regulatory decision
- making, and would pro vide stakeholders with a clearer picture of the hazardous secondary material recycling industry in this country . Accordingly , the Agency examined three issues that we believed were of particular importance to informing this rulemaking effort:

 How do respon sible generators and recy clers of hazardous secondary materials ensure that recy cling is done in an environmentall y safe manner?

 To what extent have hazardous secondary material recy cling practices resulted in environmental problems in recent ye ars, and wh y?

 Are there certain economic forces or incentives specific to hazardous secondary material recy cling that can explain why environmental problems can sometimes originate from such recy cling activities? Reports documenting these studies are available in the docket for the 2008 DSW final rule under the following titles:

 An Assessment of Good Current Practices for Recycling of Hazardous Secondary Materials (EPA
- HQ
- RCRA
- 2002
- 0031
- 0354 ) (“successful recy cling study”)*** E.O. 12866 Review

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21 of 210  An Assessment of Environmental Problems Associated W ith Recycling of Hazardous Secondary Materials (EPA
- HQ
- RCRA
- 2002
- 0031
- 0355) (“environmental problems study ”)

 A Study of Potential Effects of Market Forces on the Management of Hazardous Secondary Materials Intended for Recycling (EPA
- HQ
- RCRA
- 2002
- 0031
- 0358) (“market forces study”) In the successful recy cling study , EPA found that responsible recy cling practices used by generators and recy clers to manage hazardous secondary materials fall into two general categories. The first category includes the audit activities and inquiries performed by a generator of a hazardous secondary material to determine whether the entit y to which it is sending such material is equipped to manage it responsibl y without the risk of releases or other environmental damage. These recy cling and waste audits of other companies’ facilities are common to those generators that responsibly recy cle in the hazardous secondary materials market. The second category of responsible recy cling practices consists of the control practices that ensure responsible management of an y given shipment of hazardous secondary material, such as the contracts under which the transaction takes place and the tracking s ys tems that can inform a generator that its hazardous secondary material has been prope rl y managed. The goal of the environmental problems study was to identify

and characterize environmental problems that have been attributed to some ty pes of hazardous secondary material recy cling that are relevant for the purpose of this rulemaking effort . To address commenters ’ concerns that historic damages are irrelevant to current practices because environmental programs (post
- RCRA and
- CERCLA implementation) have created strong incentives for proper management of recy clable hazardous secondary materia ls, EPA only

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22 of 210 damages occurred after 1982. The study identifies 208 cases in which environmental damages of some kind occurred from some ty pe of recy cling activity

and that otherwise fit the scope of the study
. 3 The Agency

believes that the occurrence of certain ty pes of environmental problems associated with post
- 1982 recy cling practices shows that discard has occurred. In particular, instances where hazardous secondary materials were abandoned (e.g., in warehouses) and which required r emoval overseen by a government agency

and the expenditure of public funds clearl y demonstrate that the hazardous secondary material was discarded. Of the 208 damage cases, 69 cases (33%) involve abandoned materials. The relatively high incidence of abando ned materials likely reflects the fact that bankruptcies or other types of business failures were associated with 138 (66%) of the cases. In addition, the pattern of environmental damages that resulted from the mismanagement of recy clable materials (inclu ding contamination of soils, groundwater, surface water and air) is a strong indication that the hazardous secondary materials were generall y not managed as valuable commodities and were discarded. Of the 208 damage cases, 81 cases (40%) primarily resulted from the mismanagement of recy clable hazardous secondary materials, while mismanagement of recy cling residuals was the primary cause in 71 cases (34%). Often, in the case of mismanagement of recy cling residuals, reclamation processes generated residuals i n which the toxic components of the recy cled materials were separated from the non
- toxic components, and these portions of the hazardous secondary material were then mismanaged and discarded.

3 EPA initially identified over 800 potential d am age cases, most of which were not included in the analysis because (1) the damages occurred before 1982, (2) the damages were not caused by recycling, or (3) there w as not enough information to determine when the damages occurred or whether recycling contributed to the damages. The cases EPA considered, but did not include, were listed in an appendix to the report to allow the public to comment on whether additional cases should be included in the analysis. As a result of public comment, EPA identifie d one new damage case and updated tw o existing damage case profiles with more information about environmental problems , as detailed in Addendum: An Assessment of Environmental Problems Associated with Recycling o f Hazardous Secondary Materials ( EPA
- HQ
- RCRA
- 2002
- 0031
- 0601 ). EPA determined that the new damage case and supplemental information were consistent with the damage cases p reviously cited in the study.*** E.O. 12866 Review

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23 of 210 Examples of this include a number of drum reconditioning facilit ies, where large numbers of used drums were cleaned out to remove small amounts of remaining product, such as solvent, and these wastes were then improperl y stored or disposed, while the drums were reused or recy cled. The market forces study

used accepted economic theory to describe how various market incentives can influence a firm’s decision
- making process when recy cling hazardous secondary materials. This study

helps explain some of the possible fundamental economic drivers of both the successful and uns uccessful recy cling practices. As pointed out by

some commenters to the 2003 DSW proposed rule, the economic forces shaping the behavior of firms that recycle hazardous secondary materials are often different from those at play in manufacturing processes u sing virgin materials. The market forces study used economic theory

to provide information on how certain characteristics can influence three different recy cling models to encourage or discourage an optimal outcome. The three recy cling models examined were (1) commercial recy cling, where the primary business of the firm is the recy cling of hazardous secondary materials that are accepted from off
- site industrial sources (which usuall y pay a fee); (2) industrial intra
- compan y recy cling, where firms generate h azardous secondary

materials as by
- products of their main production processes and recycle the hazardous secondary

materials for sale or for their own reuse in production; and (3) industrial inter
- compan y rec ycling, where firms either use or recycle hazard ous secondary materials obtained from other firms, with the objective of reducing the cost of their production inputs. The report looked at how the outcome from each model is potentially affected by

three market characteristics: (1) the value of the recycl ed product, (2) the price stability of recy cling output or inputs, and (3) the net worth of the firm.*** E.O. 12866 Review

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24 of 210 An individual firm’s decision
- making is based on many factors and extrapolating a firm’s likely behavior from a few factors could be an over
- simplificatio n. However, when used in conjunction with other information, the economic theory can be quite illuminating. For example, according to the market forces stud y, industrial intra
- and inter
- company recy clers have more flexibility in adjusting to unstable recycling markets (e.g., during price fluctuations, these companies can more easily switch from recy cling to disposal or from recy cled inputs to virgin inputs). Therefore, they

would be expected to be less likely to have environmental problems from over
- accumu lated materials. On the other hand, in certain ty pes of commercial recy cling, the product has low value, the prices are unstable, and/or the firm has a low net worth. Facilities in these situations can be more susceptible to environmental problems from the over
- accumulation or mishandling of hazardous secondary

materials, especially

when compared to recy cling by a well
- capitalized firm that yields a product with high value. These predicted outcomes appear to be supported by the results of the environment al problems study , which showed the majorit y of environmental damages occur at off

- site commercial recyclers. However, as shown b y the successful recycling study, generators who might otherwise bear a large liability

from poorly
- managed recy cling at other companies have addressed this issue by carefully examining the recy clers to which they send their hazardous secondary materials to ensure that they are technically

and financiall y capable of performing the recycling. In addition, we have seen that successf ul recy clers (both commercial and industrial) have often taken advantage of mechanisms, such as long
- term contracts to help stabilize price fluctuations, allowing recy clers to plan their operations more effectivel y. Further discussion of the recy cling stu dies, including the methodology and limitations of*** E.O. 12866 Review

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25 of 210 the studies, can be found in the March 2007 supplemental proposal (72 FR 14178

– 83), and the October 2008 DSW final rule (73 FR 64673

– 74) and the studies themselves can be found in the docket for the 2008 D SW rule (EPA
- HQ
- RCRA
- 2002
- 0031
- 0355). E. March 2007 Supplemental Proposal to Revise the Definition of Solid W aste In March 2007, EPA published a supplemental proposal that provided the public the opportunity

to comment on these studies. The Agency also re
- structured the proposed rule and proposed (1) two exclusions for hazardous secondary materials recy cled under the control of the generator (one exclusion would apply to hazardous secondary

materials managed in non
- land
based units, and the other exclusion would apply to hazardous secondary

materials managed in land
- based units) and (2) an exclusion for hazardous secondary materials transferred to another party for reclamation. The Agency also proposed a non
- waste determination petition process, and re - prop osed the legitimacy criteria, with certain modifications (72 FR 14172, March 26, 2007)
. For the exclusions of hazardous secondary materials reclaimed under the control of the generator, EPA described three circumstances under which we believed that discard does not take place and where the potential for environmental releases is low. The three situations involve hazardous secondary

materials that are generated and legitimatel y reclaimed at the generating facility , legitimatel y reclaimed at a different facil ity within the same company , or legitimately reclaimed through a tolling arrangement. Under all three circumstances, the hazardous secondary materials must be generated and reclaimed within the United States or its territories. Because the hazardous second ary material generator in these situations still finds value in the hazardous secondary materials, has retained control over them, and intends to use them, EPA proposed to exclude these materials from the definition of solid waste and, thus, from regulatio n under Subtitle C of RCRA, provided the reclamation is legitimate and the hazardous secondary*** E.O. 12866 Review

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26 of 210 materials are contained and not speculatively accumulated. In addition, EPA proposed that facilities generating and reclaiming hazardous secondary materials unde r the control of the generator must submit notification to their regulatory authority
. For the exclusion of hazardous secondary materials transferred to another party for reclamation (referred to as the transfer
- based exclusion), the Agency proposed condit ions that, when met, would indicate that these hazardous secondary materials were not discarded. For example, one of the conditions would require the generator to make reasonable efforts, a form of due diligence, to determine that its hazardous secondary m aterials would be properl y and legitimatel y rec ycled (and that the hazardous secondary material would not be discarded). Another condition would require the reclamation facility to have adequate financial assurance (thus demonstrating that the hazardous se condary material would not be abandoned). In addition, EPA proposed that both the generator and reclaimer would be required to maintain shipping records (to demonstrate that the hazardous secondary material was sent for reclamation and was received b y the reclaimer). Furthermore, the reclaimer would be subject to additional storage and residual management standards (to address the instances of discard observed at off
- site reclamation facilities in the damage cases). Finally, facilities operating under the t ransfer
- based exclusion must also submit notification to their regulatory authorit y. In addition, the 2007 DSW supplemental proposal included a case
- by
- case non - waste determination petition process that would allow applicants to receive a formal determinat ion from EPA that their hazardous secondary materials were not discarded and therefore were not solid wastes. The case
- by
- case petition process would allow EPA or the authorized state to take into account the particular fact pattern of the recy cling and to determine that the hazardous secondary materials in question were not solid wastes. The petition process for the non
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27 of 210 determination was the same as that for the variances from the definition of solid waste found at 40 CFR 260.31. EPA also proposed a definition of legitimate recy cling that restructured the legitimacy factors originall y proposed in October 2003. The proposed legitimacy factors would be used to determine that the recycling of hazardous secondary materials is not a “sham” and is not wast e treatment . F. October 2008 Final Rule to Revise the Definition of Solid W aste In October 2008, EPA promulgated a final rule largel y as proposed in March 2007, with some revisions and clarifications, including (1) clarifying that hazardous secondary mate rials held at a transfer facility

for less than 10 day s are considered to be in transport (and therefore such transfer facilities are not considered to be stor ing the hazardous secondary materials for the purpose of the DSW exclusion ), (2) allowing the use of intermediate facilities that store hazardous secondary

materials for more than 10 day s under the transfer
- based exclusion, provided the facilities comply with the same conditions applicable to reclamation facilities, (3) requiring facilities operating under the generator
- controlled and/or the transfer
- based exclusion to notify their regulatory

authority prior to operating under the exclusion and every other y ear thereafter, and (4) making legitimacy a condition of the exclusions and the non
- waste determ inations in that rule, but not finaliz ing the legitimacy language for all recy cling activities. G. Section 7004 Petition Submitted by the Sierra Club and Industry Response On January

29, 2009, the Sierra Club submitted an administrative petition under RC RA section 7004(a), 42 U.S.C. 6974(a), to the Administrator of EPA requesting that the Agency repeal the October 2008 revisions to the definition of solid waste rule and stay the implementation of the rule.*** E.O. 12866 Review

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28 of 210 The administrative petition was submitted at the same time that that the American Petroleum Institute (API) and Sierra Club filed judicial Petitions for Review under RCRA section 7006(a), 42 U.S.C. 6976(a) challenging the rule in the United States Court of Appeals for the District of Columbia Circuit (D. C. Circuit). These cases, designated as Docket Nos. 09
- 1038 and 1041, respectivel y, are currentl y before the D.C. Circuit. The petition argued that the revised regulations are unlawful and that they increase threats to public health and the environment wi thout producing compensatory benefits and, therefore, should be repealed. Among other things, the petition singled out the lack of regulatory definitions for key

conditions of the rule and disagreed with the Agency ’s findings that the rule would have no adverse environmental impacts, including the finding there would be no adverse impact to environmental justice communities or children’s health. On March 6, 2009, a coalition of industry associations (“industry

coalition”) submitted a letter to the Administrator of EPA in response to the Sierra Club petition. This letter requested that EPA deny

Sierra Club's petition on the grounds that the 2008 DSW final rule comports with court cases construing the scope of the definition of solid waste under RCRA, and that the 2008 DSW final rule achieves significant economic and conservation benefits, while imposing significant controls on the hazardous secondary material recy cling industry that are full y protective of the environment. The letter also responds to each of the specific points raised by Sierra Club in its petition. H. June 2009 Public Meeting and the D raft DSW Environmental Justice Analysis Methodology In response to Sierra Club’s administrative petition and the industry coalitions letter to the Administrato r, EPA issued a May 27, 2009, Federal Register notice (74 FR 25200) describing possible actions and optional paths forward, as well as announcing a public meeting*** E.O. 12866 Review

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29 of 210 on June 30, 2009, to allow the public and interested stakeholders the opportunity to provide input to the decision
- making process. In the May

27, 2009, Federal Register notice announcing the public meeting, EPA described the scope of possible action, which is governed b y the concept of “discard.” As stated in RCRA section 1004(27), “ solid waste ” is defined as “... an y garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material
.... resulting from industrial, commercial, mining and agricultural activities. ” The May 200 9 public meeting notice said that “[b]ecause the final revisions to the definition of solid waste are closel y tied to EPA's interpretation of “ discard, ” EPA does not expect to completely

repeal the rule or stay

its implementation, because such an action co uld result in hazardous secondary

materials that are not discarded being regulated as hazardous waste. In particular, EPA said that it does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the gener ator or the non
- waste determination petition process. However, the Agency stated that it could revise other parts of the definition of solid waste rule, such as the definition of legitimacy and the transfer
- based exclusion, in way s that could increase envi ronmental protection, while still appropriatel y defining when a hazardous secondary material being reclaimed is a solid waste” (74 FR 25203). Thirty
- three people spoke at the public meeting, and approximately 4,000 written comments were received, of which the majorit y were from private citizens who wrote in via a mass email campaign to repeal the rule. The remaining comments came from s tate and local governments (17), the generating industry (28), the waste management/recy cling industry (15), environmental, public health and community organizations (12), and academics (2). Industry comments were uniformly in favor of den yi ng the Sierra Club petition to repeal the rule, citing*** E.O. 12866 Review

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30 of 210 legal issues and the protectiveness of the rule’ s conditions. Environmental and community organizations, on the other hand, were uniformly in favor of repealing the rule, expressing concerns over the protectiveness, enforceability and environmental justice and children’s health impacts of the rule. Waste management/recycling industry comments were split, with many of the recy clers advocating that EPA retain and improve the rule with more stringent standards. Other waste management industry comments were in favor of repealing the rule. State comments expressed concerns about implementing the rule, particularl y given the economic climate, and generall y were in favor of repealing or significantly revising the transfer
- based exclusion. EPA appreciates all the comments that were provided and has carefull y considered them in deciding to revisit the definition of solid waste in today ’s proposal. A cop y of the public meeting transcript and the comments submitted in response to the public meeting notice are available in the docket for the public meeting (Docket ID number EPA
- HQ
- RCRA
- 2009
- 0315). Many commenters (including those at the public meeting and those who responded with written comments) expressed strong concerns that the Agency did not adequately

address environmental justice in the rulemaking. In response to the concerns over the environment al justice anal ys is, EPA committed to perform a more rigorous and thorough anal ys is of the environmental justice impacts of the 2008 DSW final rule. On January 15, 2010, EPA released for public input a draft methodology for conducting the DSW Environmental Justice Analy sis. The draft methodology

was presented to the National Environmental Justice Advisory Committee (NEJAC) and discussed at three public roundtable meetings. I. Settlement Agreement with the Sierra Club 1. Overview of Settlement Agreement On S eptember 7, 2010, EPA signed a settlement agreement with the Sierra Club under*** E.O. 12866 Review

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31 of 210 which the Sierra Club agreed to withdraw their administrative petition and EPA agreed to prepare a notice of proposed rulemaking to be signed no later than June 30, 2011, which would address, at a minimum, the issues raised in the Sierra Club’s administrative petition, including the four issues discussed in the May 27, 2009, public meeting Federal Register notice (74 FR 25200). A notice taking final administrative action concerni ng the notice of proposed rulemaking is to be signed no later than December 31, 2012. The settlement agreement was approved b y the court on January 11, 2011. Today ’s proposal represents EPA’s fulfillment of the portion of the settlement agreement concerni ng the proposed rule. The four issues in the settlement agreement are (1) the definition of “contained” (which includes the issue of defining “significant releases”) (addressed in Section IX.B.1 of this preamble), (2) notification before operating under the exclusion (addressed in Section IX.B.2 of this preamble), (3) the definition of “legitimacy” (addressed in Section X of this preamble) and (4) the transfer
- based exclusion (addressed in Section VII of this preamble). Other issues presented in the admin istrative petition are discussed below. 2. Request To Immediately Stay The Implementation Of And Revoke the 2008 DSW Rule The Sierra Club’s administrative petition included a request to immediatel y stay and revoke the 2008 DSW final rule. To support this r equest, the petition asserted that the damage case stud y demonstrates that hazardous waste recycling has caused substantial harm to health and the environment and that the 2008 DSW final rule increases the likelihood of greater future harm. The petition al so asserted that the 2008 DSW final rule does not account for the possibility that unstable recy cling markets or financial conditions increase the risk of hazardous waste abandonment. In addition, the petition asserted that the 2008 DSW final rule will not*** E.O. 12866 Review

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32 of 210 substantially

increase recy cling and that the economic benefits are few and will only accrue to deregulated industries. Additionally , the petition claimed that there would be job losses in the hazardous waste treatment industry and increased worker health problems as a result of the rule. EPA addressed Sierra Club’s request to revoke the 2008 DSW final rule in whole and stay its implementation in the May 27, 2009 , public meeting notice, which continues to reflect EPA’s current thinking. In that notice, EP A stated at 74 FR 25202:

“The scope of possible changes to the definition of solid waste is governed by the concept of “discard.” As discussed in the preamble to the DSW final rule, EPA used the concept of discard as the central organizing idea behind the October 2008 revisions to the definition of solid waste. As stated in RCRA section 1004(27), ‘‘so lid waste’’ is defined as “... an y garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and othe r discarded material
... resulting from industrial, commercial, min ing and agricultural activities” (emphasis added)
. Therefore, in the context of the DSW final rule, a key issue relates to the circumstances under which a hazardous secondary

material that is recy cled by reclamation is or is not discarded (73 FR 64675). In exercising its discretion in the DSW final rule to define what constitutes “discard” for hazardous secondary materials reclamation, EPA included an explanation of how each provision of the fi nal rule relates to discard (73 FR 64676

– 64679). For example, in the DSW final rule, EPA determined that if the generator maintains control over the recy cled hazardous secondary material and if the material is legitimatel y rec ycled under the standards est ablished in the final rule*** E.O. 12866 Review

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33 of 210 and not speculativel y accumulated within the meaning of EPA’s regulations, then the hazardous secondary

material is not discarded. This is because the hazardous secondary material is being treated as a valuable commodity rather than as a waste. By maintaining control over, and potential liability for, the reclamation process, the generator ensures that the hazardous secondary materials are not discarded. (See 73 FR 64676.) Because the final revisions to the definition of solid w aste are closel y tied to EPA’s interpretation of the concept of “discard,” EPA does not plan to repeal the rule in whole or stay

its implementation. Such an action could result in hazardous secondary

materials that are not discarded being regulated as hazardous wastes. In particular, EPA does not expect to repeal either the exclusion for hazardous secondary

materials reclaimed under the control of the generator or the non - waste determination petition process. However, EPA believes that there may be opportun ities to revise or clarify the definition of solid waste rule, particularl y with respect to the definition of legitimacy

and the transfer
- based exclusion, in way s that could improve implementation and enforcement of the provisions, thus increasing environm ental protection, while still appropriatel y defining when a hazardous secondary material being reclaimed is a solid waste and subject to hazardous waste regulation.” Today ’s proposal includes a discussion of several potential changes to the generator
contr olled exclusion and to the non
- waste determination petition process, but, for the reasons stated above, EPA did not stay the rule and is not proposing to withdraw either provision. 3. Adequacy

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34 of 210 Finally , the Sierra Club petition asserted that EPA’s conclusion that the 2008 DSW final rule would have no adverse environmental impacts, and therefore would have no disproportional adverse impacts to minority and low
- income communities, is unsupported by the administrative record. This issue is a ddressed in the next section (Section VI) below. J. Commitment to Sustainable Materials Management In addition to addressing the environmental and public health concerns raised by the Sierra Club and other commenters, EPA also envisions today ’s proposal a s an opportunity to discuss focused approaches to revising the hazardous waste recycling regulations to promote sustainable materials management, while ensuring protection of human health and the environment. Sustainable materials management is an approach to serving human needs by using/reusing resources most productively and sustainably

throughout their life cy cles, generally minimizing the amount of materials involved and all the associated environmental impacts. Sustainable materials management is a cor e element of RCRA’s resource conservation mandate. The shift to sustain able materials management by taking a life
- cy cle approach to managing materials is articulated in EPA’s 2020 Vision Report: Sustainable Materials Management: The Road Ahead , 4 which has received the support of both the Environmental Council of the States (ECOS) and the Association of State and Territorial Solid Waste Management Officials (ASTSWMO). Sustainable materials management, as articulated in the “2020 Vision Report,” is aligned al so with the vision and efforts of the World Business Council for Sustainable Development. 5

4 www.epa.gov/waste/inforesources/pubs/vision.htm
. 5 www. wb csd.org/web/projects/BZrole/Vision2050
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35 of 210 Sustainable materials management helps identify opportunities to reduce environmental impacts, including greenhouse gas reductions, and societal impacts across the life cy cle of materials from how they

are extracted, manufactured, distributed, used, reused, recy cled, and disposed. Itworks to ensure unintended consequences are avoided. Efficiencies gained in a sustainable materials management approach , especially with respect to non
- renewable materials, can result in less energy

used, more efficient use of materials, more efficient movement of goods and services, conservation of water, and reduced volume and toxicity of waste. By considering s ys tem - wide impacts, sus tainable materials management casts a far broader net than traditional waste and chemicals management approaches and represents a change in how we think about environmental protection. Hazardous waste regulations can onl y influence a small part of the pict ure, but to the extent that the Agency can use today ’s proposal to help advance these goals, while ensuring protection of human health and the environment, EPA believes that it makes sense to do so. VI. Definition of Solid Waste Environmental Justice Analy sis In response to comments by Sierra Club and other stakeholders, EPA committed to producing an expanded analy sis of the potential disproportionate impacts of the 2008 DSW final rule. A draft methodology for the analy sis was shared with the public in January 2010, and three public roundtable discussions were held to discuss the draft methodology
. 6 EPA considered the comments raised in those discussions and conducted an analy sis. The anal ysis has undergone peer review, the results of which are included in the docket for today ’s proposed rule
. The methodology

for the DSW environmental justice analy sis consists of six steps:

6 U.S. EPA. Draft Environmental Justice Methodology for the Definition of Solid Waste Rule, January 2010, http://www.epa.gov/epawaste/hazard/dsw/ej.htm*** E.O. 12866 Review

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36 of 210 Step 1: Hazard characterization In cludes two phases: (1) identifying potential hazards that could pose risks to human health and the environment from recy cling of hazardous secondary materials, including accidental releases of hazardous constituents and (2) analyzing the likelihood of such hazards occurring under the requirements of the 2008 DSW exclusions as compared to the pre - 2008 DS W hazardous waste regulations. Step 2: Id entification of potentially

affected communities Modeling the locations of facilities (including potential new facilities) that are likel y to choose to take advantage of the 2008 DSW final rule. Step 3: Demographi cs of potentially

affected communities Mapping the location of the facilities modeled in Step 2 and identifying the demographics (e.g., minority population and income level) of the surrounding communities. Step 4: I dentifying other factors that affect vul nerability

in potentially

affected communities Id entifying important vulnerability factors. These include factors that may increase the likelihood of “damages,” the likelihood that a facility is sited within a community , or the likelihood of health risks in the event of releases. Examples include the presence of other pollution sources and an y information about the public health of the surrounding population. Step 5: Information sy nthesis: assessment of disproportional impact Sy nthesizing all the informat ion to characterize whether the 2008 DSW rule will facilitate the occurrence of an y adverse impacts and whether some population groups (e.g., minorit y or low income populations) would be overrepresented in the impacted communities. Step 6: I dentification of potential preventive and mitigation strategies Id entifying potential strategies to prevent non
- compliance and releases to the environment and also strategies to mitigate any impacts identified under step 5. A brief description of the six steps is presented below. A. Step 1

—

Hazard Characterization The first step of the methodology is hazard characterization, which includes both identifying the potential hazards that hazardous secondary materials recy cling could pose to human health and the environment, and evaluating the likelihood of such hazards resulting in increased risk under the 2008 DSW final rule, assessing a number of different scenarios, which reflect how such hazardous secondary materials may

be managed. With respect to the first part of the anal ys is, because hazardous secondary materials sent to recy cling are phy sically and chemically

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37 of 210 wastes sent for treatment and disposal, the potential risks from the ir management are similar, if not the same, as from hazardous wastes sent for treatment and disposal. The most commonly recy cled hazardous secondary materials are spent solvents and electric arc furnace dust (which is recy cled to reclaim metals). Spent solvents present particular mana gement challenges in that recy cling them involves the storage of liquids containing volatile organic chemicals and includes both halogenated and non
- halogenated organic chemicals, which represent a broad range of chemicals and associated hazards. Electric arc furnace dust, which is usually in a solid state, presents different management challenges, including that the dust contains high concentrations of toxic metals, the storage of the dust is ty picall y in waste piles, and the potential for the dust to beco me wind
- blown, or otherwise released , and the potential for toxic metals contained in this waste to leach into the ground water. These two classes of hazardous secondary materials (as well as other hazardous secondary materials that are recy cled) can po se risks via a wide variet y of exposure routes and include a range of potential adverse health effects, both carcinogenic and non
- carcinogenic, as well as a potential for acute impacts, such as fires and explosions
. The second part of the hazard characteri zation step

— determining whether these hazards could result in increased risk to human health and the environment

— is a complex issue because of the interactions between how the regulations are written and how they are actuall y implemented. Under the 2008 DS W final rule, EPA believed that the conditions of the rule, which were designed to determine when a hazardous secondary material is not discarded, would also prevent an y increase in risk. For example, the condition that the hazardous secondary materials be “contained” was intended to address this issue, because if the material is not released to the environment, then there would be no increased exposure, and therefore no*** E.O. 12866 Review

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38 of 210 increased risk. However, what the 2008 anal ys is failed to take into account was whethe r the conditions of the rule

— such as the “contained” standard

— would operate as effectivel y in the real world as the more prescriptive requirements of the RCRA hazardous waste regulations. One of the most common criticisms of the January 2010 draft environm ental justice methodology was that it did not adequatel y address some of the important protections of the hazardous waste regulations, particularl y the public participation requirements, which were not considered under the 2008 DSW final rule. A more detai led comparative anal ys is of the regulatory requirements under the 2008 DSW final rule with the hazardous waste regulations reveals potentiall y significant gaps in environmental protection under the 2008 DSW final rule, particularl y the incentives to accumu late larger volumes of hazardous secondary materials, the reduction in oversight resulting from eliminating the permit requirement for storage, and the reduction in the public’s access to information and the opportunity for public participation. The specif ic gaps vary

depending on the baseline scenario and the post
- DSW scenario being considered, 7 and in some cases, there is also a potential for increased benefits, primaril y from resource conservation and from reduced transportation distances. 8 B. Step 2

—

Identification of Potentially Affected Communities
7 The specific scenarios evaluated w ere (1) generator continues current recycling practices; (2) generator switches from off
- site disposal to on
- site reclamation; (3) generat or switches from off
- site disposal to off

- site recycling under the control of the generator; (4) generator switches from off
- site disposal to off

- site recycling at a RCRA
- permitted facility; (5) generator switches from off
- site disposal to off

- site recycli ng at a U.S. facility without a RCRA permit; (6) generator switches from off
- site disposal to exporting for recycling; (7) generator switches from off
- site recycling at a facility without a permit to another types of recycling under the 2008 DSW rule; and (8) generator switches from off

- site recycling at a RCRA
- permitted facility or exporting waste for recycling to another type of recycling under the 2008 DSW rule. 8 By reporting the potential for increased benefits under certain scenarios, EPA does not int end to imply that such benefits could justify increased risk to human health and the environment from discarded hazardous secondary material. Promoting resource conservation and recovery is a major goal of RCRA, but this goal does not supersede the mandat e to assure that hazardous w aste management practices are protective of human health and the environment.*** E.O. 12866 Review

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39 of 210 The second step of the methodology identified those potential facilities that can represent the facilities that are likely to take advantage of the 2008 DSW final rule. These facilities are grouped into four different categories: (1) facilities that have already notified under the 2008 DSW final rule, (2) hazardous waste facilities that are likel y to recy cle under the rule (including hazardous waste generators producing more than a truckload (25 tons) of recyclable hazardous secondary materials annually , and hazardous waste recy clers), (3) facilities from the environmental problems study (man y of which operated under various exclusions or reduced regulations), and (4) facilities currentl y rec ycling non
- hazardo us industrial waste (e.g., antifreeze) that could most easily switch or expand to recy cling under the 2008 DSW final rule. C. Step 3

—

Demographics of Potentially Affected Communities The third step characterized the demographics of the communities within a three kilometer radius around these facilities and determined whether they were disproportionately minority , low
- income , or both compared to the nation as a whole, and compared to the population in the state. Disproportionality was evaluated both at the co mmunity and at the population level. For the community
- level anal ys is, the question is whether the communities around a facility had a higher or lower percentage of minority and/or low
- income population as compared to the comparison population (i.e., natio nal or state population). In general, some communities will have a higher percentage than the comparison population, while some communities will have a lower percentage. As long at these differences have a regular distribution, they generall y would not ind icate disproportionate impact. However, if the number of communities with a higher percentage of minority and/or low
- income population is greater than that of the comparison populations, then there is a potential for disproportionate impact. The higher the*** E.O. 12866 Review

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40 of 210 average differences between the potentiall y affected communities and the comparison group, the greater the potential disproportionality
. In the chart below, the category that consistently

demonstrates the potential for disproportionate impact are the dama ge case facilities, which is the third category of facilities identified in Step 2, although a few other categories indicates disproportionate impact in a few instances. For both the national and the state comparison populations, more than 50 percent of th e damage case facilities are located in communities with minority and low
- income populations that have a higher representation than the comparison populations. Inaddition, the average difference in these cases (i.e., the average amount that these faciliti es have a higher
- than
- average percentage of minorities or low
- income populations) ranges from 6

– 8 percent.

Community - Level Analysis of Potential Disproportionate Impacts of 2008 DSW Final Rule to Minority and Low - Income Communities Values Greater than 50 % Indicate Potential Disproportionate Impact National Comparison % communities with higher minority representation (average difference) National

Comparison % communities with higher low
income representation (average difference) State Comparison

% communities with higher minority representation (average difference) State

Comparison % communities with higher low
income representation (average difference) Facilities that Have Notified (40 total) 7.5%

(
- 20.7%) 32.5%

(
- 2.0%) 50.0% (IA)

(3.1%) 20.0% (NJ) (
- 11.0%) 31.3% (PA) (
- 2.3%) 64.0% (IA)

(1.7%) 0% (NJ) (
- 3.7%) 50% (PA) (2.6%) Damage Case Facilities (217 total) 53%

(8.2%) 65%

(5.9%) 55.8%

(8.2%) 69%

(6.7%) Hazardous Waste Facilities (2,677 total) 42%

(0.9%) 48%

(1.5%) 47.9%

(4.0%) 50.6%

(1.8%) Non - Hazardous 36% 40% 36% 44%*** E.O. 12866 Review

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41 of 210 Industrial Waste Facilities (25 total) (
- 5.0%) (
- 0.5%) (
- 2.55%) (
- 0.3%)
The population
- level analy sis examines the demographics of the total potentially affected population as compared to the total comparison population to determine (1) whether there is a substantially

greater probability

of members in a population group of concern (minority or low
income) being present as compared to members of the comparison population, an d (2) whether members of the population group of concern comprised a substantially greater proportion of the potentially

affected population than the comparison populations. These two comparisons are referred to as (1) the Threshold Risk Ratio, and (2) the Demographic Ratio. Inboth cases, if the ratio is greater than 1.0, then there is a potential for disproportionate impact to the population of concern, and the larger the ratio, the greater the disproportionality
.

Population - Level Analysis of Potential D isproportionate Impacts of 2008 DSW Rule to Minority and Low - Income Communities Ratios Greater Than 1.0 Indicate Potential Disproportionate Impact to Population of Concern

All Results Statistically Significant (p
- value <0.05) National Comparison Minority Population Threshold Risk Ratio Demographic Ratio National

Comparison Low - Income Population Threshold Risk Ratio Demographic Ratio State

Comparison Minority Population Threshold Risk Ratio Demographic Ratio State

Comparison Low - Income Population Threshold Risk Ratio Demographic Ratio Notification Facilities (40 total) 0.70 0.76 1.05

1.04 1.80 (IA)

1.76 (IA) 1.02 (NJ) 1.01 (NJ) 1.46 (PA) 1.47 (PA) 1.34 (IA)

1.32 (IA) 0.64 (NJ) 0.65 (NJ) 1.74 (PA) 1.63 (PA)*** E.O. 12866 Review

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42 of 210 Damage Case Facilities (217 total) 2.87 1.86 1.98

1.80 2.59

1.64 2.04

1.90 Hazardous Waste Facilities (2,677 total) 1.90 1.80 1.39

1.50 1.94

2.04 1.47

1.83 Non - Hazardous Industrial Waste Facilities (25 total) 1.19 1.12 1.16

1.14 1.34

1.20 1.17

1.15 The chart above shows that the population level analy sis has a greater incidence of potential disproportionate impact to minority and low
- income populations than the community
level anal ys is. For the population
- level anal ys is, the potential for disproporti onate impact (i.e., ratios greater than one) occurs under all categories, while the community
- level anal ys is exhibits the potential for disproportionate impact primaril y in the damage case facility category. This difference can occur when the populations o f those communities that do have a greater percentage of minorit y or low
- income individuals also have a significantly higher total population than those communities that do not. In other words, for the categories of facilities, except the damage case facil ities, the facilities of concern generall y do not appear to be disproportionately

located in minority

or low
- income communities, but the facilities that are located in minority

and low
- income communities have the potential to impact much larger populations than those which are not, resulting in an overall potential disproportionate impact to minority and low
- income populations as a whole. D. Step 4

— Other Factors That Affect Vulnerability In Potentially Affected Communities Inaddition to considering the po tential for the 2008 DSW final rule to result in adverse impacts that disproportionately affect minority

and low
- income communities, the DSW environmental justice analy sis also considers other factors that could affect the impacts of the*** E.O. 12866 Review

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43 of 210 rule, based on cat egories from EPA’s interim guidance on incorporating environmental justice into rulemaking. 9 These factors are described under five broad categories: (1) Susceptible Populations, (2) Multiple and Cumulative Effects, (3) Unique Exposure Pathway s, (4) Abilit y to Participate in the Decision
- Making Process, and (5) Phy sical Infrastructure. All of these factors have the potential to exacerbate the potential for adverse impacts to minority and low
- income communities, but two of these factors are of particular con cern to the 2008 DSW final rule: a bility to p articipate in the d ecision
- m aking p rocess, and multiple and c umulative e ffects 1. Ability to Participate in the Decision
- Making Process A key element of environmental justice is ensuring that all people have an opportunity for meaningful involvement in decision
- making which may impact them. Certain groups may not have historicall y participated in decision
- making because of economic (e.g., income), social (e.g., language barriers, education levels, distrust of gov ernment), and infrastructural reasons (e.g., access to public transportation). A critical concern is whether, and the extent to which, communities have the ability to influence the t ypes and number of regulated activities taking place in their communit y, a s well as the requirements, conditions, and parameters under which such activities must operate (e.g., permit conditions). Under the 2008 DSW final rule, facilities claiming an exclusion must submit an initial and biennial notification to EPA or the state, providing general facility information and describing hazardous secondary material ty

pes and activities under the exclusion. However, under the 2008 DSW final rule, this information is not made directly available to potentially

affected communities, and facilities and regulators are not required to solicit or consider community

input into the decision
- making process as is the case with RCRA
- permitted

9 U.S. EPA Interim Guidance on Considering Environmental Justice During the Development of an Action July 2010. http://www.epa.gov/environmentaljustice/resources/policy/considering
- ej
- in
- rulemaking
- guide
- 07
- 2010.pdf*** E.O. 12866 Review

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44 of 210 facilities. 10 Thus, by

removing the RCRA permitting requirement for facilities that manage excluded hazardo us secondary materials, the 2008 DSW final rule also removed one of the key provisions for allowing communities to participate in the regulatory process (at least as it concerns the management of the hazardous secondary materials excluded under the rule). Communities with lower participation levels may experience greater adverse impacts from environmental decision
- making because their input has not been considered fully , particularl y if competing interests are set forth more effectivel y. This effect is most likely to occur in communities that have traditionally been excluded from the decision
- making process. 2. Multiple and Cumulative Effects Minority , low
- income, and indigenous communities that have been affected by multiple pollution sources may

be at risk for increased health consequences. Potential sources of pollution can include, for example, industrial facilities, landfills, transportation
- related air emissions, poor housing conditions (e.g., lead
- based paint), leaking underground storage tanks, pestic ides, and incompatible land uses. An anal ys is of the cumulative effects from multiple stressors can provide a more complete evaluation of a population’s health risks from pollutants. For example, an anal ys is of discrete stressors and effects on a populatio n might conclude that nearb y pollution sources are within regulatory limits; however, an anal ys is of cumulative effects might determine that a person’s collective exposure to a contaminant from multiple sources exceeds a health
based limit. An examination of the facilities that have alread y notified under the 2008 DSW final rule shows that multiple environmental hazards are a potential concern for communities around these facilities. All have multiple facilities reporting to EPA, either under RCRA, the Clean Air Act

10 Although not required, EPA has posted on the internet a list of facilities that have notified under the DSW exemption. The most recent list can be fo und at http://www.epa.gov/epaw aste/hazard/dsw/notify
- sum.pdf
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45 of 210 (CAA), or Comprehensive Environmental Response, Compensation and L iability Act (CERCLA

- also known as Superfund), within a three
- kilometer radius of the facility
. E. Step 5

—

Assessment of Disproportionate Impact The environmental justice anal y sis demonstrates that hazardous secondary material recy cling can pose significant potential hazards to human health and the environment, and that it is reasonable to conclude that the potential for hazards from hazardous secondary materials recy cling adver sel y impacting human health and the environment has increased under the 2008 DSW final r

ule. Of particular concern are the absence of required measures at hazardous secondary materials reclaimers to prevent problems (e.g., weekly inspections, training, contingency

plans, etc), the incentives to accumulate larger volumes of hazardous secondary materials, and the reduction in access to information and opportunity for public participation. Moreover, some of the communities potentially impacted by

this increase in risk of adverse impacts are minority and low
- income communities, and in most cases the populations potentially

impacted are disproportionately minority and/or low income. Inparticular, the population
- level anal ys is shows a potential disproportionate i mpact to minority and low
- income populations, with the damage case facilities, the hazardous waste facilities and the non
- hazardous waste facilities all consistently showing potential statistically significant disproportionate representation in potentially affected communities. Inaddition, underl yi ng vulnerabilities traditionally

associated with minority and low
- income communities can pose the potential to exacerbate potential adverse impacts of the 2008 DSW final r ule. The ability

of communities to partic ipate in the decision
- making process and potential for multiple and cumulative effects are of particular concern. F. Step 6

— Identification of Potential Strategies to Mitigate Adverse Impacts*** E.O. 12866 Review

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46 of 210 Potential strategies to mitigate adverse impacts of the 2008 DSW rule, including the disproportionate impacts to minority and low
- income communities, include both possible regulatory

changes and implementation strategies. 1. Regulatory

Changes Regulatory

changes to the 2008 DSW final rule were made according to EPA’s authority under RCRA to regulate discarded material. As discussed in the preamble to the 2008 DSW final rule, EPA used the concept of discard as the central organizing idea behind the October 2008 revisions to the definition of solid waste. As stated in R CRA section 1004(27), “solid waste” is defined as “... an y garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material...resulting from industrial, commercial, mining and ag ricultural activities.” In exercising its discretion in the 2008 DSW final rule to define what constitutes “discard” for hazardous secondary materials reclamation in the 2008 DSW final rule, EPA included an explanation of how each provision of the final rule relates to discard (73 FR 64676

– 64679). While the concept of discard also is the central organizing principle in this proposed rule since EPA only

has authority

under RCRA to regulate materials that have been discarded, the Federal Register notice announcing the June 2009 public meeting identified areas or opportunities to revise the 2008 DSW final rule in way s that could increase environmental protection, including in environmental justice communities, while still appropriately defining when a hazard ous secondary material being reclaimed is a solid waste and subject to hazardous waste regulation (74 FR 25202). The purpose of today ’s proposal is to provide notice and the opportunity

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47 of 210 impacts to human health and the environment from discarded material, including disproportionate impacts to minority and low income communities. In particular, the proposed withdrawal of the transfer
- based exclusion and its replacement with an a lternative Subtitle C standard will address the concerns regarding third
- part y rec yclers, including the impact of longer accumulation times, the lack of preventative measures under the containment standard, the lack of public participation requirements, th e lack of RCRA air standards, and concerns regarding certain transportation issues. Inaddition, the proposed codification of the “contained” standard also addresses the lack of preventative measures and the lack of RCRA air standards under the generator
- c ontrolled exclusion. Proposed additional recordkeeping requirements for speculative accumulation and legitimacy would help ensure that hazardous secondary

material is being legitimately recycled and not simply discarded through over - accumulation and abando nment, and recordkeeping under the tolling and same
- compan y provisions will help ensure that the hazardous secondary materials meet their intended destinations. 2. Implementation Measures In addition to considering regulatory changes to address potential a dverse impacts of the 2008 DSW final rule, EPA can take steps in implementing the regulations that would help mitigate an y potential adverse impacts. These steps include closel y monitoring the facilities notifying under the 2008 DSW final rule, making info rmation about the DSW facilities available to the public, and working with the states and EPA Regions to ensure they have the information they need to ensure compliance with the provisions of the rule, and making available to the public information about the facilities that have notified. EPA has begun this process for the states and territories currently operating under the 2008 DSW final rule and plans to continue*** E.O. 12866 Review

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48 of 210 these efforts in order to help prevent potential adverse impacts at the same time that revis ions to the rule are under consideration. VII. Withdrawal of the Exclusion For Hazardous Secondary Materials That Are Transferred For The Purpose Of Legitimate Reclamation A. Summary of Transfer
- Based Exclusion The exclusion for hazardous secondary mater ials that are transferred for the purpose of legitimate reclamation , 40 CFR 261.4(a)(24) and (25), 11 applies to hazardous secondary materials (i.e., spent materials, listed sludges, and listed by
- products) that are generated and subsequently

transferred to a different person or company for the purpose of reclamation. As long as the conditions and restrictions to the exclusion are satisfied, the hazardous secondary materials would not be subject to the Subtitle C hazardous waste regulations. T his exclusion i ncludes the following general requirements:

 hazardous secondary

material generators, reclaimers, and intermediate facilities (i.e., facilities that would not reclaim the hazardous secondary material, but would store them for more than 10 day s) must submit a notification prior to operating under the exclusion and by March 1 of each even
- numbered y ear thereafter to the EPA Regional Administrator or, in an authorized state, to the State Director (see 40 CFR 260.42) , reporting volumes and ty pes of hazardous sec ondary materials being reclaimed and

 hazardous secondary

materials managed at such facilities must not be speculativel y accumulated as defined in § 261.1(c)(8) and must be legitimately reclaimed as specified in § 260.43.

11 40 CFR 261.4(a)(24) is the primary transfer
- based exclusion and 40 CFR 261.4(a)(25) contains the export requirements for the transfer
- based exclusion.*** E.O. 12866 Review

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49 of 210 Conditions applicable to generators of hazardous secondary materials are found at 40 CFR 261.4(a)(24)(v) and include the following provisions:

 containment of such hazardous secondary materials,

 reasonable efforts, a form of due diligence, to ensure that the intermediate facility or reclaimer intends to manage or recy cle the hazardous secondary material properl y and legitimatel y, and

 retention of records of off
- site shipments for three y ears. Co nditions applicable to intermediate facilities and reclaimers of hazardous secondary materials are found at 40 CFR 261.4(a)(24)(vi) and inc lude the following provisions:

 containment of such materials,

 transmittal of confirmations of receipt to generators,

 maintenance of records for hazardous secondary materials received and sent off
site,

 financial assurance equivalent to that required of hazardous waste facilities, and

 (for reclaimers) proper management of an y residuals generated from the reclamation a ctivities. In addition, if an y of the hazardous secondary materials excluded under 40 CFR 261.4(a)(24) are generated and then exported to another country for reclamation, the exporter must notify

and obtain consent from the receiving country and file an annual report. This export requirement is codified in 40 CFR 261.4(a)(25). EPA’s rationale for finalizing the transfer
- based exclusion in the 2008 DSW final rule was that the conditions of the transfer
- based exclusion would effectively limit the exclusion to hazardous secondary

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50 of 210 and their ability

to prevent discard is discussed in detail in the 2008 DSW final rule preamble at 73 FR 64675

– 79. At this point, however, EPA has reconsidere d its findings and is now proposing to withdraw the transfer based exclusion for the following reasons. Inherent in EPA’s decision to finalize the transfer
- based exclusion was the assumption of full compliance with the above conditions. EPA did not focus o n the properties of any particular ty

pe of hazardous secondary material when making this determination . Instead, the transfer
- based exclusion is broadly applicable to a wide range of hazardous spent materials and listed b y - products and sludges. In addition , the record for the 2008 DSW final rule demonstrates a pattern of discard with third
party transfers, noting that 94 percent of the damage cases were at third
- party or commercial recy clers, and that there are underl yi ng market forces for commercial recycl ing that create incentives to over
- accumulate and abandon hazardous secondary materials. Thus, if the conditions of the transfer
- based exclusion do not operate as intended, then the likelihood of discard for these hazardous secondary materials is high. B. Proposed Withdrawal EPA is proposing to withdraw the transfer
- based exclusion and replace it with alternative Subtitle C regulations for generators of hazardous recy clable material under proposed 40 CFR part 266 subpart D (see Section VIII of today ’s prop osal for further discussion of the alternative Subtitle C regulations). After anal yz ing the potential for discard resulting in adverse impact to human health and the environment from hazardous secondary materials reclaimed under the transfer
- based exclus ion, including the potential for disproportionate impact to minority and low
- income populations, EPA believes that the most appropriate regulatory approach is to keep most ty pes of*** E.O. 12866 Review

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51 of 210 third
- part y transfers of hazardous secondary material s regulated under Subt itle C of RCRA. As noted in the preamble to the 2008 DSW final rule, generators of hazardous secondary materials who do not reclaim these materials themselves often ship these materials to a commercial facility

or another manufacturer for reclamation in o rder to avoid the costs of disposing of the material. Because of the low commercial value and the high potential liability associated with most ty

pes of hazardous secondary materials (i.e., spent materials and listed hazardous waste b y - products and sludges ), generators will ty picall y pa y the reclamation facility to accept these hazardous secondary materials or receive a salvage fee that only partiall y offsets the cost of transporting and managing them. In such situations, the generator has relinquished control of the hazardous secondary materials and the entity

receiving such materials may not have the same incentives to manage them as a useful product (73 FR 64675). This behavior is evidenced by the results of the environmental problems study , found in the docket of the 2008 DSW final rule. Of the 208 damage cases discussed in the 2008 DSW final rule, 195 (or approximately 94%) were from reclamation activities of off
- site third
- party recy clers, with clear instances of discard resulting in risk to human health and the environment, including cases of large
- scale soil and ground water contamination with remediation costs in some instances in the tens of millions of dollars (73 FR 64673)
. In addition, the market forces stud y in the docket for the 2008 DSW rule su pports the conclusion that the pattern of discard at off
- site, third
- part y reclaimers is a result of inherent differences between commercial recy cling and normal manufacturing. As opposed to manufacturing, where the cost of raw materials or intermediates ( or inputs) is greater than zero and revenue is generated primarily from the sale of the output, hazardous secondary materials recy cling can involve generating revenue primarily from the receipt of the hazardous secondary*** E.O. 12866 Review

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52 of 210 materials. Recy clers of hazardous s econdary materials in this situation may thus respond differentl y from traditional manufacturers to economic forces and incentives, accumulating more inputs (hazardous secondary materials) than can be processed (reclaimed). In addition, commercial recycler s have less flexibility than in
- house recy clers in changing how they manage their hazardous secondary materials (e.g., during price fluctuations, in
- house recy clers can more easily switch from recy cling to disposal or from recy cled inputs to virgin inputs, while commercial recyclers cannot switch to disposal without obtaining a RCRA permit) (73 FR 64674). The 2008 DSW final rule attempted to address this pattern of adverse impacts to human health and the environment from hazardous secondary materials trans ferred to a third part y for recy cling by

setting conditions for the transfer
- based exclusion. The intent of these conditions was to define when transfers to third
- party recy clers would not result in discard. However, as explained in the DSW environmental j ustice anal ysis, found in the docket for today’s proposal, EPA failed to take into account how the conditions of the 2008 transfer
- based exclusion would work when actuall y implemented. EPA’s analy sis of the 2008 DSW final rule assumed that compliance with the DSW conditions would be the same as compliance with the Subtitle C hazardous waste regulations. However, the Subtitle C requirements for treatment, storage , and disposal facilities have several implementation provisions that are not included in the D SW transfer
- based exclusion that we believe, based on the environmental justice analy sis, must be part of any regulatory

structure. These provisions ensure a greater level of oversight of the Subtitle C requirements, thereb y increasing the likelihood of co mpliance. Most important of these is the permit requirement under RCRA section 3005, which ensures that EPA or the state has reviewed a facility ’s planned*** E.O. 12866 Review

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53 of 210 operations before waste management begins and which allows public participation in the environmental decision
- making process under RCRA section 7004. Subtitle C requirements for treatment, storage, and disposal facilities also include a statutory provision that such facilities be inspected every

two y ears under RCRA section 3008(e). B ased on the evidence of the damage case stud y and the market forces study, EPA now proposes that transfers of hazardous secondary materials to third
- part y rec yclers generall y do involve discard . T he Agency is now proposing a finding that, in general, these hazardous secondary materials are more like wastes than like products and are most appropriatel y regulated under Subtitle C of RCRA. T he evidence of past damage cases of significant risk to human health and the environment from hazardous secondary materials originally

intende d for recy cling and the underl yi ng perverse incentives of the recycling market to over
- accumulate such hazardous secondary

materials intended for recy cling, resulting in discard of the material, indicate the need to regulate these hazardous secondary mater ials as hazardous waste. EPA is therefore proposing to withdraw the transfer
- based exclusion found in 40 CFR 261.4(a)(24) and (25). At the same time, EPA acknowledges that some specific t ypes of hazardous secondary materials are more like valuable commodi ties than solid wastes, and the act of transferring them to a third
- part y does not automatically involve discard. Man y of the other exclusions in 40 CFR 261.4(a) are for these t yp es of materials, and the non
- waste determination process under 40 CFR 260.34( c) provides an administrative process for determining that additional hazardous secondary materials are indistinguishable from product s and therefore are not waste. In addition, in Section XII of this preamble, EPA is requesting comment on a possible re
- manufacturing exclusion from the definition of solid waste for certain higher
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54 of 210 materials whose management is more like manufacturing than waste management. VIII. Alternative Subtitle C Regulation for Hazardous Recyclable Materials A. Purpose of the Alternative Subtitle C Regulatory Standards for Hazardous Recyclable Materials As discussed above, after examining the potential adverse impacts to human health and the environment from discarded hazardous secondary materials transferre d to another part y for reclamation, EPA is proposing to withdraw the transfer
- based exclusion. At the same time, EPA recognizes the environmental benefits of safe recycling and how it can contribute to the goal of sustainable materials management , and ackn owledges that in some cases the additional costs of Subtitle C regulation can be an economic disincentive to such recy cling. Thus, in order to help encourage safe reclamation of hazardous waste, EPA is proposing alternative hazardous waste standards under 40 CFR part 266 subpart D for generators of hazardous recy clable materials sent for reclamation. “Hazardous recy clable materials” would be defined as hazardous waste being reclaimed
. EPA is proposing to use this term to be consistent with other standards for the management of specific hazardous wastes in 40 CFR part 266, and to distinguish them from the “hazardous secondary materials” reclaimed under the control of the generator and excluded under 40 CFR 261.4(a)(23). These proposed alternative standards are designed to be as protective as the current hazardous waste standards, but tailored to the specific circumstances faced b y generators of hazardous waste who would want to send their materials to a reclaimer, but are not able to do so because they cannot accumulate enough hazardous waste during the generator accumulation time limits to make such recycling economically viable. Under these alternative standards, the hazardous recy clable material would, for the most part, be subject to all hazardous waste r egulations (i.e., accumulated in Subtitle C storage units,*** E.O. 12866 Review

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55 of 210 transported under a hazardous waste manifest, sent to a RCRA
- permitted facility or a facility operating under 40 CFR 261.6(c)(2)). However, in order to allow generators time to accumulate enough hazardous recy clable material to make reclamation more economical, EPA is proposing alternative regulatory

standards that would allow hazardous recyclable materials to be accumulated up to one ye ar without a permit or interim status. To guard against the ri sks of over
- accumulation and possible abandonment of hazardous recy clable materials, EPA is proposing that before operating under the alternative standard and by March 1 of each even
- numbered ye ar thereafter , a generator must notify the EPA Regional Admini strator (or the State Director, if the state is authorized) . In addition, before operating under the alternative standard, the generator must develop a reclamation plan that provides details of where the hazardous recy clable material will be sent for reclamation, a short description of the recy cling process , and the estimated volume of materials in each shipment. Also, the generator must contact the reclaimer in advance and make arrangements for the recy cling. In addition, EPA is requesting comment on setti ng an upper limit on the amount of hazardous recy clable material a generator may accumulate at any

one time, limiting it to no more than two shipments worth of hazardous secondary materials (as documented in the reclamation plan) at an y point in time. Fina lly , EPA is requesting comment on allowing an alternative manifest sy stem for hazardous recy clable materials regulated under this provision. B. Proposed Part 266 Standards for the Management of Hazardous Recyclable Material Under the proposed part 266 subp art D Hazardous Recy clable Materials standards, large quantity generators and small quantity generators of hazardous recy clable materials would need to meet the alternative requirements described below. 1. Notification*** E.O. 12866 Review

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56 of 210 Under the proposed alternative standards, generators would be required to submit a notification prior to operating under this standard and by March 1 of each even
- numbered y ear thereafter to the EPA Regional Administrator using EPA Form 8700
- 12. 12 In states authorized by EPA to administer the RCRA Subtitle C hazardous waste program, notifications may be sent to the state director. The notice must include:

• The name, address and EPA ID number of the facility ;

• The name and telephone number of a contact person;

• The NAICS (North American Industry Classification Sy stem) code of the facility ;

• The regulatory

citation under which the hazardous recy clable materials will be managed (i.e., 40 CFR part 266 subpart D)

• When the facility

expects to beg in managing the hazardous recy clable materials in accordance with the alternative standard;

• A list of hazardous recy clable materials that will be managed according to the new standard (reported as the EPA hazardous waste numbers that would appl y if the h azardous recy clable materials were managed as hazardous waste);

• The quantity

of each hazardous recy clable material to be managed annually ; and

• The certification (included in EPA Form 8700
- 12) signed and dated b y an authorized representative of the fac ility
. EPA believes that the information requested in the notification is the minimum information necessary to ensure that such hazardous recy clable materials are managed in a manner that is protective of human health and the environment. Generators woul d be required to notify on a per facility

basis. In other words, each generator facility

managing hazardous recy clable materials would need to submit a notification
12 These notification requirements are the same as those currently found in 40 CFR 260.42.*** E.O. 12866 Review

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57 of 210 form in accordance with the alternative standard. One notification cannot cover two or more generators or facilities. Furthermore, each generator need onl y use one notification form to list all of the hazardous recyclable materials to be managed under the exclusion at any particular facility (i.e., generators need not file separate notifications for each hazardous recy clable material). We also would require facilities that stop managing hazardous recy clable materials in accordance with the exclusion to notify the Regional Administrator (or State Director ) within 30 day s after ceasing operations u sing the same EPA Form 8700
- 12. 2. Reclamation Plan Prior to operating under the alternative standard, generators would be required to make and document advance arrangements for reclamation. These advance arrangements would be documented in a reclamation plan that (1) describes the hazardous recy clable material(s) and identif ies the reclamation facility where the material will be sent, (2) includes written confirmation from the facility that they are able to reclaim the hazardous recy clable material (3) do cuments the amount of hazardous recy clable material expected in each shipment and the anticipated frequency

of shipments, and (4) documents that the reclamation is legitimate per 40 CFR 260.43. The purpose of the reclamation plan is to ensure that the haza rdous secondary material will be recycled legitimatel y and not over
- accumulated and abandoned. The reclamation plan must be kept on
- site for at least three ye ars from the date the generator ceases to operate under the alternative standards 3. Management Standards Generators operating under the proposed alternative standards would be able to accumulate hazardous recy clable materials on site for one y ear or less without a permit or without having interim status, provided that they follow the usual requirem ents for on
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58 of 210 management of hazardous wastes b y large quantity or small quantit y generators, with the following exceptions: (a) While accumulated on
- site, each container and tank is labeled or marked clearl y with the words “hazardous recy clable materials,” rather than being marked as “hazardous waste.” (b) As noted, the allowed accumulation period will be up to one y ear, rather than 90 or 180 day s, respectivel y. 13 EPA believes that the combination of the requirements of the notification and the reclam ation plan (including the provision mandating advance arrangements for reclamation) would be as full y protective as the current generator times limits of 90 day s for large quantity generator and 180/270 days for small quantity generators, since the reclamation plan will ensure that the hazardous recy clable material s are going to be recy cled and not be stored indefinitely , and the notification provision will allow proper oversight of this provision. However, EPA also requests comment on limiting the maximum volume of hazardous recy clable material s accumulated on
- site at an y one time to no more than two standard shipments to the designated facility , as identified in the generator’s reclamation plan. Under such a requirement, the maximum volume would differ d epending on the hazardous recy clable material s and where they are being transferred to, but it would ensure that the generator is not accumulating more than what it would need to make an off
- site shipment economically feasible. (Setting the upper limit at two shipments worth would allow the generator to continue to accumulate hazardous recy clable material s while the first shipment is being prepared). 4. Transportation Before transporting hazardous recy clable material s or offering hazardous recy clable

13 Sm all quantity generators may accumulate hazardous waste on
- site for up to 270 days if they transport, or offer the waste for transport, over a distance of 200 miles or more for off
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59 of 210 mate rial s for transportation off
- site, a hazardous recy clable material generator would need to meet all the applicable pre - transportation requirements for hazardous waste generators under 40 CFR part 262 subparts B and C, including the need to package, label and placard the materials in accordance with Department of Transportation standards, as applicable to large or small quantity generators and preparing a hazardous was te manifest. In addition, EPA requests comment on allowing an alternative hazardous recy c lable materials manifest. Under the alternative manifest sy stem, the same requirements (e.g., filling out the manifest, record
- keeping and procedures for rejected shipments) and information would apply to hazardous recy clable materials shipped on a hazardo us recy clable materials manifest as those that apply

to the hazardous waste manifest, but the manifests would be labeled “hazardous recy clable materials manifest.” Such an alternative sy stem would require conforming changes to 40 CFR §§262.20, 262.21, 262. 40(a), 262.42, the appendix to part 262, §§263.20, 263.22, 264.71, 264.72, 265.71 and 265.72, plus 49 CFR 171.8 (DOT regulations). C. Request for Comment EPA requests comment on the alternative standards for hazardous recy clable materials sent to reclamation, particularl y on whether the longer accumulation times without requiring a hazardous waste permit or complying with the interim status standards and al ternative designation of the materials as “hazardous recyclable materials ” will help encourage legitimate reclamation. EPA notes that although the materials would be labeled as “hazardous recy clable materials,” they

would be, by

definition, still hazardous wastes and, per 40 CFR 261.5, would count towards a facility ’s generator status (e.g., Large Quantit y Generator, Small Quantity Generator). EPA requests comment on this issue. EPA also requests comments on whether it should adopt additional recy cling
- spec ific*** E.O. 12866 Review

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60 of 210 generator standards to further encourage reclamation (without jeopardizing the public health and environment) and that would be more appropriate for these materials. IX. Revisions to the Exclusion for Hazardous Secondary Materials that are Legitimate ly Reclaimed Under the Control of the Generator A. Summary of Current Exclusion In the 2008 DSW final rule, EPA excluded from the definition of solid waste those hazardous secondary materials that are legitimatel y reclaimed under the control of the generator, provided the materials are contained in the units in which they are stored, are not speculativel y accumulated, and are reclaimed within the United States or its territories. Under the 2008 DSW final rule, the generator must also periodically notify EP A or the authorized state (as discussed previously) that it is operating under the exclusion. The regulatory provision excluding hazardous secondary

materials under the control of the generator that are managed in land
- based units is currently

found at 40 CFR 261.4(a)(23), while the provision excluding such materials that are managed in non
- land
- based units is currently found at 40 CFR 261.2(a)(2)(ii). A land
based unit is defined in 40 CFR 260.10 as an area where hazardous secondary materials are placed in or on the land before recy cling, but this definition does not include land
- based production units. Examples of land
- based units include surface impoundments and piles. Examples of non
- land
- based units include tanks, containers, and containment buildings. The definition of “hazardous secondary material generated and reclaimed under the control of the generator” is currentl y found at 40 CFR 260.10. Hazardous secondary materials are considered “under the control of the generator” under the following circumst ances:
 they are generated and then reclaimed at the generating facility ; or
 they are generated and reclaimed at different facilities, if the generator certifies that the*** E.O. 12866 Review

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61 of 210 hazardous secondary

materials are sent either to a facility controlled by

the generator or to a facility

under common control with the generator, and that either the generator or the reclaimer has acknowledged responsibility for the safe management of the hazardous secondary materials; or

 they are generated and reclaimed pursuant to a written agreement between a tolling contractor and toll manufacturer, if the tolling contractor certifies that it has entered into a tolling contract with a toll manufacturer and that the tolling contractor r etains ownership of, and responsibility

for, the hazardous secondary materials generated during the course of the manufacture, including an y releases of hazardous secondary materials that occur during the manufacturing process. Under this provision, the h azardous secondary materials must be contained, whether they are stored in land
- based or non
- land
- based units. The materials are also subject to the speculative accumulation requirements of 40 CFR 261.1(c)(8), as well as the provisions for legitimate recy c ling at 40 CFR 260.43. Finally , under 40 CFR 260.42, the generator (and the reclaimer, if the generator and reclaimer are located at different facilities) must send a notification prior to operating under the exclusion and by March 1 of each even
- numbered ye ar thereafter to the EPA Regional Administrator or, in an authorized state, to the S tate Director. By maintaining control over, and potential liability for, the hazardous secondary materials and the reclamation process, the generator ensures that such m aterials have not been discarded. When reclaimed under the control of the generator, the hazardous secondary materials are being handled as a valuable commodity rather than a waste. However, if such hazardous secondary materials are released into the envir onment and are not recovered for legitimate recy cling immediatel y, they have been discarded (i.e., are solid and hazardous wastes) and the*** E.O. 12866 Review

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62 of 210 generator is subject to all applicable federal and state regulations, as well as applicable cleanup authorities. (See 73 FR 64680, October 30, 2008 for a more detailed discussion of the generator
controlled exclusion.) B. Proposed Changes to Generator
- Controlled Exclusion As discussed in Section V.I.2 of today ’s proposal, EPA is not proposing to withdraw the generator co ntrolled exclusion. In the 2008 DSW final rule, EPA determined that if the generator maintains control over the recy cled hazardous secondary material s and if the material s are legitimatel y rec ycled under the standards established in the final rule and not speculatively accumulated within the meaning of EPA’s regulations, then the hazardous secondary material s are not discarded. This is because the hazardous secondary material s are being treated as a valuable commodity

rather than as a waste. By maintaining control over, and potential liability for, the reclamation process, the generator ensures that the hazardous secondary materials are not discarded ( s ee 73 FR 64676). EPA has not received any information that would cause the Agency to reverse this determination, and this continues to be the underl yi ng rationale for the generator - controlled exclusion. However, EPA does believe that revisions to the generator
- controlled exclusion are needed in order to ensure that it operates as intended and does not result in discarded hazardous secondary material posing a significant risk to human health and the environment. The proposed changes are in five areas: (1) the contained standard, (2) notification as a condition, (3) recordkeeping for speculative accumulation, (4) recordkeeping for the tolling provision, and (5) clarifying edits to the regulatory text. In each of the five areas, the proposed changes are intended to improve the implementation of the generator
- controlled exclusion to ensure that it is correctly functi oning to onl y exclude hazardous secondary material that is not discarded.*** E.O. 12866 Review

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63 of 210 1. Contained Standard Under the generator
- controlled exclusion, hazardous secondary materials must be contained, regardless of whether they are stored in land
- based units or non
- land
- based units. The contained standard is a key provision for determining that a hazardous secondary material is not discarded. Hazardous secondary materials that are not contained and are instead released to the environment are not destined for recy cling an d are clearl y discarded. In today’s proposed rule, EPA is retaining the “contained” condition based on the same rationale used in the 2008 DSW final rule, but is adding a regulatory definition of contained to make it easier for implementing agencies and th e regulatory community

to determine that a material is contained. In the preamble to the 2008 DSW final rule (73 FR 64681), the Agency interpreted that such material is “contained” if it is placed in a unit that controls the movement of the hazardous secon dary material s out of the unit and into the environment. However, EPA did not provide specific guidance on how an implementing agency or the regulated community would determine if a unit did adequatel y control the movement of hazardous secondary material s and meet the contained standard. In the same preamble, EPA also discussed the issue of releases to the environment from stored hazardous secondary materials and when such materials could be considered “contained.” We stated that in the event of a release t o the environment, the hazardous secondary materials remaining in the unit may or may not meet the terms of the exclusion, and specificall y stated that such hazardous secondary materials would be considered wastes if a “significant” release occurred as a r esult of its not being managed as a valuable raw material, intermediate, or product, unless the hazardous secondary materials were immediately recovered for legitimate recy cling. EPA then gave several examples of hazardous secondary materials not being man aged as a*** E.O. 12866 Review

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64 of 210 valuable raw material, intermediate, or product, including storing acidic materials in a tank not suitable for such materials or failure to monitor the structural integrit y of a tank, resulting in releases. If these releases were not immediatel y recovered, they would be considered discarded and, if hazardous, subject to the appropriate federal or state regulations and applicable authorities. The Agency

also noted that a “significant” release is not necessarily large in volume. For example, unaddressed small releases to the environment could cause significant damage over time and , if the hazardous secondary materials are managed in such a way that such unaddressed releases are likely

to continue, the hazardous secondary materials still remain ing in the unit could be considered discarded because they were not being managed as a valuable raw material, intermediate, or product. Conversel y, the Agency also said that a unit in good condition could experience small releases resulting from normal op erations of the facility , or a released material could be captured by secondary

containment before being released to the environment. In those cases, the unit would retain its exclusion from the RCRA hazardous waste regulations and the hazardous secondary material in the unit would still be excluded from the definition of solid waste, even though an y such materials that had been released would be considered discarded if not immediately

recovered and would be subject to appropriate regulation. EPA did not f

inalize a regulatory

definition of “contained,” nor did the 2008 DSW final rule impose specific performance or storage standards. In response to comments on the 2007 DSW supplemental proposal suggesting such specific standards, EPA stated its belief that s uch detailed measures were unnecessary for hazardous secondary materials that are handled as valuable products and are destined for recy cling. Rather, in the Agency ’s view at that time, regulatory

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65 of 210 contained b y considering site
- specific circumstances (such as local conditions) and measures employ ed b y the facility

(such as liners, leak detection measures, and monitoring) to determine whether the hazardous secondary materials were contained in a storage unit. Since implementation of the 2008 DSW final rule, the Agency has reconsidered its position about whether a regulatory definition of “contained” might be necessary for hazardous secondary materials managed under the control of the g enerator. EPA has received a considerable number of inquiries from state authorities and the regulated community about how to determine if a hazardous secondary material is contained. In particular, there have been man y questions about when a release is “s ignificant” and when hazardous secondary materials remaining in a unit that has suffered a release should be considered discarded. Of particular concern is the lack of preventative measures in the contained standard in the 2008 DSW final rule, which is no ted as a major regulatory gap in the environmental justice anal ys is discussed in Section VIof this preamble. As noted above, EPA did not provide specific guidance on which t yp es of units would be considered as adequatel y containing a hazardous secondary m aterial. In the 2008 DSW rule preamble, only the absence of containment, i.e., a release to the environment, is discussed, and even then the confusion over whether a release is “significant” makes proper implementation of the contained standard problematic
. Given that the contained standard is one of the major requirements for determining that hazardous secondary

material reclaimed under the generator
- controlled exclusion is not discarded, this lack of specificit y has the potential to undermine the exclusi on. That is, if the primary or onl y wa y to determine that the hazardous secondary material is not contained is to wait until it is released to the environment, then the 2008 DSW final rule increases the likelihood of discard for these materials. The Agency therefore has considered whether adding a regulatory*** E.O. 12866 Review

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66 of 210 definition of “contained” could resolve this uncertainty without sacrificing the flexibility that would allow the implementing authorit y to take into account a wide variety of case
- specific circumstance s when necessary
. For these reasons, EPA is today proposing to amend 40 CFR 260.10 to include a regulatory

definition of “contained.” Under today ’s proposal, a hazardous secondary material is contained if it is managed in a unit that (1) is in good condit ion and has no leaks or other continuing or intermittent unpermitted releases to the environment; (2) is properly labeled or otherwise has a sy stem (such as a log) to immediately identify the hazardous secondary material in the unit; (3) does not hold inco mpatible materials and addresses an y potential risks of fires or explosions; and (4) has sy stems in place to prevent and to respond to releases to the environment, which may

include, but are not limited to, runoff, releases to groundwater, wind
- blown dust, fugitive hazardous air emissions, and catastrophic unit failures, as appropriate. Hazardous secondary materials in units that meet the applicable requirements of 40 CFR part 264 or 265 are assumed to be contained. Also, to clarify

the regulatory

status of units from which releases have occurred, the Agency is also proposing to add to 40 CFR 261.4(a)(23) the following: (1) a hazardous secondary material released to the environment is discarded and a solid waste unless it is immediately

recovered for the pur

pose of reclamation; and (2) hazardous secondary material managed in a unit with leaks or other continuing or intermittent unpermitted releases to the environment is discarded and a solid waste. EPA notes that under today ’s proposal, this definition of “c ontained” would apply to both land
- based units and non
- land
- based units under the generator
- controlled exclusion. For the reasons explained in section IX.B.5 of this preamble, EPA is proposing to place all requirements*** E.O. 12866 Review

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67 of 210 for both ty

pes of units in 40 CFR 261 .4(a)(23). In the preamble to the 2008 DSW final rule, EPA referred to “significant” releases as the criterion to determine whether hazardous secondary materials remaining in the unit should be considered wastes. We believe that today ’s proposed codificati on better expresses our intent that all releases are of concern. However, under today’s proposal, in the event of a release from a unit to the environment, the hazardous secondary material s that remain in the unit could still meet the terms of the exclusio n in certain circumstances, as long as the other provisions of the containment definition are met. A single release that is quickly addressed would not generall y affect the regulatory

status of the hazardous secondary material s still contained in the unit. Sometimes a material may escape from primary

containment and may

be captured by

secondary containment or some other mechanism that would prevent the hazardous secondary material s from being released to the environment or would allow immediate recovery of the material s . In that case, the unit would not be subject to the RCRA hazardous waste regulations and the hazardous secondary

material s in the unit would still be excluded from the definition of solid waste, even though an y s uch materials that had been re leased would be considered discarded if not immediately

recovered for reclamation and would be subject to appropriate regulation. However, hazardous secondary material s in a unit that has had a release in the past and is likely to have one in the future ( as demonstrated by not meeting the four factors in the standard) 14 is not “contained” and is therefore a solid waste and the unit would therefore be subject to Subtitle C regulation. In order to determine whether a unit that has had a release is

14 The four factors are that the unit (1) is in good condition and has no leaks or other continuing or intermittent releases to the environment; (2) is properly labeled or otherwise has a system (such as a log) to immediately identify the hazardous secondary material in the unit; (3) does not hold incompatible materials and addresses any potential risks of fires or explosions; and (4) has systems in place to prevent and to respond to releases to the environment, which may include, but are not limited to, runoff, releases to groundwater, wind
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68 of 210 likely to s uffer future releases, the regulatory authorities should consider all the factors in proposed 40 CFR 261.4(a)(23)(i). The Agency believes that this procedure is more likely to provide effective guidance to regulatory authorities and the regulated community than the current criterion of “significant.” We note that factors 1

–4 of proposed 40 CFR 261.4(a)(23)(i) are similar to the scenarios discussed in the preamble to the 2008 DSW final rule as examples of hazardous secondary

materials that were not managed a s a valuable raw material, intermediate, or product. If such hazardous secondary materials, when released, were not immediately recovered, the materials remaining in the unit would be considered solid and hazardous wastes and the unit would be subject to the appropriate hazardous waste regulations. The Agency

solicits comment on whether the proposed changes to 40 CFR 261.4(a)(23)(i) will be effective in improving the implementability and enforceabilit y of the “contained” requirement, and on whether additio nal requirements might be needed to achieve this end, or to ensure the hazardous secondary material is not discarded. We also request comment on whether the proposed regulatory definition of “contained” allows sufficient flexibility to regulatory

authoriti es to evaluate site
- specific circumstances that might be relevant to whether a hazardous secondary material could be considered discarded. 2. Notification a. Summary . Under 40 CFR 260.42, hazardous secondary material generators, tolling contractors, toll manufacturers, intermediate facilities, and reclaimers managing hazardous secondary materials under 40 CFR 261.2(a)(2)(ii), 261.4(a)(23), (24), or (25), are required to submit a notification prior to operating under these exclusions and by March 1 of each even - numbered ye ar thereafter to their regulatory authority . Facilities must also notify their regulatory

authorit y within 30 day s of stopping management of hazardous secondary materials under the rule.*** E.O. 12866 Review

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69 of 210 The intent of the notification requirement is to pro vide basic information to the regulatory agencies about who will be managing hazardous secondary materials under the exclusion. The specific information included in the notification requirement enables regulatory agencies to monitor compliance and to ensur e that the hazardous secondary materials are managed according to the exclusion and not discarded. Notification information is collected in EPA's RCRAInfo database, which is the national repository of all RCRA Subtitle C site identification information, wh ether collected b y a state authorit y or EPA. As explained in the 2008 DSW final rule, EPA believes our authorit y to request such information is inherent in our authority to determine whether a material is discarded . W e consider this to be the minimum infor mation needed to enable credible evaluation of the status of hazardous secondary materials under section 3007 of RCRA and to ensure that the terms of the exclusions are being met b y generators and reclaimers. EPA continues to support the underlying rationa le outlined in the 2008 DSW final rule for the need to collect this information. (See 73 FR 64682, October 30, 2008 , for a more detailed discussion of our authority to collect this information.) As codified, the requirement to provide this notification is not a condition of the exclusions. Thus, although failure to compl y with the requirement constitutes a violation of RCRA, it does not affect the excluded status of the hazardous secondary materia l. b. Proposed changes . We are proposing today to make the notification provision in 40 CFR 260.42 a condition of the generator
- controlled exclusion in 40 CFR 261.4 (a)(23). In the 2009 Federal Register notice announcing the June 2009 DSW p ublic m eeting , EPA listed as an issue for discussion whether notification should be a condition, rather than a requirement, of the exclusions. A number of commenters weighed in on both sides of this issue. On one hand, commenters stated that keeping notification as a r equirement would create an*** E.O. 12866 Review

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70 of 210 unintended incentive for hazardous secondary material generators, intermediate facilities and reclaimers not to notify , because those who chose not to notify would likely

evade oversight for many y ears and, if caught, could simpl y regard the violation as a “paperwork violation,” and regard the possible penalty for that violation as a cost of doing business. These commenters also argued that the failure of a hazardous secondary material generator, intermediate facilit y or reclaimer to provide notification is a strong indication that these entities are either unaware of or trying to circumvent the regulatory requirements
. I n both cases, these actions potentially increas e the likelihood for environmental damage. Therefore, failure to notify should be regarded as more serious than a reporting violation and should remove the excluded status of the hazardous secondary materials. Conversel y, some commenters supported maintaining notification as a requirement, arguing that if an entit y fai ls to notify , it does not necessarily indicate that the hazardous secondary materials were discarded and, therefore, should not automatically affect the excluded status of such materials. At issue here are not the specifics of the notification in 40 CFR 260.42, but rather the consequences an entity

would face for failing to notify . Thus, if notification is a requirement under the authorit y of RCRA section 3007 of the exclusion, it means that failure to notify would constitute a violation of the notification regulations. On the other hand, if notification is a condition of the exclusion, it means failure to notify would potentially result in the loss of the exclusion for the hazardous secondary materials (i.e., the hazardous secondary materials would become solid and hazardous wastes and subject to full Subtitle C regulation). In the 2008 DSW final rule, EPA considered the notification requirement as providing basic information to regulatory a uthorities, but determined that notification, in and of itself, did*** E.O. 12866 Review

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71 of 210 not allow regulatory

authorities to directly

determine that hazardous secondary materials were discarded. In other words, a generator or intermediate facility /reclaimer could fail to notif y yet still be legitimately

reclaiming (or storing the material prior to reclamation) their hazardous secondary materials according to the conditions of the exclusion (73 FR 64739, October 30, 2008). However, the notification provision is also the only f ormal indication of a facility 's intent to reclaim a hazardous secondary material under the conditional exemption and not discard it. F or example, if during an inspection of a large quantity generator of hazardous waste, EPA were to discover a hazardous se condary material that had been stored on
- site for more than 90 day s without a RCRA permit (an act that would t ypically be a violation of the hazardous waste regulations), a previously filed notification would be an indication that the facility was planning to reclaim the hazardous secondary material under the conditions of the exclusion. Absent such a notification, it would be difficult for the facility to justify its true intentions for the hazardous secondary material. F ailure to meet the notification pro vision would be a strong indication that the facility

either did not intend to comply with or was unaware of the provisions of the exclusion, since it failed to comply with the first step for claiming the exclusion. Inboth cases, the lack of notification could indicate that the hazardous secondary material may

be mismanaged. Making n otification a condition of the rule would further discourage facilities from trying to evade enforcement by not notifying because the costs of not notifyingcould be significantl y higher than if notification remains a requirement. Notification is important for informing regulators and the public about hazardous secondary materials activity

and, without such notification, regulators are unable to effectively monitor compliance. Additionally , state*** E.O. 12866 Review

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72 of 210 commenters have argued that enforcement discretion is commonly used to distinguish between the unintentional administrative oversight of “not notifying” and a blatant attempt at evading enforcement. Making notification a condition of th e exclusion provides states the ability to properl y enforce against this latter group, while leaving the flexibility to tailor enforcement in appropriate cases. EPA is therefore proposing today to make the notification provision in § 260.42 a condition of the generator
- controlled exclusion in § 261.4(a)(23). Additionally , we are also requesting comment on making notification a condition of the re
- manufacturing exclusion and of the other recy cling exclusions and exemptions (see Section XII “Request for Comme nt on Re - manufacturing Exclusion” and Section XIII “Request for Comment on Revisions to Other Recy cling Exclusions and Exemptions”). 3. Recordkeeping for Speculative Accumulation Inaddition to the containment provision, hazardous secondary materials that are generated and legitimately reclaimed under the control of the generator are subject to the speculative accumulation provisions of 40 CFR 261.1(c)(8). If these hazardous secondary materials are speculatively accumulated, they are considered discarded. EPA did not propose changes to the speculative accumulation provisions in the March 26, 2007, DSW proposal and has not reopened an y substantive provision of the speculative accumulation requirement. However, since implementation of the 2008 DSW final rule , EPA has received questions from regulatory

authorities about enforcement of the speculative accumulation requirement. In particular, enforcement personnel have suggested that ease of enforcement would be greatl y facilitated if persons subject to the spec ulative accumulation requirement were required to post a start date for the accumulation. In this way , inspectors and other regulatory authorities could quickly ascertain how long a facilit y has been storing an excluded hazardous secondary material,*** E.O. 12866 Review

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73 of 210 and, therefore, whether that facility was in compliance with the storage time limits of 40 CFR 261.4(a)(23)(iii) and 40 CFR 261.1(c)(8). EPA agrees with this suggestion and is therefore proposing to amend 40 CFR 261.4(a)(23)(iii) to require persons operating un der the generator
- controlled exclusion to place a label on the storage unit indicating the first date that the excluded hazardous secondary material began to be accumulated. In cases where placing a label on the storage unit is not practicable (e.g., if materials are stored in a surface impoundment), we are proposing as an alternative to amend 40 CFR 261.4(a)(23)(iii) to require persons operating under the generator
- controlled exclusion to document in an inventory log the first date that the excluded hazard ous secondary material began to be accumulated. EPA also notes that we are not proposing any changes or otherwise reopening the substantive requirements of the speculative accumulation condition. The Agency

notes that placing labels on storage units or entering accumulation start dates in inventory

logs is likely to alread y be part of normal business operations at many facilities. For this reason, we believe that this proposed requirement is not unduly burdensome and will provide a greater degree of clarity and certainty both to the regulated community and to regulatory authorities who are trying to determine when excluded hazardous secondary materials began to be accumulated. EPA solicits comment on whether this proposed requirement will be effective in me eting this goal and on whether other methods of measuring storage durations and/or identifying start dates would be equall y effective (such as a requirement to post accumulation start dates in storage areas, within a specified number of feet of the storage unit). As proposed, this recordkeeping provision would only appl y to the exclusion under 40 CFR 261.4(a)(23). However, the same arguments for tracking accumulation start dates could be made more broadl y for all recycling subject to the speculative accumu lation limits. Thus, EPA is*** E.O. 12866 Review

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74 of 210 also requesting comment on whether to add this recordkeeping requirement to the speculative accumulation provision in 40 CFR 261.1(c)(8) itself. 4. Tolling Provision Under the 2008 DSW final rule, hazardous secondary materials are eligible for the generator - controlled exclusion if they are generated and reclaimed pursuant to a written agreement between a tolling contractor and toll manufacturer, if the tolling contractor certifies that it has entered into a contract with a toll manufacturer and that the tolling contractor retains ownership of, and responsibility for, the hazardous secondary materials generated during the course of the manufacture, including an y releases of hazardous secondary materials that occur during the manuf

acturing process. For purposes of this exclusion, a tolling contractor is a person who arranges for the production of a product or intermediate made from specified unused materials through a written contract with a toll manufacturer. The toll manufacturer is the person who produces a product or intermediate made from specified unused materials pursuant to a written contract with a tolling contractor. Under the 2008 DSW final rule, the tolling contractor must certify that it has a written contract with the toll manufacturer to manufacture a product or intermediate made from specified unused materials, and that the tolling contractor will reclaim the hazardous secondary materials generated during the manufacture of the product or intermediate. The tolling contractor must also certify that it retains ownership of, and liability for, the hazardous secondary materials that are generated during the course of the manufacture, including an y releases of hazardous secondary materials that occur during the manufacturin g process at the toll manufacturer’s facility . This certification should be made b y an official familiar with the terms of the written contract and should be retained at the site of the tolling contractor.*** E.O. 12866 Review

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75 of 210 However, there were no requirements to keep record s of shipments of hazardous secondary materials sent or received pursuant to the written contract between the tolling contractor and the tolling manufacturer. Since implementation of the final rule, the Agency has received inquiries from regulatory authori ties regarding the enforceabilit y of the tolling provision. These authorities believe that it would be easier to determine if tolling contractors and manufacturers were in compliance with the requirements for the tolling exclusion if records were kept of these shipments. The Agency agrees with these suggestions and is therefore proposing to amend 40 CFR 261.4(a)(23)(ii) to add a recordkeeping requirement for tolling contractors and manufacturers. The proposed language would require the tolling contractor t o maintain at its facility for no less than three ye ars records of all hazardous secondary materials received pursuant to the written contract with the tolling manufacturer. Itwould also require the tolling manufacturer to maintain at its facility

for no less than three ye ars records of all hazardous secondary materials shipped pursuant to its written contract with the tolling contractor. In both cases, the records must contain the name of the transporter, the date of the shipment, and the ty pe and quantit y of the hazardous secondary

material shipped or received pursuant to the written contract. These requirements may

be satisfied by

routine business records (e.g., financial records, bills of lading, copies of DOT shipping papers, or electronic confirmation s). EPA solicits comment on whether this proposed requirement would make the exclusion for hazardous secondary materials generated pursuant to a tolling contract easier to enforce. We also solicit comment on other information which would be appropriate for the recordkeeping requirements. While not specifically

raised by regulatory

authorities, the same question of enforceability

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76 of 210 different facilities where both facilities are under the control of the generator. Therefore, EPA also solicits comments on whether the recordkeeping requirement should also apply to hazardous secondary materials reclaimed off

- site at the same company under 40 CFR 261.4(a)(23). Furthermore, the Agency is also soliciting comment on whether the specific tolling exclusion for hazardous secondary materials generated and reclaimed under the control of the generator should be retained or eliminated. We note that since implementation of the 2008 DSW final rule , no facilities have notified that they are operating under the tolling exclusion, which , in any event , applies onl y t o a small subset of generators and reclaimers. The definitions under this exclusion (with its attendant certifications) are complicated an d involve applying the exemption to companies other than the original generators and relying on contractual commitments to ensure generator control. If the exclusion is going to be only infrequentl y utilized, while possibly adding some additional risks of discard, it might be better for both the regulated community and regulatory

authorities if it were not part of the exclusions granted to hazardous secondary materials generated and reclaimed under the control of the generator. Instead, persons operating un der tolling arrangements would be eligible for the proposed alternative hazardous waste regulations for hazardous recy clable materials transferred to a third
- party for reclamation. These proposed alternative regulations are discussed in Section VIII of thi s preamble. If this approach were finalized, there would be no need for definitions and certifications that are specific to tolling arrangements. On the other hand, the tolling contractor conducting the reclamation might need to obtain a RCRA storage permi t. Toll manufacturing can be an efficient method for material production and the Agency does not wish to unnecessaril y discourage sustainable reclamation practices under these arrangements. EPA requests comment on the likelihood and extent to which generat ors expect to rely on toll manufacturing arrangements and on the risks*** E.O. 12866 Review

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77 of 210 and benefits of including tolling arrangements in our proposed alternative regulatory scheme, or on maintaining their eligibility under the generator
- controlled exclusion. 5. Other Chan ges The Agency

is also proposing a number of structural changes to the regulations in the 2008 DSW final rule in order to make the generator controlled exclusion simpler and easier to understand . In the 2008 DSW final rule, the requirements for non
- land
- ba sed units operating under the generator
- controlled exclusion were found at 40 CFR 261.2(a)(2)(ii), while the requirements for land
- based units operating under the same exclusion were found at 40 CFR 261.4(a)(23). Since the requirements for the two types of units are identical, we believe that all the requirements for units operating under the control of the generator should be placed in one regulatory

provision. We are therefore proposing to move the requirements listed in 40 CFR 261.2(a)(2)(ii) to 40 CFR 2 61.4(a)(23). We believe this will provide more clarity and transparency

to all users of the regulations. 15 Another proposed change concerns the definitions of terms applicable to the generator
controlled exclusion. Inthe 2008 DSW final rule, these definiti ons (including certification requirements) were found in 40 CFR 260.10. We are proposing today to move these definitions to 40 CFR 261.4(a)(23). We believe that placing all definitions applicable to the generator
controlled exclusion together with the requ irements for that exclusion in the same regulatory section will make it easier to locate and understand this exclusion in a single reading. X. Revisions to the Definition of Legitimacy A. Summary of Current Definition of Legitimacy Under the RCRA Subtitle C definition of solid waste, certain hazardous secondary

15 In making this change, we are still keeping the definition for land
- based operating units since the noti fication requirement at 40 CFR 260.42 still will request whether or not the unit managing the hazardous secondary material is a land
- based operating unit or a non
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78 of 210 materials, if recy cled, are not solid wastes and, therefore, are not subject to RCRA’s “cradle to grave” management sy stem. The basic idea behind this principle is that recy cling of these hazardous secondary

materials often closely

resembles industrial manufacturing rather than waste management. However, due to the economic incentives for managing hazardous secondary materials outside the RCRA Subtitle C regulatory sy stem, there is a potentia l for some handlers to claim that they

are recy cling the hazardous secondary materials when, in fact, they are conducting waste treatment and/or disposal. To guard against this, EPA has long articulated the need to distinguish between legitimate (i.e., tru e) recy cling and sham recy cling, beginning with the preamble to the 1985 regulations that discussed the definition of solid waste (50 FR 638, January 4, 1985) and continuing through the 2008 DSW final rule. The legitimacy provision that is required for the definition of solid waste final exclusions and non
- waste determinations promulgated in the 2008 DSW final rule (40 CFR 260.43) is designed to distinguish between real recy cling activities

— legitimate recy cling

— and sham recy cling, an activity undertaken by an entity

to avoid the requirements of managing a hazardous secondary material as a hazardous waste . This provision is substantively the same as the Agency ’s long
- standing policy that has been expressed in our earlier preamble discussions and policy

state ments. The legitimacy provision applicable to these exclusions and non - waste determinations is based on the 2003 DSW proposal, the 2007 DSW supplemental proposal, the 2008 DSW final rule, and all relevant information available to EPA as contained in the ru lemaking record for the 2008 DSW final rule. The preamble to the 2008 DSW final rule contains the operative discussion on the four legitimacy factors that should be used when making legitimate recycling determinations. In the 2008 DSW final rule, hazardou s secondary materials that are not legitimately*** E.O. 12866 Review

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79 of 210 recy cled are discarded materials and, therefore, are solid wastes (40 CFR 260.43). This provision also states that an y facility claiming an exclusion at § 261.2( a)(2)(ii), § 261.4 (a)(23), § 261.4 (a)(24), or § 261.4( a)(25) or using a non
- waste determination at § 260.30(d ) or (e) must be able to demonstrate that its recycling activity is legitimate. The structure of the legitimacy standard in the 2008 DSW final rule has two parts. The first part includes a requi rement that hazardous secondary materials being recy cled must provide a useful contribution to the recy cling process or to the product of the recycling process and a requirement that the product of the recycling process is valuable. These two factors make up the core of legitimacy

and, therefore, a process that does not conform to them cannot be a legitimate recy cling process, but would be considered sham recy cling. The second part of legitimacy in the 2008 DSW rule includes two factors that must be consid ered, but not necessarily met, when a recy cler is making a legitimacy determination. That is, EPA believed that these two factors that must be considered when making a legitimacy determination did not alway s need to be met. This was because the Agency is aware of a few situations in which a legitimate recy cling process does not conform to one or both of these two factors, yet the reclamation activity would still be considered legitimate. EPA did not believe that this will be a common occurrence, but in rec ognition that legitimate recycling may

still occur in these situations, EPA promulgated the factors that address the management of the hazardous secondary materials and the presence of hazardous constituents in the product of the recycling process as facto rs that must be considered in the overall legitimacy

determination, but not factors that must alway s be met. Following is a summary

of the four legitimacy

factors that were codified in the 2008 DSW final rule. The preamble to the 2008 DSW final rule includ es a lengthy discussion of the*** E.O. 12866 Review

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80 of 210 four legitimacy

factors that is the operative discussion for making legitimate recy cling determinations (73 FR 64700, October 30, 2008). Summary of the Four Factors in the 2008 DSW Final Rule Factor 1

—

Useful Contribution: “L e gitimate recycling must involve a hazardous secondary material that provides a useful contribution to the recycling process or to a product of the recy cling process...The hazardous secondary material provides a useful contribution if it (i) contributes valua

ble ingredients to a product or intermediate; or (ii) replaces a catal ys t or carrier in the recy cling process; or (iii) is the source of a valuable constituent recovered in the recy cling process; or (iv) is recovered or regenerated b y the recycling process ; or (v) is used as an effective substitute for a commercial product” (40 CFR 260.43(b)(1)). This factor expresses the principle that hazardous secondary materials should contribute value to the recy cling process. This factor is an essential element to le gitimate recy cling because real recy cling is not occurring if the hazardous secondary materials being added or recovered do not add an ything to the process or recy cled product. This factor is intended to prevent the practice of adding hazardous secondary m aterials to a manufacturing operation simply as a means of disposing of them, or of recovering onl y small amounts of a constituent, both of which EPA would consider sham recy cling. For hazardous secondary materials to meet this factor, not every constituent or component of the hazardous secondary material has to make a contribution to the recy cling activity . For example, a legitimate recy cling operation involving precious metals might not recover all of the components of the hazardous secondary material, but would recover precious metals with sufficient value to consider the recy cling process legitimate. In addition, the recy cling activity

does not have to involve the hazardous component of the hazardous secondary materials if the value of the contribution o f the non
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81 of 210 activity
. Factor 2

—Valuable Product or Intermediate : “The recy cling process must produce a valuable product or intermediate...The product or intermediate is valuable if it is (i) sold to a third
- part y or (ii) used b y the recycler or the generator as an effective substitute for a commercial product or as an ingredient or intermediate in an industrial process” (40 CFR 260.43(b)(2)). This factor expresses the principle that the product or intermediate of the recy cling process should be a material of value, either to a third part y who bu ys it from the recy cler, or to the generator or recy cler itself, who can use it as a substitute for another material that it would otherwise have to buy

or obtain for its indus trial process. This factor is an essential element of the concept of legitimate recy cling because recy cling cannot be occurring if the product or intermediate of the recy cling process is not of use to any one and, therefore, is not a real product. This fact or is intended to prevent the practice of running hazardous secondary material s through an industrial process for the purpose of avoiding the costs of hazardous waste management, rather than for the purpose of using the product or intermediate of the recyc ling activit y. Such a practice would be sham recy cling. Factor 3

—Managed as a Valuable Commodity : “The generator and the recycler should manage the hazardous secondary

material as a valuable commodity . Where there is an analogous raw material, the hazardo us secondary material should be managed, at a minimum, in a manner consistent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary

material should be contained. Hazardous secondary materials that are re leased to the environment and are not recovered immediately are discarded” (40 CFR 260.43(c)(1)). This factor expresses the principle that hazardous secondary materials being recy cled*** E.O. 12866 Review

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82 of 210 should be managed in the same manner as other valuable materials. This factor requires those making a legitimacy

determination to look at how the hazardous secondary material s are managed before they enter the recy cling process. In EPA’s view, a recy cler will value hazardous secondary materials that provide an important contr ibution to its process or product and, therefore, will manage those hazardous secondary materials in a manner consistent with how it manages a valuable feedstock. If, on the other hand, the recy cler does not manage the hazardous secondary materials as it w ould a valuable feedstock, that behavior may indicate that the hazardous secondary

materials may

not be recy cled, but rather will be released into the environment and discarded. Factor 4

— Comparison of Toxics in the Product: “The product of the recy cling p rocess does not (i) contain significant concentrations of an y hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) contain concentrations of an y hazardous constituents found in Appendix VIII of part 26 1 at levels that are significantly elevated from those found in analogous products; or (iii) exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit” (40 CFR 260.43(c)(2)). This factor expresses the pri nciple that when making a legitimacy determination, one needs to look at the concentrations of the hazardous constituents found in the product made from the hazardous secondary

materials and compare them to the concentrations of hazardous constituents in analogous products that were not made from hazardous secondary materials. Any of the following three situations could be an indicator of sham recy cling: a product that contains significant levels of hazardous constituents that are not found in the analogous products; a product with significantly higher levels of hazardous constituents than were in the analogous products; or a product that exhibits a hazardous characteristic that analogous products do not*** E.O. 12866 Review

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83 of 210 exhibit. Any of these situations could indicate that sham recy cling is occurring because in lieu of proper hazardous waste disposal, the recy cler could have incorporated hazardous constituents into the final product when they are not needed to make the product effective for its purpose. This factor, therefor e, is designed to determine when toxics that are “along for the ride” are discarded in a final product and, therefore, the hazardous secondary material s are not being legitimatel y rec ycled. Evaluating the significance of levels of hazardous constituents in products of the recy cling process may involve taking into consideration several variables, such as the t ype of product, how it is used and by whom, whether or not the elevated levels of hazardous constituents compromise the efficacy of the product, the av ailability of the hazardous constituents to the environment, and others. In addition to promulgating the legitimate recycling provision in the 2008 DSW final rule, EPA included a discussion of how the current legitimacy policy continues to apply

to existing recy cling exclusions and how the four factors included in the legitimacy provision at 40 CFR 260.43 are substantively the same as the current legitimacy policy . The Agency

included a length y discussion of how it developed the legitimacy factors in 40 CFR 260.43 by closely examining the questions and sub
- questions in its long
- standing policy memo on the subject, OSWER Directive 9441.1989(19) (April 26, 1989), also known as the Lowrance Memo, and in the relevant Federal Register preambles, and conver ting this policy

guidance into four direct factors. The detailed explanations of how each of the four factors is derived from the Lowrance Memo and other existing policy statements can be found at 73 FR 64708

– 64710, October 30, 2008. B. Proposed Changes to the Definition of Legitimacy*** E.O. 12866 Review

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84 of 210 1. L egitimacy

Codified for All Recy cling In today ’s action, EPA is proposing to codify the legitimate recy cling requirement for all recy cling. In the October 28, 2003, proposal at 68 FR 61581

– 61588, EPA discussed its position on the relevance of legitimacy to hazardous secondary

materials recy cling in general and to the redefinition of solid waste specifically . At that time, we proposed to codify in the RCRA hazardous waste regulations four general criteria to be used in deter mining whether recy cling of hazardous secondary

materials is legitimate. In the supplemental proposal of March 26, 2007, at 72 FR 14197

– 14201, we proposed two changes to the 2003 proposed legitimacy criteria and asked for public comment on those changes. T he changes were (1) a restructuring of the proposed criteria, called "factors" in that proposal, to make two of them mandatory , while leaving the other two as factors to be considered, and (2) additional guidance on how the economics of the recy cling activ ity should be considered in a legitimate recy cling determination. EPA’s 2008 DSW final rule codified legitimacy for the recy cling covered by the exclusions and non
- waste determinations in that rulemaking. However, at that time, EPA did not codify the legit imacy

factors for other recy cling exclusions/activities, but explained that the concept of legitimacy

finalized in that rule as a restriction or a condition for the final exclusions and the non
- waste determinations is not substantively different from the A gency 's longstanding policy that has been expressed in our earlier preamble discussions and policy statements. Upon further consideration of legitimacy , EPA believes that codifying the legitimacy factors for all recy cling would provide a number of benefits . These benefits include ensuring that this important requirement is more readil y accessible to the public, including the regulated community , by

being published in the Federal Register and in the Code of Federal Regulations. EPA also expects that this act ion will prevent or minimize fraudulent or sham recycling, which*** E.O. 12866 Review

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85 of 210 will make the legitimacy

provision a more enforceable standard for states and other entities implementing RCRA. a. What is the proposed scope of the legitimacy provision? If codified for all recy cling, the definition of legitimacy

would apply

to these t yp es of hazardous secondary materials, in addition to the final exclusions and non
- waste determinations promulgated in the 2008 DSW rule:

 Hazardous recy clable materials that are managed under t oday ’s proposed alternative Subtitle C regulations for hazardous recy clable materials.

 Hazardous secondary materials that, because they are recy cled, are excluded or exempted from Subtitle C regulation under other regulatory provisions (e.g., see the exclu sions from the definition of solid waste in 40 CFR 261.4(a)).

 Materials formall y determined to be non
- wastes under the procedures in 40 CFR 260.34.

 Recy clable hazardous wastes that are regulated under Subtitle C prior to recy cling or subject to reduced regulation. The concept of legitimate recycling is also used to determine if a unit is a recycling unit exempt from RCRA Subtitle C permitting or is a regulated waste treatment or storage unit subject to full RCRA Subtitle C permitting. 16 If finalized for all recy cling, the legitimacy factors would apply

to these situations as well. One important note is that EPA has previously examined in depth a number of waste
specific and industry
- specific recy cling activities and has promulgated specific regulatory exclu sions or provisions that address the legitimacy of these practices in much more specific terms than the general factors being promulgated today . Thus, there would be situations where today ’s proposed broadl y applicable factors would overlap with these more specific legitimacy

16 Certain exempt legitimate recycling facilities are still subjec t to RCRA air emission standards.*** E.O. 12866 Review

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86 of 210 provisions. One example is the regulation for zinc fertilizers made from recy cled hazardous secondary materials. In the zinc fertilizer regulation, among the requirements established by EPA are specific numerical limits on five heav y metal contaminants and dioxins in the zinc fertilizer product exclusion at 40 CFR 261.4(a)(21). These limits would be the “comparable” standard for those contaminants when determining if the recycling meets legitimacy factor 4 (Comparison of Toxics in the Product). However, if fertilizer made from hazardous secondary materials contains other hazardous constituents that do not have specific numerical limits in 40 CFR 261.4(a)(21), then the generator or recycler would need to compare the levels of those hazar dous constituents with those in an analogous fertilizer product not made from hazardous secondary materials. Other examples of more specific legitimacy provisions are found in the regulations for comparable fuels at § 261.38, the use constituting disposal provisions in part 266 subpart C, and the burning for energy

recovery and material recovery

provisions in part 266 subpart H. In doing a legitimacy

determination on a fuel made from hazardous secondary material under the comparable fuels exclusion, the re gulations contain concentration limits for a comprehensive list of chemicals. If the fuel meets those limits, it would generall y meet legitimacy

factor 4 (unless it contains a hazardous constituent that is not on the list of chemicals in § 261.38 Table 1). However, the regulated entity would need to consider the other legitimacy factors as well in making an overall legitimacy determination on the hazardous secondary material being burned as a comparable fuel. For hazardous secondary materials being used in a manner constituting disposal under 40 CFR part 266 subpart C, a person would need to determine if the hazardous secondary material being recy cled in this way meets all four legitimacy factors in 40 CFR § 260.43, in addition to*** E.O. 12866 Review

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87 of 210 meeting the conditions of 40 CFR part 266 subpart C. Meeting the applicable treatment standards as required b y § 266.20 would not substitute for meeting legitimacy factor 4 because those standards are technologically
- based standards and are not based on a comparison to an analogous product. Those standards in some cases would be more stringent while in other cases, they may be less stringent. The legitimacy

provisions would also apply to hazardous secondary

materials being burned either for energy

recovery or material recovery

unde r 40 CFR part 266 subpart H. For those materials being burned for metals recovery , meeting the concentration limits in 40 CFR 266.100(d)(2) would be considered comparable for the sake of legitimacy factor 4. The regulated entity would have to ensure that the recy cling meets the other legitimacy factors as well to be in compliance with the overall legitimate recycling provision. EPA is proposing that these more specific provisions remain applicable and that the legitimacy

factors would not replace them. That is, regulated entities would need to compl y with both the specific regulatory conditions of their recy cling exclusions, as well as any of the legitimate recycling factors not explicitly covered by

the specific recy cling exclusion. The Agency seeks public comment on the overlap between the general legitimacy provision and the specific recy cling exclusions. b. Wh y is EPA proposing to codify legitimacy for all recycling? In the 2008 DSW final rule, EPA explained that it was finalizing codified legitimacy fact ors onl y for the exclusions and non
- waste determinations in that rule to avoid confusion among the regulated community and state and other implementing regulatory agencies about the status of recy cling under existing exclusions. At the time, EPA did not expect members of the regulated community to revisit their previously
made legitimacy

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88 of 210 After evaluating the comments in response to the May 27, 2009, public meeting notice (74 FR 25200) and concerns brought up in the subsequent public meetin gs, EPA has determined that the benefits from the entire hazardous waste community having identical codified legitimacy requirements outweigh concerns about making administrative changes to the requirement. One codified legitimacy

standard will be less con fusing and more clear to the regulated community , implementing agencies and the public. EPA also believes that there will be benefits to the environment from requiring those who are recy cling under existing exclusions and other provisions to do this kind of evaluation of their recy cling process with legitimacy considerations in mind. EPA believes that codifying the legitimacy

factors for all recy cling and the requirement to document legitimacy determinations, as discussed below, will result in more thorough, accurate and consistent legitimacy determinations. However, as we discuss below, documentation of the legitimacy determination (i.e., how the hazardous secondary material meets the legitimacy factors) needs only

to be available from the effective date o f this rule. EPA continues to believe that the four legitimacy factors we are proposing to codify for all recy cling are substantively the same as the existing policy found in previous Federal Register preamble statements and its long
- standing policy memo on the subject (i.e., the L owrance Memo). An anal ys is that shows how the four factors are derived from and equivalent to the Lowrance Memo and other policy statements is in the 2008 DSW final rule preamble (73 FR 64708

– 64710). In addition, EPA continues to believe that the vast majority of recy cling of hazardous secondary

materials in the regulated community is currentl y legitimate and would alread y meet all four legitimacy factors. It is the Agency ’s belief that it is an advantage for the regulated commun ity and the*** E.O. 12866 Review

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89 of 210 regulating agencies to have the regulatory requirements for legitimacy be identical for all recy cling processes and to have the legitimacy provision promulgated in the regulations. Because legitimacy

is an inherent concept underlying all of the current recy cling exclusions, the legitimate recycling standard already applies to all hazardous secondary materials recy cling and hazardous waste recy cling, whether such recy cling remains under the hazardous waste regulations or is excluded from the defi nition of solid waste. Therefore, the change being proposed today

would result in the details of an existing standard being added to the regulations and thereb y being more publicly available. Requiring recy cling to be legitimate has been our long
- standing policy and it is well understood throughout the regulated community and the implementing state regulatory agencies. EPA also firmly

believes that the legitimacy factors are a simplification and clarification of our existing policy

and, as such, the large m ajority of existing determinations should not change or need to be revisited. We are reiterating today that simply

codifying the legitimacy standard is not changing the underl yi ng principles of legitimate recycling that have existed since the basic RCRA DS W structure was put in place in 1985. We recognize that under some of the existing exclusions, certain conditions may fulfill certain legitimacy

factors or considerations, but this is not universally the case for all of the recy cling exclusions. Even under the existing exclusions, there remains the possibility of someone claiming an existing recy cling exclusion as a means of discarding their hazardous waste. Thus, simply

meeting the conditions of an exclusion does not automatically ensure that the recy cling is legitimate and codifying the legitimacy factors for all recy cling emphasizes this fact. The codified legitimacy factors would appl y t o all future recy cling of hazardous secondary materials as well, unless we establish specific legitimacy conditions for a specific recy cling*** E.O. 12866 Review

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90 of 210 practice that stand in for the more general factors. EPA is asking for comments on this proposed approach to the legitimate recy cling requirement. 2. All L egitimacy

Factors Being Mandatory a. What structure is EPA proposing for the legitimacy factors? In this proposed rule, EPA is reconsidering the current legitimacy structure and proposing that all the legitimacy factors be mandatory . EPA is proposing also that a petition process be available if a legitimate recycling process can be shown to be legitimate even though it does not meet one or both of the factors that currentl y have to be considered. As stated above, in the 2008 DSW final rule, EPA finalized a structure for legitimacy that included two factors that had to be met and two factors that had to be considered, but not necessarily

met. We stated that we thought this approach would be clearer than the guidance for legitimacy

being followed at that time, but would still provide some flexibility in those cases where recy cling did not meet all the legitimacy factors, but the recy cling activity was still legitimate. In this proposal, EPA is reconsidering its position on this issue and now believes that it would be most appropriate for all legitimacy factors to be mandatory

and to pr ovide a petition process for those rare cases where the recy cling process is legitimate, even though factor 3 or factor 4 or both are not met. EPA is proposing this administrative change in the structure of the legitimacy

factors for several reasons. Comme nts in response to EPA’s May 27, 2009, notice of a public meeting and comments provided at that public meeting on June 30, 2009, reiterated that most of the state agencies that would be responsible for implementing the DSW regulations when the state has ad opted the program support an approach in which all legitimacy factors are*** E.O. 12866 Review

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91 of 210 mandatory . EPA also expects that making all of the legitimacy factors mandatory

would be less complicated across the overall RCRA Subtitle C program and would improve both the effect iveness and the protectiveness of the legitimacy provision. Commenters also argued that the legitimacy provision does not effectively address EPA’s expectation that most recycling should meet all four legitimacy factors and leaves too much leeway for pote ntial sham operations. A structure with four mandatory factors and a petition process for an entit y that believes that its recycling is legitimate despite not meeting factor 3 or factor 4 or both does convey EPA’s belief that these exceptions to the legiti macy factors are rare. In addition, EPA had believed that the two mandatory factors and two factors to be considered would be protective of human health and the environment because, under the regulations in 40 CFR 260.43, exceptions to all four factors b eing met would only happen in cases of recy cling that was legitimate any way —that is, cases where either factor 3 or factor 4 were not met would have to have valid reasons for still being legitimate. However, it is not clear that this result will always occ ur in practice. Continued confusion about how the regulations work and concerns from state agencies that are and will be responsible for the enforcement and implementation of this provision are making EPA revisit its previous decision that this structure
w ould be protective. Specificall y, in the design of the legitimacy provision in the 2008 DSW final rule, EPA did not intend to make it possible for materials going for reclamation to be mismanaged or to allow recy cled products that could pose a risk into the market. EPA heard in further comments, however, that states and implementing agencies remained concerned that the structure of the factors would lead to these outcomes. These comments about the protectiveness of the legitimacy structure received from those regulators during actual implementation of the rule are one of the*** E.O. 12866 Review

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92 of 210 main reasons that EPA is rethinking its approach. EPA continues to believe that the majority of recycling currentl y taking place would meet all legitimacy

factors, but recognizes that there may be rare instances where recy cling may be legitimate, but not meet one or both of the two factors that were labeled “to be considered” in the 2008 DSW final rule. It is critical that the legitimacy regulations be flexible enough to allow for the se situations, particularly if the regulations are going to appl y to all recycling. Therefore, EPA is proposing a petition process for facilities that believe that their recy cling processes are legitimate despite not meeting one or both of these two final factors. EPA’s proposal for how this petition process would work is described later in this section. Comments in response to the May 27, 2009, Federal Register notice also demonstrated that despite EPA’s efforts to clarify what it meant by

“factors to be considered” and how the Agency thought that structure would work in implementation of legitimacy, many commenters still found the requirement confusing and believed the regulated community as a whole would be confused as well. EPA believes that a structur e where all factors must be met with a petition process for an y exceptions would be more straightforward than the current two mandatory factors with two factors that have to be considered. EPA notes that the ultimate determination of legitimacy would be the same under either approach (i.e., whether factors 3 and 4 “must be considered” or “must be met”). Under the current structure requiring the factors be considered , a person making a legitimacy determination regarding a recy cling process that does not me et one or both of these factors (i.e., is not being managed as a valuable commodity or has elevated levels of hazardous constituents in the product) would need a strong reason for why the recy cling is still legitimate and, in the case of an enforcement action, would be required to demonstrate that reason. Under the proposed*** E.O. 12866 Review

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93 of 210 restructuring of the factors, under the same scenario a person would be required to demonstrate legitimacy

up front as part of a petition process and receive EPA approval before claiming an exemption. In other words, there would be no substantive distinction between the final legitimacy

determination under the two approaches, but the administrative process for making that determination would be diffe rent. One potential concern with the proposed new structure is that it will require all entities making a legitimacy

determination to reassess whether they meet all four factors and, if a facility ’s recy cling does not meet factor 3 or factor 4 or both, it would either have to reengineer the process or submit a petition for a legitimacy variance. However, under the revisions being proposed today , all entities that are recy cling hazardous secondary materials are alread y going to be required to consider the legitimacy of their recycling in order to document that their recy cling is legitimate for their files. Therefore, the onl y burden on top of that requirement would be in the rare instance where a facility would need to submit a petition for a legitimacy variance. Finally , in designing the legitimacy factors that apply

throughout the RCRA program, particularl y in the various parts of the definition of solid waste, EPA is striving for consistency and cohesiveness. EPA’s recent Identification of Non
- Hazardou s Secondary Materials that are Solid Wastes final rule ( xx FR xxx xx, 20xx, xxxxx ) includes legitimacy factors for non
hazardous secondary

materials that are burned in combustion units as fuels or as ingredients. Despite the differences in the circumstance s covered b y that rule and this proposed rule, the legitimacy

concepts are similar. EPA’s non
- hazardous secondary material rule mandates that all legitimacy

factors must be met and in proposing to alter the legitimacy factors for hazardous secondary materi als, EPA is proposing to line up these concepts in a consistent manner. b. Petition process for legitimacy. As stated above, EPA believes it is critical that the legitimacy*** E.O. 12866 Review

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94 of 210 requirement have flexibility for those rare situations where a facility is recy cli ng legitimatel y, but is not meeting factor 3 and/or factor 4. The petition process being proposed today would be a mechanism for that flexibility , while also allowing the implementing agency to review the site
specific nature of the recycling practice and ensure that it is legitimate. EPA is seeking comment on the various aspects of this proposed process. EPA believes that the situations that would warrant legitimacy

variances are rare, but seeks comment again on specific recy cling scenarios that are legiti mate yet do not meet either legitimacy factor 3 and/or legitimacy factor 4. Commenters to the 2007 DSW supplemental proposal suggested the idea of a petition process with four mandatory factors. EPA considered this option for the 2008 DSW final rule, but did not finalize it. However, after determining that an approach to legitimacy with all four factors being mandatory

may be most appropriate, EPA is returning to the idea of a petition process to provide the needed flexibility and oversight to legitimacy d eterminations. In formation to be included in the petition Of primary

interest, the petition would need to include information on the hazardous secondary material being recy cled and the recy cling process itself in the context of the four legitimacy

factor s. EPA continues to believe that legitimacy factors 1 and 2

—

which state that the material being recy cled has to provide a useful contribution to the recycling product or process and that the process must produce a valuable product or intermediate

— have to b e met for recy cling to be considered legitimate. A facility would be eligible to submit a petition for a legitimacy

variance to its implementing agency under § 260.43(c) if it has met legitimacy factors 1 and 2, but for some reason does not meet either fac tor 3, the requirement that the hazardous secondary material is managed as a valuable commodity , or factor 4, the requirement that the levels of an y contaminants in the product of the recycling process be comparable to or lower than*** E.O. 12866 Review

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95 of 210 an analogous product or both. 17 Thus, the legitimacy

variance petition would include a narrative description of how the facility ’s recy cling process addresses each of the four legitimacy factors. For the factor or factors that the process does not meet, the petition would have to explain how the recy cling process does not meet the factor(s), but why the recy cling should nevertheless be determined to be legitimate. If, for example, the recy cling process does not meet factor 3, the petition would include an in
depth description of how the hazardous secondary materials are managed and stored on
- site and how analogous raw materials, if there are an y, are stored on
- site, as well as an explanation for why the storage of the hazardous secondary materials is different y et still indicative of management as a valuable product or intermediate. It may be appropriate to include photos or engineering specifications to illustrate the nature of the material storage. As described below, the Agency is also proposing to modify the language of this fa ctor slightl y to allow for situations where the hazardous secondary material is stored in a way that is different from the analogous raw material, but is stored in a manner equally protective. We are proposing that in those situations, a person would not h ave to petition for a legitimacy variance simply

because the storage method was different than how the analogous raw material was stored. For a recy cling process that does not meet factor 4 because the levels of contaminants in the product of the recy clin g process are not comparable to or lower than the levels in an analogous product, the petition should include a description of the product and its uses and an explanation of why

the recy cling is legitimate despite the elevated contaminant levels from the h azardous secondary

material. This explanation could include considerations such as the lack of plausible exposure pathway s to humans and the environment from the product, the

17 EPA is proposing to amend legitimacy factors 3 and 4 in this proposal. These are discussed below in X.B.3. and X.B.4.*** E.O. 12866 Review

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96 of 210 bioavailability

of the toxics in the product, or other factors, as appropriate. I t may also be appropriate in this section to include relevant product specifications, either from the specific facility or industry
- wide, as well as results from any toxicity testing of the product of the recy cling process. In the 2008 DSW final rule, EPA gave the following example of where recycling could still be considered legitimate, even though the contaminant levels could be considered significantl y higher than an analogous product. The example of the reuse of lead contaminated foundry sands may

or m ay not be legitimate, depending on the use. The use and reuse of foundry sands for mold making in a facilit y's sand loop under normal industry practices has been found to be legitimate because the sand is part of an industrial process where there is little chance of the hazardous constituents being released into the environment or causing damage to human health and the environment when it is kept inside, because there is lead throughout the foundry 's process, and because there is a clear value to reusing th e sand. However, in the case of lead contaminated foundry

sand used as children's play sand, the same high levels of lead would disqualify this use from being considered legitimate recycling. In fact, the Agency is considering codifying the determination that the reuse of foundry sands for mold making in a foundry ’s sand loop is legitimate recycling and thus, these facilities would not need to submit a legitimacy variance petition since the Agency has already

examined the practice and determined it is legit imate recy cling. The Agency requests comment on this. In addition, the facility

submitting a petition would also be required to include in its petition a detailed description of its process and its hazardous secondary materials, including, where applicab le, material flow charts or diagrams, or other information the implementing agency may request. Because of the case
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97 of 210 implementing agency

reviewing the petition will need this detailed information to make an a ccurate assessment of the legitimacy of the process. Process for evaluating the petition EPA is proposing that this petition process be managed b y the state agencies where a state implements the RCRA Subtitle C program. In states where EPA implements Sub title C, the petition process would be run b y the appropriate EPA Regional office. EPA is proposing that in responding to a legitimacy variance petition, the implementing agency would follow the same procedures alread y in place for variances from solid wa ste, variances to be classified as a boiler, and for non
- waste determinations in § 260.33. After evaluating the petition for a legitimacy variance and, if necessary , visiting the requesting facility , the implementing agency would issue a draft notice tentatively granting or denying the application. Notification of the tentative decision would be provided b y newspaper advertisement or radio broadcast in the locality where the recy cler is located. The implementing agency would then accept comment on the tentative decision for at least 30 day s and may also hold a public hearing. The implementing agency would issue its final decision after receipt of comments and after an y public meetings. Upon receiving a legitimacy variance, EPA is proposing that the facility include this information in the appropriate place of the RCRA Site I D Form (EPA Form 8700
- 12). EPA is proposing to revise this form to provide a place to check that a legitimacy variance has been received. The variance would not expire as long as the cond itions relevant to the legitimacy variance described in the original petition do not change. The facilit y would be required to confirm that its process has not changed b y re - notifying every two y ears, also through the RCRA Site ID Form. The facility should keep records of its legitimacy variance as part of its legitimacy*** E.O. 12866 Review

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98 of 210 documentation. EPA is seeking comment on the legitimacy petition process as proposed here and how the design of this process would work for both implementing agencies and facilities that may have to submit such a petition. 3. Proposed New Language for Legitimacy Factor 3 (Managed as a Valuable Commodity) The 2008 DSW final rule codified four factors as part of the § 260.43 definition of legitimacy , as summarized above. Factor 3 addressed the management of the hazardous secondary materials before it is recy cled. Specifically , the regulatory language for thi s factor reads as follows: “The generator and the recy cler should manage the hazardous secondary material as a valuable commodity . Where there is an analogous raw material, the hazardous secondary material should be managed, at a minimum, in a manner cons istent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary material should be contained. Hazardous secondary materials that are released to the environment and are not recovered immediatel y are discard ed.” In making all legitimacy

factors mandatory , the first sentence of the regulatory language would be revised to read as follows: “The generator and the recy cler must manage the hazardous secondary material as a valuable commodity .” In addition, the Age ncy is requesting public comment on whether the language that follows that sentence should also be changed to more closely reflect the intent of the provision to: “Where there is an analogous raw material, the hazardous secondary

material, must be managed, at a minimum, in a manner consistent with the management of the raw material or in an equally protective manner. ” Thus, a generator or recy cler would not have to submit a petition for a legitimacy variance if their hazardous*** E.O. 12866 Review

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99 of 210 secondary material is stored i n a different manner than the analogous raw material, as long as that storage was as protective as the way the analogous raw material was stored. The entire new proposed paragraph at 40 CFR 260.43(a)(3) would read as follows: “The generator and the recy cl er must manage the hazardous secondary material as a valuable commodity . Where there is an analogous raw material, the hazardous secondary material must be managed, at a minimum, in a manner consistent with the management of the raw material or in an equal ly

protective manner. Where there is no analogous raw material, the hazardous secondary material must be contained. Hazardous secondary materials that are released to the environment and are not recovered immediatel y are discarded.” EPA requests comment o n these changes to the language in factor 3. 4. Proposed New Language for Legitimacy Factor 4 (Comparison of Toxics in the Product) The 2008 DSW final rule codified four factors as part of the § 260.43 definition of legitimacy , as summarized above. Factor 4 addressed the issue of toxics along for the ride in the products made from hazardous secondary materials. Specificall y, the regulatory language for this factor reads as follows: “40 CFR 260.43(c)(2): The product of the recy cling process does not (i) contain significant concentrations of an y hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are si gnificantly elevated from those found in analogous products; or (iii) exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit” (emphasis added). The agency

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100 of 210 legitimacy

factor from “significant” and “significantly elevated” to “comparable to or lower than” because it more clearly reflects the intent of this factor. The agency believes “comparable to or lower than” means that an y cont aminants present in the product made from hazardous secondary materials are within a small acceptable range. In making this change, we also are simplifying the regulatory text by combining subparagraphs (i) and (ii) since it is no longer necessary to separ ate those instances where the hazardous constituents are or are not present in the analogous product. This language is also more consistent with the I dentification of Non
Hazardous Secondary

Materials that are Solid Wastes final rule (insert citation). How ever, we are not changing the basic meaning of this factor and the examples the Agency provided in the 2008 DSW final rule preamble that explained how the Agency envisions this factor working are still appropriate. Those examples are repeated here. For example, if paint made from reclaimed solvent contains significant amounts of cadmium, but the same type of paint made from virgin raw materials does not contain cadmium, it could indicate that the cadmium serves no useful purpose and is being passed though the recy cling process and discarded in the product. Thus, the levels of cadmium would not be considered “comparable” and the paint would fail this legitimacy factor. In a second example, if a lead
- bearing hazardous secondary material was reclaimed and then that material was used as an ingredient in making ceramic tiles and the amount of lead in the tiles was significantly

higher than the amount of lead found in similar tiles made from virgin raw materials, the recy cler should look more closely at the factors to determine the overall legitimacy of the process. The significantly higher levels of lead would indicate that the recycled product is not comparable to an analogous product and, thus, the recy cling process is really a sham. Another example is if zinc g alvanizing metal made from hazardous secondary materials*** E.O. 12866 Review

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101 of 210 that were reclaimed contains 500 parts per million (ppm) of lead, while the same zinc product made from raw materials ty picall y contains 475 ppm. These levels would be considered comparable since the y are within a “small acceptable range” and, thus, the product would meet this factor. If, on the other hand, the lead levels in the zinc product made from reclaimed hazardous secondary

materials were 1,000 ppm, these levels would not be comparable in that they would not be considered to be within a “small acceptable range” and it may indicate that the product was being used to illegall y dispose of the lead and that the activity is sham recycling, unless the recy cler submits a petition and receives a determ ination from the implementing agency that other factors demonstrate otherwise and the recycling activity is determined to be legitimate. The new proposed language for 40 CFR 260.43(a)(4) would read as follows: “The product of the recy cling process (i) mus t contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are comparable to or lower than those found in analogous products or (ii) must not exhibit a hazardous characteristic (as defined in part 261 subpart C ) that analogous products do not exhibit. EPA requests comment on these changes to the language in factor 4. 5. Documentation of Legitimacy When the Agency

codified the legitimacy

standard in the 2008 DSW final rule, we did not require specific document ation regarding the legitimacy determination, although the regulatory

language stated that persons claiming to be excluded from hazardous waste regulation because they

are engaged in reclamation must be able to demonstrate that the recycling is legitimate. Specificall y, 40 CFR 260.43 states that any facility claiming an exclusion at § 261.2( a)(2)(ii), § 261.4( a)(23), § 261.4( a)(24), or § 261.4 (a)(25) or using a non
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102 of 210 determination at § 260.30 (d) or (e) must be able to demonstrate that its recycling activity is legitimate. Although there was no specific recordkeeping requirement that went along with the ability to demonstrate legitimacy in the 2008 DSW final rule, EPA stated that we expected that in the event of an inspection or an enforcement action by an implementing agency , the recy cler would be able to show how it made the overall legitimacy determination per § 261.2 (f). Section 261.2(f) requires persons claiming that materials are not soli d waste or are conditionally exempt from RCRA Subtitle C regulation to provide appropriate documentation of these claims. Under the 2008 DSW final rule, when a recy cling process does not conform to one or both of the two non - mandatory

factors under § 260.4 3 (c), the Agency would expect the facility to show that it considered the factor(s) and why the recy cling activity

overall remains legitimate. Although § 261.2(f) will still apply

in enforcement actions, w e have since realized that the information document ing a recy cling activity as legitimate should be assembled in advance and be available at all times. After implementing the DSW exclusions in several states since its promulgation in 2008, we have determined that a one
- time documentation of legitimacy is an important step in ensuring compliance with this provision and will make oversight and enforcement more effective. We are therefore proposing today to require that persons who perform the recy cling include documentation in their paperwork to explain how their hazardous secondary materials are legitimatel y rec ycled. We generally expect that this documentation would be a narrative description, which could include photographs or other illustrations of how the recy cling of their hazardous secondary

materials meets all four factors of legitimate recy cling. All recy clers of hazardous secondary

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103 of 210 recy cling occurs for the duration of the recy cling operations and for three ye ars after the recy cling operations cease. If the recy cling occurs on
- site at a generator’s facility rather than at the recy cler’s facilit y, then the documentation would be maintained at the generator’s facility
. Written documentation would provide an easil y - available explanation of the facility ’s rationale for the legitimacy of its process that is available to the implementing agency on regular inspections or as part of compliance assistance. This provision would require that persons claiming that their recycling activity is legitimate have the burden to provide written documentation showing how the hazardous secondary materials provide a useful contribution to the recy cling process, how the product of the recyclin g activity

— whether it is a product or process intermediate

— is valuable, how the generator or the recycler manages the hazardous secondary materials as a valuable commodity , and how the levels of any hazardous constituents in the product made from hazardous secondary materials are comparable to or lower than those in analogous products made from virgin materials. If the hazardous secondary material generator or recy cler determines that one or both of the latter two factors were not met, it would need to prod uce documentation that it ha s petitioned the implementing agency for a legitimacy

variance, as described above, and received a determination that the recycling was indeed legitimate, even though one or both of those factors were not met. The Agency

is not proposing an y specific format for the documentation of legitimacy; however, we expect that the recy cler would have a written narrative describing the recy cling process and how it meets each legitimacy factor. For example:

 Useful contribution legitimacy fa ctor

—the recy cler would document how the hazardous secondary

materials provide a useful contribution to the recy cling process or to the product or intermediate of the recy cling process. The regulatory*** E.O. 12866 Review

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104 of 210 text for this factor provides five specific way s in whi ch useful contribution can be achieved. The recy cler would need to document how the hazardous secondary materials add value and/or are useful to the recy cling process in one or more of these way s: ( i) contributing valuable ingredients to a product or inter mediate; (ii) replacing a catal ys t or carrier in the recy cling process; (iii) providing a valuable constituent to be recovered; (iv) being regenerated; or (v) being used as an effective substitute for a commercial product. For example, if the hazardous sec ondary material is a source of a valuable constituent, such as a precious metal, the document would explain the specific precious metals recovered and their value to the process.

 Valuable product or intermediate legitimacy factor

—the recy cler would explain how the product or intermediate made from hazardous secondary material is valuable, either in a monetary sense or through its intrinsic value. If the product made from hazardous secondary material is sold, the documentation of sale could be proof of the v alue of the material to a third party . Such documentation could be in the form of a selection of receipts or contracts and agreements that establish the terms of the sale or transaction. A recy cler that has not y et arranged for the sale also could demonstr ate value b y showing that the product or intermediate can replace another product or intermediate that is available in the marketplace. Demonstrating intrinsic value may be less straightforward than demonstrating the value of products that are sold in the marketplace, but could involve an explanation of the industrial process that shows how the product of the recycling process or intermediate replaces an alternative product that would otherwise have*** E.O. 12866 Review

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105 of 210 to be purchased.

 Managed as a valuable commodity legitima cy

factor

—the recy cler would include a description of how the hazardous secondary material is managed and explain how this management is similar or provides equivalent protection to the management of an analogous raw material. That is, the documentation wo uld describe how the hazardous secondary material is stored and handled prior to being inserted into the recy cling process. Where there is no analogous raw material, the recycler would explain how the management of the hazardous secondary material ensures that the material is contained as proposed in 40 CFR 260.10.

 Comparison of toxics in the product legitimacy factor

— the recy cler would include an y data or information that shows that the levels of hazardous constituents in the product are comparable to or lower than those found in analogous products. For example, if a recy cling process produced paint, the levels of hazardous constituents in the paint would be compared to the levels of the same constituents found in a similar paint made from virgin raw materials. This comparison would be included in the documentation of this legitimacy determination. A recy cler is also allowed to perform this evaluation by comparing the hazardous constituents in the hazardous secondary material feedstock with those in an anal ogous raw material feedstock. This may be easier in cases where the recy cler knows that the hazardous secondary material is very

similar in profile to the raw material. It may also be preferable in cases where the recy cler creates an intermediate which is later processed again and may end up in two or more*** E.O. 12866 Review

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106 of 210 products, where there is no analogous product or when production of the product of the recy cling process has not y et begun. As discussed above, the Agency is also proposing that the legitimacy standard b e codified for all hazardous secondary material recy cling, not only for the specific DSW exclusions promulgated in the 2008 DSW final rule. As part of ensuring that all hazardous secondary material recy cling is legitimate, we are proposing that persons rec ycling under these other recy cling exclusions and recy cling under the Subtitle C hazardous waste regulations (which often are subject to reduced regulatory requirements) also maintain documentation in their files of why their recy cling is legitimate. This proposed administrative requirement would apply to all recy cling that is ongoing after the effective date of the final rule adopting this requirement. We are interested in receiving public comment on this issue. As far as how documentation would work for e xisting exclusions, as we noted in the 2003 DSW proposal, EPA has alread y examined in depth a number of waste
- specific and industry
- specific recy cling activities and has promulgated specific regulatory exclusions or provisions that address the legitimacy o f these practices in much more specific terms than the general factors that were finalized as part of the 2008 DSW exclusions and non
- waste determination process. One example is the regulation for zinc fertilizers made from recycled hazardous secondary

mat erials. In the zinc fertilizer regulation, among the requirements established by

EPA are specific numerical limits on five heavy metal contaminants and dioxins in the zinc fertilizer product exclusion at 40 CFR 261.4( a)(21). We believe that data showing th e zinc fertilizer product meets those numerical limits would be sufficient for documenting that the product meets legitimacy factor 4 (comparison of toxics in the product). Other examples of existing exclusions where EPA has established specific conditions that are related to their*** E.O. 12866 Review

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107 of 210 legitimacy

determinations are shredded circuit boards excluded under 40 CFR 261.4 (a)(14), which must be free of mercury switches, mercury

relay s, and nickel
- cadmium and lithium batteries, and comparable fuels excluded under 40 CF R 261.4( a)(16), which must meet specific levels for hazardous constituents (thus, meeting legitimacy factor 4). The conditions developed for the recy cling exclusions in § 2 61.4 (a) were found to be necessary under material
- specific rulemakings that determi ned when the particular hazardous secondary materials in question are not solid wastes. When EPA originall y made the decision that these hazardous secondary materials are not solid waste, the Agency took into account the relevant factors about the hazardou s secondary materials, including how the materials were managed and what toxic chemicals were present. Thus, for those specific exclusions in § 261.4(a) that have conditions that relate directl y to legitimacy , documentation that shows that the facility me ets those conditions would be what is necessary to show that the recy cling of such material is meeting those specific legitimacy factors. However, a facility

would also have to include a narrative description of how it meets the other legitimacy

factors th at may

not be reflected in the waste
- specific conditions of the exclusion, in its legitimacy

documentation. EPA is requesting comment on the requirement for documentation of legitimacy , for both the 2008 DSW exclusions and for the existing recy cling excl usions. XI. Revisions to Solid Waste Variances and Non - Waste Determinations The Agency

is also proposing today

to modify

the existing regulation of solid waste variances at 40 CFR 260.31(c), 40 CFR 260.33 and 40 CFR 260.34 to foster greater consistency on the part of implementing agencies and help ensure the protectiveness of the implementation of the solid waste variances and non
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108 of 210 following: 1. Revise 40 CFR 260.33(c) to require facilities to re
- apply for a variance in the event of a change in circumstances that affects how a material meets the criteria upon which a solid waste variance has been based ; 2. Add a provision at 40 CFR 260.33(d) stating that facilities receiving a variance or non
waste de termination must provide notification as required by § 260.42 of this chapter ; 3. Revise the criteria for the partial reclamation variance in 40 CFR 260.31(c) to more clearl y explain when the variance applies and to require, among other things, that the crite ria for this variance must be reviewed and evaluated collectivel y, since each criterion reinforces and supports other criterion ; 4. Revise the criteria for the non
- waste determination in 40 CFR 260.34 to require that petitioners explain or demonstrate wh y the ir hazardous secondary materials cannot meet, or should not have to meet, the existing DSW exclusions under §§ 261.2 or 261.4 ; and 5. Designate the Regional Administrator as the EPA recipient of petitions for variance and non - waste determinations. Finally , EPA is requesting comment on other possible steps to help ensure national consistency and protectiveness in the implementation of variances and non
- waste determinations. In response to the May

27, 2009, Federal Register notice announcing the DSW p ublic
m ee ting, commenters identified issues with the implementation of the non
- waste determination process, arguing that (1) determinations can lead to inconsistency among states and may negativel y impact economies for states that are more stringent in their determ inations; (2) determinations may

require a large amount of state resources to review and process; and, (3) determinations that are indefinitely approved may

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109 of 210 required to ensure that legitimate and safe reclamation i s occurring. 18 While these comments were focused on the non
- waste determination petition process in the 2008 DSW final rule (which was the focus of the public meeting), they can appl y equally to the solid waste variances as well, since the procedures in 40 CFR 260.33 are intended to appl y to both. Thus, EPA is proposing to make changes that affect both the solid waste variances and the non - waste determinations. A. Proposed Revisions to Procedures for Variances and Non
- Wa ste Determinations Found in 40 CFR 26 0.33 Under the current regulatory framework, 40 CFR 260.30 provides the Administrator with the authority

to grant a variance from the definition of solid waste or a non
- waste determination on a case - by
- case basis if materials are recy cled in a particular m anner. The practical effect of both the solid waste variances and the non
- waste determinations is the same; once a petition is granted b y EPA or the authorized state, the hazardous secondary material is not regulated as a solid or hazardous waste. The proc edures for these variances and non
- waste determinations are found in 40 CFR 260.33. In today ’s proposed rule , EPA is proposing two changes to 40 CFR 260.33. First, EPA is proposing to make all variances subject to the provision in 40 CFR 260.33(c) that w ould require an applicant to re
- appl y for a variance in the event that the material no longer meets the relevant criteria. Second, EPA is proposing to make all variances and non
- waste determinations subject to the biennial notification requirements in 40 C FR 260.42. 1. Requirement that an Applicant R e - appl y in the E vent the M aterial N o L onger M eets the R elevant C riteria

18 EPA stated in the public meeting notice that we did not expect to repeal the non
- waste determination process and thus we did not explicitly ask for comment on the provision in the notice. However, in some cases, commenters did address this provision.*** E.O. 12866 Review

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110 of 210 The 2008 DSW rule noted that once a non
- waste determination has been granted, the applicant is obligated to ensure the hazardous secondary material continues to meet the criteria of the non
- waste determination, including an y conditions specified therein by the regulatory authority . If a change occurs that affects how the hazardous secondary material s meet the relevant criteria and (if applica ble) an y conditions as specified b y the regulatory authorit y and the applicant fails to re
- apply to the Administrator for a formal determination, the hazardous secondary material s may

be determined to be solid and hazardous waste and subject to the RCRA Subtitle C hazardous waste requirements (73 FR 64712

– 13, October 30, 2008). This requirement was codified at 40 CFR 260.33(c). The requirement that the hazardous secondary material s determined to not be a solid waste must continue to meet the relevant criteria of a solid waste variance or non
- waste determination is inherent in the regulations. Failure to meet the criteria could indicate that the hazardous secondary

material s are discarded and a solid waste and would trigger the need to re
examine the circumst ances of the recy cling. The 2008 DSW rule codified this requirement in order to enhance clarit y and assist in its implementation, but only focused on the non
- waste determination provisions because that was the scope of that rule. EPA is now proposing to ex plicitly appl y 40 CFR 260.33(c) to all the solid waste variances, as well as the non
- waste determination provisions listed in 40 CFR 260.30 to ensure that if there are changes that may impact how hazardous secondary material s meet the relevant criteria, th at such changes be considered by the regulatory

authority to ensure that those criteria continue to be met. Codifyingthis requirement would help ensure clarity and consistency

by providing an administrative procedure for reconsidering a variance in the ev ent that the hazardous secondary

material no longer meets the relative criteria for the variance.*** E.O. 12866 Review

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111 of 210 2. Proposed Re
- notification Requirement The second proposed change to 40 CFR 260.33 is to require facilities receiving variances or non - waste determinations to re - notify EPA or the State Director, if the state is authorized for this aspect of the rule, every two y ears by

March 1 of each even
- numbered y ear using EPA Form 8700
- 12 in compliance with 40 CFR 260.42. The current process cannot track variances or non
waste determinations at a national level and over time. This lack of tracking can lead to state
- to state inconsistency

in determinations because one state cannot easily access information regarding similar determinations made by another state. Two comment ers expressed specific concern over this inconsistency , arguing that variations in stringency can drive jobs out of more
stringent states and into less
- stringent states. These commenters argued that more detailed or restrictive criteria and EPA oversight are necessary to ensure that non
- waste determinations are issued consistently

across states. One of the commenters also recommended increasing transparency

by making the non
- waste determinations available online. Additionally , lack of tracking inhibits effe ctive oversight of facilities receiving variances and non
- waste determinations because it does not provide regulatory authorities with a mechanism for receiving updated information. Amending the procedures for variances and non
- waste determinations to re quire re
notification ensures that regulatory authorities are provided regularly updated information (such as information regarding quantities of hazardous secondary materials managed under the determination). Such updating enables better compliance with the criteria and with any stipulations of the variance or non
- waste determination. Additionally , this information can be used to identify

facilities which may

have undergone changes to their reclamation process significant enough to trigger a review of the determination under 40 CFR 260.33(c).*** E.O. 12866 Review

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112 of 210 This proposed change is also based on EPA’s experience with the § 260.42 notification requirement. Since the 2008 DSW final rule became effective on December 29, 2008, EPA has received a number of notifications from f acilities managing hazardous secondary materials under the generator
- controlled and transfer
- based exclusion and has judged the notification provision to have worked well in enabling regulatory authorities to monitor compliance of the facilities with the c onditions of the exclusions. Regulatory authorities receive information on the name and location of the facilities operating under the exclusion and the ty pes and quantities of hazardous secondary materials the facility

is managing, which allows the regulatory authority to prioritize inspections, as well as create a list of facilities that would benefit from training and compliance assistance on the rule. Additionally , notification has allowed regulatory authorities to follow up with facilities that appear to have misunderstood the regulations. For example, notification allows regulatory authorities to contact facilities that notified that they were operating under the exclusions but were, in fact, residing in a state that had not adopted the 2008 DSW final rule. Notification in these instances allowed regulatory authorities to identify

problems and to intervene earl y to prevent potential mismanagement. EPA is convinced of the value of the notification provision in ensuring proper implementation of its rules and believes that such notification for variances and non - waste determinations would increase the transparency and oversight of facilities receiving a variance or non
- waste determination. In addition to re
- notification, EPA also plans to increase the tran sparency of the variance and non
- waste determination petition processes by providing online access to a list of facilities receiving variances and non
- waste determinations, including an y supporting documentation upon which a determination has been made. Id eall y, this website would function as a clearinghouse of*** E.O. 12866 Review

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113 of 210 information so that the states could use each other’s determinations to inform determinations within their own state borders. EPA believes this sharing of information would increase consistency

in de terminations across states. EPA plans to work with states to develop a process for collecting information regarding non
- waste determinations so that EPA can include these facilities in its online database. Additionall y, EPA requests comment on requiring st ates to notify EPA when an application for a variance or a non
- waste determination has been received and to provide EPA information regarding the state’s final decision on the application. B. Proposed Revisions to Partial Reclamation Variance The “partial reclamation” variance at 40 CFR 260.30(c) applies to materials that have been reclaimed, but must be reclaimed further before the materials are completely recovered (i.e., “partial reclamation”). In turn, 40 CFR 260.31(c) provides the specific standards th at a material must meet in order to be eligible for a variance from classification as a solid waste. Today , the Agency

is proposing to revise the partial reclamation variance provision of 40 CFR 260. 31(c) to clarify

when partiall y - reclaimed materials are not solid waste because they are commodity
- like. The objectives of these proposed revisions are to clarify the regulatory language, foster consistent application of the variance criteria, and make clear that the variance should be granted onl y when partial reclamation has produced a commodity
- like material. EPA’s proposed modificati ons of 40 CFR 260.31(c) include ( 1) revising the introductory text to clarify when the variance applies; ( 2) revising the introductory text to require that all of the decision cr iteria must be met; ( 3) revising the language of all of the decision criteria; and ( 4) eliminating the sixth criterion “other relevant factors.” 1. The Current Partial Reclamation Variance Provision Under the current regulations, 40 CFR 260.30, 260.31, an d 260.33 together provide*** E.O. 12866 Review

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114 of 210 variance mechanisms for three t ypes of recycled materials which the Regional Administrator (or State Director, in an authorized state) may determine, on a case
- by
- case basis, are not solid waste if they meet specified criteria. On e of the variances, found in 40 CFR 260.30(c), with associated criteria at 40 CFR 260.31(c), addresses materials that have been partiall y reclaimed but must be reclaimed further before the materials are completely recovered. Under current 40 CFR 260.31(c), the Regional Administrator may grant a request for a variance for such materials if, after initial reclamation, the resulting material is commodity
- like. The determination that a partially reclaimed material is commodity
- like is made using the following s ix factors: (1) The degree of processing the material has undergone and the degree of further processing that is required; (2) The value of the material after it has been reclaimed; (3) The degree to which the reclaimed material is like an analogous raw material; (4) The extent to which an end market for the reclaimed material is guaranteed; (5) The extent to which the reclaimed material is handled to minimize loss; and (6) Other relevant factors. In the preamble to the 1985 Definition of Solid Waste fina l rule (January 4, 1985; 50 FR 655) where this provision was promulgated, EPA stated that “the Regional Administrator may weigh these factors as she sees fit, and may rel y on any or all of them to reach a decision.” 2. The Intent of the Partial Reclamatio n Variance When the partial reclamation variance provision was promulgated in 1985, EPA’s intent was to provide a mechanism for determining that a hazardous waste had undergone sufficient reclamation (a ty

pe of processing) to produce a material that was mo re like a commodity than a solid waste. The variance would be applicable if the material was commodity
- like, even though*** E.O. 12866 Review

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115 of 210 some further reclamation was required before the material became a commercial product. EPA intended that the variance would be applied at the point that the commodity
- like material was produced. After that point, the material would be managed as a commodity rather than as a solid and hazardous waste. Prior to the point that partial reclamation produced a commodity
- like material, the material would have to be managed as a hazardous waste. The following discussion illustrates how the Agency intended the variance to work for a ty pical treatment s ys tem involving three parties: ( 1) a generator of hazardous waste; ( 2) a partial reclamation facil ity

that receives, stores, and partially reclaims the hazardous waste to produce a commodity
- like material; and ( 3) a final reclaimer, or end market, that receives the commodity
like material and uses it as a substitute for products or intermediates in pro duction processes that involve further reclamation. First, the generator would manage and ship the hazardous waste following all of the applicable hazardous waste regulations , including waste quantity determinations, accumulation time limits, generator acc umulation technical requirements, and hazardous waste manifest procedures for shipping. Second, the partial reclamation facility would receive the hazardous waste under a hazardous waste manifest. The facility would also have a RCRA permit for management o f the hazardous waste until the point that the partial reclamation process had produced a commodity
- like material. Once the partial reclamation process had produced a commodity
- like material, a partial reclamation variance from classification as solid wast e could be granted. Accordingl y, management of the commodity
- like material after that point would not be covered b y the partial reclamation facility ’s RCRA permit. In addition, the partial reclamation facility would not be required to use a manifest to shi p the commodity
- like material to the final reclaimer.*** E.O. 12866 Review

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116 of 210 Finally , the final reclaimer would receive the commodity
- like material from the partial reclaimer without a manifest. The final reclaimer would not require a RCRA permit for management of the commodity
- like material because the material is not a solid and hazardous waste. The preceding discussion illustrates how the variance would appl y to a t ypi cal three
facility , three
- step process. However, the critical point is not how many steps or facilities are involved, but at what point the partial reclamation process has produced a commodity
- like material as defined b y the criteria in 40 CFR 260.31(c). Depending on the materials and processes in question, th is point could occur at varyingsteps in the management of a hazardous waste, at varying facilities where it is managed. 3. Experience With the Current Partial Reclamation Variance Provision EPA has become aware that authorized states across the country have interpreted and applied the variance provision incon sistently , even in similar circumstances. T his inconsistency may be due to ( 1) the wide discretion allowed the regulatory authorit y to weigh an y or all of the decision criteria in an y way it sees fit; ( 2) lack of clarity in the decision criteria themselves ; or ( 3) the general sixth criterion “other relevant factors.” This inconsistency

has resulted in variances being granted under 40 CFR 260.31(c) for some materials that are not y et commodit y - like and that are still clearl y hazardous waste. Therefore, EPA is proposing revisions to the variance criteria to address the inconsistency among authorized states, remove ambiguities, and clearl y convey the original intent that only hazardous wastes that have been partially reclaimed to produce commodity
- like materi als are eligible for a variance from classification as solid waste. Consistent and appropriate application of the partial reclamation variance is necessary so that the hazardous waste program provides the level of*** E.O. 12866 Review

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117 of 210 protection of human health and the environment required b y the RCRA statute in all communities in all areas of the country
. An illustration of how the revised variance provision would be applied to a commonly reclaimed hazardous waste example is included in the Background Document “F006 Reclamatio n.” This document includes a detailed description of how the proposed revised variance provision would be used to make determinations about whether a variance would be appropriate for listed hazardous waste F006 (wastewater treatment sludges from electropl ating operations) at various steps in the reclamation process. 4. Proposed Revisions to Clarify and Improve the Partial Reclamation Variance Provision As stated above, EPA is proposing several revisions to 40 CFR 260.31(c). Each of the proposed revisions i s discussed below. a. Revision to clarify the introductory text of 40 CFR 260.31(c). EPA is proposing to revise the introductory

text of 40 CFR 260.31(c) to clarify when a partial reclamation variance is applicable. The proposed revised text reads as foll ows: (c) The Regional Administrator may grant requests for a variance from classifying as a solid waste those materials that have been partially reclaimed but must be reclaimed further before recovery is completed, if the partial reclamation has produced a commodity
- like material. To qualify for a variance the material must be legitimately recy cled as specified in 40 CFR 260.43, must be partiall y - reclaimed as determined b y meeting criterion 1 below, and must be commodity
- like as determined by meeting crit er ia 2

– 5 below: The revised text is intended to clarify that the variance is applicable at the point that partial reclamation has produced a commodity
- like material. The revised text includes the phrase*** E.O. 12866 Review

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118 of 210 “ has produced a commodity
- like material ” and “must be commodity
- like.” These changes clarify and reflect EPA’s intent that the variance applies only after partial reclamation has produced a commodity
- like material. The variance does not apply earlier in a process when a hazardous waste is still present. Whil e not a new regulatory requirement, the proposed change also highlights that the commodity
- like material must be legitimately recy cled. The revised introducto ry

text also replaces the term “reclaimed” with “ partiall y reclaimed ” to be more specific about wh en a variance would be applicable (i.e., after partial reclamation has produced a commodity
- like material, rather than after full reclamation). Finall y, the revised text clarifies that the first criterion is to be used to determine whether partial reclamat ion has occurred and the remaining criteria are to be used to determine whether a partially
- reclaimed material is commodity
- like. EPA requests comment on whether the proposed revisions to the introductory text clarify the variance provision effectivel y an d whether they will result in appropriate and consistent decisions about whether and when to grant a variance. b. Revision to the introductory text of 40 CFR 260.31(c) to require that all criteria are met. When the partial reclamation variance provision was originally promulgated in 1985, EPA stated that the Regional Administrator or authorized State Director could weigh the decision criteria “as she sees fit, and may

rel y on any or all of them to reach a de cision.” Based on experience with the variance provision, EPA is proposing to change the introductory text of 40 CFR 260.31(c) to require that all criteria must be satisfied before a variance is granted. EPA is proposing this change for several reasons. Fi rst, criterion 1 emphasizes that the material must have been substantially

partiall y reclaimed to be eligible for a variance. (This is discussed further in the next section below .) Second, we believe that each of the proposed revised criteria numbers 2, 3,*** E.O. 12866 Review

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119 of 210 4, and 5 appropriatel y reflects a fundamental and essential characteristic of a commodity
- like material. Therefore, all criteria must be met for the material to be determined to be commodity
like. In addition, clarifying that all of the criteria must be m et will result in more consistent application of the variance by different decision makers. EPA requests comment on whether ( 1) the revised introductory text is more clear, ( 2) the revised criteria appropriately reflect the fundamental characteristics of a commodity
- like material; and (3 ) requiring that all criteria must be met to grant a variance will foster appropriate and consistent variance decisions. c. Revisions to all criteria of 40 CFR 260.31(c). EPA is proposing revisions to all of the criteria in 40 CFR 260.31(c). First, all of the criteria have been revised to begin with the word “whether” to make it clear that the regulatory authorit y must make a yes or no determination as to whether the material meets each criterion. In addition, all of the cri teria have been revised to be clearer and to better reflect the fundamental characteristics of a commodity - like material. The proposed changes to each criterion are discussed below. 1. The degree of processing the material has undergone and the degree of f urther processing that is required. EPA is proposing to revise this criterion to read as follows: ( 1) Whether the degree of partial reclamation the material has undergone is substantial. This criterion examines the degree of reclamation the material has undergone. The more substantial the partial reclamation step is, the more likely it is that the material generated by the partial reclamation step is no longer a hazardous waste and that the partial reclamation has produced attributes that would make the m aterial commodity
- like. First, EPA is proposing to replace the general term “ processing ” with the more specific*** E.O. 12866 Review

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120 of 210 and accurate term “ partial reclamation. ” Second, EPA is proposing to remove from the criterion the concept that the initial partial reclamatio n step that makes a material commodity
- like should be compared to the further reclamation that occurs after the material has become commodity like. Experience with the variance has clarified that the relevant question is whether the partial reclamation that has been completed has substantial ly changed the material from the original hazardous waste to produce an objectively different material . If the material has been substantially

partiall y reclaimed, it then can be evaluated to determine whether it is co mmodity
like using the remaining criteria. The degree of reclamation that occurs in the final reclamation step is not indicative of whether the partiall y - reclaimed material is commodity
- like. This criterion would be satisfied when true reclamation has occurred and has made substantial changes to the material. The changes must be substantial to have produce d a material that is no longer the original hazardous waste and to have produced new attributes that may satisfy the commodity
- like criteria 2 through 5
. EPA requests comment on whether the proposed revisions to this criterion clarify when a variance is applicable. EPA also requests comment on the appropriateness of removing the requirement to compare the degree of partial reclamation to the degree of fi nal reclamation. 2. The value of the material after it has been reclaimed. EPA is proposing to revise this criterion to read as follows: ( 2) Whether the partially
- reclaimed material has sufficient economic value that it will be purchased for final reclamation. This criterion examines the first of four fundamental characteristics that indicates that a partially
- reclaimed material is commodity
- like, the value of the material produced b y the partial reclamation step.*** E.O. 12866 Review

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121 of 210 EPA is proposing to add the word “parti ally
- ” before the word “reclaimed” to clarify that the cri terion applies to the partiall y - re claimed material, not the full y - reclaimed material produced later in the process. EPA is also proposing to revise this criterion to reflect the fundamental characte ristic that a commodity
- like material has positive economic value. A partially
- reclaimed material that is commodity
- like will be purchased by those who use it in manufacturing and production operations. EPA notes that the value of a material produced at a later stage of reclamation cannot be used to justify a variance for the partiall y - reclaimed material produced earlier in the process. In other words, the criterion must be applied to the material as it is at the specific point in the reclamation process wh ere application of the variance is requested. Evidence to sup port this criterion may include sales information; demand for the material; and business contracts (e.g., contracts specifying quantities of material sold, details of the transaction, and the ef fective price paid for the partially reclaimed material by

purchasers (i.e., after subtracting transportation costs and any other goods or services rendered in exchange for the material purchased)). EPA requests comment on whether the proposed revisions c larify the criterion and appropriatel y describe the fundamental economic value characteristic of a commodity
- like material. 3. The degree to which the reclaimed material is like an analogous raw material. EPA is proposing to revise this criterion to read as follows: ( 3) Whether the partially
- reclaimed material is a viable substitute for a product or intermediate, produced from virgin or raw materials, which feeds subsequent production steps. This criterion reflects the second of four fundamental characteristics of a commodity
- like material that must go through further reclamation before it becomes a final commercial product.*** E.O. 12866 Review

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122 of 210 In short, the material must be sufficientl y analogous to a product or intermediate used in a manufacturing process to substitute for that product or intermediate. First, as with other criteria, EPA is proposing to add the word “partially
- ” before the word “reclaimed” to clarify that the cri terion applies to the partiall y - re claimed material, not the fully
- reclaimed material produced later in the process. Second, EPA is p roposing to replace the phrase “ is like an analogous raw material” with the phrase “ is a viable substitute for a product or intermediate, produced from virgin or raw materials, which feed s subsequent production steps.” T his revision is intended to more accuratel y describe the fundamental characteristic of a commodity
- like material used in production, which is that it will be used as a viable substitute for a product or intermediate. A partiall y - reclaimed material would me et this criterion if it is analogous to, or , in other words, would replace, valuable products or intermediates in the manufacturing process that have been produced (i.e., partiall y reclaimed) from raw materials but require further processing (reclamation) steps before the manufacturing process is complete. Evidence to support this criterion would include a comparison of the ph ys ical and chemical c haracteristics of the partially
- reclaimed material being considered for the variance to those of products or int ermediates produced from virgin raw materials. EPA requests comment on whether the proposed revisions clarify the criterion and appropriatel y describe the fundamental characteristic of a commodity
- like material related to substituting for a product or raw material in a production process. 4. The extent to which an end market for the reclaimed material is guaranteed. EPA is proposing to revise this criterion to read as follows: ( 4) Whether there is a guarante ed end market for the partiall y - reclaimed mate rial. This criterion addresses the third of four fundamental characteristics of a commodity
- like*** E.O. 12866 Review

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123 of 210 material, whether there is an end market for the partially
- reclaimed material. As with other criteria, EPA is proposing to add the word “partially
- ” before the word “reclaimed” to clarify that the cri terion applies to the partiall y - reclaimed material for which the variance is sought. An end market for further reclaimed material produced at a later stage of reclamation cannot be used to justify a variance for a p artiall y - reclaimed material. EPA requests comment on whether this proposed revision clarifies the criterion effectively. In addition, although EPA is not proposing an y other substantive changes to the criterion, based on experience with the variance provision , EPA believes that further explanation of this criterion is necessary . The criterion requires an evaluation of whether an end market is guaranteed for the material for which a variance is requested. For example, if a facility requests a variance for an incoming hazardous waste, the end market that would have to be evaluated is the market for the incoming hazardous waste itself. A demonstrated end market for materials the facility produces later from the incoming hazardous waste would not be relevant to the anal ys is for the incoming waste. Fo r an end market for a partially
- reclaimed material to be guaranteed, there must be secure demand and long
- term markets for the material. This would make it unlikely that large quantities of the material will be stockpiled for long periods of time, lost, or mismanaged due to insufficient demand. Assessing whether an end market is guaranteed for the partiall y - reclaimed material requires that the applicant for the variance provide end market information for the mate rial generated b y the partial reclamation step. Evidence to support this criterion may include the material’s value as an input to a production process, traditional usage of quantities of the material, contractual arrangements for use of the material, and the likel y stability of markets for the material. Furthermore, the end market must be demonstrated b y a record of multiple actual*** E.O. 12866 Review

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124 of 210 purchases of the partially
- reclaimed material b y other parties. Further reclamation that can only be conducted b y the facility seeking the variance is not proof of an end market. 5. The extent to which the reclaimed material is handled to minimize loss. EPA is proposing to revise this criterion to read as follows: ( 5) Whether the partially
- reclaimed material is handled to minim ize loss. This criterion addresses the fourth of four fundamental characteristics of a commodity
like material, whether the partially
- reclaimed material is handled to minimize loss, or in other words, is handled similarly to a commodit y. As with other crit eria, EPA is proposing to add the word “partially
- ” before the word “reclaimed” to clarify that the cri terion applies to the partially
reclaimed material for which the variance is sought. Management of materials produced at later stages of reclamation is n ot relevant to how the partially
- reclaimed material itself is handled. EPA requests comment on whether this proposed revision clarifies the criterion effectively
. In addition, EPA's experience with the variance provision indicates that further explanation of this criterion is necessary. Specifically , this criterion requires evaluation of how the partially
- reclaimed material is handled before it is further reclaimed. Handling a partially
reclaimed material to minimize loss indicates that the material is commodity
- like. Generall y, persons handling hazardous waste with little or no economic value do not have the same incentives to minimize loss as persons handling commodities. Evidence to support this criterion may include documentation of facilit y procedures used to minimize loss (e.g. , inspections, training), and storage and management equipment designed to minimize loss. 6. Revision to eliminate criterion six
. Finally , EPA is proposing to eliminate the sixth and final criterion, “ ( 6) other relevant factors. ” When the partial reclamation variance was promulgated in 1985, EPA believed that this*** E.O. 12866 Review

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125 of 210 criterion could help determine whether a material is commodity
- like. However, based on experience with the variance provision, EPA now believes that criteria numbers 2, 3, 4, and 5 (as proposed to be revised) together accuratel y and fully reflect the fundamental substantive characteristics of a commodity
- like material for the situation where a material has been partiall y reclaimed but must go on for further reclamation b efore it is a final commercial product. We have not seen other essential characteristics of this ty pe of commodity
- like material identified in variances or applications. Thus, we are proposing to eliminate this criterion. We also believe that removing this general criterion will result in more consistent and appropriate decision
- making for partial reclamation variances. EPA requests comment on removing the sixth criterion and whether there are an y additional characteristics that should be evaluated to asse ss whether a material is commodity
like. EPA also requests comment on whether one or more of the five remaining criteria should be consolidated. C. Proposed Change to Non
- Wa ste Determinations EPA is also proposing to add a criterion to both non
- waste dete rminations that require facilities appl yi ng for a non
- waste determination to explain or demonstrate why they cannot meet, or should not have to meet, the existing DSW exclusions under §§ 261.2 or 261.4. 19 Because commenters to the 2009 DSW public meeting notice have argued that the non
- waste determinations may

be burdensome to states, EPA believes requiring applicants to formally consider and explain why they are not eligible for an existing DSW exclusion will reduce the burden on states. On the other hand, petitioners also would be allowed to seek non
- waste determinations if they

could show that they

should not have to meet the conditions of another

19 Th e tw o ty

pes of non
- waste determinations are (1) a determination for hazardous secondary materials reclaimed in a continuous industrial process and (2) a determination for hazardous secondary materials that are indistinguishable in all relevant aspects from a product or intermediate.*** E.O. 12866 Review

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126 of 210 exclusion, but rather should be allowed to operate under a non - waste determination with fewer or different conditions. However, if EPA or the authorized state determines that an applicant may , in fact, use an existing solid waste exclusion under §§ 261.2 or 261.4, this may be grounds for denying a non
- waste dete rmination on the basis that regulatory relief has already

been granted. D. Designating the Regional Administrator to Receive Petitions Lastl y, we are proposing to change the word “Administrator” to “Regional Administrator” in 40 CFR 260.30, 260.31, 260.32, 260.33, and 260.34. Due to the case
- specific nature of the variances and non
- waste determinations, we believe these decisions should be made by the Regional Administrator because of his or her regional authority . We also note that although we propose to a ssign the decision
- making authorit y to the Regional Administrator, it is common practice within EPA to work with other EPA offices, EPA Regions, EPA Headquarters on decisions that may

affect national policy
. E. Request For Comment On Other Possible Steps T o Help Ensure National Consistency And Protectiveness In The Implementation Of Variances And Non
- Waste Determinations EPA is also requesting comment on other possible steps to help ensure national consistency

and protectiveness in the implementation of variances and non
- waste determinations. First, EPA is requesting comment on whether to require variances and non
- waste determinations to be renewed periodically , and, if so, what time period would be appropriate (e.g., two or five years). A renewal period would help ensures the hazardous secondary materials continue to meet the criteria and remain valid over time. To a certain extent, this concern would be addressed b y the proposed revision to 40 CFR 260.33(c), which would require applicants to re - appl y fo r a variance or non
- waste determination in the event of a change in circumstances that affect how hazardous secondary material s meet the relevant criteria, and b y the proposed*** E.O. 12866 Review

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127 of 210 biennial re
- notification, which would require the applicant to review the manage ment of their hazardous secondary

material s . However, the proposed revision to 40 CFR 260.33(c) still relies on the applicant to recognize when there is a need to reconsider a variance and take action, while a specific renewal period would mandate a recons ideration. On the other hand, mandating a renewal period would be an additional burden to the states, and may not be necessary

in all situations. Additionally , regulators could alway s stipulate time limits in specific determinations, if warranted. EPA requ ests comment on whether to require a renewal period and, if so, how to minimize the burden on the states. The second possible change EPA is requesting comment on is whether to require states to share copies of the variance and non
- waste determination petit ions and the tentative decisions with EPA to allow the Agency to comment and to encourage collaboration and national consistency
. EPA and the states share responsibility for environmental protection and work as partners to solve the nation's environmental challenges. Because solid waste variances and non
waste determinations are made on a case
- by
- case basis, state governments are best situated to understand and evaluate the specific factors involved with the compan y submitting a petition. At the same time, EPA may

be familiar with similar cases in other states or EPA Regions and can often provide additional expertise and a national perspective on issues that affect more than one location. As a general matter, the state and EPA frequently consult on such case s, helping to achieve the best results possible, taking full advantage of the unique strengths of each partner. However, formalizing this ty pe of collaboration would have the benefit of reinforcing this working relationship and would help ensure national c onsistency . Thus, EPA requests comment on whether to require authorized states to forward to EPA copies of solid waste variance and non - waste determinations petitions and tentative decisions on those petitions for review and*** E.O. 12866 Review

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128 of 210 comment. XII. Request for Comme nt on Re - Manufacturing Exclusion A. Background In addition to the proposed changes to the definition of solid waste discussed in Sections VII

– XIof this preamble, EPA is requesting comment on a focused exclusion from the definition of solid waste for cert ain ty pes of higher
- value hazardous secondary materials 20 which are being re - manufactured into commercial
- grade products. The goal of the re
- manufacturing exclusion would be to encourage sustainable materials management b y identifying specific t ypes of transfers of hazardous secondary materials to third parties that , under appropriate conditions , do not involve discard and can result in extending the useful life of a commercial
- grade chemical. Sustainable materials management, as discussed in more detail in Section V.J. of this preamble, considers s ys tem - wide impacts, and represents a shift away from end
- of

- life waste management and toward a more sustainable future that avoids unintended consequences. The benefits of sustainable materials management are c onsiderable, and include reductions in energy used, more efficient use of materials, more efficient movement of goods and services, conservation of water, reduced greenhouse gas and other air emissions, and reduced volume and toxicity of waste. In particul ar, when hazardous secondary materials can be kept in the manufacturing process, rather than disposed of, or used in a lower
- value process such as cleaning or degreasing, substantial environmental benefits can be obtained. However, for a process to be truly sustainable in the long run, it must be done in a way that does not adversel y affect human health and the environment. As discussed in Section VII of

20 “Higher
- value” hazardous secondary materials are those who have a higher value than most types of hazardous secondary materials and can be used in manufacturing commercial
- grade products.*** E.O. 12866 Review

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129 of 210 this preamble, EPA is proposing to withdraw the transfer
- based exclusion found in 40 CFR 261.4(a)(24) and (a)(25) because of the potential for adverse impacts to human health and the environment from discarded hazardous secondary materials
. After further analyzing the potential for adverse impact to human health and the environment from hazardous secondary m aterials that are transferred to a third part y under the transfer
- based exclusion, EPA believes that the most appropriate regulatory approach is to keep most ty pes of third
- part y transfers regulated under Subtitle C of RCRA because these t ypes of transf ers are generally

linked to discard. However, as also discussed in Section VII, EPA acknowledges that some specific t ypes of hazardous secondary

materials are more like valuable commodities than solid wastes, and thus the act of transferring them to a third party under appropriate conditions does not automatically involve discard. From a sustainable materials management perspective, these materials are the ideal candidates for focused regulatory changes that would address their life
- cy cle impacts and he lp extend their useful life. Man y of the other exclusions in 40 CFR 261.4(a) were developed for these t ypes of hazardous secondary materials, and the non
- waste determination process under 40 CFR 260.34(c) provides an administrative process for additional h azardous secondary materials that are indistinguishable from a product to be determined to be non
- wastes. To further encourage sustainable materials management ,, EPA is requesting comment on an exclusion for the transfer of higher
- value hazardous secondary material s from one manufacturer to another, for the purpose of extending the useful life of the original material product b y keeping such material s in commerce to reproduce a commercial grade of the original material product (a process that for the purp ose of this preamble discussion EPA is defining as “re
- manufacturing”). Re - manufacturing these higher
- value hazardous secondary materials can have significantl y lower environmental impact than creating these material products and using*** E.O. 12866 Review

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130 of 210 them one time in the ir virgin state and then transferring them for off
- site treatment and disposal , especiall y with regards to non
- renewable materials
. Thus, re
- manufacturing allows the material products to be used again, lowering their life
- cy cle environmental impacts signif icantl y. Specificall y, EPA has reached a preliminary conclusion that, under appropriate conditions, the potential for discard in inter
- company re - manufacturing transfers for certain higher
- value spent solvents would be low because they will be incorporat ed into the manufacturing process rather than accumulated or disposed of . Once these solvents are re
manufacture d to commercial grade, they can be used as replacements for virgin commercial grade solvents. The economic incentive for a company receiving the spent solvents would be to sell or directl y use (avoiding purchase of virgin product) the re
- manufactured solvent products to realize an economic value. The compan y s ending these higher
- value hazardous secondary materials for re
- manufacturing is expected to have little economic incentive to pay the receiving compan y more than a nominal amount of money, since it would alread y be transferring something of intrinsic market value (materials that can be easily re - manufactured for profit). So, unlike the RCRA
- pe rmitted waste handler which can charge a considerable fee for receiving discarded waste, the company receiving these higher
- value hazardous secondary materials for re
manufacturing is expected to realize most of its profit from the sale or use of re
- manufa ctured solvents. Once re
- manufacturing processes are in place, EPA expects that solvent re
- manufacturers would be competitive with solvent manufacturers even in the event of a downturn in the sizable chemical markets. Companies would also have the flexi bility to redirect re
- manufacturing capacity to manufacturing should it ever make economic sense to do so, leaving little economic reason to accumulate unsold or unused re
- manufactured solvents.*** E.O. 12866 Review

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131 of 210 Although the following discussion focuses mainly on spent so lvents, EPA would welcome information on other ty pes of non
- renewable hazardous secondary materials that could benefit from a focused regulatory change that would encourage sustainable materials management and be protective of human health and the environm ent. B. Conditions for the Re
- Manufacturing Exclusion Given the wide variet y of hazardous secondary materials and industrial processes, EPA believes it is reasonable to set conditions for the exclusion which there is supporting evidence that discard will be avoided and risk will be controlled. The supporting evidence that EPA is relying on for defining the conditions of this exclusion has been gathered from some of the Agency ’s ongoing efforts to promote sustainability and resource conservation. 21 In parti cular, the Green Engineering Program within the Office of Chemical Safety and Pollution Prevention (OCSPP) has for several ye ars been studying re
- manufacturing scenarios for “once
- used” solvents in several industry sectors that use solvents as chemical manufacturing and processing aids. By

focusing on the life
- cy cle (cradle
- to - grave) impact of the manufacture, process, and use of chemicals, and reviewing Toxics Release Inventory (TRI) reporting data for production related wastes cross
- walked with RCRA waste reporting data, EPA has found that a large, but often hidden lifecy cle environmental impact of a final consumer product is from the solvents used to produce the consumer product. For example, pharmaceutical manufacturers use at least 100 kg of solvents to make 1 kg of active pharmaceutical ingredient. The lifecycle impact of these solvent streams, which often are disposed after a single use under current regulatory conditions, is very

high. EPA has determined that the environmental impacts from solvents use d as manufacturing and processing aids could be significantly reduced if the product life of solvents used for these purposes were extended to more than a single use.
21 U.S. EPA Life
- Cycle Benefits of Switching from Incineration to Reclamation for Certain Higher
- Value Chemicals.*** E.O. 12866 Review

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132 of 210 Based on this information, EPA has determined that all of the following conditions woul d need to be satisfied for eligibility under a re
- manufacturing exclusion . The purpose of these conditions is to ensure that the exclusion would focus on higher
- value hazardous secondary materials that are being re
- manufactured rather than discarded. (1) The h azardous secondary material consists of one or more of the following solvents: toluene, x yl enes, eth yl benzene, 1,2,4
- trimethylbenzene, chlorobenzene, n
- hexane, cy clohexane, methyl tert
- butyl ether, acetonitrile, chloroform, chloromethane, dichloromethane, methyl isobutyl ketone, N,N
- dimethylformamide, tetrahydrofuran , n butyl alcohol, ethanol, and methanol; (2) The hazardous secondary material originated from using one or more of the above
- listed solvents in commercial grade for reacting, extracting, purifying, or blending chemicals in the pharmaceutical, organic chemical, or plastics and resins manufacturing sectors , or the paint and coatings sector; (3) After re
- manufacturing, the continuing use of the solvent is limited to reacting, extracting, purifying, or blen ding chemicals in the pharmaceutical, organic chemical, or plastics and resins manufacturing sectors, or the paint and coatings sector, or using them as ingredients in a product. These allowed continuing uses correspond to chemical functional uses enumerated under the proposed modification to the Inventory Update Rule of the Toxic Substances Control Act (40 CFR Parts 704, 710

– 711), including Industrial Function Codes U015 (solvents consumed in a reaction to produce other chemicals) 22 and U030 (solvents become part of the mixture). 23

22 U015 Intermediates: Chemical substances consumed in a reaction to produce other chemical substances for commercial advantage. A residual of the intermediate chemical substance which has no separate function may remain in the reaction product.*** E.O. 12866 Review

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133 of 210 (4) After re
- manufacturing, the continuing use of the solvent does not involve cleaning or degreasing oil, grease, or similar material from textiles, glassware, metal surfaces, or other articles ( These disallowed continuing uses correspond to chemical functional uses in Industrial F unction Code U029 under the proposed modification of the Inventory Update R ule of the Toxics Substances Control Act) ; (5) Additionall y , both the hazardous secondary material generator and the re
- manufacturer would have to a. Notify

EPA or the State Director, if the state is authorized for the program, and update the notification every two y ears per 40 CFR 260.42; b. D evelop and maintain a re
- manufacturing plan which includes information on the ty pes and expected annual volumes of solvents to be re
- manufactured, the processes and industry

sectors that generate the solvents, the specific uses and industry sectors for the re
- manufactured solvent s and the legitimacy of the re
manufacturing process; c. Maintain records of shipments and confirmations of receipts for a period of three ye ars from the dates of the shipments ; d. Prior to re
- manufacturing, store the hazardous spent solvents in tanks or contai ners that meet technical standards that would be the same as those found in 40 CFR part 264 subparts Iand J, with the tanks and containers being labeled or otherwise having an immediatel y available record of the material being stored ; 24

23 U30 Solvents (which become part of product formulation or mixture): Chemical substance used to dissolve another substance (solute) to form a uniformly dispersed mixture ( solution) at the molecular level. Examples include diluents used to reduce the concentration of an active material to achieve a specified effect and low gravity materials added to reduce cost. 24 These standards w ould be specified in the regulatory language of this exclusi on, but w ould be the same technical standards as those required in 40 CFR part 264 subparts I and J.*** E.O. 12866 Review

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134 of 210 During re - manufacturing, and during storage of the hazardous secondary materials prior to re
- manufacturing, ensure that there is effective control of hazardous air emissions by compl yi ng with all applicable NESHAP standards, and with the requirements of 40 CFR part 264 or 265 subparts AA, BB, CC; and e. Meet the requirements prohibiting speculative accumulation per 40 CFR 261.1(c)(8). The rationale for the data elements under each condition is provided below. EPA requests comment on each of the conditions, the speci fic data elements under each condition, and/or any other ty pes of scenarios that might also meet EPA’s proposed definition of re
- manufacturing (i.e., the transfer of a higher
- value secondary material from one manufacturer to another, for the purpose of kee ping the hazardous secondary material in commerce to produce a commercial grade product). In addition , EPA requests comment on whether, as part of the re
- manufacturing plan, the hazardous secondary materials generator and the re
- manufacturer should be requ ired to estimate the energy

and environmental benefits of re
- manufacturing versus the use of virgin feedstock. 1. Designated Solvents EPA has identified 18 chemicals that could be included in the re
- manufacturing exclusion. They

are toluene, xylenes, eth yl benzene, 1,2,4
- trimethylbenzene, chlorobenzene, n
hexane, cy clohexane, methyl tert
- but yl ether, acetonitrile, chloroform, chloromethane, dichloromethane, meth yl isobutyl ketone, N,N - dimethylformamide, tetrahydrofuran, n
- butyl alcohol, ethanol, and methan ol. These 18 solvents are used in large volumes as chemical manufacturing aids, chemical processing aids, and chemical formulation aids (generall y referred to as “processing aids” for the*** E.O. 12866 Review

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135 of 210 purpose of this rule). The “processing aids” solvents assist in the reaction, extraction, purification, and blending of ingredients and reactive products, but are not themselves reacted. These processing aid solvents, once used, can then be re
- manufactured to commercial grade again. These higher
- value solvents were selected because there are existing markets for all these solvents to be re
- manufactured to serve similar purposes to those of the original commercial
grade materials. Note that, as explained below, these hazardous spent solvents would onl y be eligible if their originating use was of a specific ty pe, and if they

are re - manufactured to serve certain t ypes of commercial functions. This restriction would help limit the exclusion to higher
- value materials and processes that resemble manufacturi ng more than waste management. EPA believes that spent solvents are particularl y appropriate for the re
- manufacturing exclusion because they

are derived from a non
- renewable resource (petroleum), and they are manufactured in the industrial chemicals sector , which, according to EPA’s report on sustainable materials management, ranks third overall as far as direct adverse overall impact to the environment. 25 EPA requests comment on whether these solvents are appropriate for inclusion in the re
- manufacturing ex clusion, and whether there are other solvents, chemicals or other t ypes of hazardous secondary

materials that should be included in the re
- manufacturing exclusion. In particular, EPA requests comment on opportunities for re
- manufacturing other ty pes of non
renewable hazardous secondary materials, such as metal catal ys ts or other ty pes of metal
- bearing hazardous secondary

materials. 2. Chemical Functions EPA believes that the re
- manufactured chemical product should serve a similar functional

25 U.S. EPA. 2020 Vision Report: Sustainable Materials Management: The Road Ahead, Table 1, page 25.

. www.epa.gov/waste/inforesources/pubs/vision.htm . The other top ranked sectors are electric services (#1) and cotton production (#2).*** E.O. 12866 Review

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136 of 210 purpose as the original commercial
- grade material so that it can substitute for virgin product, since it is this substitution that displaces some manufacturing of virgin product and fosters a sy stem where the original solvent remains in commerce and is not discarded. EPA has identified the following chemical functions for possible inclusion in the re
- manufacturing exclusion: chemical manufacturing aid (reacting, extracting, blending and/or purifying chemicals), and chemical processing aid (extracting , blending and purifyi ng chemicals) . The solvents used for these functions can be separated readil y from the other reaction components and therefore do not get contaminated as do solvents used for cleaning or degreasing operations, which are more likely to become discarded. Mor e environmental benefits will be obtained by maximizing the number of times a chemical product can be used at high
- purity grade as an aid to chemical manufacturing and processing, before it is used for at lower
- purity as a cleaner or degreaser. While it is possible to extend the product life of a used chemical as a cleaner/degreaser, it takes significantly less energy to bring solvents used as chemical manufacturing aids back to commercial grade than to bring solvents used as cleaners and degreasers back to lower grade functionality , making re
manufacturing of the higher
- value solvents more economicall y feasible. Accordingl y, the functions that the re
- manufactured chemical products should serve would be the same as those enumerated above, plus the use in th e formulation of the final product (a function which causes the solvent to remain in the product), or use as a chemical intermediate (a function which causes the solvent to be consumed in a chemical reaction). With respect to the hazardous secondary mater ial generator, this exclusion would focus on the functions of aiding chemical manufacturing and processing because the solvents performing these functions retain their original phy s ical and chemical properties. In these*** E.O. 12866 Review

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137 of 210 functions, the solvents do not get c ontaminated by substances from which they are difficult to separate, such as inks and greases, but onl y get mixed with pure product ingredients, from which they can be separated readily

in a commerciall y feasible manner. Furthermore, manufacturing and proc essing operations can be more easil y controlled in terms of exposure and releases, whereas the spent solvents from downstream uses such as degreasing and cleaning operations are of inherentl y lower
- value and these downstream operations result in more wides pread exposure and releases and a higher potential for discard. EPA requests comment on whether these chemical functions are appropriate for inclusion in the exclusion and whether there are other chemical functions that should also be included in the re
- manufacturing exclusion. 3. Manufacturing Sectors EPA intends that any

exclusion would be limited to companies whose primary business is manufacturing, rather than waste management, as indicated by particular NAI CS codes. EPA has identified the operations o f four manufacturing sectors as candidates for the re
- manufacturing exclusion: pharmaceutical manufacturing (NAICS 325412), basic organic chemical manufacturing (NAICS 325199), plastics and resins manufacturing (NAICS 325211), and the paints and coatings m anufacturing sectors (NAI CS 325510). Manufacturers within these four sectors all use one o r more of the eighteen identified solvents as chemical manufacturing, processing, and formulation aids in high volumes. Based on the Toxics Release Inventory informat ion, these four sectors are also closel y associated with the chemical functions identified in the exclusion and currently use a high volume of the solvents for the functional purposes included in this exclusion. Therefore, these four sectors seem to be goo d candidates for inclusion in the exclusion.*** E.O. 12866 Review

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138 of 210 As discussed earlier, companies whose primary business is the sale of a commercial product do not operate under the same market forces as commercial recyclers, whose profit depends on maximizing the amount of h azardous secondary material accepted, creating a perverse market incentive to over
- accumulate hazardous secondary material, resulting in discard. It is not intended that the exclusion could be utilized by a commercial recycler even if it undertook reclamation operations involving the chemicals and chemical functions described above. Commercial recyclers are best regulated by the RCRA hazardous waste standards since waste handling is their primary business and RCRA standards are the primary governing standards for this line of business. EPA requests comment on whether these sectors are appropriate for inclusion in the exclusion, and whether there are other industry sectors that should be included in the re
manufacturing exclusion. Inparticular, while the r e - manufactur ing exclusion on which EPA is requesting comment focuses on those industry sectors that generate large volumes of spent solvents, we also are interested in other industry sectors that would generate other materials, especiall y other t yp es of no n - renewable materials, such as metal
- bearing hazardous secondary materials. For example, the “2020 Vision Report” identifies industry sectors that could be evaluated and for which significant environmental gains could be realized through sustainable materi als management. Thus, EPA requests comment on which sectors provide the most opportunity

for reducing overall environmental impact by encouraging sustainable materials management through re
- manufacturing. 26 4. Additional Exclusion Conditions EPA has identi fied the following additional conditions as necessary for the proper

26 For an analysis of materials, products and services ranked by overall environmental impact, see U.S. EPA. 2020 Vision Report: Sustainable Materials Management: The Road Ahead, Ta ble 1, page 25.

. www.epa.gov/waste/inforesources/pubs/vision.htm
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139 of 210 implementation of a re
- manufacturing exclusion and to ensure that the hazardous secondary materia ls are managed in a way that does not involve discard. a. Notification. Notification unde r a re - manufacturing exclusion would serve the same purpose and operate similarly

to the notification provision found at 40 CFR 260.42. In other words, hazardous secondary

material generators and re
- manufacturers would have to submit a notification prior t o operating under the exclusion and by March 1 of each even
- numbered y ear thereafter to the EPA Regional Administrator or the State Director, in an authorized state. The notification would include:

• The name, address and EPA ID number (if applicable) of the facility ;

• The name and telephone number of a contact person;

• The NAICS and TRI code of the facility ;

• When the facility

expects to begin managing the hazardous secondary material in accordance with the re
- manufacturing exclusion;

• A list of the hazardous secondary materials that would be managed according to the new standard (reported as the EPA hazardous waste numbers that would appl y if the materials were managed as hazardous waste );

• The quantity

of each hazardous secondary material solvents to be managed annually ; and

• The certification signed and dated b y an authorized representative of the facility. The intent of the notification requirement is to provide basic information to the regulatory agencies about who will be managing hazardous secondary materials under the re
- manufacturing exclusion. The specific information included in the notification requirement enables regulatory agencies to monitor compliance and to ensure hazard ous secondary materials are managed in accordance with the exclusion and not discarded.*** E.O. 12866 Review

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140 of 210 b. Re
- manufacturing plan. A key issue for a re
- manufacturing exclusion would be how the facilities operating under the exclusion would demonstrate that they meet the re quirements (e.g., that the hazardous secondary materials , functions , and manufacturing sectors are those identified in the exclusion). A straightforward method would be to require a re
- manufacturing plan to be prepared and maintained by both the hazardous secondary material generator and re
manufacturer that includes information on the ty pes and expected annual volumes of solvents to be excluded, the processes and industry sectors that generate the chemicals, the specific uses and industry sectors

— for the r e - manufactured solvents, and the legitimacy of the re
- manufacturing process (see Section X for further discussion on legitimacy). The hazardous secondary material generator would also be require d to make arrangements with the re
- manufacturer to jointly dev elop this plan and to verify the appropriateness of the hazardous secondary material s for the re - manufacturing process before claiming the exclusion, thus helping ensure that the hazardous secondary material will be re
- manufactured and not discarded. 27 c. R ecord of shipments and confirmations of receipts. Under a re
- manufacturing exclusion, generators and re
- manufacturers would need to maintain at the facility records of shipments of hazardous secondary

materials for a period of three y ears. Specificall y, fo r each shipment of hazardous secondary

material, the generator and re
- manufacturer would need to maintain documentation of when the shipment occurred, who the transporter was, and the ty pe and quantity of the hazardous secondary materials in the shipment. This recordkeeping requirement may be fulfilled by

ordinary business records, such as bills of lading. However, EPA requests comment on whether for ease of implementation and enforcement, it should require more standardized record
- keeping, such as the use of a standardized bill of lading.

27 See U.S. EPA Example Re
- Manufacturing Plan for Possible Exclusion from the Definition of Solid Waste in the docket for today’s proposal.*** E.O. 12866 Review

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141 of 210 In addition, generators would need to maintain confirmations of receipt for all off
- site shipments of hazardous secondary materials in order to verify that the hazardous secondary materials reached their intended destinati on and were not discarded. These receipts must be maintained at the facility

for a period of three y ears from when they were created . Specificall y, the documentation of receipt would include the name and address of the re
- manufacturer, and the ty pe, quanti ty , and date of hazardous secondary materials received. The Agency might not require a specific template or format for confirmation of receipt since routine business records (e.g., financial records, bills of lading, copies of Department of Transportation (DOT) shipping papers, and electronic confirmation of receipt) would contain the appropriate information sufficient for meeting this requirement. However, documented information must be verifiable. Therefore, EPA requests comment on whether for ease of imp lementation and enforcement, it should require more standardized record
- keeping, such as requiring a standard method of confirmation of receipt and/or keeping this information in a readil y accessible file. This provision is being proposed in order that all parties responsible for the excluded hazardous secondary

materials would be able to demonstrate that the materials were in fact sent for re
- manufacturing and arrived at the intended facility and were not discarded in transit. d. Management in tanks and co ntainers. Solvents, whether virgin or spent, are best stored in tanks or containers that possess inherent controls to address issues such a volatile air emissions, leaks, and fires or explosions. As discussed in Section VIof this preamble, spent solvents present particular management challenges associated with the storage of liquids containing volatile organic chemicals and include both halogenated and non
- halogenated organic chemicals, which represent a broad range of chemicals and associated hazards. E PA believes that b y focusing on higher
- value spent solvents going to re
- manufacturing,*** E.O. 12866 Review

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142 of 210 a re - manufacturing exclusion reduces the chance of mismanagement of the spent solvents. However, given the history of solvent mismanagement, as demonstrated in the damag e cases found in environmental problems study , 28 EPA also believes it would be appropriate to make an explicit condition that spent solvents excluded under a re
- manufacturing exclusion be labeled or otherwise have an immediately available record of the mate rial being stored and be stored prior to re - manufacturing in tanks or containers that meet technical standards that will ensure that the solvents will go to re
- manufacturing and will not be discarded via leaks, spills or explosions. For ease of implementation, EPA requests comment on establishing explicit tank and container standards which meet the technical standards that would be the same as those found in 40 CFR part 264 subparts Iand J. The tank and container standards of 40 CFR part 264 were develope d for hazardous wastes, but an analy sis of the full set of technical requirements under subparts I and J shows that they are comparable to product storage standards from a number of sources, including regulations promulgated under the Occupational Safet y and Health Act (OSHA), DOT , and industry standards , and may

also be appropriate standards for storage prior to re - manufacturing. 29 Establishing technical standards equivalent to subparts I and J has the benefit of using standards that the regulated community are alread y familiar with, and which are designed to prevent the spent solvents from being discarded through leaks or explosions. EPA also believes that during re
- manufacturing and storage prior to re
- manufacturing, there should be effective controls of h azardous air emissions. This can be ensured b y requiring that equipment, vents , and tanks meet the technical standards of the National Emission Standards for Hazardous Air Pollutants (NESHAP) applicable to the sector, or absent such standards for the parti cular

28 U.S. EPA An Assessment of Environmental Problems Associated With Recycling of Hazardous Secondary Materials (EPA
- HQ
- RCRA
- 2002
- 0031
- 0355)
. 29 U.S EPA Comparison of Technical Storage Standards Applicable to Chemical Products in the docket for today’s proposed rule.*** E.O. 12866 Review

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143 of 210 operation or piece of equipment covered b y the exemption, then the standards equivalent to those found in 40 CFR part 264 or 265 subparts AA (vents), BB (equipment) and CC (tank storage). EPA requests comment on using these standards or other altern ative standards that would be appropriate for helping to demonstrate that the excluded spent solvents under the re
manufacturing exclusion are being managed as a commodity rather than being discarded. e. No speculative accumulation. Inaddition to the othe r conditions, hazardous secondary materials under a re
- manufacturing exclusion would still be subject to the speculative accumulation restrictions in 40 CFR 261.1( c )(8), which includes both a time limitation and a requirement that the facility be able to s how that there is a feasible means of recy cling/recovering the hazardous secondary material. This helps ensure that the materials are re - manufactured and not discarded. EPA requests comment on whether these conditions are appropriate and whether there are additional conditions that should be also included in any re - manufacturing exclusion. C. Benefits of Re
-

Manufacturing Exclusion The solvents identified as possible candidates for a re
- manufacturing exclusion are highly energy - intensive and carbon
- intensiv e at their creation and destruction. Therefore, an y step towards extending the useful life of these solvents (e.g., re
- manufacturing via distillation) significantl y reduces the energy use and carbon release associated with these solvents , as well as other pollutants associated with their manufacturing and disposal
. Using solvents multiple times instead of once means fewer solvents need to be produce d and destroy ed, which reduces the energy consumed for solvent production and destruction. That is, l ess fuel is needed to re manufacture solve nts than to produce solvents from virgin materials
. The reduction in fuel for manufacturing is significant because solvent manufacture is energy intensive due to a*** E.O. 12866 Review

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144 of 210 combination of the high and low temperature manufa cturing steps involved. Also , less fuel is needed to destro y solvents (at very high temperatures) if fewer solvents are being destro yed. Lastl y, less pollution, including carbon, is released from the solvents themselves when incinerated or burned as fuel at the end of their useful life if fewer solvents are being incinerated or burned. There is also a benefit of reduced transportation impacts associated with extending the useful life of solvents. EPA research indicates that in numerous instances the transpo rt involved in transferring a quantity

of spent solvents for purposes of re
- manufacturing (including an y delivery to secondary

users) is measurabl y less than the transport required for an equal quantity of solvents disposed of and replaced with new solvent s. 30 Inaddition, transportation impacts of virgin feedstocks would also be reduced. Thus, allowing hazardous secondary material generators to re - manufacture solvents is also likely to reduce the risks to communities by reducing the likelihood of transportation accidents involving hazardous materials, as well as reducing other adverse environmental impacts from fuel consumed in transportation. Further, reduced manufacturing of virgin solvents would reduce the quantity of ingredients needed and the toxic an d hazardous pollutant releases associated with solvent manufacture. Moreover, a re - manufacturing exclusion w ould create a business
- case incentive for hazardous secondary

material generators to re - manufacture solvents. Reducing the economic barriers to solv ent re - manufacturing (in particular, avoiding the costs associated with RCRA permitting ) would make it commerciall y feasible for more chemical manufacturers to re
manufacture solvents, and would thus serve to encourage chemical manufacturers to reduce the overall environmental impacts of solvent manufacturing and use.

30 U.S. EPA Life
- Cycle Benefits of Switching from Incineration to Reclamation for Certain Higher
- Value Chemicals in the docke t to today’s proposed rule.

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145 of 210 Finally , the benefit of limiting the functions of re
- manufactured material to those performed b y chemical manufacturers, processors, and formulators is that there are existing commercial purp oses for re
- manufactured solvents, which would limit or prevent the over
accumulation of the spent solvents, which also reduces the likelihood for discard. D. Potential Rulemaking Variance Process to Add Candidates for Re
- Manufacturing Exclusion EPA is requesting comment in today ’s proposal on a re
- manufacturing exclusion that is narrowl y defined to apply to 18 solvents used for specific functions within four industry sectors. However, it is possible that other hazardous secondary materials, industry

sector s, and/or functional uses may

also be suitable candidates for the re
- manufacturing exclusion if they involve the transfer of a higher
- value hazardous secondary material from one manufacturer to another, for the purpose of re
- manufacturing a material with s ignificant commercial value. If the Agency were to promulgate a re
- manufacturing exclusion, EPA is requesting comment on whether to also include a specific petition process where petitioners may apply to EPA to request a hazardous secondary

material, indus try

sector, and/or functional use be added to the exclusion. The petition process would be similar to 40 CFR 260.20, where an y person may petition the Administrator to modify or revoke any

provisions of the hazardous waste rules. Thus, in the context of a re - manufacturing exclusion, any person would be able to petition the Administrator to add or remove hazardous secondary materials, industry

sectors, and/or specific use functions to the list of hazardous secondary materials qualifying for this exclusion. T o be successful, the petitioner would need to demonstrate to the satisfaction of the Administrator that the proposed regulatory

amendment (1) meets the goal of the re
- manufacturing exclusion , which is to encourage sustainable materials management b y extend ing the productive life of a hazardous secondary material ; (2) involves the transfer of a higher
- value hazardous secondary material*** E.O. 12866 Review

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146 of 210 from one manufacturer to another for the purpose of re
- manufacturing the hazardous secondary material to produce a product o f significant commercial value; and, (3) results in neither the hazardous secondary

material s nor the products recovered being discarded when the conditions of the exemption are followed . The application could be required to include (1) the petitioner's name and address; (2) a statement of the petitioner's interest in the proposed action; (3) a description of the proposed action, including the specific hazardous secondary material, industry (i.e., NAICS code) and functional use (i.e., industrial functional code listed in 40 CFR 710.52(c)(4)(i)(C)) ; and (4) a statement of the need and justification for the proposed action, including an y supporting tests, studies, or other information. Under this possible petition process, the Administrator would make a tentative decision to grant or den y a petition and then publish notice of such tentative decision, either in the form of an advanced notice of proposed rulemaking, a proposed rule, or a tentative determination to den y the petition, in the Federal Register for written public comment. The Administrator could, at his discretion, hold an informal public hearing to consider oral comm ents on the tentative decision. After evaluating all public comments, the Administrator would make a final decision by publishing in the Federal Register a regulatory amendment or a denial of the petition. E. Other Issues Related to a Possible Re
- Manufacturing Exclusion A re
- manufacturing exclusion, as described above, would be based on a direct business arrangement between the hazar dous secondary material generator of spent solvents and the re
manufacture r , such that the spent solvents would be shipped directl y from the generator to the re
manufacturer. Therefore, EPA does not believe that it would be necessary or appropriate to incl ude intermediate storage facilities in the exclusion. We also believe that including such intermediate storage facilities would make it harder to keep track of the hazardous secondary*** E.O. 12866 Review

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147 of 210 material s and would increase storage time frames, potentially increasing the likelihood that the hazardous secondary

material s will not be safel y rec ycled. However, the Agency also recognizes that not allowing intermediate storage facilities to be part of the transaction may have an adverse impact on small businesses since suc h intermediate storage facilities would allow small businesses to ship their spent solvent, that are likely generated in limited quantities, to the intermediate facility

for consolidation before they go to the re
- manufacturer. Thus, EPA requests comment on this issue. Similarly , EPA anticipates that re
- manufacturing arrangements would be made within the United States, so that the companies involved would be governed b y the same set of laws and regulations as far at their re
- manufacturing agreements are conc erned. EPA requests comment on limiting the re
- manufacturing exclusion to the United States, or requiring the generator to notify the receiving country

through EPA and obtain consent from that country before shipment of the hazardous secondary

materials take s place. Th ese notice and consent requirement s, which would be the same as those currently required under the transfer
- based exclusion ( see 40 CFR 261.4(a)(25)), would provide notification to the receiving country so that it can ensure that the hazardous secondary

materials are reclaimed rather than disposed of or abandoned. As an additional benefit, th ese requirements would allow the receiving country the opportunity

to consent or refuse consent based on its anal ys is of whether the re
- manufacturing facil ity can p roperl y manage the hazardous secondary materials in an environmentally sound manner within its borders
. E PA also requests comment on other possible conditions that could be added to any re manufacturing exclusion. In particular, EPA requests comme nt on whether it should require the re - manufacturer to have financial assurance. EPA required financial assurance for recy clers*** E.O. 12866 Review

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148 of 210 under the transfer
- based exclusion. Since the re
- manufacturing exclusion will be limited to higher
- value solvents going to manuf acturers with a greater flexibility than commercial recy clers to adjust to unstable markets, there may be less of a need for financial assurance under this proposed exclusion. However, EPA requests comment on whether financial assurance should nevertheless be included as a condition to best ensure against discard. EPA also requests comment on whether it should add public participation requirements and/or a regulatory agency approval (short of a RCRA permit) before a re
- manufacturer may start handling hazard ous secondary materials sent from another company
. EPA received input during its environmental justice review of the 2008 DSW rule that the absence of an opportunity for public input was a deficiency

of the transfer
- based exclusion. However, since the re
- m anufacturing exclusion will be limited to manufacturing facilities, ty pically at their already

existing locations, and actually may reduce the environmental impacts at such facilities, the need for public participation may be less. However, EPA requests co mment on whether it should nevertheless require a public participation process to ensure that neighbors of a facility are aware that it will be handling hazardous secondary

materials sent from other companies, and have input about how the protective condit ions required by the proposed exclusion will be met. Finally , EPA requests comment on whether companies should be required to keep records and/or report to EPA about the environmental benefits (e.g., reduced air emissions, energy savings, reduced transport ation impacts) that are realized through their use of the re
- manufacturing exclusion. One of the major goals of this exclusion would be to encourage sustainable materials management, and information on environmental benefits would help the Agency assess th e program and promote continuous improvement. XIII. Request for Comment on Revisions to Other Recycling Exclusions and Exemptions*** E.O. 12866 Review

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149 of 210 A. Background Information on Other Recycling Exclusions and Exemptions As part of the 2008 DSW rulemaking, EPA developed a report, “An Assessment of Environmental Problems Associated with Recy cling of Hazardous Secondary Materials” (environmental problems study), which anal yz ed 218 recy cling damage cases. 31 The goal of the environmental problems study was to identify

and characterize environmental problems that have been attributed to hazardous secondary materials recy cling activities. EPA then used the findings from this study

to craft a number of condition s for the 2008 DSW final rule, which were specificall y designed to target the major causes of damage and thus help define “discard” of hazardous secondary

materials. These conditions, however, were applied only to the 2008 DSW exclusions. In developing tod ay ’s proposal, we are interested in whether these conditions should be codified for the pre
- 2008 recy cling exclusions and exemptions. As part of the “Definition of Solid Waste Final Rule Environmental Justice Anal ys is” (EJ anal ys is), EPA reviewed and anal y zed each damage case in the environmental problems study and determined the regulatory provision that likely , or potentially , governed the management of the hazardous secondary

materials, based on the t ype of hazardous secondary material and the date of th e damage case (related to the effective date of the regulatory provision). The results of this analy sis can be found in the docket for this rulemaking. 32 From this anal ys is, we conclude that over half of the damage cases in this study were associated with h azardous secondary materials that were likel y excluded or exempted from

31 The original environmental problems study, published January 11, 2007, review ed 208 damage cases. Based on information submitted by commenters, EPA revie we d an additional 10 recycling damage cases in an addendum to the envir onmental problems study, published July 14, 2008.An Assessment of Environmental Problems Associated with Recycling of Hazardous Secondary Materials, U.S. EPA, January 11, 2007 and addendum. Report: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064801f3efb Addendum: http://www.reg ulations.gov/search/Regs/home.html#documentDetail?R=09000064806b5741
. 32 U.S. EPA Correlation of Recycling Damage Cases with Regulatory Exclusions, Exemptions or Alternative Standards.*** E.O. 12866 Review

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150 of 210 Subtitle C under an existing (pre
- 2008) regulatory provision. For example, 52 damage cases (24%) are associated with scrap metal that is likely excluded under 261.4(a)(13) and/or 261.6 (a)(3)(ii). Drum reconditioning accounted for 23 damage cases (11%), in which the residuals are likely

excluded under 40 CFR 261.7. Additionally , 35 damage cases (16%) were associated with recy cling of batteries that are likely managed under 40 CFR 273.2 and/or 40 CFR part 266 subpart G. Based on these results, and given that man y of the pre
- 2008 recy cling exclusions specify

limited or no conditions, we believe that these provisions may not be adequatel y enforceable in order to protect human health and the environment. Thus, we are requesting comment today on codifying specific conditions for these recy cling exclusions. EPA emphasizes that we are not reopening comment on any substantive provisions of the regulatory

exclusions or exemptions. The inclusion of requirements for legitimacy , containment, and notification are strictly meant as means to better enforce the regulations. Moreover, EPA believes that the containment condition

— as with the legitimacy

criteria

— is implicit in all of the regulations to which it would apply . If secondary material is not contained when it is being recy cled, it is simply

being discarded. As part of the 2008 DSW final rulemaking, we reviewed the recy cling studies and public comments in order to develop conditions that defined dis card of hazardous secondary materials. Four conditions required for the generator
- controlled exclusion in 40 CFR 261.4(a)(23)

— legitimate recycling, no speculative accumulation, containment, and notification

— constitute what we believe to be the minimum requ irements necessary to define when recy cled hazardous secondary materials are not discarded. Therefore, it seems prudent to review past exclusions and exemptions to ensure these regulatory provisions clearl y require these newly codified standards.*** E.O. 12866 Review

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151 of 210 Specifica lly , we are requesting comment on codifyingthe legitimate recy cling standard in 40 CFR 260.43, additional recordkeeping requirements in the speculative accumulation standard in 40 CFR 261.1(c)(8), the contained standard in 40 CFR 260.10, and the notificat ion provision in 40 CFR 260.42 for 3 2 regulatory provisions that exclude or exempt certain ty pes of recy cling from full Subtitle C regulation. A list of these 3 2 regulatory provisions can be found below
. The new legitimacy

standard would apply

to all regu latory

provisions except for 40 CFR 261.7, because it involves determining whether residues in containers are regulated, and no hazardous secondary material is being reclaimed. The contained standard and notification condition would apply to all pr ovisio ns, although facilities operating under provisions that already contain specific regulatory

requirements would have to continue meeting those requirements. The additional recordkeeping requirements for speculative accumulation would only appl y to those regulatory

provisions already

subject to speculative accumulation (i.e., hazardous secondary material being used or reused per 261.2(e), characteristic by
- products and sludges being reclaimed as noted in 40 CFR 261.2 Table 1, and the recy cling
- related exclusi ons in 40 CFR 261.4(a)), but would not apply to commercial chemical products being reclaimed (see 40 CFR 261.2 Table 1) or to recycling provisions that apply to recy cling of solid or hazardous wastes (as noted in the chart below).*** E.O. 12866 Review

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153 of 210 260 & 261 Definition of Solid Waste 1 260.30 Procedures for variances and non
- waste determinations 2 261.2 (e) Use/Reuse 3 261.2 Table 1 Characteristic sludges being reclaimed 4 261.2 Table 1 Characteristic by
- products being reclaimed 5 261.2 Table 1 Commercial chemical products being reclaimed 261.4(a) Exclusions from the Definition of Solid Waste 6 261.4(a)(6) Pulping L iquors 7 261.4(a)(7) Spent Sulfuric Acid 8 261.4(a)(8) Closed
- Lo op Recy cling 9 261.4(a)(9) Spent Wood Preservatives 10 261.4(a)(10) Coke By
- Product Wastes 11 261.4(a)(11) Splash Condenser Dross Residue 12 261.4(a)(12) Hazardous Oil
- Bearing Secondary Materials and Recovered Oil from Petroleum Refining Operations 13 261.4(a)(13) Processed Scrap Metal 14 261.4(a)(14) Shredded Circuit Boards 15 261.4(a)(16) Comparable Fuels 16 261.4(a)(17) Mineral Processing Spent Materials 17 261.4(a)(18) Petrochemical Recovered Oil 18 261.4(a)(19) Spent Caustic Solutions from Petroleum Refining 19 261.4(a)(20) Hazardous Secondary Materials Used to Make Zinc Fertilizers 20 261.4(a)(21) Zinc Fertilizers Made from Recycled Hazardous Secondary Materials*** E.O. 12866 Review

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154 of 210 Note that the possible changes discussed below would be in addition to the proposed application of the definition of legitimacy to all recy cling, discussed in Section X of this preamble, and the request for comment on additional recordkeeping for speculative accumulation, discussed in Section IX.B.2 of this preamble. B. Possible Changes to Other Exclusions and Exemptions 21 261.4(a)(22) Used Cathode Ray Tubes (CRTs) 261.4(b) Solid wastes which are not hazardous wastes 22 261.4(b)(12) Spent Chlorofluorocarbon Refrigerants 23 261.4(b)(14) Used Oil Distillation Bottoms used to manufacture asphalt products 261.6 Requirements for recyclable materials (hazardous wastes) 2 4 261.6(a)(3)(ii) Scrap metal 2 5 261.6(a)(3)(iii) Waste - derived fuels from refining processes 2 6 261.6(a)(3)(iv) Unrefined waste
- derived fuels and oils from petroleum refineries 2 7 261.6(c)(2) Reclaimers that do not store 261.7 Residues of hazardous waste in empty containers 2 8 261.7 Residues of hazardous waste in empty containers Part 266 Standards for the Management of Specific Hazardous Wastes 29 266 Subpart C Recy clable Materials Used in a Manner Constituting Disposal 3 0 266 Subpart F Materials Utilized for Precious Metal Recovery 3 1 266 Subpart G Spent L ead
- Acid Batteries Being Reclaimed 3 2 266 Subpart H Hazardous Waste Burned in Boilers and Industrial Furnaces*** E.O. 12866 Review

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155 of 210 1. Contained Standard Under the 2008 DSW final rule, hazardous secondary materials must be contained, whether they

are stored in land
- based units or non
- land
- based units. Generally , such material is considered “contained” if it is placed in a unit that controls the movement of the hazardous secondary material out of the unit and into the environment. Hazardous secondary materials that are released to the environment are not destined for recycling and are clearly discarded. Additionally , hazardous secondary materials that are not conta ined, and have not been immediately

recovered, are not being managed as valuable commodities, which is relevant to determining whether the recy cling process is legitimate. Lastly , requiring that hazardous secondary materials be contained ensures that the m aterials are managed in a manner protective of human health and the environment. In the environmental problems study , mismanagement of hazardous secondary materials was determined to be the cause, or one of the causes, in 11 percent of the damage cases. S ince many of these damage cases have been associated with a pre
- 2008 recy cling provision, we believe it appropriate to close this gap b y specifically requiring compliance with the contained standard in 40 CFR 260.10. Of course, facilities operating under p rovisions that alread y contain management requirements would have to continue meeting those requirements. 2. Notification Under the 2008 DSW final rule, facilities managing hazardous secondary materials are required to submit a notification prior to operating under the exclusions and by March 1 of each even - numbered y ear thereafter to the EPA Regional Administrator or State D irector, if a state is authorized for the program, using the Site ID form, EPA Form 8700
- 12. The intent of this notification requirement is to provide basic information to regulatory authorities in order to enable adequate compliance monitoring and to ensure hazardous secondary materials are*** E.O. 12866 Review

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156 of 210 managed according to the exclusion and are not discarded. For example, in the notification, EPA requires facilities to include the quantity of hazardous secondary

materials that will be managed under each exclusion and disclose whether certain ty pes of hazardous secondary materials will be managed in land
- based units. This information can be used to assist RCRA inspectors in determining which facilities may warrant greater oversight and provides a basis for setting enfor cement priorities. Furthermore, requiring facilities to notify when they

have stopped managing hazardous secondary materials allows states to follow up at those facilities and ensure that the hazardous secondary materials have not been discarded. Notification information is collected in EPA's RCRAInfo database, which is the national repository

of all RCRA Subtitle C site identification information, whether collected by a state or EPA. EPA provides public access to this information through EPA's public webs ite. 33 The 2008 DSW final rule differed from other prior exclusions because it required facilities claiming the exclusion to notify EPA, or the authorized state, using an established EPA form (i.e., the Site ID form) and required facilities to re
- notify eve ry two y ears. Together, these requirements provide regulatory authorities with regularl y updated data in a consistent format that enables them to collect, store, access, use, and publicly share information about these facilities. In contrast, many of the p re - 2008 DSW recy cling exclusions and exemptions do not contain an y notification requirement and the few provisions that do require notification do not require a specific format for submitting the information or periodic updates. This results in facilities providing information in various forms, such as letters, which makes it difficult for regulatory

authorities to share and use the information. Additionally , a one - time notification requirement has limited value. With a one
- time notification approach, ther e is no assurance that the information collected in EPA’s databases
33 http://www.epa.gov/epawaste/hazard/dsw/impresource.htm*** E.O. 12866 Review

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157 of 210 over time will accuratel y reflect facilities that are managing hazardous secondary materials according to the exclusions. Therefore, the Agency can imagine instances where extensive resour ces are required to be spent on ‘cleaning up’ the data before regulatory authorities can use it to identify

facilities who are currentl y managing hazardous secondary materials under the exclusions. With a one
- time notification, we can also foresee problems where regulatory agencies spend time and resources monitoring compliance at facilities that have since stopped managing hazardous secondary materials at some point in the past. This inefficient use of resources would lower the overall effectiveness of regulators’ ability to monitor compliance and could potentially

increase the risk of environmental damage from abuse. In the time since the 2008 DSW final rule became effective, we have received more than 40 notifications from facilities managing hazardous secondary materials under the generator
controlled and/or transfer
- based exclusions. This information has directly enabled regulatory authorities to monitor compliance and assist implementation via guidance materials and training. Additionally , notificatio n has had the added benefit of identifying facilities that planned to manage hazardous secondary materials under the rule, but were, in fact, ineligible for the exclusions. (For example, we have received notifications from facilities located in a state tha t had not adopted the 2008 DSW final rule.) Notification in these instances allowed regulatory authorities to identify

problems and to intervene early to prevent potential mismanagement. Inthe case of the many

of the pre
- 2008 recy cling exclusions and exe mptions, we do not require notification (and even in those instances where we require notification, it is a one
- time notification) and thus have no reliable or efficient way to receive information that enables regulatory

authorities to adequatel y monitor these exclusions and exemptions. We believe this gap increases the risk of environmental damage stemming from improper management of*** E.O. 12866 Review

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158 of 210 hazardous secondary

materials being recy cled. We, therefore, are requesting comment on whether to require notification for those facilities operating under pre
- 2008 recy cling exclusions and exemptions. Specificall y, we are requesting comment on codifying notification under § 260.42 for facilities managing hazardous secondary materials under the pre
- 2008 recycling provisions. F or those exclusions and exemptions that alread y require a one
- time notification, notification under § 260.42 would replace, and not duplicate, the one
- time notification requirement. XIV. Effect of this Proposal on Other Programs A. Effect on Permitted and Interim Status Facilities In the 2008 DSW final rule, EPA discussed how that rule would affect permitted and interim status facilities. Specificall y, the Agency explained that permitted and interim status disposal facilities that manage hazardous wastes e xcluded under the 2008 DSW final rule are affected b y the final rule in a number of way s, depending on the situation at the facility . (74 FR 64715
- 7) If a permitted facility seeks to either terminate its operating permit or to remove units from its permit as a result of the 2008 DSW final rule, a facility must submit a Class Ipermit modification request with prior Agency approval; however, the obligation to address facility
wide corrective action remains in effect. Similarly, for facilities operating und er interim status, the owner or operator retains responsibility for unaddressed corrective action obligations at the facility
. However, if EPA finalizes today ’s proposed withdrawal of the transfer
- based exclusion, EPA anticipates that the number of perm itted and interim status facilities that are able to take advantage of the exclusion would be significantly reduced, because most of the permitted and interim status facilities affected b y the 2008 final rule are excluded under the transfer
- based*** E.O. 12866 Review

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159 of 210 exclusion . Furthermore, if EPA finalizes the re
- manufacturing exclusion discussed in Section XII of this preamble, the Agency would not expect TSDFs to be affected, since that exclusion would be limited to manufacturers. Regardless of the ultimate scope of the e xclusion, however, facilities with units covered by the exclusion should continue to refer to the preamble in the 2008 DSW final rule (at FR 64715
- 17) for a discussion of the effect of the exclusion on permitted and interim status facilities. B. Effect on CERCLA In 1999, Congress enacted the Superfund Recy cling Equit y Act (SREA), explicitly defining those hazardous substance recy cling activities that may be exempted from liability under CERCLA (CERCLA section 127). Today ’s proposal, if finalized, would no t change the universe of recy cling activities that could be exempted from CERCLA liability pursuant to CERCLA section 127. The proposal would onl y change the definition of solid waste for purposes of the RCRA Subtitle C requirements. The proposal also woul d not limit or otherwise affect EPA’s ability

to pursue potentially

responsible persons under section 107 of CERCLA for releases or threatened releases of hazardous substances. C. Effect on the Derived

-From Rule In the 2008 DSW final rule (October 30, 2008 , 73 FR 64692), EPA notes that the

“ derived from ” rule articulated in 40 CFR 261.3(c)(2) does not appl y to residuals from the reclamation of hazardous secondary materials excluded under the generator
- controlled and transfer
- based exclusions. These residual s are a new point of generation for the purposes of applying the hazardous waste determination requirements of 40 CFR 262.11. If the residuals exhibit a hazardous characteristic, or they themselves are a listed hazardous waste, they would be considered haz ardous wastes (unless otherwise exempted) and would have to be managed*** E.O. 12866 Review

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160 of 210 accordingl y. If they

did not exhibit a hazardous characteristic, or were not themselves a listed hazardous waste, they

would have to be managed in accordance with applicable state or fe deral requirements for non
- hazardous wastes. EPA believes that in most cases, this would not be an issue because residuals from hazardous secondary material reclamation that may be of concern would either themselves be listed hazardous waste (i.e., still b ottoms from the reclamation of solvents listed in 40 CFR 261.31) or would exhibit a characteristic (i.e., residuals from metals reclamation with hazardous metals concentrations above the toxicity characteristic in 40 CFR 261.24). EPA requests comment, incl uding for an y available data, on the hazardousness of reclamation residuals and whether the derived
- from rule would need to be modified to regulate these residuals as hazardous waste. D. Effect on Spent Petroleum Catalysts In the 2008 DSW final rule, EPA deferred the question of whether spent petroleum catal ys ts should be eligible for the exclusions pending further consideration of the py rophoric properties of the spent petroleum catal ys ts (73 FR 64714). EPA noted that the Agency was planning to propose

— in a separate rulemaking from the 2008 DSW final rule

— an amendment to its hazardous waste regulations to conditionally exclude from the definition of solid waste spent hy drotreating and h ydrorefining catal ys ts generated in the petroleum refining industry whe n these hazardous secondary materials are reclaimed. Spent hydrotreating and hydrorefining catal ys ts generated in the petroleum refining industry are routinel y recy cled by regenerating the catal ys t so that it may

be used again as a cataly st. When regeneration is no longer possible, these spent catal ys ts are either treated and disposed of as listed hazardous wastes or sent to RCRA
permitted reclamation facilities, where metals, such as vanadium, mol ybdenum, cobalt, and nickel are reclaimed from the spent catal ys ts. EPA originall y added spent hydrotreating and*** E.O. 12866 Review

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161 of 210 hy drorefining catal ys ts (waste codes K171 and K172) to the list of RCRA hazardous wastes found in 40 CFR 261.31 on the basis of toxicity (i.e., these materials were shown to pose unacceptable risk to human health and the environment when mismanaged) (63 FR 42110, August 6, 1998). In addition, EPA based its decision to list these materials as hazardous due to the fact that these spent cataly sts can at times exhibit py rophoric properties (i.e., can ignite spontaneously

in contact with air). It was largel y because of these pyrophoric properties that EPA deferred the question of whether spent petroleum catal ys ts should be included in the 2008 DSW rule exclusions. While spent petroleum cataly sts can be a val uable source of recoverable metals, the risk of these hazardous secondary

materials spontaneousl y i gniting when in contact with air is not a propert y that most metal recy clers would be expected to address, and thus, present additional risks that are not pr esented b y other t ypes of metal
- bearing hazardous secondary materials and are therefore may be most appropriately

managed as hazardous waste when recy cled. Under today ’s proposal, EPA is proposing to withdraw the transfer
- based exclusion and this withdrawal, if finalized, would make the question of the eligibility of most ty

pes of spent catal ys t recy cling for the 2008 DSW final rule exclusions moot. However, EPA is also proposing to add a regulatory definition of the “contained” standard which inc ludes a requirement to address the risk of fires and explosions. This provision, if properly implemented, could address the p yr ophoric properties of the spent petroleum catal ys ts (as well as other t ypes of ignitibility

or reactivity). EPA requests comment on whether this provision would adequatel y address the potential for discard of spent petroleum catal ys ts due to fire and explosions, thereby allowing EPA to remove the ineligibility of K171 and K172 from the DSW exclusion, and on other regulatory

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162 of 210 specific to p yrophoric materials to the exclusion. XV. Implementation Issues with 2008 DSW Final Rule The 2008 DSW final rule became federall y effective on December 29, 2008. The rule was effective immediately in states and territories for which EPA manages the RCRA program, specificall y Alaska, Iowa, the U.S. Virgin Islands, the Northern Mariana Islands, American Samoa, and tribal lands. The rule does not go into effect in states that are authorized to manage their own RCRA programs unless and until the state adopts the rule. Currently , four states

— Id aho, Illinois, New Jersey , and Penns yl vania

— have adopted the rule. Within the states and territories where the 2008 DSW final rule is effective, more than 40 facilities have notified that they are managing hazardous secondary materials under the generator
- controlled and/or the transfer
- based exclusion. EPA be lieves that it is important to support effective implementation of the 2008 DSW final rule in order to ensure that hazardous secondary materials are properly

managed and not discarded. Our goal is to reduce the risk of mismanagement of hazardous secondary materials that may occur from misunderstanding the regulations and incorrect implementation of the requirements and conditions. To this end, we have worked with the EPA Regions and states to provide training and guidance materials for regulators and the re gulated community . Since the 2008 DSW final rule was codified, there have been number of questions from states and the regulated communit y regarding how the rule should be implemented and how it operates in special circumstances. Today , we are taking the opportunity to clarify these issues in the context of the 2008 DSW final rule. It should be noted that some of these implementation issues are specific to the transfer
- based exclusion found at 40 CFR 261.4(a)(24), which EPA is proposing to withdraw and*** E.O. 12866 Review

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163 of 210 rep lace with alternative management standards under Subtitle C of RCRA. If EPA finalizes this withdrawal, some of these issues would become moot. A. Mixing Of Hazardous Secondary Materials Excluded Under 40 CFR 261.4(a)(24) W ith Similar Hazardous W

astes 34 One issue regards whether hazardous secondary materials excluded under 40 CFR 261.4(a)(24) can be mixed with other similar hazardous wastes within permitted units or exempt recy cling units and how such mixing would affect the requirements of the generator and the reclaimer. Under § 261.4(a)(24), which covers hazardous secondary materials transferred off

- site for reclamation, hazardous secondary material generators may

send their materials to a facility that operates under a RCRA Part B permit or interim status standards. In this case, generators are not required to conduct reasonable efforts on the reclaimer as long as the RCRA Part B permit extends to the management of the hazardous secondary materials in question. We believe Part B permits or the interim statu s standards provide adequate assurance that the hazardous secondary materials will be well managed, specificall y because the hazardous secondary materials are managed in units that are subject to stringent design and operating standards, the reclaimer must demonstrate financial assurance, and the materials are subject to the corrective action requirements in the event of environmental problems. EPA understands that some reclaimers are receiving the same ty pe of hazardous secondary material s for reclamation from multiple generators, with some amount excluded under § 261.4(a)(24) and some amount regulated as hazardous waste. The regulatory status of the material depends on how the generator who sent the materials chose to manage and transfer the

34 This secti on restates our policy on this issue, which is published in the “ Guidance for Mixing Hazardous Secondary Materials Received Under the 40 CFR 261.4(a)(24) Exclusion from the Definition of Solid Waste with Regulated Hazardous Wastes .” This guidance can be fo und in RCRAOnline and on our DSW Implementation website at http://www.epa.gov/epaw aste/hazard/dsw/impresource.htm.*** E.O. 12866 Review

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164 of 210 materials off site. We also understand that reclaimers are interpreting § 261.4(a)(24) to mean that hazardous wastes and hazardous secondary materials must be stored in separate units and reclaimed independentl y of each other in order to preserve the regulatory status of the excluded material and the exclusion for the generators that transferred the hazardous secondary materials to the reclaimer. It is clear in the 2008 DSW final rule that EPA allows hazardous secondary materials that are excluded from full Subtitle C regulation to be managed under a RCRA Part B permit or interim status standards. Managing hazardous secondary materials under a RCRA Part B permit affords further assurance that the hazardous secondary materials will be properly managed and reclaimed. Addi tionall y, we believe that taking advantage of the existing recycling infrastructure both improves efficiency under the rule and increases opportunities for recycling. Section 261.4(a)(24) states that the exclusion applies if the hazardous secondary materi al s are generated and transferred “ for the purpose of reclamation.” Thus, a reclaimer mixing excluded hazardous secondary materials with regulated hazardous wastes of the same t ype ma y only mix the materials for the purpose of reclamation (and not for the purpose of, for example, burning for energy

recovery or disposal). Prior to mixing, the reclaimer must manage the excluded hazardous secondary materials under § 261.4(a)(24) up to the point that they mix th e excluded materials with similar material s that are regulated hazardous waste. The reclaimer must comply with all applicable conditions of § 261.4(a)(24) because it is receiving hazardous secondary material s transferred for the purpose of reclamation and excluded from the definition of solid waste. The reclaimer must therefore meet the applicable conditions of the § 261.4(a)(24) exclusion, including legitimate reclamation,*** E.O. 12866 Review

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165 of 210 recordkeeping, financial assurance, containment of hazardous secondary materials, no tification, and the prohibition on speculative accumulation. A reclaimer may

onl y mix hazardous secondary material s excluded under § 261.4(a)(24) with regulated hazardous waste for the purpose of reclamation. This can be satisfied by mixing in units that are dedicated for reclamation, such as storage units that are connected to reclamation units by hard pipes or other convey ance; storage units that are solely used to store materials prior to the reclamation process; and recy cling units . Additionally , a rec laimer is not mixing for the purpose of reclamation if the reclaimer first mixes the materials and then makes a determination whether the mixture should be reclaimed or sent for burning or disposal. This determination must be made prior to mixing the exclu ded hazardous secondary materials with regulated hazardous wastes. After mixing the excluded hazardous secondary materials with regulated hazardous waste, the reclaimer must manage the entire mixture as hazardous waste for the purpose of reclamation. Exclu ded hazardous secondary materials cannot be mixed with regulated hazardous waste and still maintain the exclusion from the definition of solid waste. I f excluded hazardous secondary materials are mixed with hazardous waste, the resulting mixture is a hazar dous waste. This follows the general principle that RCRA applicability cannot be avoided by

mixing a hazardous waste with another material. 35 Therefore, the reclaimer must comply with the standard hazardous waste regulations applicable to hazardous waste managed by an off
- site reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265). The mixture must be stored and managed in compliance with the hazardous waste regulations applicable to hazardous waste managed b y an off

- site reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265). If a reclaimer mixes hazardous secondary materials and other similar hazardous wastes in a recy cling
35 Horsehead Resource Development Co., Inc. v. EPA, 16 F3d 1246 (February 1994).*** E.O. 12866 Review

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166 of 210 unit, the mixture would be considered hazardous waste, but the unit would be generally exempt from regulation under 40 CFR 261.6(c)(2)
. Mixing by

the reclaimer of excluded hazardous secondary materials received under 40 CFR 261.4(a)(24) with regulated hazardous wastes does not affect the requirements applicable to generators who shipped the hazardous secondary m aterials, provided that the hazardous secondary materials are transferred for the purpose of reclamation and the reclaimer complies with all applicable conditions of § 261.4(a)(24) prior to mixing. Excluded hazardous secondary materials mixed with regulate d hazardous wastes of the same t ype become hazardous waste at the point of mixing and must be managed as such after that point. Therefore, generators transferring hazardous secondary materials under § 261.4(a)(24) to a reclaimer who mixes may manage the hazardou s secondary materials under the § 261.4(a)(24) exclusion (e.g., longer storage times, shipping without a manifest) because the hazardous secondary materials have not ye t been mixed with regulated hazardous waste s . ( Of course, the generator and the re claimer must meet all applicable conditions of § 261.4(a)(24) prior to mixing. ) B. Rejected Loads A second issue regards shipments of hazardous secondary material transferred off

- site by the generator for reclamation, but that are subsequently rejected b y the reclaimer (otherwise known as “rejected loads”). Because 40 CFR 261.4(a)(24) states that the exclusion applies if the hazardous secondary

material is generated and transferred "for the purpose of reclamation,” EPA has received questions regarding how generators and reclaimers should handle rejected loads. Although EPA did not explicitly address rejected loads in the preamble to the 2008 DSW final rule, we offered some guidance in our Response to Comments document for that action. Specificall y, we state that if hazardous secondary materials transferred off

- site for reclamation*** E.O. 12866 Review

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167 of 210 are subsequently

rejected by

the reclaimer, the generator can choose to send the hazardous secondary materials to another reclamation facility, provided the generator continues to comply with the conditions of the exclusion, including the speculative accumulation limits. Prior to arranging for transport to an alternate reclamation facility , hazardous secondary material generators must make reasonable efforts to ensure the alternate reclamation facility intends to properly

and legitimatel y reclaim the hazardous secondary material and must keep records of the off

- site shipment and confirmation of its receipt as required under the 2008 DSW final rule. If a hazardous secondary material generator is unable to reclaim the hazardous secondary material in compliance with the speculative accumulation provision and the other terms of the exclusion, it must manage the materials as solid and hazardous waste according to the RCRA Subtitle C hazar dous waste regulations. Furthermore, we believe the recordkeeping conditions (records of all off
- site shipments and confirmations of receipt) are sufficient to ensure the hazardous secondary

materials are properly

managed if a rejected shipment must be returned to the hazardous secondary material generator or sent to an alternate reclamation facility
. In the event of a rejected load, generators and reclamation facilities should contact their regulatory

authorit y in order to receive instructions on a case
- by
- case basis. Reclamation facilities should document their rejected loads, including information such as the EPA ID number, name, and address of the generator, the date the facility received the hazardous secondary material, a description and quantity of th e material, the ultimate destination and disposition of the material, and an explanation of why the load was rejected. Additionally , we note that efforts to prevent rejected loads may help to avoid this issue altogether, for example, by sending test sample s of the hazardous secondary material to a reclaimer to ensure that legitimate reclamation can be performed prior to sending the first shipment.*** E.O. 12866 Review

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168 of 210 C. Interstate Transport A third implementation issue regards the transport of excluded hazardous secondary mate rials from or to a state that has adopted the 2008 DSW final rule to or from a state that has not adopted the rule and what conditions would apply in each state. Specifically , if the originating state has adopted the 2008 DSW rule, but the receiving (or tr ansfer) state has not adopted the rule, the hazardous secondary material s (1) are subject to the hazardous waste requirements of the receiving state that has not adopted the rule upon reaching the border of that state (e.g., manifesting requirements); (2) must go to a RCRA
- permitted facility (or other authorized designated facility ), and, if stored, materials must be managed in permitted storage units (or when applicable under interim status requirements); and (3) cannot go to an unpermitted recy cling facil ity

which is not a designated facility in a state that has not adopted the rule because such a facility

would not meet the conditions of the exclusion (e.g., financial assurance) and since the receiving state would not have adopted the exclusion. If the or ig inating state has not adopted the rule, but the receiving state has adopted the rule, the hazardous secondary material s (1) must be managed as regulated hazardous waste not only in the originating state, but also in the receiving state that has adopted the rule (e.g., may be sent to a permitted recy cling facility , in the receiving state, which has notified that it is operating under the exclusion, but must then be stored only in permitted units at that facility) and (2) would not be eligible for the exclu sion because the generator in the originating state that has not adopted the rule would not meet the conditions and requirements of the exclusion. In particular, the fact that the generator would not have notified EPA that it is sending the hazardous secon dary material to an excluded reclamation facility , and would not have performed a “reasonable efforts” audit under 40 CFR 261.4(a)(24)(v)(B) to ensure that the hazardous*** E.O. 12866 Review

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169 of 210 secondary material will be safel y and legitimately reclaimed could undermine the prope r implementation of the 2008 DSW exclusion. As noted in written comments submitted in response to the May 2009 public meeting Federal Register Notice, some states that do not plan on adopting the 2008 DSW final rule in full would like the generators in their states to be able to send their hazardous secondary materials to facilities without RCRA permits that are operating under the 40 CFR 261.4(a)(24) transfer
- based exclusion in states that have adopted the rule
. 36 One possible solution for such a state might be to adopt the requirements applicable to generators in the 2008 DSW rule (found in 40 CFR 261.4(a)(24)(i

–v and vii)), in addition to the state’s hazardous waste requirements, for those generators that wish to ship to reclaimers without RCRA permits whose operations are covered by the exclusion. In most cases, a generator following the generating state’s hazardous waste requirements would also meet the 2008 DSW rule requirements (i.e., no speculative accumulation, meeting DOT transport requirements, containment, records of shipments), since the state’s RCRA program requirements (e.g., 90 and 180 day storage limits, manifesting requirements) would be equally or more stringent than the 2008 DSW rule requirements), but the generator would also need to en sure that the hazardous secondary material meets the codified definition of legitimacy

under 40 CFR 260.43, perform a “reasonable efforts” audit of the reclaimer and keep a copy of the audit for three ye ars per 40 CFR 261.4(a)(24)(v)(B) and (C), and provid e notification per 40 CFR 260.42. Thus, the hazardous secondary material would be covered both b y the state hazardous waste program in the generating state that has not adopted the 2008 DSW final rule, and by the DSW transfer
- based exclusion in the reclaim ing state that has adopted the 2008 DSW final rule.

36 Generators in states that have not adopted the 2008 DSW final rule are able to send their materials to RCRA
permitted reclaimers under hazardous w aste regulations*** E.O. 12866 Review

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170 of 210 As discussed earlier, EPA has proposed to withdraw the transfer
- based exclusion, which would possibly

render this issue moot. However, EPA is interested in and requests comments on these issues of how int erstate transportation should be handled, particularl y whether states are interested in such a solution, if the transfer
- based exclusion is retained or not, and whether it is an issue for an y of the other exclusions EPA is proposing to retain or is asking for comment on today . For example, should EPA allow for the shipment of hazardous secondary materials from a state which does not adopt the ‘under the control of the generator’ exclusion to a state that has adopted that exclusion. I f so, what additional re quirements would the generating state have to adopt in order to allow for such shipments. Similarly , if a re
- manufacturing exclusion is adopted, should EPA allow for the shipment of hazardous secondary materials from a state that does not adopt that exclus ion to a state that adopts that exclusion. Again, what additional requirements would the generating state have to adopt in order to allow for such shipments. D. Regulatory Status of Solvent Still Bottoms A fourth implementation issue is whether still bottoms from the reclamation of solvents can be burned for energy recovery without invalidating the 2008 DSW final rule exclusions, which specifically

does not include burning for energy recovery . Still bottoms from the reclamation of the solvents listed in 4 0 CFR 261.31(a) as F001

–F005 are themselves listed hazardous waste and are not products of solvent reclamation. These still bottoms are a new point of generation, and they

may be burned for energy

recovery under the hazardous waste regulations without inva lidating the exclusion. XVI. State Authorization A. Applicability of Rules in Authorized S tates Under section 3006 of RCRA, EPA may authorize a qualified state to administer and*** E.O. 12866 Review

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171 of 210 enforce a hazardous waste program within the state in lieu of the federal program, and to issue and enforce permits in the state. A state may receive authorization by

following the approval process described in 40 CFR 271.21 (see 40 CFR part 271 for the overall standards and requirements for authorization). EPA continues to have independent authority to bring enforcement actions under RCRA sections 3007, 3008, 3013, and 7003. An authorized state also continues to have independent authority to bring enforcement actions under state law. After a state receives initial authorizatio n, new federal requirements promulgated under RCRA authority

existing prior to the 1984 Hazardous and Solid Waste Amendments (HSWA) do not apply in that state until the state adopts and receives authorization for equivalent state requirements. In contrast, under RCRA section 3006(g) (42 U.S.C. 6926(g)), new federal requirements and prohibitions promulgated pursuant to HSWA provisions take effect in authorized states at the same time that they take effect in unauthorized states. As such, EPA carries out HSWA requirements and prohibitions in authorized states, including the issuance of new permits implementing those requirements, until EPA authorizes the state to do so. Authorized states are required to modify their programs only

when EPA enacts federal requi rements that are more stringent or broader in scope than the existing federal requirements. RCRA section 3009 allows the states to impose standards more stringent than those in the federal program (see also 40 FR 271.1(i)). Therefore, authorized states are not required to adopt federal regulations, both HSWA and non
- HSWA, that are considered less stringent than previous federal regulations or that narrow the scope of the RCRA program. B. Effect on State Authorization of Proposed Rule Today's notice proposes regulations that, if finalized, would not be promulgated under the authority

of HSWA. Thus, the standards, if finalized, would be applicable on the effective*** E.O. 12866 Review

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172 of 210 date only in those states that do not have final authorization of their base RCRA program s. Moreover, authorized states are required to modify their programs onl y when EPA promulgates federal regulations that are more stringent or broader in scope than the authorized state regulations. For those changes that are less stringent, states are not required to modify their program. This is a result of section 3009 of RCRA, which allows states to impose more stringent regulations than the federal program. The revisions to the definition of solid waste being proposed today are more stringent than th ose promulgated under the 2008 DSW final rule, so those states which have adopted the 2008 DSW rule would be required to modify their programs if these standards are finalized. However, when compared to the federal program that was in place when the 2008 D SW rule was finalized, many

of today 's proposed revisions would be considered less stringent (e.g., the revised generator
- controlled exclusion and the potential re
- manufacturing exclusion) or are neither more nor less stringent (i.e., the alternative Subti tle C regulations for reclaimed hazardous recy clable materials). Therefore, authorized states that have not adopted the 2008 DSW final rule would not be required to modify their programs to adopt these standards, if finalized. However, the potential revi sions to the other recy cling exclusions and exemptions discussed in Section XIII of this preamble that EPA is currentl y requesting comment on, including codifying the legitimacy criteria for other exclusions as discussed in Section X of the preamble, would be more stringent than the current federal hazardous waste program, and all authorized states would be required to modify their programs to adopt equivalent, consistent and no less stringent requirements. Also, the proposed changes to the standards and criteria for variances from classification as a solid waste discussed in Section XI would be more stringent*** E.O. 12866 Review

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173 of 210 than the current federal hazardous waste program, and all authorized states which have adopted the underl yi ng § 260.31 variance procedures would be re quired to modify their programs to adopt equivalent, consistent and no less stringent requirements. XVII. Administrative Requirements for This Rulemaking A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a "significant regulatory

action” because it is likely to “raise novel legal or policy issues” under section 3(f)(4) of Executive Order 12866. Accordingl y, EPA submitted this action to the Office of Management and Budget (O MB) for review and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, EPA prepared an anal ys is of the potential costs and benefits associated with this action. This analy sis is contained in EPA’s Regulatory Impact Analy sis (RIA) document titled “EPA’s 2011 Proposed Revisions to Industrial Recy cling Exclusions of the RCRA Definition of Solid Waste” which is available for public download from the docket for this action. The RIA is briefly summ arized here. The RIA evaluates the potential future impacts of the eight proposed revisions (i.e., Options 1 to 8 in the RIA) to the DSW regulatory exclusions for industrial hazardous secondary materials recy cling. Six of the eight proposed revisions (Opt ions 1 thru 6) could affect EPA’s most recent (2008) DSW recy cling exclusions involving between 1,100 and 3,800 RCRA
regulated facilities, while three of the revisions (Options 5, 7, 8) in part or in whole could affect EPA’s pre
- 2008 DSW recy cling exclusio ns involving about 8,500 industrial facilities with current DSW
- excluded recy cling activities. The RIA presents a qualitative description of three categories of expected future*** E.O. 12866 Review

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174 of 210 environmental and economic benefits for the proposed revisions: (1) reduction i n future environmental damage cases associated with industrial hazardous secondary materials recycling; (2) increased environmental compliance; and (3) reduced liability , less regulatory uncertainty , and lower legal and credit costs for recy cling facilitie s. In aggregate, the RIA estimates the future average annualized costs to industry to compl y with the eight proposed revisions at between $3.8 million to $11.3 million per y ear under a lower
- bound state adoption scenario, which results in 11% of recy cling facilities implementing the revisions, and between $6.5 million to $61.8 million per y ear under an upper
- bound state adoption scenario, which results in 6 7 % of recy cling facilities implementing the revisions (2010$ @7% discount rate). This range reflects uncertainty about the ultimate number of states which may voluntaril y adopt the proposed revisions. B. Paperwork Reduction Act (Information Collection Request) The information collection requirements in this proposed rule have been submitted for approval t o the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) document prepared b y EPA has been assigned EPA ICR number [Insert EPA ICR number.] Burden is defined at 5 CFR 132 0.3(b). An agency

may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it display s a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. To comment on the Agency 's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, EPA has established a public docket for this rule, which includes this I CR, under Docket I D number EPA
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175 of 210 HQ
- RCRA
- 2010
- 0742
. Submit any comments related to the I CR to EPA and OMB. See ADDRESSES section at the beginning of this notice for where to submit comments to EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Offi ce of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is required to make a decision concerning the IC R between 30 and 60 day s after [Insert date of publication in the Federal Register.], a comment to OMB is best assured of having its full effect if OMB receives it b y [ In sert date 30 day s after publication in the Federal Register.]. The final rule will respond to any OMB or public comments on the information collection requirements contained in thi s proposal. C. Regulatory Flexibility Act The Regulatory

Flexibility

Act (RFA) generall y requires an agency to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking requirements under the Administrative Procedure Ac t or an y 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 purpose of assessing the impacts of today 's proposed rule on small entities, small entity is defined as (1) a small business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a cit y, count y, 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 independentl y owned and operated and is not dominant in its fiel d. After considering the economic impacts of today ’s proposed rule on small entities, Icertify that this action will not have a significant economic*** E.O. 12866 Review

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176 of 210 impact on a substantial number of small entities. As presented in EPA’s RIA for today ’s proposal, the ty

pe s of small entities which could potentially be directl y regulated are in a wide range of up to 280 industries. For purposes of analy sis, the RIA evaluated potential small business impacts in 25 NAI CS code industries with the largest number of facilities po tentially affected. This RIA identified the 25 industries by first looking at the count of facilities by 6
- digit NAI CS codes for the current population of facilities recovering hazardous secondary materials, including (1) 323110 Commercial L ithographic Pri nting; (2) 324110 Petroleum Refineries; (3) 325188 All Other Basic Inorganic Chemical Mfg; (4) 325199 All Other Basic Organic Chemical Mfg; (5) 325211 Plastics Material and Resin Manufacturing; (6) 325412 Pharmaceutical Preparation Manufacturing; (7) 32551 0 Paint and Coating Manufacturing; (8) 325998 All Other Miscellaneous Chemical Product and Preparation Mfg; (9) 326199 All Other Plastics Product Manufacturing; (10) 331111 Iron and Steel Mills; (11) 331492 Secondary Smelting, Refining & Alloying of Nonfer

rous Metal (except Copper, Aluminum); (12) 332812 Metal Coating, Engraving (except Jewelry and Silverware), and Allied Services to Manufacturers; (13) 332813 Electroplating, Plating, Polishing, Anodizing and Coloring; (14) 332999 All Other Miscellaneous Fa

bricated Metal Product Mfg; (15) 334412 Bare Printed Circuit Board Manufacturing; (16) 334413 Semiconductor and Related Device Manufacturing; (17) 336399 All Other Motor Vehicle Parts Manufacturing; (18) 336412 Bare Printed Circuit Board Manufacturing; (19 ) 336413 Other Aircraft Part and Auxiliary Equipment Mfg; (20) 541710 Research & Development in the Phy sical, Engineering, and Li fe Sciences; (21) 562112 Hazardous Waste Collection; (22) 562211 Hazardous Waste Treatment and Disposal; (23) 611310 Colleges, Universities and Professional Schools; (24) 622110 General Medical and Surgical Hospitals; (25) 928110 National Security.*** E.O. 12866 Review

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177 of 210 The estimated potential average annual impact on small businesses is estimated to be significantl y less than 1 percent of annual sale s for all small entities. Based on the RIA’s upper
bound estimation assumptions, the highest impact as a percentage of revenues (i.e., the “sales test” method) is estimated at 0.66 percent of annual sales revenues. The total number of small businesses impa cted is estimated to be less than 1,300 businesses, or 14 percent of the almost 9,100 businesses which could be impacted b y today’s proposal, including facilities currentl y operating under the pre
- 2008 DSW recy cling exclusions, plus additional current hazardous waste recy clers which in the future could potentiall y operate under the 2011 proposed revisions to the DSW recy cling exclusions. Although this proposed rule will not have a significant economic impact on a substantial number of small entities, we co ntinue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts and suggestions on how to reduce such impacts. D. Unfunded Mandates Reform Act This rule does not contain a fede ral 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 y ear. Potential future annual added direct costs to state, local, and tribal governments could include seven administrative activities associated with a number of the options, including (1) review and approve advance arrangement documentation (Option 2); (2) review and approve contingency

plan (Option 2); (3) review and approve contingency and closure notifications (Option 2); (4) receive, review and file biennial notifications (Options 4 & Option 7); (5) administer online public access to a list (including supporting documentation) of facilities receiving non
- waste determinations (Option 4); (6) eva luate legitimacy petitions (Options 5 &*** E.O. 12866 Review

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178 of 210 6); and (7) evaluate legitimacy documentation (Option 5). (See the RIA for a complete description of the options and the various administrative activities.) The RIA estimates that the state government share of future average annualized direct costs for the above seven implementation requirements ranges between $2.3 million and $3.3 million per year. No impacts are expected for local or tribal governments. Because these direct costs are well below the $100 million annu al direct cost threshold, this proposed rule is not subject to the requirements of sections 202 or 205 of UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquel y affect small governments. E. Executive Order 13132: Federalism This action 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, o r on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The RIA for today ’s action presents an evaluation of whether the proposed regulatory revisions could “impose substantial dire ct compliance costs” on state or local governments. For purpose of quantitative anal ys is, the RIA applied a numerical method known as the “$25 million test.” The analysis evaluated whether annualized direct compliance costs to state or local governments po tentially exceed $25 million per year. Potential future annual added direct costs to state or local governments could include seven administrative activities associated with a number of the options, including (1) review and approve advance arrangement documentation (Option 2); (2) review and approve contingency plan (Option 2); (3) review and approve contingency and closure notifications (Option 2); (4) receive, review and file biennial notifications (Options 4 & Option 7); (5) administer online public acce ss to a list*** E.O. 12866 Review

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179 of 210 (including supporting documentation) of facilities receiving non
- waste determinations (Option 4); (6) evaluate legitimacy petitions (Options 5 & 6); and (7) evaluate legitimacy documentation (Option 5). (See the RIA for a complete description of the Options and the various administrative activities.) The RIA estimates that the state government share of future average annualized direct costs for these implementation tasks ranges between $2.3 million and $3.3 million per y ear. No impacts are expe cted for local governments. Because these direct costs are well below the $25 million test threshold, we conclude that Executive Order 13132 does not apply to this action. However, in the spirit of Executive Order 13132, and consistent with EPA policy to p romote communications between EPA and state and local governments, EPA specifically solicits comment on this proposed action from state and local officials. F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments Subject to the Executive Order 13175 (65 FR 67249, November 9, 2000), EPA may not issue a regulation that has tribal implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or EPA consults with tribal officials earl y in the process of developing the proposed regulation and develops a tribal summary impact statement. EPA has concluded that this acti on may have tribal implications. However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt tribal law. Under the RCRA statute, the federal government implements hazardous waste regulations directl y in Indian Country . Thus, the changes to the hazardous waste regulations proposed today would not impose any

direct costs on tribal governments. In addition, currentl y there are no facilities operating on land controlled by tribal governments, but if such facilities did locate in such areas,*** E.O. 12866 Review

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180 of 210 then this action could have tribal implications, to the extent that the proposed rule is intended to address potential adverse impacts of the 2008 DSW rule. EPA consulted with tribal officials early in the process of developing thi s regulation to ensure they

had an opportunity

for meaningful and timely input into its development. Tribal representatives participated in the public meetings EPA held on the draft environmental justice methodology

and noted that the census data used as the basis for the demographic analy sis can undercount indigenous populations. EPA has noted this limitation in the analy sis and has committed to working independentl y with the tribal governments as the rulemaking moves forward to ensure their concerns have been met. EPA specificall y solicits additional comment from tribal officials on this proposed action and any tribal implications
. G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in Executive Order 12866. This action’s health assessment are contained in Section VI of this preamble (as the hazard characterization portion of the environmental justice anal ys is). The public is invited to submit comments or identify peer - reviewed studies and data that assess effects of earl y life exposure to hazardous secondary materials being reclaimed. H. Executive Order 13211: Actions that Sign ificantly Affect Energy Supply, Distribution, or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May

22, 2001)), because it is not likely to have a significant adverse effect on the supply , distributio n, or use of energy
. As defined in Executive Order 13211, a “significant energy action” is any

action by an agency

(normally

published in the Federal Register) that*** E.O. 12866 Review

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181 of 210 promulgates or is expected to lead to the promulgation of a final rule or regulation, inclu ding notices of inquiry , advance notices of proposed rulemaking, and notices of proposed rulemaking that: (1) is a significant regulatory action under Executive Order 12866 or any successor order and is likely

to have a significant adverse effect on the su pply , distribution, or use of energy ; or (2) is designated b y OMB as a significant energy action. This rule does not involve the supply , distribution, or use of energy and is not a significant regulatory action under Executive Order 12866. Thus, Executive Order 13211 does not apply to this rule. I. National Technology Transfer and Advancement Act of 1995 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104
- 113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, samplin g procedures, and business practices) that are developed or adopted b y voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary

consensus st andards. This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary

consensus standards. J. Executive Order 12898: Environmental Justice Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) est ablishes federal executive policy on environmental justice. It s main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropri ate, disproportionately high and adverse human health or*** E.O. 12866 Review

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182 of 210 environmental effects of their programs, policies, and activities on minority populations and low
income populations in the United States. EPA has determined that this proposed rule will not have disproportionatel y high and adverse human health or environmental effects on minority or low
- income populations because it increases the level of environmental protection for all affected populations without having an y disproportionately

high and adverse human health or environmental effects on any population, including an y minorit y or low
- income population. The purpose of this proposal is to revise the 2008 DSW final rule in such a way that reduces potential adverse impacts, including potential disproporti onate impacts to minority and low
- impact communities. See Section VI . for further discussion of the environmental justice anal ys is that was conducted for this proposed rule, a copy of which is included in the docket to today ’s proposed rule. In addition, the environmental justice anal ys is was subject to peer review. Copies of the peer review comments that EPA received, as well as how EPA responded to those comments are also in the docket to this proposal. EPA requests comments on EPA’s environmental justice analy sis, and whether there remains any potential adverse impacts of the proposed rule, including disproportionate impacts to minority and low
- income communities, that is within the Agency ’s discretion to address.*** E.O. 12866 Review

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183 of 210 For the reasons stated in the preamble, title 40, c hapter I of the Code of Federal Regulations is proposed to be amended to read as follows:
PART 260
—HAZARDOUS WASTE MANAGEMENT SYSTEM: GENERAL

 1. The authorit y citation for part 260 continues to read as follows: Authority : 42 U.S.C. 6905, 6912(a), 6921

– 6927, 6930, 6935, 6937, 6938, 6939 and 6974. Subpart B
—Definitions

 2. Amend section 260.10 as follows: a. Remove the definition of “hazardous secondary material generated and reclaimed under the control of the generator , ” b. Add in alphabetical order the definition of “contained” to read as follows: § 260.10 Definitions
* * * * *
Contained means a unit that (1) is in good condition and has no leaks or other continuing or intermittent releases to the environment; (2) is properly labeled or otherwise has a s ys tem (such as a log) to immediately

identify the hazardous secondary material in the unit; (3) does not hold*** E.O. 12866 Review

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184 of 210 incompatible materials and addresses an y potential risks of fires or explosions; (4) has s ys tems in place to prevent and to re spond to releases to the environment, which may include but are not limited to runoff, releases to groundwater, wind
- blown dust, fugitive hazardous air emissions, and catastrophic unit failures; or (5) meets the applicable requirements of 40 CFR Parts 264 or 265.
* * * * * Subpart C
—Rulemaking Petitions

 3. Section 260.30 is amended by revising the introductory paragraph to read as follows: § 260.30 Non - waste determinations and variances from classification as a solid waste. In accordance with the standards and criteria in § 260.31 and § 260.34 and the procedures in § 260.33, the Regional Administrator may determine on a case
- by
- case basis that the following recy cled materials are not solid wastes: * * * * *

 4. Amend § 260.31 as follows: a. Revise the introductory text of paragraphs (a) and (b); b. Revise paragraph (c)
. § 260.31 Standards and criteria for variances from classification as a solid waste.*** E.O. 12866 Review

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185 of 210 (a) The Regional Administrator may grant requests for a variance from classifying as a soli d waste those materials that are accumulated speculatively without sufficient amounts being recy cled if the applicant demonstrates that sufficient amounts of the material will be recy cled or transferred for recy cling in the following y ear. If a variance is granted, it is valid only for the following ye ar, but can be renewed, on an annual basis, by filing a new application. The Regional Administrator's decision will be based on whether the hazardous secondary material is legitimatel y rec ycled as specified in § 260.43 and the following criteria: * * * * * (b) The Regional Administrator may grant requests for a variance from classifying as a solid waste those materials that are reclaimed and then reused as feedstock within the original production proc ess in which the materials were generated if the reclamation operation is an essential part of the production process. This determination will be based on whether the hazardous secondary

material is legitimately

reclaimed as specified in § 260.43 and the f ollowing criteria: * * * * * (c) The Regional Administrator may grant requests for a variance from classifying as a solid waste those materials that have been partiall y reclaimed but must be reclaimed further before recovery is completed, if the partial reclamation has produced a commodity
- like material. To qualify for a variance the material must be legitimately recy cled as specified in 40 CFR 260.43, must be partially
- reclaimed as determined b y meeting criterion 1 below, and must be commodity
- l ike as determined by meeting criteria 2

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186 of 210 ( 1) Whether the degree of partial reclamation the material has undergone is substantial ; (2 ) Whether the partially
- reclaimed material has sufficient economic value that it will be purchased for final recl amation ; ( 3) Whether the partially
- reclaimed material is a viable substitute for a product or intermediate produced from virgin or raw materials which feeds subsequent production steps ; (4 ) Whether the re is a guaranteed end market for the partiall y - reclaimed material; (5) Whether the partially
- reclaimed material is handled to minimize loss.

 5. Section 260.32 is amended by revising the introductory paragraph to read as follows: § 260.32 Variances to be classified as a boiler. In accordance with the standards and criteria in § 260.10 (definition of “boiler”), and the procedures in § 260.33, the Regional Administrator may determine on a case
- by
- case basis that certain enclosed devices using controlled flame combustion are boilers, even though they do not otherwise meet the definition of boiler contained in § 260.10, after considering the following criteria: * * * * *

 6. Section 260.33 is amended by revising the introductory paragraph and paragraphs (a) , (b), and (c) and b y adding paragraph (d) to read as follows: § 260.33 Procedures for variances from classification as a solid waste, for variances to be classified as a boiler, or for non - waste determinations.*** E.O. 12866 Review

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187 of 210 The Regional Administrator will use the following procedures in evaluating applications for variances from classification as a solid waste, applications to classify particular enclosed controlled flame combustion devices as boilers, or applications for non
- waste determinations. (a) The applicant must apply to the Regional Adminis trator for the variance or non
- waste determination. The application must address the relevant criteria contained in § 260.31, § 260.32, or § 260.34, as applicable. (b) The Regional Administrator will evaluate the application and issue a draft notice tentat ivel y granting or den yi ng the application. Notification of this tentative decision will be provided by newspaper advertisement or radio broadcast in the locality where the recy cler is located. The Regional Administrator will accept comment on the tentative decision for 30 day s, and may also hold a public hearing upon request or at his discretion. The Regional Administrator will issue a final decision after receipt of comments and after the hearing (if an y). (c) In the event of a change in circumstances that affect how a hazardous secondary material meets the relevant criteria contained in § 260.31, § 260.32, or § 260.34 upon which a variance or non - waste determination has been based, the applicant must re
- appl y to the Regional Administrator for a formal dete rmination that the hazardous secondary material continues to meet the relevant criteria and therefore is not a solid waste. (d) Facilities receiving a variance or non
- waste determination must provide notification as required b y § 260.42 of this chapter.

 7. Amend § 260.34 as follows:*** E.O. 12866 Review

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188 of 210 a. Revise the introductory text of paragraph (a) ; b. Revise the introductory text of paragraph (b) and (b)(4); c. Revise the introductory text to paragraph (c) and (c)(5). § 260. 34 Standards and criteria for non - waste determinations. (a) An applicant may

apply to the Regional Administrator for a formal determination that a hazardous secondary

material is not discarded and therefore not a solid waste. The determinations will be based on the criteria contained in paragra phs (b) or (c) of this section, as applicable. If an application is denied, the hazardous secondary material might still be eligible for a solid waste variance or exclusion (for example, one of the solid waste variances under § 260.31). Determinations may also be granted b y the State if the State is either authorized for this provision or if the following conditions are met:
* * * * * (b) The Regional Administrator may grant a non - waste determination for hazardous secondary material which is rec laimed in a continuous industrial process if the applicant demonstrates that the hazardous secondary

material is a part of the production process and is not discarded. The determination will be based on whether the hazardous secondary material is legitimat el y rec ycled as specified in § 260.43 and on the following criteria: (1) * * **** E.O. 12866 Review

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189 of 210 (2) * * * (3) * * * (4) Other relevant factors that demonstrate the hazardous secondary material is not discarded, including wh y the hazardous secondary material cannot m eet, or should not have to meet, the conditions of an exclusion under § 261.2 or § 261.4 of this chapter
. (c) The Regional Administrator may grant a non - waste determination for hazardous secondary material which is indistinguishable in all relevant aspect s from a product or intermediate if the applicant demonstrates that the hazardous secondary material is comparable to a product or intermediate and is reclaimed and is not discarded. The determination will be based on whether the hazardous secondary

materi al is legitimatel y rec ycled as specified in §260.43 and on the following criteria: (1) * * * (2) * * * (3) * * * (4) * * **** E.O. 12866 Review

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190 of 210 (5) Other relevant factors that demonstrate the hazardous secondary material is not discarded, including wh y the hazardous secondary material cannot meet, or should not have to meet, the conditions of an exclusion under § 261.2 or § 261.4 of this chapter
.

 8. Amend § 260.42 as follows: a. Revise the introductory text to paragraph (a) and paragraphs (a)(1), (a)(4), (a)(5), (a)(6) , (a)(7), (a)(8) and (a)(9); b. Remove paragraph (a)(10); c. Revise paragraph (b)
. § 260.42 Notification requirement for hazardous secondary materials. (a) Facilities managing hazardous secondary materials or hazardous recy clable materials under §§ 260.30, 261.4(a)(23) or part 266 subpart D must send a notification prior to operating under the regulatory

provision and by

March 1 of each even
- numbered y ear thereafter to the Regional Administrator using EPA Form 8700
- 12 that includes the following information : (1) The name, address, and EPA ID number of the facilit y; (2) * * * (3) * * **** E.O. 12866 Review

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191 of 210 (4) The regulation under which the hazardous secondary materials will be managed; (5) When the facility

began or expects to begin managing the hazardous secondary materials in accordance with the regulation; (6) A list of hazardous secondary materials that will be managed according to the exclusion (reported as the EPA hazardous waste numbers that would apply if the hazardous secondary materials were managed as haz ardous wastes); (7) For each hazardous secondary material, whether the hazardous secondary material, or any portion thereof, will be managed in a land
- based unit; (8) The quantit y of each hazardous secondary material to be managed annually; and (9) The certification (included in EPA Form 8700
- 12) signed and dated b y an authorized representative of the facility
. (b) If a facility

managing hazardous secondary materials has submitted a notification, but then subsequently

stops managing hazardous secondary materials in accordance with the regulation(s) listed above, the facility

must notify

the Regional Administrator within thirty (30) day s using EPA Form 8700
- 12. For purposes of this section, a facilit y has stopped managing hazardous secondary materials i f the facilit y no longer generates, manages and/or reclaims hazardous secondary materials under the regulation(s) above and does not expect to manage any amount of*** E.O. 12866 Review

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192 of 210 hazardous secondary

materials for at least one y ear.

 9. Section 260.43 is amended by revisi ng the section heading and paragraphs (a) , (b) and (c) to read as follows: § 260.43 Legitimate recycling of hazardous secondary materials. (a) Recy cling of hazardous secondary materials for the purpose of the exclusions or exemptions from the hazardous wa ste regulations or alternate regulatory standards must be legitimate. Hazardous secondary

material that is not legitimately recy cled is discarded material and is a solid waste. In determining if their recy cling is legitimate, persons must address all the r equirements of this paragraph. (1) Legitimate recy cling must involve a hazardous secondary material that provides a useful contribution to the recy cling process or to a product or intermediate of the recy cling process. The hazardous secondary

material prov ides a useful contribution if it (i) Contributes valuable ingredients to a product or intermediate; or (ii) Replaces a catal ys t or carrier in the recy cling process; or (iii) I s the source of a valuable constituent recovered in the recycling process; or (iv) Is recovered or regenerated b y the recy cling process; or (v) Is used as an effective substitute for a commercial product.*** E.O. 12866 Review

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193 of 210 (2) The recy cling process must produce a valuable product or intermediate. The product or intermediate is valuable if it is (i) S old to a third party ; or (ii) Used b y the recycler or the generator as an effective substitute for a commercial product or as an ingredient or intermediate in an industrial process. (3) The generator and the recycler must manage the hazardous secondary mat erial as a valuable commodity . Where there is an analogous raw material, the hazardous secondary material must be managed, at a minimum, in a manner consistent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary material must be contained. Hazardous secondary

materials that are released to the environment and are not recovered immediately

are discarded. (4) The product of the recy cling process (i) Must contain concentrations of an y hazardous constituents found in Appendix VIII of part 261 of this chapter at levels that are comparable to or lower than those found in analogous products; or (ii) Must not exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not ex hibit. (b) Persons recy cling hazardous secondary materials for the purpose of obtaining exclusions or exemptions from the hazardous waste regulations or alternative regulatory standards must maintain documentation of their legitimacy determination on
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194 of 210 (1) Documentation must be either a written narrative description of how the recy cling meets all four factors in § 260.43(a) or a cop y of a legitimacy variance received from the person’s implementing agency
. (2) Documentation must be maintained for three y ears after the recy cling operation has ceased. (c) An applicant may

petition the Regional Administrator for a formal determination that a recy cling process is legitimate without meeting the requirements under § 260.43(a)(3) or § 260.43(a)(4). The Regional Administrator will use the procedures in § 260.33 in evaluating petitions for legitimacy

variances. (1) In making a determination on a petition for a legitimacy variance, the Regional Administrator will evaluate all factors and consider legitimacy as a whole. In determining whether a process that does not meet one or both of the requirements under § 260.43(a)(3) or § 260.43(a)(4) is still legitimate, the Regional Administrator can consider the protectiveness of the storage methods, exposure from toxics in the product, the bioavailability of the toxics in the product, and an y other relevant considerations.
PART 261

— ID ENTIFICATION AND LISTING OF HAZARDOUS WASTE
10. The authorit y citation for Part 261 continues to read as follows: Authority : 42 U.S.C. 690 5, 6912(a), 6921, 6922, 6924(y) and 6938. Subpart A
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195 of 210  11. Section 261.2 is amended by removing paragraph (a)(2)(ii) and by revising the introductory

text to paragraph (e). § 261.2 Definition of Solid Waste * * * * * (e) Materials that are not solid waste when recycled. (1) Materials are not solid wastes when they can be shown to be legitimatel y rec ycl ed as specified in § 260.43 b y being: * * * * *

 12. Amend § 261.4, as follows: a. Republish the introductory text of paragraph (a); b. Revise paragraphs (a)(6) and (a)(7) ; c. Revise the introductory text to paragraph (a)(8) ; d. Revise paragraphs (a)(9) (i) and (a)(9)(ii); e. Revise paragraphs (a)(10) and (a)(11) ; f. Revise the first sentence of (a)(12) (i); g. Revise the first sentence of ( a)(12)(ii); h. Revise paragraph (a)(13); i. Revise the introductory text of paragraph (a)(14); j. Revise paragraph (a)(17) (i); k. Revise the introductory text to (a)(18) ; l. Revise paragraph (a)(19) ;*** E.O. 12866 Review

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196 of 210 m. Revise the introductory text to paragraph (a)(20) and the introductory text to paragraph (a)(21) ; n. Revise paragraph (a)(22) (ii); o. Revise paragraph (a)(23); p. Remove paragraphs (a)(24) and (a)(25); q. Republish the introductory text of paragraph (b); r. Revise paragraphs (b)(12) and (b)(14). § 261.4 Exclusions. (a ) Materials which are not solid wastes. The following materials are not solid wastes for the purpose of this part: * * * * * (6) Pulping liquors ( i.e., black liquor) that are legitimately reclaimed as specified in §260.43 of this chapter in a pulpin g liquor recovery furnace and then reused in the pulping process, unless it is accumulated speculatively as defined in §261.1(c) of this chapter. (7) Spent sulfuric acid legitimatel y used to produce virgin sulfuric acid as specified in §260.43 of this chap ter , unless it is accumulated speculativel y as defined in §261.1(c) of this chapter. (8) Secondary

materials that are legitimatel y reclaimed as specified in §260.43 of this chapter and returned to the original process or processes in which they were generated where they are reused in the production process provided: * * * * **** E.O. 12866 Review

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197 of 210 (9)(i) Spent wood preserving solutions that have been legitimately reclaimed as specified in §260.43 of this chapter and are reused for their original intended purpose; and (ii ) Wastewaters from the wood preserving process that have been legitimately reclaimed as specified in §260.43 of this chapter and are reused to treat wood. * * * * * (10) EPA Hazardous Waste Nos. K060, K087, K141, K142, K143, K144, K145, K147, an d K148, and an y wastes from the coke b y - products processes that are hazardous only because they exhibit the Toxicity

Characteristic (TC) specified in section 261.24 of this part when, subsequent to generation, these materials are legitimatel y rec ycled as s pecified in §260.43 of this chapter to coke ovens, to the tar recovery process as a feedstock to produce coal tar, or mixed with coal tar prior to the tar's sale or refining. This exclusion is conditioned on there being no land disposal of the wastes from the point they are generated to the point they are recy cled to coke ovens or tar recovery or refining processes, or mixed with coal tar. (11) Nonwastewater splash condenser dross residue from the treatment of K061 in high temperature metals recovery units, provided it is shipped in drums (if shipped) and not land disposed before legitimate recovery as specified in §260.43 of this chapter
. (12)(i) Oil
- bearing hazardous secondary materials ( i.e. , sludges, by products, or spent materials) that are generated at a petroleum refinery (SI C code 2911) and are legitimately recy cled as specified in §260.43 of this chapter by being inserted into the petroleum refining process (SIC code 2911

— including, but not limited to, distillation, catal yt ic cracking, fractionation , gasification (as defined in 40 CFR 260.10) or thermal cracking units (i.e., cokers)) unless the*** E.O. 12866 Review

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198 of 210 material is placed on the land, or speculativel y accumulated before being so recy cled. * * * (ii) Recovered oil that is legitimatel y rec ycled as specif ied in §260.43 of this chapter in the same manner and with the same conditions as described in paragraph (a)(12)(i) of this section. * * * (13) Excluded scrap metal (processed scrap metal, unprocessed home scrap metal, and unprocessed prompt scrap me tal) being legitimately recy cled as specified in §260.43 of this chapter
. (14) Shredded circuit boards being legitimately recy cled as specified in §260.43 of this chapter provided that they

are: * * * * * (17) * * * (i) The spent material is legitimatel y rec ycl ed as specified in §260.43 of this chapter to recover minerals, acids, cy anide, water or other values; * * * * * (18) Petrochemical recovered oil from an associated organic chemical manufacturing facility , where the oil is legit imately recy cled as specified in §260.43 of this chapter by being inserted into the petroleum refining process (SIC code 2911) along with normal petroleum refinery process streams, provided: * * * * **** E.O. 12866 Review

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199 of 210 (19) Spent caustic solutions from petroleum refining liquid treating processes legitimatel y used as a feedstock as specified in § 260.43 of this chapter to produce cres yl ic or naphthenic acid unless the material is placed on the land, or accumulated speculativel y as defined in §261.1(c). (20) Hazar dous secondary materials legitimately

used as specified in § 260.43 to make zinc fertilizers, provided that the following conditions specified are satisfied: * * * * * (21) Zinc fertilizers legitimately made from hazardous wastes, or hazardous secondary materials that are excluded under paragraph (a)(20) of this section as specified in §260.43 of this chapter , provided that: * * * * * (22) * * * * * * * * (ii) Used, intact CRTs as defined in §260.10 of this chapter are not solid wastes when exported for legitimate recy cling as specified in §260.43 of this chapter provided that they meet the requirements of §261.40. * * * * * (23) Hazardous secondary material generated and legitimatel y reclaimed under the control of the generator provided that it complies with (i) and (ii) below:*** E.O. 12866 Review

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200 of 210 (i) (A) The hazardous secondary material is generated and reclaimed at the generating facility (for purpos es of this definition, generating facility means all contiguous property owned, leased, or otherwise controlled by the hazardous secondary material generator) or (B) The hazardous secondary material is generated and reclaimed at different facilities, if the reclaiming facility

is controlled by

the generator or if both the generating facility and the reclaiming facility

are controlled by

a person as defined in § 260.10 of this chapter , and if the generator provides one of the following certifications: “on b ehalf of [insert generator facility name], Icertify

that this facility

will send the indicated hazardous secondary material to [insert reclaimer facility

name], which is controlled by [insert generator facility

name] and that [insert the name of either fa cility ] has acknowledged full responsibility for the safe management of the hazardous secondary

material”. For purposes of this paragraph, “control” means the power to direct the policies of the facility , whether b y the ownership of stock, voting rights, o r otherwise, except that contractors who operate facilities on behalf of a different person as defined in § 260.10 of this chapter shall not be deemed to “control” such facilities, or (C) The hazardous secondary material is generated pursuant to a written contract between a tolling contractor and a toll manufacturer and is reclaimed b y the tolling contractor, if the tolling contractor certifies the following: “on behalf of [insert tolling contractor name], I certify that [insert tolling contractor name] ha s a written contract with [insert toll manufacturer name] to manufacture [insert name of product or intermediate] which is made from specified unused materials, and that [insert tolling contractor name] will reclaim the hazardous secondary materials generated during this manufacture. On behalf of [insert tolling contractor name] I also*** E.O. 12866 Review

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201 of 210 certify that [insert tolling contractor name] retains ownership of, and responsibility for, the hazardous secondary

materials that are generated during the course of the manu facture, including any releases of hazardous secondary materials that occur during the manufacturing process”. The tolling contractor must maintain at its facility for no less than three y ears records of hazardous secondary materials received pursuant to i ts written contract with the tolling manufacturer, and the tolling manufacturer must maintain at its facility for no less than three years records of hazardous secondary

materials shipped pursuant to its written contract with the tolling contractor. In both cases, the records must contain the name of the transporter, the date of the shipment, and the ty

pe and quantity

of the hazardous secondary material shipped or received pursuant to the written contract. These requirements may be satisfied by

routine busi ness records (e.g., financial records, bills of lading, copies of DOT shipping papers, or electronic confirmations). For purposes of this paragraph, tolling contractor means a person who arranges for the production of a product or intermediate made from sp ecified unused materials through a written contract with a toll manufacturer. Toll manufacturer means a person who produces a product or intermediate made from specified unused materials pursuant to a written contract with a tolling contractor. (ii) (A) The hazardous secondary material is generated and reclaimed within the United States or its territories. (B) The hazardous secondary material is contained as defined in § 260.10 of this chapter . A hazardous secondary

material released to the environment i s discarded and a solid waste unless it is immediately

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202 of 210 a unit with leaks or other continuing releases is discarded and a solid waste. (C) The hazardous secondary material is not speculatively accumulated, as defined in § 261.1(c)(8), and the material is placed in a storage unit with a label indicating the first date that the excluded hazardous secondary material began to be accumulated. If placing a label on the storage unit i s not practicable, the first date that the excluded hazardous secondary material began to be accumulated must be entered in an inventory log. (D) Notice is provided as required b y § 260.42 of this chapter. (b) Solid wastes which are not hazardous wa stes. The following solid wastes are not hazardous wastes: * * * * * (12) Used chlorofluorocarbon refrigerants from totally enclosed heat transfer equipment, including mobile air conditioning sy stems, mobile refrigeration, and commercial and industrial air conditioning and refrigeration s ys tems that use chlorofluorocarbons as the heat transfer fluid in a refrigeration cy cle, provided the refrigerant is reclaimed for further use in a manner that is legitimate as specified in §260.43 of this chapter
. * * * * * (14) Used oil re
- refining distillation bottoms that are used as feedstock to manufacture asphalt products in a manner that is legitimate as specified in §260.43 of this chapter
. * * * * **** E.O. 12866 Review

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203 of 210  13. Amend § 261.6 as follows:

a. Revise paragraph (a)(1); b. Revise the introductory text to paragraph (a)(2) and add paragraph (a)(2)(v);
c. Revise the introductory text to paragraph (a)(3); d. Revise paragraph (c)(1) and the introductory text to (c)(2). § 261.6 Requirements for recyclable materials. (a )(1) Hazardous wastes that are legitimatel y rec ycled as specified in §260.43 of this chapter are subject to the requirements for generators, transporters, and storage facilities of paragraphs (b) and (c) of this section, except for the materials listed in paragraphs (a)(2) and (a)(3) of this section. Hazardous wastes that are legitimatel y recycled will be known as “recyclable materials.” (2) The following recy clable materials are not subject to the requirements of this section when legitimatel y rec ycled as specified in §260.43 of this chapter but are regulated under subparts C through N of part 266 of this chapter and all applicable provisions in parts 268, 270, and 124 of this chapter. * * * * * (v) Hazardous recy clable materials transferred for reclamation (40 CFR part 266, subpart D) (3 ) The following recy clable materials are not subject to regulation under parts 262 through parts 268, 270, or 124 of this chapter and are not subject to the notification requirements of section 3010 of RCRA when l egitimately recy cled as specified in §260.43 of this chapter : * * * * **** E.O. 12866 Review

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204 of 210 (c) (1) Owners and operators of facilities that store recy clable materials before they are recy cled are regulated under all applicable provisions of subparts A though L, AA, BB, and CC of parts 264 and 265, and under parts 124, 266, 267, 268, and 270 of this chapter and the notification requirements under section 3010 of RCRA, except as provided in paragraph (a) of this section. (The recy cling process itself is exempt from regulation as long as the recy cling is legitimate as specified in §260.43 of this chapter , except as provided in §261.6(d).) (2) Owners or operators of facilities that recy cle recy clable materials without storing them before they are legitimatel y rec ycled are subject to the following requirements, except as provided in paragraph (a) of this section: * * * * * Subpart E
—Exclusions/Exemptions

 14. Section 261.38 is amended b y adding paragraph (b)(17) to read as follows: § 261.38 Exclusion of comparable fuel and syngas fuel. * * * * * (b) * * * * * * * * (17 ) Legitimate recycling. Excluded fuel must be legitimatel y rec ycl ed as specified in §260.43 of this chapter
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205 of 210 * * * * *

 15. Section 261.39 is amended b y revising the introductory paragraph to read as follows: § 261.39 Conditional Exclusion for Used, Broken Cathode Ray Tubes (CRTs) and Processed CRT Glass Undergoing Recycling. Used, broken CRTs are not solid wastes if they are legitimatel y rec ycled as specified in §260. 43 of this chapter and meet the following conditions: * * * * *

 16. Section 261.40 is amended b y being revised to read as follows: § 261.40 Conditional Exclusion for Used, Intact Cathode Ray Tubes (CRTs) Exported for Recycling. Used, intact CRTs e xported for legitimate recycling as specified in §260.43 of this chapter are not solid wastes if they

meet the notice and consent conditions of §261.39(a)(5), and if they are not speculatively

accumulated as defined in §261.1(c)(8).

 17. Section 261.41 is amended b y revising paragraphs (a) and (b) to read as follows: § 261.41 Notification and Recordkeeping for Used, Intact Cathode Ray Tubes (CRTs) Exported for Reuse. (a) Persons who export used, intact CRTs for legitimate reuse as specified in §260.43 of thi s chapter must send a one
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206 of 210 include a statement that the notifier plans to export used, intact CRTs for reuse, the notifier's name, address, and EPA ID number (if applicable) and the name and phone number of a contact person. (b) Persons who export used, intact CRTs for legitimate reuse as specified in §260.43 of this chapter must keep copies of normal business records, such as contracts, demonstrating that each shipment of exported CRTs w ill be reused. This documentation must be retained for a period of at least three ye ars from the date the CRTs were exported. Subpart H
—Financial Requirements for Management of Excluded Hazardous Secondary Materials

 18. Part 261 is amended by removing Subp art H (261.140 through 261.151). Subpart H (§261.140

– §261.151) [removed] PART 266
— STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES

 19. The authorit y citation for part 266 continues to read as follows: Authority: 42 U.S.C 1006, 2002(a), 3001

– 3009, 3014, 3017, 6905, 6906, 6912, 6921, 6922, 6924

– 6927, 6934, and 6937. Subpart C
—Recyclable Materials Used in a Manner Constituting Disposal*** E.O. 12866 Review

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207 of 210  20. Section 266.20 is being amended b y revising the introductory text to paragraph (a), paragraph (b), and paragraph (d)(2) to read as follows: § 266.20 Applicability
. (a) The regulations of this subpart appl y to recyclable materials that are applied to or placed on the land, provided they

are legitimately

recy cled as specified in §260.43 of this chapter : * * * * * (b) Products produced for the general public's use that are used in a manner that constitutes disposal and that contain recy clable materials are not presently subject to regulation if the recy clable materials have undergone a chemical reaction in the course of producing the products so as to become inseparable by phy sical means and if such products meet the applicable treatment standard s in subpart D of part 268 (or applicable prohibition levels in §268.32 or RCRA section 3004(d), where no treatment standards have been established) for each recy clable material ( i.e., hazardous waste) that they contain, provided they

are legitimately

rec yc led as specified in §260.43 of this chapter
. * * * * * (d) * * * * * * * * (2) They meet the applicable treatment standards in subpart D of Part 268 of this chapter for each hazardous waste that they contain and provided they are legi timately

recy cled as specified in*** E.O. 12866 Review

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208 of 210 §260.43 of this chapter
.

 21. Section 266 is being amended b y adding Subpart D to read as follows: Subpart D
— Hazardous Recyclable Materials §266.30 Applicability (a) The regulations of this subpart appl y to hazardous recy clable materials that are reclaimed as defined in §261.1(a)(4). For the purposes of this subpart, a hazardous recyclable material is a hazardous waste this is being recy cled. (b) A hazardous recy clable material generator may accumulate hazardous recy cl able material on
site for one ye ar or less without a permit or without having interim status, provided that: (1) The hazardous recy clable material generator provides notification as required by § 260.42 of this chapter; (2) The hazardous recy clable materi al generator makes and documents advance arrangements for reclamation prior to operating under this subpart in a reclamation plan that (i) describes the hazardous recy clable material and identifies the reclamation facilit y where the material will be sent, (ii) includes written confirmation from the facility that they are able to recy cle the material (iii) documents the amount of hazardous recy clable material expected in each shipment and the anticipated frequency

of shipments, and (iv) documents that the re clamation is legitimate per 40 CFR 260.43; (3) While hazardous recyclable materials are being accumulated on
- site, each container and tank*** E.O. 12866 Review

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209 of 210 is labeled or marked clearly with the words, “Hazardous recy clable material”; (4) The hazardous recy clable material generator complies as applicable either with all requirements applicable to large quantit y generators or all requirements applicable to small quantity generators, except for the 90 day storage time limit for large quantity generators and the 180 day (or 2 70 day) storage time limit for small quantity generators, and except that tanks and containers need not be labeled as containing “hazardous waste” if they instead are labeled as containing “hazardous recy clable materials.” (c) Persons who transport or who store hazardous recy clable materials other than at the site of generation, prior to reclamation are subject to all applicable requirements of §§263

–265 and §268. Subpart F
—Recyclable Materials Utilized for Precious Metal Recovery

 22. Section 266.70 is being amended b y revising paragraph (a) to read as follows: § 266.70 Applicability and requirements. (a) The regulations of this subpart appl y to recyclable materials that are legitimately reclaimed as specified in §260.43 of this chapter to recover econom ically significant amounts of gold, silver, platinum, palladium, iridium, osmium, rhodium, ruthenium, or any combination of these. * * * * * Subpart G

— Spent Lead - Acid Batteries Being Reclaimed

 23. Section 266.80 is being amended b y revising paragraph (a) to read as follows:*** E.O. 12866 Review

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210 of 210 § 266.80 Applicability and requirements. (a) Are spent lead
- acid batteries exempt from hazardous waste management requirements? I f you generate, collect, transport, store, o r regenerate lead
- acid batteries for legitimate reclamation purposes as specified in §260.43 of this chapter , you may be exempt from certain hazardous waste management requirements. Use the following table to determine which requirements appl y to y ou. Alte rnatively , y ou may choose to manage y our spent lead
- acid batteries under the “Universal Waste” rule in 40 CFR part 273. * * * * * Subpart H
—Hazardous Waste Burned in Boilers and Industrial Furnaces

 24. Section 266.100 is being amended b y revising p aragraph (a) to read as follows: § 266.100 Applicability. (a) The regulations of this subpart appl y to hazardous waste burned or processed in a boiler or industrial furnace (as defined in §260.10 of this chapter) irrespective of the purpose of burning or processing, except as provided by paragraphs (b), (c), (d), (g), and (h) of this section. In this subpart, the term “burn” means burning for energy recovery or destruction, or processing for materials recovery

or as an ingredient. The emissions standards o f §§266.104, 266.105, 266.106, and 266.107 appl y to facilities operating under interim status or under a RCRA permit as specified in §§266.102 and 266.103. Burning for energy recovery and processing for materials recovery or as an ingredient must be legiti mate recy cling as specified in §260.43 of this chapter
. * * * * *